|
|
|
|
|
|
|
|
|
|
|
Prospectus |
|
May 25, 2019 |
|
|
|
Invesco Oppenheimer Capital Income
Fund |
|
Class: R5 (CPIFX), R6 (OCIIX) |
|
Invesco Oppenheimer Developing
Markets Fund |
|
Class: R5 (DVMFX), R6 (ODVIX) |
|
|
|
|
Invesco Oppenheimer Emerging Markets Innovators Fund
|
|
|
Class: R5 (EMIMX), R6 (EMVIX) |
|
|
|
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.
The Invesco Oppenheimer Developing
Markets Fund has limited public sales of its shares to certain investors.
Beginning on January 1, 2021, as
permitted by regulations adopted by the Securities and Exchange Commission,
paper copies of the Funds’ shareholder reports will no longer be sent by mail,
unless you specifically request paper copies of the reports from the Funds or
from your financial intermediary, such as a broker-dealer or bank. Instead, the
reports will be made available on the Funds’ website, and you will be notified
by mail each time a report is posted and provided with a website link to access
the report.
If you already elected to receive
shareholder reports electronically, you will not be affected by this change and
you need not take any action. You may elect to receive shareholder reports and
other communications from the Funds electronically by contacting your financial
intermediary (such as a broker-dealer or bank) or, if you are a direct investor,
by enrolling at invesco.com/edelivery.
You may elect to receive all future
reports in paper free of charge. If you invest through a financial intermediary,
you can contact your financial intermediary to request that you continue to
receive paper copies of your shareholder reports. If you invest directly with
the Funds, you can call (800) 959-4246
to let the Funds know you wish to continue receiving paper copies of your
shareholder reports. Your election to receive reports in paper will apply to all
funds held with your financial intermediary or all funds held with the fund
complex if you invest directly with the Funds.
An investment in the Funds:
∎ |
|
is not
guaranteed by a bank. |
Table of Contents
Invesco
Investment Funds
Fund Summaries
In vesco Oppenheimer Capital Income Fund
Investment Objective(s)
The Fund’s investment objective is to
seek total return.
Fees and Expenses of the Fund
This table describes the fees and
expenses that you may pay if you buy and hold shares of the Fund. Fees and
expenses of a wholly-owned subsidiary of the Fund organized under the laws of
the Cayman Islands (Subsidiary) are included in the table. Investors may pay
commissions and/or other forms of compensation to an intermediary, such as a
broker, for transactions in Class R6 shares, which are not reflected in the
table or the Example below.
|
|
|
|
|
|
|
|
|
|
|
Shareholder Fees (fees
paid directly from your investment) |
|
Class:
|
|
R5
|
|
R6
|
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage of offering price) |
|
|
|
None |
|
|
|
|
None |
|
Maximum Deferred Sales Charge
(Load) (as a percentage of original purchase price or redemption proceeds,
whichever is less) |
|
|
|
None |
|
|
|
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Class:
|
|
R5
|
|
R6
|
Management Fees |
|
|
|
0.53 |
% |
|
|
|
0.53 |
% |
Distribution and/or Service (12b-1) Fees |
|
|
|
None |
|
|
|
|
None |
|
Other Expenses 1
|
|
|
|
0.11 |
|
|
|
|
0.06 |
|
Acquired Fund Fees and Expenses
1
|
|
|
|
0.02 |
|
|
|
|
0.02 |
|
Total Annual Fund Operating
Expenses |
|
|
|
0.66 |
|
|
|
|
0.61 |
|
Fee Waiver and/or Expense
Reimbursement 2
|
|
|
|
0.04 |
|
|
|
|
0.04 |
|
Total Annual Fund Operating
Expenses After Fee Waiver and/or Expense Reimbursement |
|
|
|
0.62 |
|
|
|
|
0.57 |
|
1 |
“Other
Expenses” and “Acquired Fund Fees and Expenses” are based on estimated
amounts for the current fiscal year. |
2 |
Invesco
Advisers, Inc. (Invesco or the Adviser) has contractually agreed to waive
advisory fees and/or reimburse expenses to the extent necessary to limit
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement (excluding Acquired Fund Fees and Expenses and certain items
discussed in the statement of additional information (SAI)) of
Class R5, and Class R6 shares to 0.68% and 0.63%, respectively,
of the Fund’s average daily net assets (the “expense limits”) through at
least May 28, 2021. Invesco has also contractually agreed to waive a
portion of the Fund’s management fee in an amount equal to the net
management fee that Invesco earns on the Fund’s investments in certain
affiliated funds, which will have the effect of reducing the Acquired Fund
Fees and Expenses, through at least May 28, 2021. During their terms,
the fee waiver agreements cannot be terminated or amended to increase the
expense limits or reduce the advisory waiver without approval of the Board
of Trustees. |
Example. This Example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds.
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 R6 shares. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain equal to the
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement for the contractual period above and the Total Annual Fund
Operating Expenses thereafter.
Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Year
|
|
3 Years |
|
5 Years |
|
10 Years |
Class R5 |
|
|
$ |
63 |
|
|
|
$ |
203 |
|
|
|
$ |
360 |
|
|
|
$ |
815 |
|
Class R6 |
|
|
$ |
58 |
|
|
|
$ |
187 |
|
|
|
$ |
332 |
|
|
|
$ |
754 |
|
Portfolio Turnover. The Fund
pays transaction costs, such as commissions, when it buys and sells securities
(or “turns over” its portfolio). A higher portfolio turnover rate may indicate
higher transaction costs and may result in higher taxes when Fund shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the Example, affect the Fund’s performance. During the
most recent fiscal year, the predecessor fund’s (defined below) portfolio
turnover rate was 88% of the average value of its portfolio.
Principal Investment Strategies of the Fund
The Fund invests in equity, debt and
other securities of domestic and foreign issuers in different capitalization
ranges and in developed or developing countries. Under normal market conditions,
the Fund invests at least 65% of its total assets in equity and debt securities
that are expected to generate income. The percentages of equity and debt
securities the Fund holds may vary from time to time. There is no limit on the
Fund’s investments in foreign securities. The Fund employs multiple strategies:
an equity/equity-like strategy, which may include common stocks, preferred
stocks, structured notes, convertible bonds and other derivatives such as
options and futures on equities and equity indices; a high grade fixed income
strategy, which may include corporate bonds, government bonds, mortgage related
securities and structured products; and an opportunistic strategy, which seeks
asymmetric risk/reward opportunities where the portfolio managers believe the
return profile has a low correlation to traditional investment strategies, as
well as opportunistically selecting positions to seek total return, income, or
capital appreciation. The opportunistic strategy may include convertible bonds,
corporate bonds, asset-backed securities, convertible bonds, derivatives, such
as currency and commodity-linked derivatives, cash and other securities. The
opportunistic strategy may also include floating rate loans (sometimes referred
to as “adjustable rate loans”) that hold a senior position in the capital
structure of U.S. and foreign corporations, partnerships or other business
entities that, under normal circumstances, allow them to have priority of claim
ahead of other obligations of a borrower in the event of liquidation. These
investments are referred to as “Senior Loans.” Senior Loans may be
collateralized or uncollateralized. They typically pay interest at rates that
are reset periodically based on a reference benchmark that reflects current
interest rates, plus a margin or premium.
Equity Securities. In selecting
equity securities, the portfolio managers mainly use value-oriented and core
investing styles. A security may be undervalued because the market does not yet
recognize its potential or the issuer is temporarily out of favor. The Fund
seeks to realize gains when other investors recognize the real or prospective
worth of the security. Value securities may offer higher than average dividends
and the Fund may invest in equity securities to seek either current income or
capital growth, or both. The Fund may also invest in equity securities solely
for the purpose of seeking dividend yields, which may include engaging in
dividend capture strategies, in which the portfolio managers purchase securities
prior to the record date for a dividend and sell them within a short time
thereafter. The portfolio managers typically looks for securities that can
deliver attractive risk-adjusted returns, which may include securities that:
have high current income, are believed to have substantial earnings
possibilities, have low price/earnings ratios, or have a low price relative to
the underlying value of the issuer’s assets, earnings, cash flow or other
factors.
Debt Securities. In connection
with the high grade fixed income strategy, the portfolio managers look for high
current yields and typically search for corporate and government debt securities
that offer: attractive relative value, more income than U.S. treasury
obligations, a balance of risk and return, high income potential and portfolio
diversification. The Fund may also invest in zero-coupon and stripped securities. In
connection with the opportunistic strategy, the portfolio managers look for high
yield, below-investment-grade securities, senior loans and asset-backed
securities, among other debt securities, that may offer attractive returns on a
1 Invesco
Investment Funds
risk-adjusted basis, with lower interest rate
sensitivity. The Fund can invest up to 40% of its total assets in
below-investment-grade securities, also referred to as “junk bonds.”
The Fund’s debt securities may be rated
by a nationally recognized statistical rating organization or may be unrated.
“Investment grade” securities are rated in one of the top four rating
categories.
Other Securities. In pursuing
its strategies, the Fund may also use derivative instruments, including to seek
income or returns, or to try to manage market or other investment risks. These
derivatives may include options, futures, swaps, “structured” notes,
mortgage-related securities, equity-linked debt securities and commodity-linked
derivatives. The Fund may also invest in convertible bonds, asset-backed
securities, Senior Loans, participation interests in loans, pooled investment
entities that invest in loans and currency derivatives, among other types of
investments.
The Fund may sell securities that no
longer meet the above criteria.
The Fund’s holdings may at times differ
significantly from the weightings of the indices comprising its reference index
(the Reference Index). The Fund’s Reference Index is a customized weighted index
currently comprised of the following underlying broad-based security indices:
65% of the Bloomberg Barclays U.S. Aggregate Bond Index and 35% of the Russell
3000 Index. The Fund is not managed to be invested in the same percentages as
those indices comprising the Reference Index.
The Fund may invest up to 25% of its
total assets in the Subsidiary, a Cayman Islands company that is wholly-owned
and controlled by the Fund. The Subsidiary invests in commodity-linked
derivatives (including commodity futures, financial futures, options and swap
contracts) and exchange-traded funds and other exchange-traded products related
to gold or other special minerals (Gold ETFs). The Subsidiary may also invest in
certain fixed-income securities and other investments that may serve as margin
or collateral for its derivatives positions. Investments in the Subsidiary are
intended to provide the Fund with exposure to commodities market returns within
the limitations of the federal tax requirements that apply to the Fund. The Fund
applies its investment restrictions and compliance policies and procedures, on a
look-through basis, to the Subsidiary. The Fund’s investment in the Subsidiary
may vary based on the portfolio managers’ use of different types of
commodity-linked derivatives, fixed-income securities, Gold ETFs, and other
investments. Since the Fund may invest a substantial portion of its assets in
the Subsidiary, which may hold certain of the investments described in this
prospectus, the Fund may be considered to be investing indirectly in those
investments through its Subsidiary. Therefore, references in this prospectus to
investments by the Fund also may be deemed to include the Fund’s indirect
investments through the Subsidiary.
Principal Risks of Investing in the Fund
As with any mutual fund investment,
loss of money is a risk of investing. An investment in the Fund is not a deposit
in a bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency. The risks associated with an
investment in the Fund can increase during times of significant market
volatility. The principal risks of investing in the Fund are:
Risks of Investing in Stocks.
The value of the Fund’s portfolio may be affected by changes in the stock
markets. Stock markets may experience significant short-term volatility and may
fall 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. 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-cap 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.
Risks of Value Investing. Value
investing entails the risk that if the market does not recognize that a fund’s
securities are undervalued, the prices of those securities might not appreciate
as anticipated. A value approach could also result in fewer investments that
increase rapidly during times of market gains and could cause a fund to
underperform funds that use a growth or non-value approach to investing. Value
investing has gone in and out of favor during past market cycles and when value
investing is out of favor or when markets are unstable, the securities of
“value” companies may underperform the securities of “growth” companies.
Risks of Investing in Debt
Securities. Debt securities may be subject to interest rate risk, duration
risk, credit risk, credit spread risk, extension risk, reinvestment risk,
prepayment risk and event risk. Interest rate risk is the risk that when
prevailing interest rates fall, the values of already-issued debt securities
generally rise; and when prevailing interest rates rise, the values of
already-issued debt securities generally fall, and therefore, those debt
securities may be worth less than the amount the Fund paid for them or valued
them. When interest rates change, the values of longer-term debt securities
usually change more than the values of shorter-term debt securities. Risks
associated with rising interest rates are heightened given that interest rates
in the U.S. are near historic lows. Duration is a measure of the price
sensitivity of a debt security or portfolio to interest rate changes. Duration
risk is the risk that longer-duration debt securities will be more volatile and
thus more likely to decline in price, and to a greater extent, in a rising
interest rate environment than shorter-duration debt securities. Credit risk is
the risk that the issuer of a security might not make interest and principal
payments on the security as they become due. If an issuer fails to pay interest
or repay principal, the Fund’s income or share value might be reduced. Adverse
news about an issuer or a downgrade in an issuer’s credit rating, for any
reason, can also reduce the market value of the issuer’s securities. “Credit
spread” is the difference in yield between securities that is due to differences
in their credit quality. There is a risk that credit spreads may increase when
the market expects lower-grade bonds to default more frequently. Widening credit
spreads may quickly reduce the market values of the Fund’s lower-rated and
unrated securities. Some unrated securities may not have an active trading
market or may trade less actively than rated securities, which means that the
Fund might have difficulty selling them promptly at an acceptable price.
Extension risk is the risk that an increase in interest rates could cause
prepayments on a debt security to occur at a slower rate than expected.
Extension risk is particularly prevalent for a callable security where an
increase in interest rates could result in the issuer of that security choosing
not to redeem the security as anticipated on the security’s call date. Such a
decision by the issuer could have the effect of lengthening the debt security’s
expected maturity, making it more vulnerable to interest rate risk and reducing
its market value. Reinvestment risk is the risk that when interest rates fall
the Fund may be required to reinvest the proceeds from a security’s sale or
redemption at a lower interest rate. Callable bonds are generally subject to
greater reinvestment risk than non-callable
bonds. Prepayment risk is the risk that the issuer may redeem the
security prior to the expected maturity or that borrowers may repay the loans
that underlie these securities more quickly than expected, thereby causing the
issuer of the security to repay the principal prior to the expected maturity.
The Fund may need to reinvest the proceeds at a lower interest rate, reducing
its income. Event risk is the risk that an issuer could be subject to an event,
such as a buyout or debt restructuring, that interferes with its ability to make
timely interest and principal payments and cause the value of its debt
securities to fall.
Fixed-Income Market Risks. The
fixed-income securities market can be susceptible to increases in volatility and
decreases in liquidity. Liquidity may decline unpredictably in response to
overall economic conditions or credit tightening. During times of reduced market
liquidity, the Fund may not be able to readily sell bonds at the prices at which
they are carried on
2 Invesco
Investment Funds
the Fund’s books and could experience a
loss. If the Fund needed to sell large blocks of bonds to meet shareholder
redemption requests or to raise cash, those sales could further reduce the
bonds’ prices, particularly for lower-rated and unrated securities. An
unexpected increase in redemptions by Fund shareholders (including requests from
shareholders who may own a significant percentage of the Fund’s shares), which
may be triggered by general market turmoil or an increase in interest rates, as
well as other adverse market and economic developments, could cause the Fund to
sell its holdings at a loss or at undesirable prices and adversely affect the
Fund’s share price and increase the Fund’s liquidity risk, Fund expenses and/or
taxable distributions. As of the date of this prospectus, interest rates in the
U.S. are near historically low levels, increasing the exposure of bond investors
to the risks associated with rising interest rates.
Economic and other market developments
can adversely affect fixed-income securities markets in the United States,
Europe and elsewhere. At times, participants in debt securities markets may
develop concerns about the ability of certain issuers of debt securities to make
timely principal and interest payments, or they may develop concerns about the
ability of financial institutions that make markets in certain debt securities
to facilitate an orderly market. Those concerns may impact the market price or
value of those debt securities and may cause increased volatility in those debt
securities or debt securities markets. Under some circumstances, those concerns
may cause reduced liquidity in certain debt securities markets, reducing the
willingness of some lenders to extend credit, and making it more difficult for
borrowers to obtain financing on attractive terms (or at all). A lack of
liquidity or other adverse credit market conditions may hamper the Fund’s
ability to sell the debt securities in which it invests or to find and purchase
suitable debt instruments.
Risks of Below-Investment-Grade
Securities. As compared to investment-grade debt securities,
below-investment grade debt securities (also referred to as “junk” bonds),
whether rated or unrated, may be subject to greater price fluctuations and
increased credit risk, as the issuer might not be able to pay interest and
principal when due, especially during times of weakening economic conditions or
rising interest rates. Credit rating downgrades of a single issuer or related
similar issuers whose securities the Fund holds in significant amounts could
substantially and unexpectedly increase the Fund’s exposure to
below-investment-grade securities and the risks associated with them, especially
liquidity and default risk. The market for below-investment-grade securities may
be less liquid and therefore these securities may be harder to value or sell at
an acceptable price, especially during times of market volatility or decline.
Risks of Senior Loans and Other
Loans. The Fund may invest in loans, and in particular, in floating rate
loans (sometimes referred to as “adjustable rate loans”) that hold (or in the
judgment of the investment adviser, hold) a senior position in the capital
structure of U.S. and foreign corporations, partnerships or other business
entities that, under normal circumstances, allow them to have priority of claim
ahead of (or at least as high as) other obligations of a borrower in the event
of liquidation. These investments are referred to as “Senior Loans.” Loans may
be collateralized or uncollateralized. They typically pay interest at rates that
are reset periodically based on a reference benchmark that reflects current
interest rates, plus a margin or premium. In addition to the risks typically
associated with debt securities, such as credit and interest rate risk, 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, the 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, the 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. The Fund’s access to collateral, if any, may be limited by
bankruptcy, other insolvency laws, or by the type of loan the 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.
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 the Fund to value them or dispose of them at an
acceptable price when it wants to. The market price of investments in floating
rate loans are 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 interests rates do and therefore should
more closely track market movements in interest rates.
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 the Fund; (ii) leave the Fund unable to
timely vote, or otherwise act with respect to, loans it has agreed to purchase;
(iii) delay the Fund from realizing the proceeds of a sale of a loan;
(iv) inhibit the Fund’s ability to re-sell a loan that it has agreed to purchase
if conditions change (leaving the Fund more exposed to price fluctuations); (v)
prevent the Fund from timely collecting principal and interest payments; and
(vi) expose the 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, the Fund may hold cash, sell investments or
temporarily borrow from banks or other lenders. If the Fund undertakes such
measures, the Fund’s ability to pay redemption proceeds in a timely manner may
be adversely affected, as well as the Fund’s performance.
If the Fund invests in a loan via a
participation, the 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 the Fund has to the
creditworthiness of the borrower.
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.
Risks of Mortgage-Related
Securities. The Fund can buy interests in pools of residential or commercial
mortgages in the form of “pass-through” mortgage securities. They may be issued
or guaranteed by the U.S. government, or its agencies and instrumentalities, or
by private issuers. The prices and yields of mortgage-related securities are
determined, in part, by assumptions about the rate of payments of the underlying
mortgages and are subject to the risks of unanticipated prepayment and extension
risks. Mortgage-backed securities are also subject to interest rate risk, and
the market for mortgage-backed securities may be volatile at times and may be
less liquid than the markets for other types of securities. Mortgage-related
securities issued by private issuers are not U.S. government securities, and are
subject to greater credit risks than mortgage-related securities that are U.S.
government securities. In addition, a substantial portion of the Fund’s assets
may be subject to “forward roll” transactions (also referred to as “mortgage
dollar rolls”) at any given time, which subject the Fund to the risk that market
value of the mortgage-related securities involved might decline, and that the
counterparty might default in its obligations.
3 Invesco
Investment Funds
Asset-Backed Securities Risk.
The Fund can buy asset-backed securities, which are fractional interests in
pools of loans and are collateralized by the loans, other assets or receivables.
They are typically issued by trusts and special purpose corporations that pass
the income from the underlying pool to the purchasers. These securities are
subject to the risk of default by the issuer as well as by the borrowers of the
underlying loans in the pool, and to interest rate and prepayment risks.
Risks of Foreign Investing.
Foreign securities are subject to special risks. Securities traded in
foreign markets may be less liquid and more volatile than those traded in U.S.
markets. Foreign issuers are usually not subject to the same accounting and
disclosure requirements that U.S. companies are subject to, which may make it
difficult for the Fund to evaluate a foreign company’s operations or financial
condition. A change in the value of a foreign currency against the U.S. dollar
will result in a change in the U.S. dollar value of investments denominated in
that foreign currency and in the value of any income or distributions the Fund
may receive on those investments. The value of foreign investments may be
affected by exchange control regulations, foreign taxes, higher transaction and
other costs, delays in the settlement of transactions, changes in economic or
monetary policy in the United States or abroad, expropriation or nationalization
of a company’s assets, or other political and economic factors. In addition, due
to the inter-relationship of global economies and financial markets, 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 the Fund to time-zone arbitrage risk. Foreign securities may trade
on weekends or other days when the Fund does not price its shares. As a result,
the value of the Fund’s net assets may change on days when you will not be able
to purchase or redeem the Fund’s shares. At times, the Fund may emphasize
investments in a particular country or region and may be subject to greater
risks from adverse events that occur in that country or region. Foreign
securities and foreign currencies held in foreign banks and securities
depositories may be subject to only limited or no regulatory oversight.
Risks of Developing and Emerging
Markets. Investments in developing and emerging markets are subject to all
the risks associated with foreign investing, however, these risks may be
magnified in developing and emerging markets. Developing or emerging market
countries may have less well-developed securities markets and exchanges that may
be substantially less liquid than those of more developed markets. Settlement
procedures in developing or emerging markets may differ from those of more
established securities markets, and settlement delays may result in the
inability to invest assets or to dispose of portfolio securities in a timely
manner. Securities prices in developing or emerging markets may be significantly
more volatile than is the case in more developed nations of the world, and
governments of developing or emerging market countries may also be more unstable
than the governments of more developed countries. Such countries’ economies may
be more dependent on relatively few industries or investors that may be highly
vulnerable to local and global changes. Developing or emerging market countries
also may be subject to social, political or economic instability. The value of
developing or emerging market countries’ currencies may fluctuate more than the
currencies of countries with more mature markets. Investments in developing or
emerging market countries may be subject to greater risks of government
restrictions, including confiscatory taxation, expropriation or 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. In addition, the ability of foreign entities
to participate in privatization programs of certain developing or emerging
market countries may be limited by local law. Investments in securities of
issuers in developing or emerging market countries may be considered
speculative.
Eurozone Investment Risks.
Certain of the regions in which the Fund may invest, including the European
Union (EU), currently experience significant financial difficulties. Following
the global economic crisis that
began in 2008, some of these countries
have depended on, and may continue to be dependent on, the assistance from
others such as the European Central Bank (ECB) or other governments or
institutions, and failure to implement reforms as a condition of assistance
could have a significant adverse effect on the value of investments in those and
other European countries. In addition, countries that have adopted the euro are
subject to fiscal and monetary controls that could limit the ability to
implement their own economic policies, and could voluntarily abandon, or be
forced out of, the euro. Such events could impact the market values of Eurozone
and various other securities and currencies, cause redenomination of certain
securities into less valuable local currencies, and create more volatile and
illiquid markets. Additionally, the United Kingdom’s intended departure from the
EU, commonly known as “Brexit,” may have significant political and financial
consequences for Eurozone markets, including greater market volatility and
illiquidity, currency fluctuations, deterioration in economic activity, a
decrease in business confidence and an increased likelihood of a recession in
the United Kingdom.
Risks of Small- and Mid-Cap Companies. Small-cap companies may be either established
or newer companies, including “unseasoned” companies that have typically been in
operation for less than three years. Mid-cap
companies are generally companies that have completed their initial start-up cycle, and in many cases have
established markets and developed seasoned market teams. While smaller companies
might offer greater opportunities for gain than larger companies, they also may
involve greater risk of loss. They may be more sensitive to changes in a
company’s earnings expectations and may experience more abrupt and erratic price
movements. Small- and mid-cap
companies’ securities may trade in lower volumes and it might be harder
for the Fund to dispose of its holdings at an acceptable price when it wants to
sell them. Small- and mid-cap companies
may not have established markets for their products or services and may have
fewer customers and product lines. They may have more limited access to
financial resources and may not have the financial strength to sustain them
through business downturns or adverse market conditions. 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. Small- and mid-cap companies may have unseasoned
management or less depth in management skill than larger, more established
companies. They may be more reliant on the efforts of particular members of
their management team and management changes may pose a greater risk to the
success of the business. It may take a substantial period of time before the
Fund realizes a gain on an investment in a small- or mid-cap company, if it realizes any gain at
all.
Risks of Commodity-Linked
Investments. Commodity-linked investments are considered speculative and
have substantial risks, including the risk of loss of a significant portion of
their principal value. Prices of commodities and commodity-linked investments
may fluctuate significantly over short periods due to a variety of factors,
including for example agricultural, economic and regulatory developments. These
risks may make commodity-linked investments more volatile than other types of
investments. The tax treatment of commodity-linked investments may be adversely
affected by changes in legislation, regulations or other legally binding
authority. If, as a result of any such adverse action, the income of the Fund
from certain commodity-linked derivatives was treated as non-qualifying income, the Fund might fail to
qualify as a regulated investment company and be subject to federal income tax
at the Fund level.
Risks of Investments In The Fund
’ s Wholly-Owned Subsidiary. The Subsidiary is not registered
under the Investment Company Act of 1940 and is not subject to its investor
protections (except as otherwise noted in this prospectus). As an investor in
the Subsidiary, the Fund does not have all of the protections offered to
investors by the Investment Company Act of 1940. However, the Subsidiary is
wholly-owned and controlled by the Fund and managed by the Adviser. Therefore,
the Fund’s ownership and control of the Subsidiary make it unlikely that the
Subsidiary would take actions contrary to the interests of the Fund or its
shareholders. In addition,
4 Invesco
Investment Funds
changes in the laws of the United
States and/or the Cayman Islands (where the Subsidiary is incorporated) could
result in the inability of the Fund and/or the Subsidiary to operate as
described in this prospectus and the SAI and could adversely affect the Fund.
Changes in the laws of the United States and/or the Cayman Islands could
adversely affect the performance of the Fund and/or the Subsidiary. For example,
the Cayman Islands currently does not impose certain taxes on exempted companies
like the Subsidiary, including income and capital gains tax, among others. If
Cayman Islands laws were changed to require such entities to pay Cayman Islands
taxes, the investment returns of the Fund would likely decrease.
Risks of Derivative Investments.
Derivatives may involve significant risks. Derivatives may be more volatile
than other types of investments, may require the payment of premiums, may
increase portfolio turnover, may be illiquid, and may not perform as expected.
Derivatives are subject to counterparty risk and the Fund may lose money on a
derivative investment if the issuer or counterparty fails to pay the amount due.
Some derivatives have the potential for unlimited loss, regardless of the size
of the Fund’s initial investment. As a result of these risks, the Fund could
realize little or no income or lose money from its investment, or a hedge might
be unsuccessful. In addition, pursuant to rules implemented under financial
reform legislation, certain over-the-counter derivatives are
required to be executed on a regulated market and/or cleared through a
clearinghouse. Entering into a derivative transaction with a clearinghouse may
entail further risks and costs.
Risks of Leverage. Leverage may
be created when an investment exposes the Fund to a risk of loss that exceeds
the amount invested. Certain derivatives and other investments provide the
potential for investment gain or loss that may be several times than the value
of the underlying security, index or other investment.
Performance Information
The bar chart and performance table
provide an indication of the risks of investing in the Fund. The Fund has
adopted the performance of the Oppenheimer Capital Income Fund (the predecessor
fund) as the result of a reorganization of the predecessor fund into the Fund,
which was consummated after the close of business on May 24, 2019 (the
“Reorganization”). Prior to the Reorganization, the Fund had not yet commenced
operations. The bar chart shows changes in the performance of the predecessor
fund from year to year as of December 31. The performance table compares the
predecessor fund’s performance to that of a broad measure of market performance
and additional indices with characteristics relevant to the Fund. For more
information on the benchmarks used see the “Benchmark Descriptions” section of
the prospectus. The Fund’s (and the predecessor fund’s) past performance (before
and after taxes) is not necessarily an indication of how the Fund will perform
in the future.
Class R6 shares’ returns shown for
periods ending on or prior to May 24, 2019 are those of the Class I shares
of the predecessor fund. Class I shares of the predecessor fund were reorganized
into Class R6 shares of the Fund after the close of business on May 24, 2019.
Class R6 shares’ returns of the Fund will be different from Class I shares’
returns of the predecessor fund as they have different expenses.
Class R5 shares of the Fund have less
than a calendar year of performance; therefore, the returns shown are those of
the Fund’s and predecessor fund’s Class A shares. Although the Class R5 shares
are invested in the same portfolio of securities, Class R5 shares’ returns of
the Fund will be different from Class A returns of the Fund and predecessor fund
as they have different expenses.
Updated performance information is
available on the Fund’s website at www.invesco.com/us.
Annual Total Returns
Class R6 shares year-to-date (ended
March 31, 2019): 6.18%
Best Quarter (ended September 30,
2018): 3.22%
Worst Quarter (ended December 31,
2018): -5.76%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Annual Total Returns
(for the periods ended December 31, 2018) |
|
|
|
1 Year
|
|
5 Years
|
|
10
Years |
|
Since
Inception |
Class R6 shares: Inception
(12/27/2013) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return Before Taxes
|
|
|
|
-3.76 |
%
|
|
|
|
3.15 |
%
|
|
|
|
— |
|
|
|
|
3.18 |
%
|
Return After Taxes on
Distributions |
|
|
|
-4.99 |
|
|
|
|
1.73 |
|
|
|
|
— |
|
|
|
|
1.76 |
|
Return After Taxes on
Distributions and Sale of Fund Shares |
|
|
|
-2.20
|
|
|
|
|
1.77 |
|
|
|
|
— |
|
|
|
|
1.80 |
|
Class R5 shares 1
: Inception (5/24/2019) |
|
|
|
-4.15
|
|
|
|
|
2.71 |
|
|
|
|
6.66 |
% |
|
|
|
— |
|
Russell 3000 ®
Index (reflects no deduction for fees, expenses or taxes)
(12/27/2013) |
|
|
|
-5.24
|
|
|
|
|
7.91 |
|
|
|
|
— |
|
|
|
|
7.98 |
|
Bloomberg Barclays U.S. Aggregate
Bond Index (reflects no deduction for fees, expenses or taxes)
(12/27/2013) |
|
|
|
0.01 |
|
|
|
|
2.52 |
|
|
|
|
— |
|
|
|
|
2.53 |
|
Custom Invesco Oppenheimer
Capital Income Index (reflects no deduction for fees, expenses or taxes)
(12/27/2013) |
|
|
|
-1.51
|
|
|
|
|
4.63 |
|
|
|
|
— |
|
|
|
|
4.66 |
|
1 |
Class R5
shares’ performance prior to the inception date is that of the predecessor
fund’s Class A shares at net asset value (NAV) and includes the 12b-1 fees
applicable to Class A shares. Class A shares’ performance reflects any
applicable fee waivers and/or expense reimbursements. The inception date
of the predecessor fund’s Class A shares is December 1, 1970.
|
After-tax returns are calculated using
the historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on
an investor’s tax situation and may differ from those shown, and after-tax
returns shown are not relevant to investors who hold their Fund shares through
tax-advantaged arrangements, such as 401(k) plans, 529 college savings plans or
individual retirement accounts. After-tax returns are shown for Class R6 shares
only and after-tax returns for other classes will vary.
Management of the Fund
Investment Adviser: Invesco Advisers,
Inc.
|
|
|
|
|
|
|
|
Portfolio Managers
|
|
Title
|
|
Length of Service on the Fund
|
Michelle Elena Borré Massick |
|
Portfolio
Manager (lead) |
|
2019 (predecessor fund 2009) |
Krishna Memani |
|
Portfolio
Manager |
|
2019 (predecessor fund 2009)
|
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.
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.
The minimum initial investment for all
other institutional investors 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
5 Invesco
Investment Funds
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’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
Web site for more information.
Inve sco Oppenheimer Developing Markets Fund
Investment Objective(s)
The Fund’s investment objective is to
seek capital appreciation.
Fees and Expenses of the Fund
This table describes the fees and
expenses that you may pay if you buy and hold shares of the Fund.
Investors may pay commissions and/or
other forms of compensation to an intermediary, such as a broker, for
transactions in Class R6 shares, which are not reflected in the table or
the Example below.
|
|
|
|
|
|
|
|
|
|
|
Shareholder Fees (fees
paid directly from your investment) |
|
Class:
|
|
R5
|
|
R6
|
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage of offering price) |
|
|
|
None |
|
|
|
|
None |
|
Maximum Deferred Sales Charge
(Load) (as a percentage of original purchase price or redemption proceeds,
whichever is less) |
|
|
|
None |
|
|
|
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Class:
|
|
R5
|
|
R6
|
Management Fees |
|
|
|
0.77 |
% |
|
|
|
0.77 |
% |
Distribution and/or Service (12b-1) Fees |
|
|
|
None |
|
|
|
|
None |
|
Other Expenses 1
|
|
|
|
0.13 |
|
|
|
|
0.08 |
|
Total Annual Fund Operating
Expenses 2
|
|
|
|
0.90 |
|
|
|
|
0.85 |
|
1 |
“Other
Expenses” are based on estimated amounts for the current fiscal year.
|
2 |
Invesco
Advisers, Inc. (Invesco or the Adviser) has contractually agreed to waive
advisory fees and/or reimburse expenses to the extent necessary to limit
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement (excluding certain items discussed in the statement of
additional information (SAI)) of Class R5 and Class R6 shares to
0.92% and 0.87%, respectively, of the Fund’s average daily net assets (the
“expense limits”) through at least May 28, 2021. During its term, the
fee waiver agreement cannot be terminated or amended to increase the
expense limits without approval of the Board of Trustees.
|
Example. This Example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds.
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 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Year
|
|
3 Years |
|
5 Years |
|
10 Years |
Class R5 |
|
|
$ |
92 |
|
|
|
$ |
287 |
|
|
|
$ |
498 |
|
|
|
$ |
1,108
|
|
Class R6 |
|
|
$ |
87 |
|
|
|
$ |
271 |
|
|
|
$ |
471 |
|
|
|
$ |
1,049
|
|
Portfolio Turnover. The Fund
pays transaction costs, such as commissions, when it buys and sells securities
(or “turns over” its portfolio). A higher portfolio turnover rate may indicate
higher transaction costs and may result in higher taxes when Fund shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the Example, affect the Fund’s performance. During the
most recent fiscal year, the predecessor fund’s (defined below) portfolio
turnover rate was 36% of the average value of its portfolio.
Principal Investment Strategies of the Fund
The Fund mainly invests in common
stocks of issuers in developing and emerging markets throughout the world and at
times it may invest up to 100% of its total assets in foreign securities. Under
normal market conditions, the Fund will invest at least 80% of its net assets,
plus borrowings for investment purposes, in equity securities of issuers whose
principal activities are in a developing market, i.e. are in a developing market
or are economically tied to a developing market country, and in derivatives and
other instruments that have economic characteristics similar to such securities.
The Fund will invest in at least three developing markets. The Fund focuses on
companies with above-average earnings growth.
In general, countries may be considered
developing or emerging markets if they are included in any one of the Morgan
Stanley Capital International (MSCI) emerging markets indices, classified as a
developing or emerging market, or classified under a similar or corresponding
classification, by organizations such as the World Bank and the International
Monetary Fund, or have economies, industries and stock markets with similar
characteristics. For purposes of the Fund’s investments, a determination that an
issuer is economically tied to a developing market country is based on factors
including, but not limited to, geographic location of its primary trading
markets, location of its assets, its domicile or its principal offices, or
whether it receives revenues from a developing market. Such a determination can
also be based, in whole or in part, on inclusion of an issuer or its securities
in an Index representative of developing or emerging markets.
The Fund may invest directly in certain
eligible China A Shares through Stock Connect (a securities trading and clearing
program designed to achieve mutual stock market access between the People’s
Republic of China (PRC) and Hong Kong), or, for operational efficiency and
regulatory considerations, through an investment in a private investment vehicle
organized under Delaware law that intends to invest significantly in China A
Shares and other securities available to certain qualified investors (the China
Fund). The China Fund’s managing member, OppenheimerFunds, has full and
exclusive discretionary authority to manage the day-to-day
operations of the China Fund and to invest its assets. The Fund’s
investment in the China Fund may vary based on the portfolio manager’s use of
different types of investments that provide exposure to Chinese securities
(through Stock Connect). Since the Fund may invest a portion of its assets in
the China Fund, the Fund may be considered to be investing indirectly in such
Chinese securities through the China Fund.
In selecting investments for the Fund,
the portfolio manager evaluates investment opportunities on a company-by-company
basis. This approach includes fundamental analysis of a company’s
financial statements, management record, and capital structure, operations,
product development, and competitive position in its industry. The portfolio
manager also looks for newer or established businesses that are entering into a
growth cycle, have the potential for accelerating earnings growth or cash flow,
and possess reasonable valuations. The portfolio manager considers the effect of
worldwide trends on the growth of particular business sectors and looks for
6 Invesco
Investment Funds
companies that may benefit from those
trends and seeks a diverse mix of industries and countries to help reduce the
risks of foreign investing, such as currency fluctuations and stock market
volatility. The portfolio manager may invest in growth companies of different
capitalization ranges in any developing market country. The portfolio manager
monitors individual issuers for changes in the factors above, which may trigger
a decision to sell a security.
Principal Risks of Investing in the Fund
As with any mutual fund investment,
loss of money is a risk of investing. An investment in the Fund is not a deposit
in a bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency. The risks associated with an
investment in the Fund can increase during times of significant market
volatility. The principal risks of investing in the Fund are:
Risks of Investing in Stocks.
The value of the Fund’s portfolio may be affected by changes in the stock
markets. Stock markets may experience significant short-term volatility and may
fall 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. 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-cap 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.
Industry and Sector Focus. At
times the Fund may increase the relative emphasis of its investments in a
particular industry or sector. The prices of stocks of issuers in a particular
industry or sector 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. To the
extent that the Fund increases the relative emphasis of its investments in a
particular industry or sector, its share values may fluctuate in response to
events affecting that industry or sector. To some extent that risk may be
limited by the Fund’s policy of not concentrating its investments in any one
industry.
Risks of Investing in China A
Shares. Investments in Class A Shares of Chinese companies involve
certain risks and special considerations not typically associated with
investments in U.S. companies, such as greater government control over the
economy, political and legal uncertainty, currency fluctuations or blockage, the
risk that the Chinese government may decide not to continue to support economic
reform programs and the risk of nationalization or expropriation of assets.
Additionally, the Chinese securities markets are emerging markets subject to the
special risks applicable to developing and emerging market countries described
elsewhere in this prospectus.
Risks of Investing in the China
Fund. The China Fund is not registered under the Investment Company Act of
1940. As an investor in the China Fund, the Fund does not have all of the
protections offered to investors by the Investment Company Act of 1940. However,
the China Fund is controlled by the Fund and managed by OppenheimerFunds.
Pursuant to an exemptive order granted on October 31, 2017 to the China
Fund by the SEC, the China Fund is required to comply with the substantive
requirements of a number of provisions of the Investment Company Act and the
regulations thereunder. Further, the China Fund may invest substantially all of
its assets in a limited number of issuers or a single issuer. To the extent that
it does so, the China Fund is more subject to the risks associated with
and developments affecting such issuers
than a fund that invests more widely.
Risks of Investing through Stock
Connect. The Fund may invest directly in China A shares through Stock
Connect, and will be subject to the following risks: sudden changes in quota
limitations, application of trading suspensions, differences in trading days
between the PRC and Stock Connect, operational risk, clearing and settlement
risk and regulatory and taxation risk.
Risks of Foreign Investing.
Foreign securities are subject to special risks. Securities traded in
foreign markets may be less liquid and more volatile than those traded in U.S.
markets. Foreign issuers are usually not subject to the same accounting and
disclosure requirements that U.S. companies are subject to, which may make it
difficult for the Fund to evaluate a foreign company’s operations or financial
condition. A change in the value of a foreign currency against the U.S. dollar
will result in a change in the U.S. dollar value of investments denominated in
that foreign currency and in the value of any income or distributions the Fund
may receive on those investments. The value of foreign investments may be
affected by exchange control regulations, foreign taxes, higher transaction and
other costs, delays in the settlement of transactions, changes in economic or
monetary policy in the United States or abroad, expropriation or nationalization
of a company’s assets, or other political and economic factors. In addition, due
to the inter-relationship of global economies and financial markets, 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 the Fund to time-zone arbitrage risk. Foreign securities may trade
on weekends or other days when the Fund does not price its shares. As a result,
the value of the Fund’s net assets may change on days when you will not be able
to purchase or redeem the Fund’s shares. At times, the Fund may emphasize
investments in a particular country or region and may be subject to greater
risks from adverse events that occur in that country or region. Foreign
securities and foreign currencies held in foreign banks and securities
depositories may be subject to only limited or no regulatory oversight.
Risks of Developing and Emerging
Markets. Investments in developing and emerging markets are subject to all
the risks associated with foreign investing, however, these risks may be
magnified in developing and emerging markets. Developing or emerging market
countries may have less well-developed securities markets and exchanges that may
be substantially less liquid than those of more developed markets. Settlement
procedures in developing or emerging markets may differ from those of more
established securities markets, and settlement delays may result in the
inability to invest assets or to dispose of portfolio securities in a timely
manner. Securities prices in developing or emerging markets may be significantly
more volatile than is the case in more developed nations of the world, and
governments of developing or emerging market countries may also be more unstable
than the governments of more developed countries. Such countries’ economies may
be more dependent on relatively few industries or investors that may be highly
vulnerable to local and global changes. Developing or emerging market countries
also may be subject to social, political or economic instability. The value of
developing or emerging market countries’ currencies may fluctuate more than the
currencies of countries with more mature markets. Investments in developing or
emerging market countries may be subject to greater risks of government
restrictions, including confiscatory taxation, expropriation or 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. In addition, the ability of foreign entities
to participate in privatization programs of certain developing or emerging
market countries may be limited by local law. Investments in securities of
issuers in developing or emerging market countries may be considered
speculative.
Eurozone Investment Risks.
Certain of the regions in which the Fund may invest, including the European
Union (EU), currently experience
7 Invesco
Investment Funds
significant financial difficulties.
Following the global economic crisis that began in 2008, some of these countries
have depended on, and may continue to be dependent on, the assistance from
others such as the European Central Bank (ECB) or other governments or
institutions, and failure to implement reforms as a condition of assistance
could have a significant adverse effect on the value of investments in those and
other European countries. In addition, countries that have adopted the euro are
subject to fiscal and monetary controls that could limit the ability to
implement their own economic policies, and could voluntarily abandon, or be
forced out of, the euro. Such events could impact the market values of Eurozone
and various other securities and currencies, cause redenomination of certain
securities into less valuable local currencies, and create more volatile and
illiquid markets. Additionally, the United Kingdom’s intended departure from the
EU, commonly known as “Brexit,” may have significant political and financial
consequences for Eurozone markets, including greater market volatility and
illiquidity, currency fluctuations, deterioration in economic activity, a
decrease in business confidence and an increased likelihood of a recession in
the United Kingdom.
Risks of Small- and Mid-Cap Companies. Small-cap companies may be either established
or newer companies, including “unseasoned” companies that have typically been in
operation for less than three years. Mid-cap
companies are generally companies that have completed their initial start-up cycle, and in many cases have
established markets and developed seasoned market teams. While smaller companies
might offer greater opportunities for gain than larger companies, they also may
involve greater risk of loss. They may be more sensitive to changes in a
company’s earnings expectations and may experience more abrupt and erratic price
movements. Small- and mid-cap
companies’ securities may trade in lower volumes and it might be harder
for the Fund to dispose of its holdings at an acceptable price when it wants to
sell them. Small- and mid-cap companies
may not have established markets for their products or services and may have
fewer customers and product lines. They may have more limited access to
financial resources and may not have the financial strength to sustain them
through business downturns or adverse market conditions. 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. Small- and mid-cap companies may have unseasoned
management or less depth in management skill than larger, more established
companies. They may be more reliant on the efforts of particular members of
their management team and management changes may pose a greater risk to the
success of the business. It may take a substantial period of time before the
Fund realizes a gain on an investment in a small- or mid-cap company, if it realizes any gain at
all.
Risks of Growth Investing. 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, its securities may
decline sharply. Growth companies may be newer or smaller companies that may
experience greater stock price fluctuations and risks of loss than larger, more
established companies. Newer growth companies tend to retain a large part of
their earnings for research, development or investments in capital assets.
Therefore, they may not pay any dividends for some time. 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. Growth stocks may also be more volatile than other securities
because of investor speculation.
Performance Information
The bar chart and performance table
provide an indication of the risks of investing in the Fund. The Fund has
adopted the performance of the Oppenheimer Developing Markets Fund (the
predecessor fund) as the result of a reorganization of the predecessor fund into
the Fund, which was consummated after the close of business on May 24, 2019 (the
“Reorganization”). Prior to the Reorganization, the Fund had not yet
commenced operations. The bar chart
shows changes in the performance of the predecessor fund from year to year as of
December 31. The performance table compares the predecessor fund’s performance
to that of a broad-based securities market benchmark. For more information on
the benchmark used see the “Benchmark Descriptions” section of the prospectus.
The Fund’s (and the predecessor fund’s) past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
Class R6 shares’ returns shown for
periods ending on or prior to May 24, 2019 are those of the Class I shares
of the predecessor fund. Class I shares of the predecessor fund were reorganized
into Class R6 shares of the Fund after the close of business on May 24, 2019.
Class R6 shares’ returns of the Fund will be different from Class I shares’
returns of the predecessor fund as they have different expenses.
Class R5 shares of the Fund have less
than a calendar year of performance; therefore, the returns shown are those of
the Fund’s and predecessor fund’s Class A shares. Although the Class R5 shares
are invested in the same portfolio of securities, Class R5 shares’ returns of
the Fund will be different from Class A returns of the Fund and predecessor fund
as they have different expenses.
Updated performance information is
available on the Fund’s website at www.invesco.com/us.
Annual Total Returns
Class R6 shares year-to-date (ended
March 31, 2019): 12.43%
Best Quarter (ended March 31, 2012):
14.94%
Worst Quarter (ended September 30,
2015): -17.23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Annual Total Returns
(for the periods ended December 31, 2018) |
|
|
|
1 Year
|
|
5 Years
|
|
10
Years |
|
Since
Inception |
Class R6 shares: Inception
(12/29/2011) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return Before Taxes
|
|
|
|
-11.79 |
%
|
|
|
|
1.13 |
%
|
|
|
|
— |
|
|
|
|
4.94 |
%
|
Return After Taxes on
Distributions |
|
|
|
-12.07 |
|
|
|
|
0.71 |
|
|
|
|
— |
|
|
|
|
4.53 |
|
Return After Taxes on
Distributions and Sale of Fund Shares |
|
|
|
-6.97
|
|
|
|
|
0.70 |
|
|
|
|
— |
|
|
|
|
3.72 |
|
Class R5 shares 1
: Inception (5/24/2019) |
|
|
|
-12.14
|
|
|
|
|
0.70 |
|
|
|
|
9.87 |
% |
|
|
|
— |
|
MSCI Emerging Markets Index (Net)
(reflects reinvested dividends net of withholding taxes, but reflects no
deductions for fees, expenses or other taxes) (12/29/2011) |
|
|
|
-14.58
|
|
|
|
|
1.65 |
|
|
|
|
— |
|
|
|
|
3.27 |
|
1 |
Class R5
shares’ performance prior to the inception date is that of the predecessor
fund’s Class A shares at net asset value (NAV) and includes the 12b-1 fees
applicable to Class A shares. Class A shares’ performance reflects any
applicable fee waivers and/or expense reimbursements. The inception date
of the predecessor fund’s Class A shares is November 18, 1996.
|
After-tax returns are calculated using
the historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on
an investor’s tax situation and may differ from those shown, and after-tax
returns shown are not relevant to investors who hold their Fund shares through
tax-advantaged arrangements, such as 401(k) plans, 529 college savings plans or
individual retirement accounts. After-tax returns are shown for Class R6 shares
only and after-tax returns for other classes will vary.
Management of the Fund
Investment Adviser: Invesco Advisers,
Inc.
|
|
|
|
|
|
|
|
Portfolio Manager
|
|
Title
|
|
Length of Service on the Fund
|
Justin Leverenz, CFA
|
|
Portfolio
Manager |
|
2019 (predecessor fund 2009)
|
8 Invesco
Investment Funds
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.
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.
The minimum initial investment for all
other institutional investors 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’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
Web site for more information.
Invesco O ppenheimer Emerging Markets
Innovators Fund
Investment Objective(s)
The Fund’s investment objective is to
seek capital appreciation.
Fees and Expenses of the Fund
This table describes the fees and
expenses that you may pay if you buy and hold shares of the Fund.
Investors may pay commissions and/or
other forms of compensation to an intermediary, such as a broker, for
transactions in Class R6 shares, which are not reflected in the table or
the Example below.
|
|
|
|
|
|
|
|
|
|
|
Shareholder Fees (fees
paid directly from your investment) |
|
Class:
|
|
R5
|
|
R6
|
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage of offering price) |
|
|
|
None |
|
|
|
|
None |
|
Maximum Deferred Sales Charge
(Load) (as a percentage of original purchase price or redemption proceeds,
whichever is less) |
|
|
|
None |
|
|
|
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
|
Class:
|
|
R5
|
|
R6
|
Management Fees |
|
|
|
1.15 |
% |
|
|
|
1.15 |
% |
Distribution and/or Service (12b-1) Fees |
|
|
|
None |
|
|
|
|
None |
|
Other Expenses 1
|
|
|
|
0.17 |
|
|
|
|
0.12 |
|
Acquired Fund Fees and Expenses
1
|
|
|
|
0.01 |
|
|
|
|
0.01 |
|
Total Annual Fund Operating
Expenses |
|
|
|
1.33 |
|
|
|
|
1.28 |
|
Fee Waiver and/or Expense
Reimbursement 2
|
|
|
|
0.03 |
|
|
|
|
0.03 |
|
Total Annual Fund Operating
Expenses After Fee Waiver and/or Expense Reimbursement |
|
|
|
1.30 |
|
|
|
|
1.25 |
|
1 |
“Other
Expenses” and “Acquired Fund Fees and Expenses” are based on estimated
amounts for the current fiscal year. |
2 |
Invesco
Advisers, Inc. (Invesco or the Adviser) has contractually agreed to waive
advisory fees and/or reimburse expenses to the extent necessary to limit
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement (excluding Acquired Fund Fees and Expenses and certain items
discussed in the statement of additional information (SAI)) of
Class R5 and Class R6 shares to 1.30% and 1.25%, respectively,
of the Fund’s average daily net assets (the “expense limits”) through at
least May 28, 2021. Invesco has also contractually agreed to waive a
portion of the Fund’s management fee in an amount equal to the net
management fee that Invesco earns on the Fund’s investments in certain
affiliated funds, which will have the effect of reducing the Acquired Fund
Fees and Expenses, through at least May 28, 2021. During their terms,
the fee waiver agreements cannot be terminated or amended to increase the
expense limits or reduce the advisory fee waiver without approval of the
Board of Trustees. |
Example. This Example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds.
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 R6 shares. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain equal to the
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement for the contractual period above and the Total Annual Fund
Operating Expenses thereafter.
Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Year
|
|
3 Years |
|
5 Years |
|
10 Years |
Class R5 |
|
|
$ |
132 |
|
|
|
$ |
415 |
|
|
|
$ |
723 |
|
|
|
$ |
1,596
|
|
Class R6 |
|
|
$ |
127 |
|
|
|
$ |
400 |
|
|
|
$ |
696 |
|
|
|
$ |
1,540
|
|
Portfolio Turnover. The Fund
pays transaction costs, such as commissions, when it buys and sells securities
(or “turns over” its portfolio). A higher portfolio turnover rate may indicate
higher transaction costs and may result in higher taxes when Fund shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the Example, affect the Fund’s performance. During the
most recent fiscal year, the predecessor fund’s (defined below) portfolio
turnover rate was 24% of the average value of its portfolio.
Principal Investment Strategies of the Fund
The Fund mainly invests in equity
securities of issuers in emerging and developing markets throughout the world.
Under normal market conditions, the Fund will invest at least 80% of its net
assets, plus borrowings for investment purposes, in equity securities of issuers
that are economically tied to an emerging market country and in derivatives and
other instruments that have economic characteristics similar to such securities.
For purposes of the 80% investment policy, the Fund considers an “emerging
market country” to be one whose economy or markets are generally considered
emerging or developing. The Fund typically invests in at least three emerging
market countries. At times, the Fund may invest up to 100% of its total assets
in securities of issuers in emerging and developing markets.
9 Invesco
Investment Funds
In general, countries may be considered
emerging or developing markets if they are included in any one of the Morgan
Stanley Capital Index (MSCI) emerging markets indices, classified as an emerging
or developing market, or classified under a similar or corresponding
classification, by organizations such as the International Monetary Fund, or
have economies, industries and stock markets with similar characteristics. For
purposes of the 80% investment policy discussed above, a determination that an
issuer is economically tied to an emerging market country is based on factors
including, but not limited to, geographic location of its primary trading
markets, location of its assets, its domicile or its principal offices, or
whether it receives revenues or profits from goods produced or sold from, or
investments made or services performed in, an emerging or developing market.
Such a determination can also be based, in whole or in part, on identification
of an issuer’s securities within an index or other listing indicating its
location in an emerging or developing market country.
The Fund may also invest in securities
of issuers in less-developed emerging market countries that are not included in
standard emerging market benchmarks or classifications and are traditionally
less accessible to investors or in the early stages of capital market or
economic development (such countries are commonly referred to as “frontier”
market countries). Frontier market countries generally have smaller economies
and less developed capital markets than traditional emerging and developing
market countries. Investments in issuers in frontier market countries are
included in the 80% of the Fund’s assets discussed in the investment policy
above.
The Fund seeks its investment objective
by focusing on investments in securities of companies in emerging or developing
markets that the Adviser believes are innovative in either, or a combination of,
their products, services, processes, business models, management, use of
technology, or approach to servicing geographic and consumer markets. The Fund
invests primarily in common stocks, but can also invest in other equity
securities, including preferred stocks, convertible securities, rights and
warrants. The Fund may buy securities of issuers of any size, any market
capitalization range and any industry or sector. Although the Fund can invest in
securities of companies of any size and any market capitalization range, because
innovative companies generally tend to have smaller market capitalizations, the
Fund anticipates that it will generally have greater exposure to small- and
mid-sized companies.
The Fund may invest directly in certain
eligible China A Shares through Stock Connect (a securities trading and clearing
program designed to achieve mutual stock market access between the People’s
Republic of China (PRC) and Hong Kong), or, for operational efficiency and
regulatory considerations, through an investment in a private investment vehicle
organized under Delaware law that intends to invest significantly in China A
Shares and other securities available to certain qualified investors (the China
Fund). The China Fund’s managing member, OppenheimerFunds, has full and
exclusive discretionary authority to manage the day-to-day
operations of the China Fund and to invest its assets. The Fund’s
investment in the China Fund may vary based on the portfolio managers’ use of
different types of investments that provide exposure to Chinese securities
(through Stock Connect). Since the Fund may invest a portion of its assets in
the China Fund, the Fund may be considered to be investing indirectly in such
Chinese securities through the China Fund.
In selecting investments for the Fund,
the Adviser evaluates investment opportunities on a company-by-company
basis. This approach includes fundamental analysis of a company’s
financial statements, management record, capital structure, operations, product
development, and competitive position in its industry. The portfolio managers
also look for newer or established businesses that are entering, or expected to
enter, into a growth cycle and have the potential for accelerating earnings
growth or cash flow. The portfolio managers consider the effect of worldwide
trends on the growth of particular business sectors and looks for companies that
may benefit from those trends and seeks a diverse mix of industries and
countries to help reduce the risks of foreign investing, such as currency
fluctuations and stock market volatility. The portfolio managers take a broad
view
that stretches across industries,
sectors, companies and a company’s operational functions, when considering
whether a company is deemed to be innovative. The portfolio managers monitor
individual issuers for changes in the factors above, which may trigger a
decision to sell a security. These factors may vary in particular cases and may
change over time.
Principal Risks of Investing in the Fund
As with any mutual fund investment,
loss of money is a risk of investing. An investment in the Fund is not a deposit
in a bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency. The risks associated with an
investment in the Fund can increase during times of significant market
volatility. The principal risks of investing in the Fund are:
Risks of Investing in Stocks.
The value of the Fund’s portfolio may be affected by changes in the stock
markets. Stock markets may experience significant short-term volatility and may
fall 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. 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-cap 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.
The Fund seeks to invest substantially
in the securities of companies that the Adviser believes are positioned for
competitive advantage, above-average earnings growth or otherwise benefitting
from opportunities in the global economy as a result of the perceived innovative
nature of each company with respect to either, or a combination of, its
products, services, processes, business models, management, use of technology,
or approach to servicing geographic and consumer markets. No assurance can be
made that a perceived innovation will result in the competitive advantage or
growth anticipated by the Adviser or that such competitive advantage or growth
may not be significantly delayed.
Industry and Sector Focus . At
times the Fund may increase the relative emphasis of its investments in a
particular industry or sector. The prices of stocks of issuers in a particular
industry or sector 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. To the
extent that the Fund increases the relative emphasis of its investments in a
particular industry or sector, its share values may fluctuate in response to
events affecting that industry or sector. To some extent that risk may be
limited by the Fund’s policy of not concentrating its investments in any one
industry.
Risks of Foreign Investing .
Foreign securities are subject to special risks. Securities traded in foreign
markets may be less liquid and more volatile than those traded in U.S. markets.
Foreign issuers are usually not subject to the same accounting and disclosure
requirements that U.S. companies are subject to, which may make it difficult for
the Fund to evaluate a foreign company’s operations or financial condition. A
change in the value of a foreign currency against the U.S. dollar will result in
a change in the U.S. dollar value of investments denominated in that foreign
currency and in the value of any income or distributions the Fund may receive on
those investments. The value of foreign investments may be affected by exchange
control regulations, foreign taxes, higher transaction and other costs, delays
in the settlement of transactions, changes in economic or monetary policy in the
United States or abroad, expropriation or nationalization of a company’s
10 Invesco
Investment Funds
assets, or other political and economic
factors. In addition, due to the inter-relationship of global economies and
financial markets, 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 the Fund to time-zone
arbitrage risk. Foreign securities may trade on weekends or other days when the
Fund does not price its shares. As a result, the value of the Fund’s net assets
may change on days when you will not be able to purchase or redeem the Fund’s
shares. At times, the Fund may emphasize investments in a particular country or
region and may be subject to greater risks from adverse events that occur in
that country or region. Foreign securities and foreign currencies held in
foreign banks and securities depositories may be subject to only limited or no
regulatory oversight.
Risks of Developing and Emerging
Markets . Investments in developing and emerging markets are subject to all
the risks associated with foreign investing, however, these risks may be
magnified in developing and emerging markets. Developing or emerging market
countries may have less well-developed securities markets and exchanges that may
be substantially less liquid than those of more developed markets. Settlement
procedures in developing or emerging markets may differ from those of more
established securities markets, and settlement delays may result in the
inability to invest assets or to dispose of portfolio securities in a timely
manner. Securities prices in developing or emerging markets may be significantly
more volatile than is the case in more developed nations of the world, and
governments of developing or emerging market countries may also be more unstable
than the governments of more developed countries. Such countries’ economies may
be more dependent on relatively few industries or investors that may be highly
vulnerable to local and global changes. Developing or emerging market countries
also may be subject to social, political or economic instability. The value of
developing or emerging market countries’ currencies may fluctuate more than the
currencies of countries with more mature markets. Investments in developing or
emerging market countries may be subject to greater risks of government
restrictions, including confiscatory taxation, expropriation or 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. In addition, the ability of foreign entities
to participate in privatization programs of certain developing or emerging
market countries may be limited by local law. Investments in securities of
issuers in developing or emerging market countries may be considered
speculative.
Frontier Market Risk. The risks
associated with investments in frontier market countries include all the risks
associated with investments in developing and emerging markets; however, these
risks are magnified for frontier market countries. As a result, investments in
companies in frontier market countries are generally subject to a higher risk of
loss than investments in companies in traditional emerging and developing market
countries due to less developed securities markets, different settlement
procedures, greater price volatility, less developed governments and economies,
more government restrictions, and the limited ability of foreign entities to
participate in certain privatization programs. Investments in companies
operating in frontier market countries are highly speculative in nature.
Eurozone Investment Risks .
Certain of the regions in which the Fund may invest, including the European
Union (EU), currently experience significant financial difficulties. Following
the global economic crisis that began in 2008, some of these countries have
depended on, and may continue to be dependent on, the assistance from others
such as the European Central Bank (ECB) or other governments or institutions,
and failure to implement reforms as a condition of assistance could have a
significant adverse effect on the value of investments in those and other
European countries. In addition, countries that have adopted the euro are
subject to fiscal and monetary controls that could limit the ability to
implement their own economic policies, and could voluntarily abandon, or be
forced out of, the euro. Such events could impact the market values of Eurozone
and
various other securities and
currencies, cause redenomination of certain securities into less valuable local
currencies, and create more volatile and illiquid markets. Additionally, the
United Kingdom’s intended departure from the EU, commonly known as “Brexit,” may
have significant political and financial consequences for Eurozone markets,
including greater market volatility and illiquidity, currency fluctuations,
deterioration in economic activity, a decrease in business confidence and an
increased likelihood of a recession in the United Kingdom.
Risks of Investing in China A
Shares. Investments in Class A Shares of Chinese companies involve
certain risks and special considerations not typically associated with
investments in U.S. companies, such as greater government control over the
economy, political and legal uncertainty, currency fluctuations or blockage, the
risk that the Chinese government may decide not to continue to support economic
reform programs and the risk of nationalization or expropriation of assets.
Additionally, the Chinese securities markets are emerging markets subject to the
special risks applicable to developing and emerging market countries described
elsewhere in this prospectus.
Risks of Investing in the China
Fund. The China Fund is not registered under the Investment Company Act of
1940. As an investor in the China Fund, the Fund does not have all of the
protections offered to investors by the Investment Company Act of 1940. Pursuant
to an exemptive order granted on October 31, 2017 to the China Fund by the
SEC, the China Fund is required to comply with the substantive requirements of a
number of provisions of the Investment Company Act and the regulations
thereunder. Further, the China Fund may invest substantially all of its assets
in a limited number of issuers or a single issuer. To the extent that it does
so, the China Fund is more subject to the risks associated with and developments
affecting such issuers than a fund that invests more widely.
Risks of Investing through Stock
Connect. The Fund may invest directly in China A shares through Stock
Connect, and will be subject to the following risks: sudden changes in quota
limitations, application of trading suspensions, differences in trading days
between the PRC and Stock Connect, operational risk, clearing and settlement
risk and regulatory and taxation risk.
Risks of Growth Investing . 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, its securities may
decline sharply. Growth companies may be newer or smaller companies that may
experience greater stock price fluctuations and risks of loss than larger, more
established companies. Newer growth companies tend to retain a large part of
their earnings for research, development or investments in capital assets.
Therefore, they may not pay any dividends for some time. 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. Growth stocks may also be more volatile than other securities
because of investor speculation.
Risks of Small- and Mid-Cap Companies . Small-cap companies may be either established
or newer companies, including “unseasoned” companies that have typically been in
operation for less than three years. Mid-cap
companies are generally companies that have completed their initial start-up cycle, and in many cases have
established markets and developed seasoned market teams. While smaller companies
might offer greater opportunities for gain than larger companies, they also may
involve greater risk of loss. They may be more sensitive to changes in a
company’s earnings expectations and may experience more abrupt and erratic price
movements. Small- and mid-cap
companies’ securities may trade in lower volumes and it might be harder
for the Fund to dispose of its holdings at an acceptable price when it wants to
sell them. Small- and mid-cap companies
may not have established markets for their products or services and may have
fewer customers and product lines. They may have more limited access to
financial resources and may not have the financial strength to sustain them
through business downturns or adverse market conditions.
11 Invesco
Investment Funds
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. Small- and mid-cap companies may have unseasoned
management or less depth in management skill than larger, more established
companies. They may be more reliant on the efforts of particular members of
their management team and management changes may pose a greater risk to the
success of the business. It may take a substantial period of time before the
Fund realizes a gain on an investment in a small- or mid-cap company, if it realizes any gain at
all.
Performance Information
The bar chart and performance table
provide an indication of the risks of investing in the Fund. The Fund has
adopted the performance of the Oppenheimer Emerging Markets Innovators Fund (the
predecessor fund) as the result of a reorganization of the predecessor fund into
the Fund, which was consummated after the close of business on May 24, 2019 (the
“Reorganization”). Prior to the Reorganization, the Fund had not yet commenced
operations. The bar chart shows changes in the performance of the predecessor
fund from year to year as of December 31. The performance table compares the
predecessor fund’s performance to that of a broad-based securities market
benchmark. For more information on the benchmark used see the “Benchmark
Descriptions” section of the prospectus. The Fund’s (and the predecessor fund’s)
past performance (before and after taxes) is not necessarily an indication of
how the Fund will perform in the future.
Class R6 shares’ returns shown for
periods ending on or prior to May 24, 2019 are those of the Class I shares
of the predecessor fund. Class I shares of the predecessor fund were reorganized
into Class R6 shares of the Fund after the close of business on May 24, 2019.
Class R6 shares’ returns of the Fund will be different from Class I shares’
returns of the predecessor fund as they have different expenses.
Class R5 shares of the Fund have less
than a calendar year of performance; therefore, the returns shown are those of
the Fund’s and predecessor fund’s Class A shares. Although the Class R5 shares
are invested in the same portfolio of securities, Class R5 shares’ returns of
the Fund will be different from Class A returns of the Fund and predecessor fund
as they have different expenses.
Updated performance information is
available on the Fund’s website at www.invesco.com/us.
Annual Total Returns
Class R6 shares year-to-date (ended
March 31, 2019): 14.08%
Best Quarter (ended March 31, 2017):
12.86%
Worst Quarter (ended September 30,
2015): -14.97%
|
|
|
|
|
|
|
|
|
|
|
Average Annual Total Returns
(for the periods ended December 31, 2018) |
|
|
|
1 Year
|
|
Since
Inception |
Class R6 shares: Inception
(6/30/2014) |
|
|
|
|
|
|
|
|
|
|
Return Before Taxes
|
|
|
|
-22.18 |
%
|
|
|
|
-1.92 |
%
|
Return After Taxes on
Distributions |
|
|
|
-22.18 |
|
|
|
|
-2.00 |
|
Return After Taxes on
Distributions and Sale of Fund Shares |
|
|
|
-13.13
|
|
|
|
|
-1.48
|
|
Class R5 shares 1
: Inception (5/24/2019) |
|
|
|
-22.44
|
|
|
|
|
-2.36
|
|
MSCI Emerging Markets Mid Cap
Index (Net) (reflects reinvested dividends net of withholding taxes, but
reflects no deductions for fees, expenses or other taxes) (6/30/2014)
|
|
|
|
-13.12
|
|
|
|
|
-0.49
|
|
1 |
Class R5
shares’ performance prior to the inception date is that of the predecessor
fund’s Class A shares at net asset value (NAV) and includes the 12b-1 fees
applicable to Class A |
|
shares. Class A shares’ performance reflects any applicable fee
waivers and/or expense reimbursements. The inception date of the
predecessor fund’s Class A shares is June 30, 2014.
|
After-tax returns are calculated using
the historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on
an investor’s tax situation and may differ from those shown, and after-tax
returns shown are not relevant to investors who hold their Fund shares through
tax-advantaged arrangements, such as 401(k) plans, 529 college savings plans or
individual retirement accounts. After-tax returns are shown for Class R6 shares
only and after-tax returns for other classes will vary.
Management of the Fund
Investment Adviser: Invesco Advisers,
Inc.
|
|
|
|
|
|
|
|
Portfolio Managers
|
|
Title
|
|
Length of Service on the Fund
|
Heidi Heikenfeld, CFA
|
|
Portfolio
Manager |
|
|
|
2019 (predecessor fund 2014) |
|
Justin Leverenz, CFA
|
|
Portfolio
Manager |
|
|
|
2019 (predecessor fund 2014) |
|
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.
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.
The minimum initial investment for all
other institutional investors 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’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
Web site for more information.
12 Invesco
Investment Funds
Investment Objective(s), Strategies, Risks
and Portfolio Holdings
Inve sco Oppenheimer Capital
Income Fund
Objective(s), Principal Investment Strategies and Risks
The Fund’s investment objective is to
seek total return. The Fund’s investment objective may be changed by the Board
of Trustees (the Board) without shareholder approval.
The following strategies and types of
investments are the ones that the Fund considers to be the most important in
seeking to achieve its investment objective and the following risks are those
the Fund expects its portfolio to be subject to as a whole.
Common Stock and Other Equity
Investments. Equity securities include common stock, preferred stock,
rights, warrants and certain securities that are convertible into common stock.
Equity investments may be exchange-traded or over-the-counter
securities.
The value of the 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 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 equity securities
generally do not all move in the same direction at the same time. 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-cap companies, growth or value stocks, or
stocks of companies in a particular industry) their share values may fluctuate
more in response to events affecting the market for that type of security.
|
∎
|
|
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.
|
|
∎
|
|
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. The dividends on preferred stock may be
cumulative (they remain a liability of the company until paid) or non-cumulative. The fixed dividend rate
of preferred stocks may cause their prices to behave more like those of
debt securities. If prevailing interest rates rise, the fixed dividend on
preferred stock may be less attractive, which may cause the price of
preferred stock to decline. |
|
∎
|
|
Warrants are
options to purchase equity securities at specific prices that are valid
for a specific period of time. Their prices do not necessarily move
parallel to the prices of the underlying securities, and can be more
volatile than the price of the underlying securities. If the market price
of the underlying security does not exceed the exercise price during the
life of the warrant, the warrant will expire worthless and any amount paid
for the warrant will be lost. The market for warrants may be very limited
and it may be difficult to sell a warrant promptly at an acceptable price.
Rights are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and
warrants have no voting rights, receive no dividends and have no rights
with respect to the assets of the issuer. |
|
∎
|
|
Convertible
securities can be converted into or exchanged for a set amount of common
stock of an issuer within a particular period of
|
|
|
time at a specified
price or according to a price formula. Convertible debt securities pay
interest and convertible preferred stocks pay dividends until they mature
or are converted, exchanged or redeemed. Some convertible debt securities
may be considered “equity equivalents” because of the feature that makes
them convertible into common stock. The conversion feature of convertible
securities generally causes the market value of convertible securities to
increase when the value of the underlying common stock increases, and to
fall when the stock price falls. The market value of a convertible
security reflects both its “investment value,” which is its expected
income potential, and its “conversion value,” which is its anticipated
market value if it were converted. If its conversion value exceeds its
investment value, the security will generally behave more like an equity
security, in which case its price will tend to fluctuate with the price of
the underlying common stock or other security. If its investment value
exceeds its conversion value, the security will generally behave more like
a debt security, in which case the security’s price will likely increase
when interest rates fall and decrease when interest rates rise.
Convertible securities may offer the Fund the ability to participate in
stock market movements while also seeking some current income. Convertible
securities may provide more income than common stock but they generally
provide less income than comparable non-convertible debt securities. Most
convertible securities will vary, to some extent, with changes in the
price of the underlying common stock and are therefore subject to the
risks of that stock. In addition, convertible securities may be subject to
the risk that the issuer will not be able to pay interest or dividends
when due, and their market value may change based on changes in the
issuer’s credit rating or the market’s perception of the issuer’s
creditworthiness. However, credit ratings of convertible securities
generally have less impact on the value of the securities than they do for
non-convertible debt securities.
Some convertible preferred stocks have a mandatory conversion feature or a
call feature that allows the issuer to redeem the stock on or prior to a
mandatory conversion date. Those features could diminish the potential for
capital appreciation on the investment. |
Small- and Mid-Cap Companies. Small-cap companies may be either established
or newer companies, including “unseasoned” companies that typically have been in
operation for less than three years. Mid-cap
companies are generally companies that have completed their initial start-up cycle, and in many cases have
established markets and developed seasoned market teams. While smaller companies
might offer greater opportunities for gain than larger companies, they also may
involve greater risk of loss. 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 the Fund to
dispose of its holdings at an acceptable price when it wants to sell them.
Small- and mid-cap companies may not
have established markets for their products or services and may have fewer
customers and product lines. They may have more limited access to financial
resources and may not have the financial strength to sustain them through
business downturns or adverse market conditions. 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. Smaller companies may have
unseasoned management or less depth in management skill than larger, more
established companies. They may be more reliant on the efforts of particular
members of their management team and management changes may pose a greater risk
to the success of the business. Securities of small, unseasoned companies may be
particularly volatile, especially in the short term, and may have very limited
13 Invesco
Investment Funds
liquidity in a declining market. 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 Fund measures the market
capitalization of an issuer at the time of investment. Because the relative
sizes of companies change over time as the securities market changes, the Fund’s
definition of what is a “small-cap,”
“mid-cap” or “large-cap” company may change over time as
well. After the Fund buys the security of an individual company, that company
may expand or contract and no longer fall within the designated capitalization
range. Although the Fund is not required to sell the securities of companies
whose market capitalizations have grown or decreased beyond the Fund’s
capitalization-range definition, it might sell some of those holdings to try to
adjust the dollar-weighted median capitalization of its portfolio. That might
cause the Fund to realize capital gains on an investment and could increase
taxable distributions to shareholders.
When the Fund invests in smaller
company securities that might trade infrequently, investors might seek to trade
Fund shares based on their knowledge or understanding of the value of those
securities (this is sometimes referred to as “price arbitrage”). If such price
arbitrage were successful, it might interfere with the efficient management of
the Fund’s portfolio and the Fund may be required to sell securities at
disadvantageous times or prices to satisfy the liquidity requirements created by
that activity. Successful price arbitrage might also dilute the value of fund
shares held by other shareholders.
Debt Securities. The Fund may
invest in debt securities, including: securities issued or guaranteed by the
U.S. government or its agencies and instrumentalities; or foreign sovereigns;
and foreign and domestic corporate bonds, notes and debentures. The Fund may
select debt securities for their income possibilities, capital appreciation or
to help cushion fluctuations in the value of its portfolio. Debt securities may
be subject to the following risks:
|
∎
|
|
Interest
Rate Risk. Interest rate risk is the risk that rising interest rates,
or an expectation of rising interest rates in the near future, will cause
the values of the Fund’s investments in debt securities to decline. The
values of debt securities usually change when prevailing interest rates
change. When interest rates rise, the values of outstanding debt
securities generally fall, and those securities may sell at a discount
from their face amount. Additionally, when interest rates rise, the
decrease in values of outstanding debt securities may not be offset by
higher income from new investments. When interest rates fall, the values
of already-issued debt securities generally rise and the Fund’s
investments in new securities may be at lower yields and may reduce the
Fund’s income. The values of longer-term debt securities usually change
more than the values of shorter-term debt securities when interest rates
change; thus, interest rate risk is usually greater for securities with
longer maturities or durations. “Zero-coupon” or “stripped” securities may
be particularly sensitive to interest rate changes. Risks associated with
rising interest rates are heightened given that interest rates in the U.S.
are near historic lows. Interest rate changes may have different effects
on the values of mortgage-related securities because of prepayment and
extension risks. |
|
∎
|
|
Duration
Risk. Duration is a measure of the price sensitivity of a debt
security or portfolio to interest rate changes. Duration risk is the risk
that longer-duration debt securities are more volatile and thus more
likely to decline in price, and to a greater extent, than shorter-duration
debt securities, in a rising interest-rate environment. “Effective
duration” attempts to measure the expected percentage change in the value
of a bond or portfolio resulting from a change in prevailing interest
rates. The change in the value of a bond or portfolio can be approximated
by multiplying its duration by a change in interest rates. For example, if
a bond has an effective duration of three years, a 1% increase in general
interest rates would be expected to cause the bond’s value to decline
about 3% while a 1% decrease in general interest rates would be expected
to cause the bond’s value to increase
|
|
|
3%. The duration of a
debt security may be equal to or shorter than the full maturity of a debt
security. |
|
∎
|
|
Credit
Risk. Credit risk is the risk that the issuer of a security might not
make interest and principal payments on the security as they become due.
U.S. government securities generally have lower credit risks than
securities issued by private issuers or certain foreign governments. If an
issuer fails to pay interest, the Fund’s income might be reduced, and if
an issuer fails to repay principal, the value of the security might fall
and the Fund could lose the amount of its investment in the security. The
extent of this risk varies based on the terms of the particular security
and the financial condition of the issuer. A downgrade in an issuer’s
credit rating or other adverse news about an issuer, for any reason, can
reduce the market value of that issuer’s securities.
|
|
∎
|
|
Credit
Spread Risk. Credit spread risk is the risk that credit spreads (i.e.,
the difference in yield between securities that is due to differences in
their credit quality) may increase when the market expects lower-grade
bonds to default more frequently. Widening credit spreads may quickly
reduce the market values of the Fund’s lower-rated and unrated securities.
Some unrated securities may not have an active trading market or may trade
less actively than rated securities, which means that the Fund might have
difficulty selling them promptly at an acceptable price.
|
|
∎
|
|
Extension
Risk. Extension risk is the risk that, if interest rates rise rapidly,
prepayments on certain debt securities may occur at a slower rate than
expected, and the expected maturity of those securities could lengthen as
a result. Securities that are subject to extension risk generally have a
greater potential for loss when prevailing interest rates rise, which
could cause their values to fall sharply. Extension risk is particularly
prevalent for a callable security where an increase in interest rates
could result in the issuer of that security choosing not to redeem the
security as anticipated on the security’s call date. Such a decision by
the issuer could have the effect of lengthening the debt security’s
expected maturity, making it more vulnerable to interest rate risk and
reducing its market value. |
|
∎
|
|
Reinvestment Risk. Reinvestment risk is the risk that when
interest rates fall, the Fund may be required to reinvest the proceeds
from a security’s sale or redemption at a lower interest rate. Callable
bonds are generally subject to greater reinvestment risk than non-callable bonds.
|
|
∎
|
|
Prepayment
Risk. Certain fixed-income securities (in particular mortgage-related
securities) are subject to the risk of unanticipated prepayment.
Prepayment risk is the risk that, when interest rates fall, the issuer
will redeem the security prior to the security’s expected maturity, or
that borrowers will repay the loans that underlie these fixed-income
securities more quickly than expected, thereby causing the issuer of the
security to repay the principal prior to expected maturity. The Fund may
need to reinvest the proceeds at a lower interest rate, reducing its
income. Securities subject to prepayment risk generally offer less
potential for gains when prevailing interest rates fall. If the Fund buys
those securities at a premium, accelerated prepayments on those securities
could cause the Fund to lose a portion of its principal investment. The
impact of prepayments on the price of a security may be difficult to
predict and may increase the security’s price volatility. Interest-only
and principal-only securities are especially sensitive to interest rate
changes, which can affect not only their prices but can also change the
income flows and repayment assumptions about those investments.
|
|
∎
|
|
Event
Risk. If an issuer of debt securities is the subject of a buyout, debt
restructuring, merger or recapitalization that increases its debt load, it
could interfere with its ability to make timely payments of interest and
principal and cause the value of its debt securities to fall.
|
Fixed-Income Market Risks. The
fixed-income securities market can be susceptible to unusual volatility and
illiquidity. Volatility and illiquidity may be
14 Invesco
Investment Funds
more pronounced in the case of
lower-rated and unrated securities. Liquidity can decline unpredictably in
response to overall economic conditions or credit tightening. Increases in
volatility and decreases in liquidity may be caused by a rise in interest rates
(or the expectation of a rise in interest rates), which are near historic lows
in the U.S. and in other countries. During times of reduced market liquidity,
the Fund may not be able to readily sell bonds at the prices at which they are
carried on the Fund’s books. If the Fund needed to sell large blocks of bonds to
meet shareholder redemption requests or to raise cash, those sales could further
reduce the bonds’ prices. An unexpected increase in Fund redemption requests
(including requests from shareholders who may own a significant percentage of
the Fund’s shares) which may be triggered by market turmoil or an increase in
interest rates, as well as other adverse market and economic developments, could
cause the Fund to sell its holdings at a loss or at undesirable prices and
adversely affect the Fund’s share price and increase the Fund’s liquidity risk,
Fund expenses and/or taxable distributions, if applicable. Similarly, the prices
of the Fund’s holdings could be adversely affected if an investment account
managed similarly to the Fund was to experience significant redemptions and that
account was required to sell its holdings at an inopportune time. The liquidity
of an issuer’s securities may decrease as a result of a decline in an issuer’s
credit rating, the occurrence of an event that causes counterparties to avoid
transacting with the issuer, or an increase in the issuer’s cash outflows, as
well as other adverse market and economic developments. A lack of liquidity or
other adverse credit market conditions may hamper the Fund’s ability to sell the
debt securities in which it invests or to find and purchase suitable debt
instruments.
Economic and other market developments
can adversely affect fixed-income securities markets in the United States,
Europe and elsewhere. At times, participants in debt securities markets may
develop concerns about the ability of certain issuers of debt securities to make
timely principal and interest payments, or they may develop concerns about the
ability of financial institutions that make markets in certain debt securities
to facilitate an orderly market. Those concerns may impact the market price or
value of those debt securities and may cause increased volatility in those debt
securities or debt securities markets, reducing the willingness of some lenders
to extend credit, and making it more difficult for borrowers to obtain financing
on attractive terms (or at all). Under some circumstances, as was the case
during the latter half of 2008 and early 2009, those concerns could cause
reduced liquidity in certain debt securities markets.
Following the financial crisis, the
Federal Reserve sought to stabilize the economy by keeping the federal funds
rate near zero percent. The Federal Reserve has also purchased large quantities
of securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities, pursuant to its monetary stimulus program known as
“quantitative easing.” As the Federal Reserve has completed the tapering of its
securities purchases pursuant to quantitative easing, it has recently raised
interest rates on multiple occasions, and continues to consider future raises to
the federal funds rate, there is a risk that interest rates may rise and cause
fixed-income investors to move out of fixed-income securities, which may also
increase redemptions in fixed-income mutual funds.
In addition, although the fixed-income
securities markets have grown significantly in the last few decades, regulations
and business practices have led some financial intermediaries to curtail their
capacity to engage in trading (i.e., “market making”) activities for certain
debt securities. As a result, dealer inventories of fixed-income securities,
which provide an indication of the ability of financial intermediaries to make
markets in fixed-income securities, are near historic lows relative to market
size. Because market makers help stabilize the market through their financial
intermediary services, further reductions in dealer inventories could have the
potential to decrease liquidity and increase volatility in the fixed-income
securities markets.
Credit Quality. The Fund can
invest in securities that are rated or unrated. “Investment-grade” securities
are those rated within the four highest rating categories by nationally
recognized statistical rating organizations such as
Moody’s Investors Service (Moody’s) or
S&P Global Ratings (S&P) (or, in the case of unrated securities,
determined by the investment adviser to be comparable to securities rated
investment-grade). “Below-investment-grade” securities are those that are rated
below those categories, which are also referred to as “junk bonds.” While
securities rated within the fourth highest category by S&P (meaning BBB+,
BBB or BBB-) or by Moody’s (meaning
Baa1, Baa2 or Baa3) are considered “investment-grade,” they have some
speculative characteristics. If two or more nationally recognized statistical
rating organizations have assigned different ratings to a security, the
investment adviser uses the highest rating assigned.
Credit ratings evaluate the expectation
that scheduled interest and principal payments will be made in a timely manner.
They do not reflect any judgment of market risk. Ratings and market value may
change from time to time, positively or negatively, to reflect new developments
regarding the issuer. Rating organizations might not change their credit rating
of an issuer in a timely manner to reflect events that could affect the issuer’s
ability to make timely payments on its obligations. In selecting securities for
its portfolio and evaluating their income potential and credit risk, the Fund
does not rely solely on ratings by rating organizations but evaluates business,
economic and other factors affecting issuers as well. Many factors affect an
issuer’s ability to make timely payments, and the credit risk of a particular
security may change over time. The investment adviser also may use its own
research and analysis to assess those risks. If a bond is insured, it will
usually be rated by the rating organizations based on the financial strength of
the insurer. The rating categories are described in an Appendix to the SAI.
Unrated Securities. Because the
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 the Fund might have
difficulty selling them promptly at an acceptable price.
In evaluating the credit quality of a
particular security, whether rated or unrated, the investment adviser will
normally take into consideration a number of factors such as, if applicable, the
financial resources of the issuer, the underlying source of funds for debt
service on a security, the issuer’s sensitivity to economic conditions and
trends, any operating history of the facility financed by the obligation, the
degree of community support for the financed facility, the capabilities of the
issuer’s management, and regulatory factors affecting the issuer or the
particular facility.
A reduction in the rating of a security
after the Fund buys it will not require the Fund to dispose of the security.
However, the investment adviser will evaluate such downgraded securities to
determine whether to keep them in the Fund’s portfolio.
Risks of Below-Investment-Grade
Securities. Below-investment-grade securities (also referred to as “junk
bonds”) generally have higher yields than investment-grade securities but also
have higher risk profiles. Below-investment-grade securities are considered to
be speculative and entail greater risk with respect to the ability of the issuer
to timely repay principal and pay interest or dividends in accordance with the
terms of the obligation and may have more credit risk than investment-grade
securities, especially during times of weakening economic conditions or rising
interest rates. These additional risks mean that the Fund may not receive the
anticipated level of income from these securities, and the Fund’s net asset
15 Invesco
Investment Funds
value may be affected by declines in
the value of below-investment-grade securities. The major risks of
below-investment-grade securities include:
|
∎
|
|
Prices of
below-investment-grade securities may be subject to extreme price
fluctuations, even under normal market conditions. Adverse changes in an
issuer’s industry and general economic conditions may have a greater
impact on the prices of below-investment-grade securities than on the
prices of investment-grade securities. |
|
∎
|
|
Below-investment-grade securities may be issued by less
creditworthy issuers and may be more likely to default than
investment-grade securities. Issuers of below-investment-grade securities
may have more outstanding debt relative to their assets than issuers of
investment-grade securities. Issuers of below-investment-grade securities
may be unable to meet their interest or principal payment obligations
because of an economic downturn, specific issuer developments, or the
unavailability of additional financing. |
|
∎
|
|
In the event
of an issuer’s bankruptcy, claims of other creditors may have priority
over the claims of the holders of below-investment-grade securities.
|
|
∎
|
|
Below-investment-grade securities may be less liquid than
investment-grade securities, even under normal market conditions. There
are fewer dealers in the below-investment-grade securities market and
there may be significant differences in the prices quoted by the dealers.
Because they are less liquid, judgment may play a greater role in valuing
certain of the Fund’s securities than is the case with securities trading
in a more liquid market. |
|
∎
|
|
Below-investment-grade securities typically contain redemption
provisions that permit the issuer of the securities containing such
provisions to redeem the securities at its discretion. If the issuer
redeems below-investment-grade securities, the Fund may have to invest the
proceeds in securities with lower yields and may lose income.
|
|
∎
|
|
Below-investment-grade securities markets may be more susceptible
to real or perceived adverse credit, economic, or market conditions than
investment-grade securities. |
The Fund can invest up to 40% of its
total assets in below-investment-grade securities. This restriction is applied
at the time of purchase and the Fund may continue to hold a security whose
credit rating has been downgraded or, in the case of an unrated security, after
the Fund’s investment adviser has changed its assessment of the security’s
credit quality. As a result, credit rating downgrades or other market
fluctuations may cause the Fund’s holdings of below-investment-grade securities
to exceed, at times significantly, this restriction for an extended period of
time. Credit rating downgrades of a single issuer or related similar issuers
whose securities the Fund holds in significant amounts could substantially and
unexpectedly increase the Fund’s exposure to below-investment-grade securities
and the risks associated with them, especially liquidity and default risk. If
the Fund has more than 40% of its total assets invested in
below-investment-grade securities, the investment adviser will not purchase
additional below-investment-grade securities until the level of holdings in
those securities no longer exceeds the restriction. Below-investment-grade
securities are subject to greater credit risks than investment-grade securities.
Industry and Sector Focus. At
times the Fund may increase the relative emphasis of its investments in a
particular industry or sector. The prices of securities of issuers in a
particular industry or sector 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.
To the extent that the Fund increases the relative emphasis of its investments
in a particular industry or sector, its share values may fluctuate in response
to events affecting that industry or sector. To some extent that risk may be
limited by the Fund’s policy of not concentrating its investments in any one
industry.
U.S. Government Securities. The
Fund may invest in securities issued or guaranteed by the U.S. government or its
agencies and instrumentalities. Some of those securities are directly issued by
the U.S. Treasury and are backed by the full faith and credit of the U.S.
government. “Full faith and
credit” means that the taxing power of
the U.S. government is pledged to the payment of interest and repayment of
principal on a security.
Some securities issued by U.S.
government agencies, such as Government National Mortgage Association
pass-through mortgage obligations (Ginnie Maes), are also backed by the full
faith and credit of the U.S. government. Others are supported only by the credit
of the agency that issued them (for example, obligations issued by the Federal
Home Loan Banks, “Fannie Mae” bonds issued by the Federal National Mortgage
Association and “Freddie Mac” obligations issued by the Federal Home Loan
Mortgage Corporation). In September 2008, the Federal Housing Finance Agency
placed the Federal National Mortgage Association and Federal Home Loan Mortgage
Corporation into conservatorship.
Mortgage-Related Securities. The
Fund can buy interests in pools of residential or commercial mortgages in the
form of “pass-through” mortgage securities. They may be issued or guaranteed by
the U.S. government, or its agencies and instrumentalities, or by private
issuers, such as corporations, banks, savings and loans, mortgage bankers and
other non-governmental issuers.
Mortgage-related securities may be issued in different series, each having
different interest rates and maturities. The prices and yields of
mortgage-related securities are determined, in part, by assumptions about the
rate of payments of the underlying mortgages and are subject to the risks of
unanticipated prepayment and extension risks. Mortgage-backed securities are
also subject to interest rate risk, and the market for mortgage-backed
securities may be volatile at times and may be less liquid than the markets for
other types of securities.
Mortgage-Related Government
Securities. Mortgage-related securities that are U.S. government securities
have collateral to secure payment of interest and principal. The collateral is
either in the form of mortgage pass-through certificates issued or guaranteed by
a U.S. agency or instrumentality or mortgage loans insured by a U.S. government
agency.
Mortgage-Related Private Issuer
Securities. Primarily these investments include multi-class debt or
pass-through certificates secured by mortgage loans, which may be issued by
private issuers. Private-issuer mortgage-backed securities may include loans on
residential or commercial properties. Mortgage-related securities, including
collateralized mortgage obligations (CMOs), issued by private issuers are not
U.S. government securities, making them subject to greater credit risks than
U.S. government securities. Private issuer securities are subject to the credit
risks of both the issuers and the underlying borrowers, although in some cases
they may be supported by insurance or guarantees.
Forward Rolls. The Fund can
enter into “forward roll” transactions (also referred to as “mortgage dollar
rolls”) with respect to mortgage-related securities. In this type of
transaction, the Fund sells a mortgage-related security to a buyer and
simultaneously agrees to repurchase a similar security at a later date at a set
price. During the period between the sale and the repurchase, the Fund will not
be entitled to receive interest and principal payments on the securities that
have been sold. The Fund will bear the risk that the market value of the
securities might decline below the price at which the Fund is obligated to
repurchase them or that the counterparty might default in its obligations.
A substantial portion of the Fund’s
assets may be subject to forward roll transactions at any given time.
Asset-Backed Securities.
Asset-backed securities are fractional interests in pools of loans,
receivables or other assets. They are issued by trusts or other special purpose
vehicles and are collateralized by the loans, receivables or other assets that
make up the pool. The trust or other issuer passes the income from the
underlying asset pool to the investor.
Neither the Fund nor the investment
adviser selects the loans, receivables or other assets that are included in the
pools or the collateral backing those pools. Asset-backed securities are subject
to interest rate risk and credit risk. These securities are subject to the risk
of default by the issuer as well as by the borrowers of the underlying loans in
the pool. Certain asset-backed securities are subject to prepayment and
extension risks.
16 Invesco
Investment Funds
Zero-Coupon and Stripped Securities.
Some of the debt securities the Fund may invest in are zero-coupon or stripped securities. They may
be issued by the U.S. government or private issuers. Zero-coupon securities pay
no interest prior to their maturity date or another specified date in the future
but are issued at a discount from their face value. Stripped securities are the
separate income or principal components of a debt security. One component might
receive all the interest and the other all the principal payments. The
securities that are entitled to only the principal payments may be sold at a
substantial discount from the market value of the initial security.
Zero-coupon and stripped securities are
particularly sensitive to changes in interest rates and may be subject to
greater price fluctuations as a result of interest rate changes than interest
bearing securities. The Fund may be required to pay a dividend of the imputed
income on a zero-coupon or
principal-only security at a time when it has not actually received the income.
The values of interest-only and principal-only securities are also very
sensitive to prepayments of underlying obligations. When prepayments tend to
fall, the timing of the cash flows to principal-only securities increases,
making them more sensitive to interest rates. The market for zero-coupon and stripped securities may be
limited, making it difficult for the Fund to value them or dispose of its
holdings quickly at an acceptable price.
Stapled Securities. The Fund may
invest in stapled securities to gain exposure to infrastructure companies. A
stapled security is comprised of two parts that cannot be separated from one
another: a unit of a trust and a share of a company. The resulting security is
influenced by both parts, and must be treated as one unit at all times, such as
when buying or selling a security. The value of stapled securities and the
income derived from them may be volatile. The listing of stapled securities on a
domestic or foreign exchange does not guarantee a liquid market for stapled
securities.
Special Considerations of Senior
Loans and Other Loans. The Fund may invest in loans, and in particular, in
floating rate loans (sometimes referred to as “adjustable rate loans”) that hold
(or in the judgment of the investment adviser, hold) a senior position in the
capital structure of U.S. and foreign corporations, partnerships or other
business entities that, under normal circumstances, allow them to have priority
of claim ahead of (or at least as high as) other obligations of a borrower in
the event of liquidation. These investments are referred to as “Senior Loans.”
Senior loans typically have higher
recoveries than other debt obligations that rank lower in the priority of
payments for a particular debtor, because in most instances they take preference
over those subordinated debt obligations, with respect to payment of interest
and principal, and over stock. However, the Fund is still subject to the risk
that the borrower under a loan will default on scheduled interest or principal
payments and that the assets of the borrower to which the Fund has recourse will
be insufficient to satisfy in full the payment obligations that the borrower has
to the Fund. The risk of default will increase in the event of an economic
downturn or, in the case of a floating rate loan, a substantial increase in
interest rates (because the cost of the borrower’s debt service will increase as
the interest rate on its loan is upwardly adjusted). The Fund may own a debt
obligation of a borrower that becomes, or is about to become, insolvent. The
Fund can also purchase debt obligations that are extended to a bankrupt entity
(so called debtor-in-possession or ‘DIP’
financing) or debt obligations that are issued in connection with a
restructuring of the borrower under bankruptcy laws.
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.
How the Fund Invests in Loans.
The Fund may invest in loans in one or more of three ways: the Fund may
invest directly in a loan by acting as an original lender; the Fund may invest
directly in a loan by purchasing a loan by an assignment; or the Fund may invest
indirectly in a loan by pur-
chasing a participation interest in a
loan. The Fund may also gain exposure to loans indirectly using certain
derivative instruments, which is described elsewhere in this prospectus.
Original Lender. The Fund can
invest in loans, generally “at par” (a price for the loan equal approximately to
100% of the funded principal amount of the loan, minus any original issue
discount) as an original lender. When the Fund is an original lender, it is
entitled to receive a return at the full interest rate for the loan.
Loan Assignments. The Fund may
also purchase a loan by assignment. In a loan assignment, the Fund typically
succeeds to the rights and obligations of the assigning lender under the loan
agreement and becomes a “lender” under the loan agreement, entitled to the same
rights (including, but not limited to, enforcement or set-off rights) that are available to lenders
generally. When the Fund buys an assignment, it may be required to pay a fee, or
cede a portion of the interest and fees that accrued prior to settlement of the
assignment, to the lender selling the assignment. Occasionally, the selling
lender pays a fee to the assignee. If the Fund assigns a loan, it may be
required to pass along to a buyer a portion of any interest and fees that the
Fund would otherwise be entitled to. In addition, the Fund may be required to
pay a transfer fee to the lending agent.
Participation Interests. The
Fund may invest in participation interests in loans. Participation interests
represent an undivided fractional interest in a loan. They are typically
purchased from banks or dealers that have made the loan or have become members
of the loan syndicate by purchasing the loan by assignment. When the Fund
invests in a loan via a participation, the participation seller remains the
lender of record under the loan agreement, and the Fund typically becomes the
beneficial owner of the loan, and is entitled to receive from the participation
seller any payments or other property or distributions received by the
participation seller from or on behalf of the borrower of the loan. When the
Fund buys a participation, it may be required to pay a fee, or cede a portion of
the interest and fees that accrued prior to settlement of the participation, to
the lender selling the participation. Occasionally, the selling lender pays a
fee to the participant. If the Fund sells a participation, it may be required to
pass along to a buyer a portion of any interest and fees that the Fund would
otherwise be entitled to.
Recourse. When the Fund invests
in loans as an original lender it will have direct recourse against the borrower
in the event of a failure to pay scheduled principal or interest. When it
purchases a loan by assignment, it typically succeeds to whatever rights the
assigning lender had under the loan agreement, and will therefore be entitled to
the same rights (including, but not limited to, enforcement or set-off rights) that are available to lenders
generally. When the Fund buys a participation interest, it assumes the credit
risk of the borrower and the counterparty risk of the lender selling the
participation interest (and, in certain circumstances, such lender’s credit
risk), and the terms of the participation may not entitle the Fund to all rights
of a direct lender under the loan (for example, with respect to consent, voting
or enforcement rights). Therefore, the 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
the Fund invests in a loan via a participation, the Fund generally will have no
right of direct recourse against the borrower or ability to otherwise directly
enforce the terms of the loan agreement.
Investments in Pooled Investment
Entities that Invest in Loans. The Fund can also buy interests in trusts and
other pooled entities (including other investment companies) that invest
primarily or exclusively in loan obligations, including entities sponsored or
advised by the Adviser or an affiliate. The Fund will be subject to the pooled
entity’s credit risks as well as the credit risks of the underlying loans. The
loans underlying these investments may include loans to foreign or U.S.
borrowers, may be collateralized or uncollateralized and may be rated
investment-grade or below-investment-grade or may be unrated. These investments
are subject to the risk of default by the borrower, interest rate and prepayment
risk, as well as credit risks of the pooled entity that holds the loan
obligations.
17 Invesco
Investment Funds
Interest Rates and Floating or
Adjustable Rate Loans. The loans in which the Fund invests typically have
floating or adjustable interest rates. For that reason, the Adviser expects that
when interest rates change, the values of these floating rate loans will
fluctuate less than the values of fixed-rate debt securities, and that the net
asset values of the Fund’s shares will fluctuate less than the shares of funds
that invest mainly in fixed-rate debt obligations. However, the interest rates
of some floating rate loans adjust only periodically. Between the times that
interest rates on floating rate loans adjust (which is most often quarterly, but
may be monthly, every six months, or some other period), the interest rates on
those floating rate loans may not correlate to prevailing interest rates. That
will affect the value of the loans and may cause the net asset values of the
Fund’s shares to fluctuate.
The base rate usually is a benchmark
that “floats” or changes to reflect current interest rates, such as the prime
rate offered by one or more major U.S. banks (referred to as the “Prime Rate”).
The applicable rate is defined in the
loan agreement. Borrowers tend to select the base lending rate that results in
the lowest interest cost, and the benchmark selected by a borrower for its loans
may change from time to time (but the benchmark selected for a particular loan
will remain the same for the life of that loan). If the benchmark interest rate
on a floating rate loan changes, the rate payable to lenders under the floating
rate loan will, in turn, change at the next scheduled adjustment date. If the
benchmark rate increases, the Fund would earn interest at a higher rate on that
floating rate loan after the next scheduled adjustment date. If the benchmark
rate decreases, the Fund would earn interest at a lower rate on that floating
rate loan after the next scheduled adjustment date.
The Fund may use interest rate swap
agreements and other hedging practices to mitigate fluctuations in value when
the interest rate under the loan is periodically reset.
The Fund may invest in loans having a
fixed rate of interest; however, it is unlikely to do so because fixed rate
loans are uncommon in the loan market generally.
Prepayment. The Fund has no
limits as to the maturity of loans it may purchase. Senior Loans in general have
a stated term of between five and seven years, and other types of loans in which
the Fund may invest may have shorter or longer maturities. Notwithstanding their
stated maturity, loans may be prepaid prior to their stated terms for reasons
including, but not limited to, high market demand for loans, refinancing by the
borrower, mandatory prepayment requirements or desire of the borrower to repay
outstanding debt. If a borrower prepays a loan, the Fund will have to reinvest
the proceeds in other loans or financial assets that may pay lower rates of
return. However, any prepayment and facility fees the Fund receives may help
reduce any adverse impact on the Fund’s yield. Because the interest rates on
floating rate loans adjust periodically, the Adviser believes that the Fund
should generally be able to reinvest prepayments in floating rate loans that
have yields similar to those that have been prepaid.
Subordination. Senior loans
typically hold the most senior position in a borrower’s capital structure. They
may include loans that hold the most senior position alone, loans that hold an
equal ranking with other senior debt, or loans that are, in the judgment of the
Adviser, in the category of senior debt of the borrower. Borrowers typically are
required contractually to pay the holders of senior loans before they pay the
holders of subordinated debt and preferred or common shareholders and give the
holders of senior secured loans a claim on some or all of the borrower’s assets
that is senior to that of subordinated debt, preferred stock and common stock of
the borrower in the event that the borrower defaults or becomes bankrupt. Senior
loans are subject to the risk that a court could subordinate a senior loan to
presently existing or future indebtedness or take other action detrimental to
the holders of senior loans.
That senior position in the borrower’s
capital structure typically gives the holders of senior loans a claim on some or
all of the borrower’s assets that is senior to that of subordinated debt,
preferred stock and common stock of the borrower in the event that the borrower
defaults or becomes bankrupt.
This means in the event the assets of
the borrower are insufficient in value to satisfy all its creditors, senior debt
will be satisfied in priority to debt that is subordinate to senior debt.
Lien Position. Loans that are
collateralized may have multiple lenders or other creditors that take different
lien positions. While second lien loan positions generally are subject to
similar risks as those associated with investments in first lien loan positions,
second lien loan positions have the additional risk that if the borrower
defaults on its obligations under the loan and the loan creditors enforce their
security interest or if the borrower becomes bankrupt, the secured claims of the
creditors in the first lien position will be satisfied prior to the secured
claims of the creditors in the second lien position. If the cash flow and assets
of the borrower are insufficient to satisfy both the first lien loans and the
second lien loans in full, the creditors in the second lien position may not be
satisfied in full. If a loan has first and second lien positions, typically the
Fund will invest in the first lien position; however, it may invest in the
second lien position. Second lien positions generally pay a higher margin than
first lien positions to compensate second lien creditors for the greater risk
they assume.
Collateral. Loans may be fully
collateralized with one or more of (1) working capital assets, such as
accounts receivable and inventory, (2) tangible fixed assets, such as real
property, buildings and equipment, (3) intangible assets such as trademarks
or patents, or (4) shares of stock of the borrower or its subsidiaries or
affiliates. A loan agreement may or may not require the borrower to pledge
additional collateral to secure a loan if the value of the initial collateral
declines, or if additional assets are acquired by the borrower. Collateral may
consist of assets that may not be readily liquidated, and there is no assurance
that the liquidation of those assets would satisfy a borrower’s obligations
under a loan in full. A borrower’s subsidiaries, affiliates, shareholders or
owners may provide collateral in the form of secured guarantees and/or security
interests in assets that they own. However, the value of the collateral may
decline after the Fund invests in the loan, particularly if the collateral
consists of equity securities of the borrower or its subsidiaries or affiliates.
If a borrower defaults, insolvency laws
may limit the Fund’s access to the collateral, or the lenders may be unable to
liquidate the collateral. A bankruptcy court might find that the lenders’
security interest or their enforcement of their security under the loan to be
invalid, or a bankruptcy court may require the borrower to use the collateral to
pay other outstanding obligations prior to satisfying the lenders in full. If
the collateral consists of stock of the borrower or its subsidiaries, the stock
may lose all of its value in the event of a bankruptcy, which would leave the
Fund exposed to greater potential loss. In addition, in the event of a borrower
default on a collateralized loan, the Fund may receive assets other than cash or
securities in full or partial satisfaction of the borrower’s obligation under
the loan. Those assets may be illiquid, and the Fund might not be able to
realize the benefit of the assets for legal, practical or other reasons. The
Fund might hold those assets until the Adviser determines it is appropriate to
dispose of them. If the collateral becomes illiquid or loses some or all of its
value, the collateral may not be sufficient in value to compensate the Fund in
full in the event of a default of scheduled interest or principal payments.
The Fund can invest in loans that are
not secured by any specific collateral of the borrower. If the borrower is
unable to pay interest or defaults in the payment of principal, there will be no
collateral on which the Fund can foreclose. Therefore, these loans present
greater risks than collateralized loans because the recourse of the Fund to the
borrower’s assets in the case of a default would be as a general unsecured
creditor.
Highly Leveraged Transactions and
Insolvent Borrowers. The Fund can invest in loans made in connection with
highly leveraged transactions. These transactions may include operating loans,
leveraged buyout loans, leveraged capitalization loans and other types of
acquisition financing. Those loans are subject to greater credit risks than
other loans. Highly leveraged loans and loans in default also may be less liquid
than other
18 Invesco
Investment Funds
loans. If the Fund voluntarily or
involuntarily sold those types of loans, it might not receive the full value it
expected.
The Fund can also invest in loans of
borrowers that are experiencing, or are likely to experience, financial
difficulty. In addition, the Fund can invest in loans of borrowers that have
filed for bankruptcy protection or that have had involuntary bankruptcy
petitions filed against them by creditors. Various laws enacted for the
protection of debtors may apply to loans. A bankruptcy proceeding against a
borrower could delay or limit the ability of the Fund to collect the principal
and interest payments on that borrower’s loans. If a lawsuit is brought by
creditors of a borrower under a loan, a court or a trustee in bankruptcy could
take certain actions that would be adverse to the Fund.
Restrictive Loan Covenants.
Borrowers must comply with various restrictive covenants typically contained
in loan agreements. They may include restrictions on dividend payments and other
distributions to stockholders, provisions requiring the borrower to maintain
specific financial ratios, and limits on total debt. They may include
requirements that the borrower prepay the loan with any free cash flow. A break
of a covenant that is not waived by the agent bank (or the lenders) is normally
an event of default that provides the agent bank or the lenders the right to
call the outstanding amount on the loan. If a lender accelerates the repayment
of a loan because of the borrower’s violation of a restrictive covenant under
the loan agreement, the borrower might default in payment of the loan.
Limited Secondary Market for Loans.
Due to restrictions on transfers in loan agreements and the nature of the
private syndication of loans, some loans are not as easily purchased or sold as
publicly-traded securities. As a result, some loans are illiquid, which means
that the Fund may be limited in its ability to sell those loans at an acceptable
price when it wants to in order to generate cash, avoid losses or to meet
repurchase requests. The market for illiquid financial assets is more volatile
than the market for liquid securities and it may be more difficult to obtain
accurate valuations for the Fund’s investments.
Possible Limited Availability of
Loans. Direct investments in loans and, to a lesser degree, investments in
participation interests in or assignments of loans may be limited. The limited
availability may be due to a number of factors. Direct lenders may allocate only
a small number of loans to new investors, including the Fund. There may be fewer
loans available for investment that meet the Fund’s credit standards,
particularly in times of economic downturns. Also, lenders or agents may have an
incentive to market the less desirable loans to investors such as the Fund while
retaining attractive loans for themselves. This would reduce the amount of
attractive investments for the Fund. If market demand for loans increases, the
interest paid by loans that the Fund holds may decrease.
Delayed Settlement. Compared to
securities and to certain other types of financial assets, purchases and sales
of loans take relatively longer to settle. This is partly due to the nature of
loans, which require a written assignment agreement and various ancillary
documents for each transfer, and frequently require discretionary consents from
both the borrower and the administrative agent. In addition, dealers frequently
insist on matching their purchases and sales, which can lead to delays in the
Fund’s settlement of a purchase or sale in circumstances where the dealer’s
corresponding transaction with another party is delayed. Dealers will also
sometimes sell loans short, and hold their trades open for an indefinite period
while waiting for a price movement or looking for inventory to purchase. This
extended settlement process can (i) increase the counterparty credit risk
borne by the Fund; (ii) leave the Fund unable to timely vote, or otherwise
act with respect to, loans it has agreed to purchase; (iii) delay the Fund
from realizing the proceeds of a sale of a loan; (iv) inhibit the Fund’s
ability to re-sell a loan that it has
agreed to purchase if conditions change (leaving the Fund more exposed to price
fluctuations); (v) prevent the Fund from timely collecting principal and
interest payments; and (vi) expose the 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, the
Fund may hold cash,
sell investments or temporarily borrow
from banks or other lenders. If the Fund undertakes such measures, the Fund’s
ability to pay redemption proceeds in a timely manner, as well as the Fund’s
performance, may be adversely affected.
Credit Quality Standards for Loans.
Rating organizations, such as S&P or Moody’s, rate debt obligations by
rating the issuer, after evaluating the issuer’s financial soundness. Generally,
the lower the investment rating, the more risky the investment. Debt securities
rated below “BBB-” by S&P or “Baa3”
by Moody’s are commonly referred to as “high risk” securities or, in the case of
bonds, “junk bonds.” Loans rated “B” are below investment grade and are regarded
by rating organizations as predominantly speculative with respect to the
borrower’s ability to repay interest and principal when due over a long period.
While securities rated Baa by Moody’s or BBB by S&P are considered to be
“investment grade,” they have some speculative characteristics. The Fund may
invest in loans that are rated both investment grade and below-investment grade
by different rating organizations. An appendix to the Fund’s SAI includes the
definitions of the rating categories of the principal rating organizations.
Many loans are not rated by rating
organizations. The lack of a rating does not necessarily imply that a loan is of
lesser investment quality.
While the Fund expects to have access
to financial and other information regarding the borrower that has been made
available to the lenders under a loan, it may not have such information in
connection with participation interests and certain loan assignments.
Additionally, the amount of public information available with respect to loans
generally will be less extensive than what is available for exchange-listed or
otherwise registered securities.
The Adviser will normally seek to avoid
receiving material, non-public
information about the issuers of loans being considered for acquisition
by the Fund or held in the Fund’s portfolio. The Adviser’s decision not to
receive material, non-public
information under normal circumstances may place the Fund at a
disadvantage relative to other investors in loans, and could adversely affect
the Fund’s investment performance. In certain cases, the Adviser may
nevertheless receive material, non-public
information regarding loans, and its ability to trade in such loans for
the account of the Fund could potentially be limited by its possession of such
information. Such limitations on the Adviser’s ability to trade could have an
adverse effect on the Fund by, for example, preventing the Fund from selling a
loan that is experiencing a material decline in value. In some instances, these
trading restrictions could continue in effect for a substantial period of time.
Foreign Investing. The Fund can
buy securities issued by companies or governments in any country, including in
developing or emerging market countries.
Risks of Foreign Investing.
Securities traded in foreign markets often involve special risks not present
in U.S. investments that can increase the chances the Fund will lose money.
Additional information regarding certain of the risks associated with foreign
investing is provided below.
|
∎
|
|
Foreign
Market Risk. If there are fewer investors in a particular foreign
market, securities traded in that market may be less liquid and more
volatile than U.S. securities and more difficult to price. Foreign markets
may also be subject to delays in the settlement of transactions and
difficulties in pricing securities. If the Fund is delayed in settling a
purchase or sale transaction, it may not receive any return on the
invested assets or it may lose money if the value of the security
declines. It may also be more expensive for the Fund to buy or sell
securities in certain foreign markets than in the United States, which may
increase the Fund’s expense ratio. |
|
∎
|
|
Foreign
Economy Risk. Foreign economies may be more vulnerable to political or
economic changes than the U.S. economy. They may be more concentrated in
particular industries or may rely on particular resources or trading
partners to a greater extent. Certain foreign economies may be adversely
affected by shortages of investment capital or by high rates of inflation.
Changes in economic or monetary |
19 Invesco
Investment Funds
|
|
policy in the U.S. or
abroad may also have a greater impact on the economies of certain foreign
countries. |
|
∎
|
|
Foreign
Governmental and Regulatory Risks. Foreign companies may not be
subject to the same accounting and disclosure requirements as U.S.
companies. As a result there may be less accurate information available
regarding a foreign company’s operations and financial condition. Foreign
companies may be subject to capital controls, nationalization, or
confiscatory taxes. There may be less government regulation of foreign
issuers, exchanges and brokers than in the United States. Some countries
also have restrictions that limit foreign ownership and may impose
penalties for increases in the value of the Fund’s investment. The value
of the Fund’s foreign investments may be affected if it experiences
difficulties in enforcing legal judgments in foreign courts.
|
|
∎
|
|
Foreign
Currency Risk. A change in the value of a foreign currency against the
U.S. dollar will result in a change in the U.S. dollar value of securities
denominated in that foreign currency. If the U.S. dollar rises in value
against a foreign currency, a security denominated in that currency will
be worth less in U.S. dollars and if the U.S. dollar decreases in value
against a foreign currency, a security denominated in that currency will
be worth more in U.S. dollars. The dollar value of foreign investments may
also be affected by exchange controls. Foreign currency exchange
transactions may impose additional costs on the Fund. The Fund can also
invest in derivative instruments linked to foreign currencies. The change
in value of a foreign currency against the U.S. dollar will result in a
change in the U.S. dollar value of derivatives linked to that foreign
currency. The investment adviser’s selection of foreign currency
denominated investments may not perform as expected. Currency derivative
investments may be particularly volatile and subject to greater risks than
other types of foreign-currency denominated investments.
|
|
∎
|
|
Foreign
Custody Risk. There may be very limited regulatory oversight of
certain foreign banks or securities depositories that hold foreign
securities and foreign currency and the laws of certain countries may
limit the ability to recover such assets if a foreign bank or depository
or their agents goes bankrupt. There may also be an increased risk of loss
of portfolio securities. |
|
∎
|
|
Time Zone
Arbitrage. If the Fund invests a significant amount of its assets in
foreign securities, it may be exposed to “time-zone arbitrage” attempts by
investors seeking to take advantage of differences in the values of
foreign securities that might result from events that occur after the
close of the foreign securities market on which a security is traded and
before the close of the New York Stock Exchange that day, when the Fund’s
net asset value is calculated. If such time zone arbitrage were
successful, it might dilute the interests of other shareholders. However,
the Fund’s use of “fair value pricing” under certain circumstances, to
adjust the closing market prices of foreign securities to reflect what the
investment adviser and the Board believe to be their fair value, may help
deter those activities. |
|
∎
|
|
Globalization Risks. The growing inter-relationship of
global economies and financial markets has increased the effect of
conditions in one country or region on issuers of securities in a
different country or region. In particular, the adoption or prolongation
of protectionist trade policies by one or more countries, changes in
economic or monetary policy in the United States or abroad, or a slowdown
in the U.S. economy, could lead to a decrease in demand for products and
reduced flows of capital and income to companies in other countries.
|
|
∎
|
|
Regional
Focus. At times, the Fund might increase the relative emphasis of its
investments in a particular region of the world. Securities of issuers in
a region might be affected by changes in economic conditions or by changes
in government regulations, availability of basic resources or supplies, or
other events that affect that region more than others. If the Fund has a
greater emphasis on investments in a particular region, it may be subject
to greater risks from adverse |
|
|
events that occur in
that region than a fund that invests in a different region or that is more
geographically diversified. Political, social or economic disruptions in
the region may adversely affect the values of the Fund’s holdings.
|
Risks of Developing and Emerging
Markets. Investments in developing and emerging market countries are subject
to all the risks associated with foreign investing, however, these risks may be
magnified in developing and emerging markets. Investments in securities of
issuers in developing or emerging market countries may be considered
speculative. Additional information regarding certain of the risks associated
with investing in developing and emerging markets is provided below.
|
∎
|
|
Less
Developed Securities Markets. Developing or emerging market countries
may have less well-developed securities markets and exchanges.
Consequently they have lower trading volume than the securities markets of
more developed countries and may be substantially less liquid than those
of more developed countries. |
|
∎
|
|
Transaction Settlement. Settlement procedures in developing
or emerging markets may differ from those of more established securities
markets, and settlement delays may result in the inability to invest
assets or to dispose of portfolio securities in a timely manner. As a
result there could be subsequent declines in the 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. |
|
∎
|
|
Price
Volatility. Securities prices in developing or emerging markets may be
significantly more volatile than is the case in more developed nations of
the world, which may lead to greater difficulties in pricing securities.
|
|
∎
|
|
Less
Developed Governments and Economies. The governments of developing or
emerging market countries may be more unstable than the governments of
more developed countries. In addition, the economies of developing or
emerging market countries may be more dependent on relatively few
industries or investors that may be highly vulnerable to local and global
changes. Developing or emerging market countries may be subject to social,
political, or economic instability. Further, the value of the currency of
a developing or emerging market country may fluctuate more than the
currencies of countries with more mature markets.
|
|
∎
|
|
Government
Restrictions. In certain developing or emerging market countries,
government approval may be required for the repatriation of investment
income, capital or the proceeds of sales of securities by foreign
investors. Other government restrictions may include confiscatory
taxation, expropriation or nationalization of company assets, restrictions
on foreign ownership of local companies, protectionist measures, and
practices such as share blocking. |
|
∎
|
|
Privatization
Programs. The governments in some developing or 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 developing
or 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.
|
Eurozone Investment Risks. The
European Union (EU) is an economic and political union of most western European
countries and a growing number of eastern European countries, collectively known
as “member states.” One of the key mandates of the EU is the establishment and
administration of a common single market, consisting of, among other things, a
single currency and a common trade policy. In order to pursue this goal, member
states established the Economic and Monetary Union (EMU), which sets out
different stages and commitments that member states need to follow to achieve
greater economic and monetary policy coordination, including the adoption of a
single currency, the euro. Many member states have adopted the euro as their
currency and, as a result, are subject to the monetary policies of the European
Central Bank (ECB).
20 Invesco
Investment Funds
The global economic crisis that began
in 2008 has caused severe financial difficulties for many EU member states,
pushing some to the brink of insolvency and causing others to experience
recession, large public debt, restructuring of government debt, credit rating
downgrades and an overall weakening of banking and financial sectors. Some of
those countries have depended on, and may continue to be dependent on, the
assistance from others such as the ECB, the International Monetary Fund (IMF),
or other governments and institutions to address those issues. Failure by one or
more EU member states to implement reforms or attain a certain performance level
imposed as a condition of assistance, or an insufficient level of assistance,
could deepen or prolong the economic downturn which could have a significant
adverse effect on the value of investments in those and other European
countries. By adopting the euro as its currency, members of the EMU are subject
to fiscal and monetary controls that could limit to some degree the ability to
implement their own economic policies. Additionally, EMU member states could
voluntarily abandon the euro or involuntarily be forced out of the euro,
including by way of a partial or complete dissolution of the EMU. The effects of
such outcomes on the rest of the Eurozone and global markets as a whole are
unpredictable, but are likely to be negative, including adversely impacted
market values of Eurozone and various other securities and currencies,
redenomination of certain securities into less valuable local currencies, and
more volatile and illiquid markets. Under such circumstances, investments
denominated in euros or replacement currencies may be difficult to value, the
ability to operate an investment strategy in connection with euro-denominated
securities may be significantly impaired and the value of euro-denominated
investments may decline significantly and unpredictably. Additionally, the
United Kingdom’s intended departure from the EU, known as “Brexit,” may have
significant political and financial consequences for Eurozone markets, including
greater market volatility and illiquidity, currency fluctuations, deterioration
in economic activity, a decrease in business confidence and an increased
likelihood of a recession in the United Kingdom. Uncertainty relating to the
withdrawal procedures and timeline may have adverse effects on asset valuations
and the renegotiation of current trade agreements, as well as an increase in
financial regulation of United Kingdom banks. While the full impact of Brexit is
unknown, market disruption in the EU and globally may have a negative effect on
the value of the Fund’s investments. Additionally, the risks related to Brexit
could be more pronounced if one or more additional EU member states seek to
leave the EU.
Commodity-Linked Derivatives. A
commodity-linked derivative is a derivative instrument whose value is linked to
the price movement of a commodity, commodity index, or commodity option or
futures contract. The value of some commodity-linked derivatives may be based on
a multiple of those price movements. The Fund is subject to legal requirements,
applicable to all mutual funds, that are designed to reduce the effects of any
leverage created by the use of derivative instruments.
Commodity-Linked Notes. A
commodity-linked note is a derivative instrument that has characteristics of
both a debt security and a commodity-linked derivative. It typically makes
interest payments like a debt security and at maturity the principal payment is
linked to the price movement of a commodity, commodity index, or commodity
option or futures contract. Commodity-linked notes are typically issued by a
bank, other financial institution or a commodity producer, and the Fund
negotiates with the issuer to obtain specific terms and features that are
tailored to the Fund’s investment needs.
Commodity-linked notes may be
principal-protected, partially-protected, or offer no principal protection. A
principal-protected commodity-linked note means that the issuer will pay, at a
minimum, the par value of the note at maturity. With a partially-protected or
no-principal-protection
commodity-linked note, the Fund may receive at maturity an amount less
than the note’s par value if the commodity, index or other economic variable
value to which the note is linked declines over the term of the note.
Investments in commodity-linked investments entail the risk that the Fund might
not qualify as a “regulated investment company” under the Internal
Revenue Code and its income might
become subject to income taxes, reducing returns to shareholders.
Risks of Commodity-Linked
Investments. Investments linked to the prices of commodities are considered
speculative. The commodity-linked instruments in which the Fund invests have
substantial risks, including risk of loss of a significant portion of their
principal value. Prices of commodities and commodity-linked investments may
fluctuate significantly over short periods due to a variety of factors,
including: changes in supply and demand relationships, weather, agriculture,
fiscal and exchange control programs, disease, pestilence, and international
economic, political, military and regulatory developments. These events might
have less impact on the values of stocks and bonds and can make commodity-linked
investments more volatile than other types of investments.
Commodity markets are also subject to
temporary distortions and other disruptions due to lack of liquidity, the
participation of speculators, and government regulation, among other factors.
U.S. futures exchanges and some foreign exchanges limit the amount of
fluctuation in futures contract prices that may occur in a single business day
(generally referred to as “daily price fluctuation limits”). The maximum or
minimum price of a contract as a result of these limits is referred to as a
“limit price.” If the limit price has been reached in a particular contract, no
trades may be made beyond the limit price. Limit prices may have the effect of
precluding trading in a particular contract or forcing the liquidation of
contracts at disadvantageous times or prices and could adversely affect the
value of commodity-linked investments.
The tax treatment of commodity-linked
investments may be adversely affected by changes in legislation, regulations or
other legally binding authority. If, as a result of any such adverse action, the
income of the Fund from certain commodity-linked derivatives was treated as
non-qualifying income, the Fund might
fail to qualify as a regulated investment company and be subject to federal
income tax at the Fund level.
Investments in the Fund’s
Wholly-Owned Subsidiary. The Fund may invest up to 25% of its total assets
in the Subsidiary. The Subsidiary invests in commodity-linked derivatives
(including commodity futures, financial futures, options and swap contracts),
and certain fixed-income securities and other investments that may serve as
margin or collateral for its derivatives positions.
Investment in the Subsidiary is
expected to provide the Fund with exposure to the commodities markets within the
limitations of the federal tax requirements of Subchapter M of the Internal
Revenue Code (Subchapter M). Subchapter M requires, among other things, that at
least 90% of the Fund’s gross income be derived from securities or derived with
respect to its business of investing in securities (typically referred to as
“qualifying income”). Income from certain of the commodity-linked derivatives in
which the Fund invests may not be treated as “qualifying income” for purposes of
the 90% income requirement.
If the Fund were to fail to qualify as
a regulated investment company accorded special tax treatment in any taxable
year, it would be subject to tax on its taxable income at the corporate income
tax rate, and all distributions from earnings and profits, including any
distributions of net tax-exempt income
and net long-term capital gains, would be taxable to shareholders as ordinary
income. The Fund could be required to pay substantial taxes, penalties and
interest and to make substantial distributions, in order to re-qualify for such special treatment.
Derivative Investments. The Fund
can invest in “derivative” instruments. A derivative is an instrument whose
value depends on (or is derived from) the value of an underlying security,
asset, interest rate, index or currency. Derivatives may allow the Fund to
increase or decrease its exposure to certain markets or risks.
The Fund may use derivatives to seek to
increase its investment return or for hedging purposes. The Fund is not required
to use derivatives in seeking its investment objective or for hedging and might
not do so.
Options, futures, forward contracts,
swaps, “structured” notes, and certain mortgage-related securities are some of
the types of derivatives
21 Invesco
Investment Funds
that the Fund may use. The Fund may
also use other types of derivatives that are consistent with its investment
strategies or for hedging purposes.
Swap Transactions. Under
financial reform legislation currently being implemented, certain types of swaps
are (or soon will be) required to be executed on a regulated market and/or
cleared through a clearinghouse, which may affect counterparty risk and other
risks faced by the Fund, and could result in increased margin requirements and
costs for the Fund. Swap agreements are privately negotiated in the over-the-counter
market and may be entered into as a bilateral contract or may be
centrally cleared. In a cleared swap, immediately following execution of the
swap agreement, the swap agreement is submitted for clearing to a clearing
house, and the Fund faces the clearinghouse by means of an account with a
futures commission merchant that is a member of the clearinghouse. Because the
regulations regarding centrally cleared swaps have not yet been fully
implemented, the scope of potential risks, including risks relating to the use
of clearinghouses and futures commission merchants, is unclear.
Credit Default Swaps. A credit
default swap enables an investor to buy or sell protection against a credit
event with respect to an issuer, such as an issuer’s failure to make timely
payments of interest or principal on its debt obligations, bankruptcy or
restructuring. A credit default swap may be embedded within a structured note or
other derivative instrument.
Risks of Credit Default Swaps.
Credit default swaps are subject to credit risk of the underlying issuer and
to counterparty credit risk. If the counterparty fails to meet its obligations,
the Fund may lose money. Credit default swaps are also subject to the risk that
the Fund will not properly assess the risk of the underlying issuer. If the Fund
is selling credit protection, there is a risk that a credit event will occur and
that the Fund will have to pay the counterparty. If the Fund is buying credit
protection, there is a risk that no credit event will occur and the Fund will
receive no benefit for the premium paid.
Total Return Swaps. In a total
return swap transaction, one party agrees to pay the other party an amount equal
to the total return on a defined underlying asset or a non-asset reference during a specified period
of time. The underlying asset might be a security or asset or basket of
securities or assets or a non-asset
reference such as a securities or other type of index. In return, the
other party would make periodic payments based on a fixed or variable interest
rate or on the total return from a different underlying asset or non-asset reference.
Risks of Total Return Swaps.
Total return swaps could result in losses if the underlying asset or
reference does not perform as anticipated. Total return swaps can have the
potential for unlimited losses. They are also subject to counterparty risk. If
the counterparty fails to meet its obligations, the Fund may lose money.
Interest Rate Swaps. In an
interest rate swap, the Fund and another party exchange the right to receive
interest payments. For example, they might swap the right to receive floating
rate payments based on a reference rate for the right to receive fixed rate
payments. An interest rate swap enables an investor to buy or sell protection
against changes in an interest rate. An interest rate swap may be embedded
within a structured note or other derivative instrument.
Risks of Interest Rate Swaps.
Interest rate swaps are subject to interest rate risk and credit risk. An
interest rate swap transaction could result in losses if the underlying asset or
reference rate does not perform as anticipated. Interest rate swaps are also
subject to counterparty risk. If the counterparty fails to meet its obligations,
the Fund may lose money.
Swaption Transactions. The Fund
may enter into a swaption transaction, which is a contract that grants the
holder, in return for payment of the purchase price (the “premium”) of the
option, the right, but not the obligation, to enter into an interest rate swap
at a preset rate within a specified period of time, with the writer of the
contract. The writer of the contract receives the premium and bears the risk of
unfavorable changes in the preset rate on the underlying interest rate swap.
Unrealized gains/losses on swaptions are reflected in investment assets and
investment liabilities in the Fund’s statement of financial condition.
“Structured” Notes. “Structured”
notes are specially-designed derivative debt instruments. The terms of the
instrument may be determined or “structured” by the purchaser and the issuer of
the note. Payments of principal or interest on these notes may be linked to the
value of an index (such as a currency or securities index), one or more
securities, a commodity or the financial performance of one or more obligors.
The value of these notes will normally rise or fall in response to the changes
in the performance of the underlying security, index, commodity or obligor.
Risks of “Structured” Notes.
Structured notes are subject to interest rate risk. They are also subject to
credit risk with respect both to the issuer and, if applicable, to the
underlying security or obligor. If the underlying investment or index does not
perform as anticipated, the structured note might pay less interest than the
stated coupon payment or repay less principal upon maturity. The price of
structured notes may be very volatile and they may have a limited trading
market, making it difficult to value them or sell them at an acceptable price.
In some cases, the Fund may enter into agreements with an issuer of structured
notes to purchase a minimum amount of those notes over time.
Foreign Currency Forwards and
Options. Foreign currency forward contracts are used to buy or sell foreign
currency for future delivery at a fixed price. They are used to lock in the U.S.
dollar price of a security denominated in a foreign currency, or to protect
against possible losses from changes in the relative value of the U.S. dollar
against a foreign currency. Forward contracts involve the risk that anticipated
currency movements will not be accurately predicted, which could result in
losses on those contracts and additional transaction costs. The use of forward
contracts could reduce performance if there are unanticipated changes in
currency prices. Options on foreign currencies may be used to try to protect
against declines in the U.S. dollar value of foreign securities the Fund owns
and against increases in the dollar cost of foreign securities the Fund
anticipates buying. Options on foreign currencies are affected by the factors
that influence foreign exchange rates and investments generally. The Fund’s
ability to establish and close out positions on foreign currency options is
subject to the maintenance of a liquid secondary market, and there can be no
assurance that a liquid secondary market will exist for a particular option at
any specific time.
Interest Rate Futures. The Fund
may use interest rate futures to manage exposure to interest rate risk or
protect the Fund from fluctuations in the value of securities. An interest rate
future is a contract for the future delivery of a debt security for a price
based on the current value of the security. An interest rate future obligates
the seller to deliver (and the purchaser to take) cash or the specified type of
debt security to settle the futures transaction at its maturity. Either party
could also enter into an offsetting contract to close out the position. For
example, to seek to mitigate the risk that increasing prevailing interest rates
may decrease the value of the Fund’s portfolio securities, the Fund might sell a
U.S. Treasury bond future obligating it to sell a U.S. Treasury bond on a future
date for an amount based on the current value of the bond. If prevailing
interest rates rise, the Fund would be expected to be able to enter into an
offsetting contract at a gain.
Risks of Interest Rate Futures.
Interest rate futures expose the Fund to price fluctuations resulting from
interest rate changes. If interest rates rise when the Fund has purchased an
interest rate future, the Fund could suffer a loss in its futures positions. If
interest rates fall when the Fund has sold an interest rate future, the Fund
could similarly suffer a loss. The market value of interest rate futures may not
move in concert with the value of the securities the Fund wishes to hedge or
intends to purchase. Further, a lack of market liquidity could make it difficult
to close out futures positions.
Risks of Futures Contracts. The
volatility of futures contracts prices has been historically greater than the
volatility of stocks and bonds. The liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced. In addition, futures exchanges often
impose a maximum
22 Invesco
Investment Funds
permissible price movement on each
futures contract for each trading session. The Fund may be disadvantaged if it
is prohibited from executing a trade outside the daily permissible price
movement.
Hedging. Hedging transactions
are intended to reduce the risks of securities in the Fund’s portfolio. At
times, however, a hedging instrument’s value might not be correlated with the
investment it is intended to hedge, and the hedge might be unsuccessful. If the
Fund uses a hedging instrument at the wrong time or judges market conditions
incorrectly, the strategy could reduce its return or create a loss.
Risks of Derivative Investments.
Derivatives may be volatile and may involve significant risks. The
underlying security, obligor or other instrument on which a derivative is based,
or the derivative itself, may not perform as expected. For some derivatives, it
is possible to lose more than the amount invested in the derivative investment.
In addition, some derivatives have the potential for unlimited loss, regardless
of the size of the Fund’s initial investment. Certain derivative investments
held by the Fund may be illiquid, making it difficult to close out an
unfavorable position. Derivative transactions may require the payment of
premiums and may increase portfolio turnover. Derivatives are subject to credit
risk, since the Fund may lose money on a derivative investment if the issuer or
counterparty fails to pay the amount due. In addition, 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. As a result of these risks,
the Fund could realize little or no income or lose money from the investment, or
the use of a derivative for hedging might be unsuccessful.
In addition, pursuant to rules
implemented under financial reform legislation, certain over-the-counter
derivatives, including certain interest rate swaps and certain
credit default swaps, are required to be executed on a regulated market and/or
cleared through a clearinghouse, which may result in increased margin
requirements and costs for the Fund. Entering into a derivative transaction that
is cleared may entail further risks and costs, including the counterparty risk
of the clearinghouse and the futures commission merchant through which the Fund
accesses the clearinghouse.
Risks of Leverage. Derivatives
may involve leverage. Leverage occurs when an investor has the right to a return
on an investment that exceeds the return that the investor would be expected to
receive based on the amount contributed to the investment. The Fund’s use of
certain leveraged derivatives can result in a loss substantially greater than
the amount invested in the derivative itself. Certain derivatives have the
potential for unlimited loss, regardless of the size of the initial investment.
When the Fund uses derivatives that entail leverage, the Fund’s share price will
tend to be more volatile, resulting in larger gains or losses in response to the
fluctuating prices of the Fund’s investments. The Fund has limits on the
leverage ratio of its overall portfolio. The Fund is also subject to legal
requirements that it must identify liquid assets on its books with respect to
certain derivatives or engage in other measures to seek to reduce derivatives
risks.
Additional Investment Information.
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.
Other Investment Strategies and Risks
The Fund can also use the investment
techniques and strategies described below. The Fund might not use all of these
techniques or strategies or might only use them from time to time.
Diversification and Concentration.
The Fund is a diversified fund. It attempts to reduce its exposure to the
risks of individual securities by diversifying its investments across a broad
number of different issuers. The Fund will not concentrate its investments in
issuers in any one industry. At times, however, the Fund may emphasize
investments in some industries or sectors more than others. The prices of
securities of issuers in a particular industry or sector 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. To the extent that the Fund increases the relative
emphasis of its investments in a particular industry or sector, its share values
may fluctuate in response to events affecting that industry or sector. The
Securities and Exchange Commission has taken the position that investment of
more than 25% of a fund’s total assets in issuers in the same industry
constitutes concentration in that industry. That limit does not apply to
securities issued or guaranteed by the U.S. government or its agencies and
instrumentalities. For purposes of compliance with its concentration policy, the
Fund will consider portfolio investments held by underlying investment companies
in which the Fund invests, to the extent that the Fund has sufficient
information about such portfolio investments. The Fund will make reasonable
efforts to obtain such information.
Investments in Other Investment
Companies. The Fund can also invest in the securities of other investment
companies, which can include open-end
funds, closed-end funds, unit
investment trusts and business development companies subject to the limits of
the Investment Company Act of 1940. One reason the Fund might do so is to gain
exposure to segments of the markets represented by another fund, at times when
the Fund might not be able to buy the particular type of securities directly. As
a shareholder of an investment company, the Fund would be subject to its ratable
share of that investment company’s expenses, including its advisory and
administration expenses. The Fund does not intend to invest in other investment
companies unless it is believed that the potential benefits of the investment
justify the expenses. The Fund’s investments in the securities of other
investment companies are subject to the limits that apply to those types of
investments under the Investment Company Act of 1940.
Illiquid and Restricted
Investments . Investments that do not have an active
trading market, or that have legal or contractual limitations on their resale,
may be considered to be “illiquid” investments. Illiquid investments may be
difficult to value or to sell promptly at an acceptable price or may require
registration under applicable securities laws before they can be sold publicly.
Securities that have limitations on their resale are referred to as “restricted
securities.” Certain restricted investments that are eligible for resale to
qualified institutional purchasers may not be regarded as illiquid.
The Fund will comply with Rule 22e-4 in managing its illiquid investments.
The Fund’s holdings of illiquid investments are monitored on an ongoing basis to
determine whether to sell any of those investments to maintain adequate
liquidity.
Investments in Mining Securities and
Metal Investments. The Fund may invest directly in, or indirectly through
the Subsidiary or by means of derivative instruments, securities issued by
companies that are involved in mining or processing or dealing in gold or other
metals or minerals. These securities are described as “Mining Securities.” The
Fund may also invest up to 10% of its total assets in gold or silver bullion, in
other precious metals, in metals naturally occurring with precious metals, in
certificates representing an ownership interest in those metals, and in gold or
silver coins. These investments are referred to as “Metal Investments.” The
Fund’s investment in Gold ETFs is subject to this investment restriction.
Risks of Investments in Mining
Securities and Metal Investments. Investments in Mining Securities and Metal
Investments involve additional risks and considerations not typically associated
with other types of investments: (1) the risk of substantial price
fluctuations of gold and pre-
23 Invesco
Investment Funds
cious metals; (2) the
concentration of gold supply is mainly in five territories (South Africa,
Australia, the Commonwealth of Independent States (the former Soviet Union),
Canada and the United States), and the prevailing economic and political
conditions of these countries may have a direct effect on the production and
marketing of gold and sales of central bank gold holdings;
(3) unpredictable international monetary policies, economic and political
conditions; (4) possible U.S. governmental regulation of Metal Investments,
as well as foreign regulation of such investments; and (5) possible adverse
tax consequences for the Fund in making Metal Investments, if it fails to
qualify as a “regulated investment company” under the Internal Revenue Code.
To the extent the Fund invests in gold
or silver bullion, it will earn no income. However, the Fund may realize gains
as a result of the sale of those investments after an appreciation in the market
price and such investments may incur higher storage and custody costs as
compared to purchasing, holding and selling more traditional investments.
Investments in metals entail the risk
that the Fund might not qualify as a “regulated investment company,” under the
Internal Revenue Code because any gains from the sale of those investments would
not constitute “qualifying income” under Subchapter M of the Code. As explained
under “Investments in the Fund’s Wholly-Owned Subsidiary” in this prospectus,
Subchapter M requires, among other things, that at least 90% of the Fund’s gross
income be derived from qualifying sources. The “Taxes” section in this
prospectus and “Dividends, Distributions and Tax Matters” section in the SAI
provides additional information about the Fund’s tax implications.
Investing in Gold ETFs. Shares
of Gold ETFs generally represent units of fractional undivided beneficial
interests in a trust. The shares are intended to reflect the performance of the
price of gold bullion. Because a Gold ETF has operating expenses and transaction
and other costs (including storage and insurance costs) while the price of gold
bullion does not, a Gold ETF will sell gold from time to time to pay expenses.
This will reduce the amount of gold represented by each Gold ETF share,
irrespective of whether the trading price of the shares rises or falls in
response to changes in the price of gold. An investment in a Gold ETF is subject
to all of the risks of investing directly in gold bullion, including tax risks.
In addition, the market value of the shares of the Gold ETF may differ from its
net asset value because the supply and demand in the market for shares of the
Gold ETF at any point in time is not always identical to the supply and demand
in the market for the underlying assets. Gold ETFs also have management fees
that are part of their costs, and the Fund will indirectly bear its
proportionate share of those costs. Under certain circumstances, a Gold ETF
could be terminated. Should termination occur, the Gold ETF could have to
liquidate its holdings at a time when the price of gold is falling.
Master Limited Partnerships. The
Fund may invest in publicly traded limited partnerships known as “master limited
partnerships” or MLPs. MLPs issue units that are registered with the Securities
and Exchange Commission and are freely tradable on a securities exchange or in
the over-the-counter market. An MLP
consists of one or more general partners, who conduct the business, and one or
more limited partners, who contribute capital. The Fund, as a limited partner,
normally would not be liable for the debts of the MLP beyond the amounts the
Fund has contributed, but would 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. This right of an MLP’s creditors would continue after the Fund sold its
investment in the MLP.
Dividend Capture Strategy and Risk.
The Fund may use a dividend capture strategy where it purchases shares prior
to the record date for a dividend and sells them within a short time thereafter.
This strategy may result in higher turnover and associated transaction costs for
the Fund and may generate taxable short-term gains or losses. There is no
guarantee that the issuers of the stocks held by the Fund will declare dividends
in the future or that, if dividends are declared, they will remain at their
current levels or increase over time. Depending on market conditions, dividend
paying stocks
that also meet the Fund’s investment
criteria may not be widely available for purchase by the Fund. This may increase
the volatility of the Fund’s returns and may limit the ability of the Fund to
produce current income while remaining fully diversified. High-dividend stocks
may not experience high earnings growth or capital appreciation. The 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. A sharp rise in
interest rates or economic downturn could cause a company to unexpectedly reduce
or eliminate its dividend. The Fund may hold securities for short periods of
time related to the dividend payment periods and may experience loss during
these periods.
Invesco Oppen heimer Developing
Markets Fund
Objective(s), Principal Investment Strategies and Risks
The Fund’s investment objective is to
seek capital appreciation. The Fund’s investment objective is fundamental and
may not be changed without shareholder approval.
The following strategies and types of
investments are the ones that the Fund considers to be the most important in
seeking to achieve its investment objective and the following risks are those
the Fund expects its portfolio to be subject to as a whole.
Common Stock. 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 the 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 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. 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), their share values may
fluctuate more in response to events affecting the market for those types of
securities.
Growth Investing. Growth
companies are companies whose earnings and stock prices are expected to grow at
a faster rate than the overall market. Growth companies can be new companies or
established companies that may be entering a growth cycle in their business.
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 into research,
development or capital assets. Although newer growth companies may not pay any
dividends for some time, their stocks may be valued because of their potential
for price increases.
24 Invesco
Investment Funds
Investing in China A Shares. The
portfolio manager may pursue the Fund’s investment objective by investing a
portion of the Fund’s assets in China A shares (China A Shares), which are
shares of companies incorporated in the People’s Republic of China (PRC) and
listed on the Shanghai Stock Exchange (SSE) or the Shenzhen Stock Exchange
(SZSE). The China A Shares market is an active Chinese market that includes a
large number of Chinese equities as well as smaller or emerging Chinese
companies that may not list shares elsewhere. The China Securities Regulatory
Commission (CSRC) and the Securities and Futures Commission of Hong Kong have
approved programs which establish mutual stock market access between the PRC and
Hong Kong, via the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect (Stock
Connect). Stock Connect is a securities trading and clearing program developed
by Hong Kong Exchanges and Clearing Limited, the SSE, the SZSE and China
Securities Depository and Clearing Corporation Limited (ChinaClear) designed to
achieve mutual stock market access between the PRC and Hong Kong.
The Fund may invest directly in certain
eligible China A Shares through Stock Connect or, for operational efficiency and
regulatory considerations, through an investment in a private investment vehicle
organized under Delaware law (the China Fund). The China Fund seeks long term
capital appreciation by investing primarily in companies established or
operating in the PRC. It is expected that the China Fund will invest a
substantial portion of its assets in China A Shares and other securities
available to certain qualified investors. The China Fund’s managing member,
OppenheimerFunds, has full and exclusive discretionary authority to manage the
day-to-day
operations of the China Fund and to invest its assets. The Fund’s
investment in the China Fund may vary based on the portfolio manager’s use of
different types of investments that provide exposure to Chinese securities,
e.g., through Stock Connect. Since the Fund may invest a portion of its assets
in the China Fund, the Fund may be considered to be investing indirectly in such
Chinese securities through the China Fund.
Risks of Investing through the China
Fund. Investments in Class A shares of Chinese companies involve
certain risks and special considerations not typically associated with
investments in U.S. companies, such as greater government control over the
economy, political and legal uncertainty, currency fluctuations or blockage, the
risk that the Chinese government may decide not to continue to support economic
reform programs and the risk of nationalization or expropriation of assets.
Additionally, the Chinese securities markets are emerging markets and may be
characterized by relatively low trading volume, which may result in
substantially less liquidity and greater price volatility than more developed
markets. Some of these risks may be more pronounced for the China A Shares
market than for Chinese securities markets generally because the A-share market is subject to greater
government restrictions and control. The China Fund’s China A Shares investment
quota may be reduced or revoked by the Chinese government at any time, including
if redemptions reduce the amount invested in China A Shares by the China Fund
below the current quota amount. Further, the China Fund may invest substantially
all of its assets in a limited number of issuers or a single issuer. To the
extent that it does so, the China Fund is more subject to the risks associated
with and developments affecting such issuers than a fund that invests more
widely. In addition, although it is not currently expected to do so, the China
Fund may invest a portion of its assets in certain exchange-traded and over-the-counter
financial instruments from countries other than China.
The Fund will deem its investment in
the China Fund to be illiquid and subject to the Fund’s policy regarding
investments in illiquid investments. The Fund will comply with Rule 22e-4 in managing its illiquid investments.
The Fund currently will invest no more than 10% of its net assets in the China
Fund. Interests in the China Fund may be redeemed, and net redemption proceeds
may be repatriated only once each day. In addition, the China Fund is subject to
a monthly accumulated repatriation limit equal
to 20% of the China Fund’s total
investment in China A Shares and other QFII permitted securities as of the end
of the previous year. The Fund’s redemption of interests from the China Fund may
be limited accordingly.
The China Fund is not registered under
the Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder by the SEC. To the extent a Fund invests in the China
Fund, it will not have all of the protections offered to investors by the
Investment Company Act of 1940. However, pursuant to an exemptive order granted
on October 31, 2017 to the China Fund by the SEC, the China Fund is
required to comply with the substantive requirements of a number of provisions
of the Investment Company Act of 1940 and the regulations thereunder.
Risks of Investing through Stock
Connect. Trading on Stock Connect is subject to an aggregated daily quota on
purchases that can change without notice, restricting the Fund’s ability to
invest in China A Shares on a timely basis. The Stock Exchange of Hong Kong
Limited (SEHK), SSE and SZSE may suspend trading of individual securities or
more broadly in response to market events, which may adversely affect the Fund’s
ability to access the PRC market. Stock Connect only operates on days when both
markets are open for trading and banks in both markets are also open on
corresponding settlement days, thus the Fund may not be able to trade China A
Shares on days when Stock Connect is not trading but normal trading for the PRC
market otherwise occurs. Prices may fluctuate on China A Shares on days when
Stock Connect is not trading. The Fund’s ability to enter and exit trades via
Stock Connect on a timely basis is also restricted by a prohibition on
turnaround (day) trading on the China A Share market (i.e., investors cannot
purchase and sell the same securities via Stock Connect in the same trading
day). Stock Connect relies on the maintenance by relevant market participants of
certain information technology, risk management and other requirements. There is
no assurance that relevant exchange trading systems and market participants will
function properly or continue to adapt to changes. If relevant systems fail to
function properly, trading disruptions can occur that adversely affect the
Fund’s ability to access the China A Share market. The Fund is also subject to
risks related to the clearing and settlement of securities, including for
example where a default occurs in connection with the settlement of cross border
trades that could cause potential delays in the Fund’s recovery process or its
ability to fully recover losses. It is expected that the list of eligible
securities on Stock Connect will be subject to review and may change
periodically. Hong Kong and overseas investors are subject to a restriction on
single foreign investors’ holding no more than 10% of the total issue shares, as
well as a restriction that, in the aggregate, foreign investors’ hold no more
than 30% of the total issue shares. Therefore, foreign investors could be
required to unwind their positions if excessive shareholding restrictions are
exceeded.
Regulations and implementation rules
applicable to Stock Connect are novel and untested, and it is uncertain as to
how they will be applied. There is also general uncertainty regarding changes in
government policies, taxation, currency repatriation restrictions, permitted
foreign ownership levels and other laws or regulations that impact Stock
Connect. Under current PRC and CSRC tax guidance, capital gains realized by a
Fund from trading of eligible China A Shares on the SSE under Stock Connect may
currently enjoy a temporary exemption from PRC income and business tax. It is
not known when such exemption will expire and whether other taxes will be
applicable to trading securities under Stock Connect in the future. There is no
guarantee that relevant tax regulations and guidance, including the temporary
tax exemption with respect to Stock Connect, will continue to apply or will not
be repealed and re-imposed
retrospectively, or that no new tax regulations and practices relating to
Stock Connect will be promulgated in the future, possibly with retroactive
effect. Such changes could have a significant adverse effect on the Fund,
including reducing returns, reducing the value of the Fund’s investments, and
possibly impairing capital invested by the Fund.
Foreign Investing. The Fund may
buy stocks and other equity securities of companies that are organized under the
laws of a foreign country or that have a substantial portion of their operations
or assets in a foreign country
25 Invesco
Investment Funds
or countries, or that derive a
substantial portion of their revenue or profits from businesses, investments or
sales outside of the United States.
The Fund may also buy debt securities
issued by foreign companies and foreign governments or their agencies.
The Fund may purchase American
Depositary Shares (ADS) as part of American Depositary Receipt (ADR) issuances,
which are negotiable certificates issued by a U.S. bank representing a specified
number of shares in a foreign stock traded on a U.S. exchange. ADS and ADRs are
subject to some of the special considerations and risks that apply to foreign
securities traded and held abroad.
Risks of Foreign Investing.
Securities traded in foreign markets often involve special risks not present
in U.S. investments that can increase the chances the Fund will lose money.
Additional information regarding certain of the risks associated with foreign
investing is provided below.
|
∎
|
|
Foreign
Market Risk. If there are fewer investors in a particular foreign
market, securities traded in that market may be less liquid and more
volatile than U.S. securities and more difficult to price. Foreign markets
may also be subject to delays in the settlement of transactions and
difficulties in pricing securities. If the Fund is delayed in settling a
purchase or sale transaction, it may not receive any return on the
invested assets or it may lose money if the value of the security
declines. It may also be more expensive for the Fund to buy or sell
securities in certain foreign markets than in the United States, which may
increase the Fund’s expense ratio. |
|
∎
|
|
Foreign
Economy Risk. Foreign economies may be more vulnerable to political or
economic changes than the U.S. economy. They may be more concentrated in
particular industries or may rely on particular resources or trading
partners to a greater extent. Certain foreign economies may be adversely
affected by shortages of investment capital or by high rates of inflation.
Changes in economic or monetary policy in the U.S. or abroad may also have
a greater impact on the economies of certain foreign countries.
|
|
∎
|
|
Foreign
Governmental and Regulatory Risks. Foreign companies may not be
subject to the same accounting and disclosure requirements as U.S.
companies. As a result there may be less accurate information available
regarding a foreign company’s operations and financial condition. Foreign
companies may be subject to capital controls, nationalization, or
confiscatory taxes. There may be less government regulation of foreign
issuers, exchanges and brokers than in the United States. Some countries
also have restrictions that limit foreign ownership and may impose
penalties for increases in the value of the Fund’s investment. The value
of the Fund’s foreign investments may be affected if it experiences
difficulties in enforcing legal judgments in foreign courts.
|
|
∎
|
|
Foreign
Currency Risk. A change in the value of a foreign currency against the
U.S. dollar will result in a change in the U.S. dollar value of securities
denominated in that foreign currency. If the U.S. dollar rises in value
against a foreign currency, a security denominated in that currency will
be worth less in U.S. dollars and if the U.S. dollar decreases in value
against a foreign currency, a security denominated in that currency will
be worth more in U.S. dollars. The dollar value of foreign investments may
also be affected by exchange controls. Foreign currency exchange
transactions may impose additional costs on the Fund. The Fund can also
invest in derivative instruments linked to foreign currencies. The change
in value of a foreign currency against the U.S. dollar will result in a
change in the U.S. dollar value of derivatives linked to that foreign
currency. The investment adviser’s selection of foreign currency
denominated investments may not perform as expected. Currency derivative
investments may be particularly volatile and subject to greater risks than
other types of foreign-currency denominated investments.
|
|
∎
|
|
Foreign
Custody Risk. There may be very limited regulatory oversight of
certain foreign banks or securities depositories that hold foreign
securities and foreign currency and the laws of certain countries may
|
|
|
limit the ability to
recover such assets if a foreign bank or depository or their agents goes
bankrupt. There may also be an increased risk of loss of portfolio
securities. |
|
∎
|
|
Time Zone
Arbitrage. If the Fund invests a significant amount of its assets in
foreign securities, it may be exposed to “time-zone arbitrage” attempts by
investors seeking to take advantage of differences in the values of
foreign securities that might result from events that occur after the
close of the foreign securities market on which a security is traded and
before the close of the New York Stock Exchange that day, when the Fund’s
net asset value is calculated. If such time zone arbitrage were
successful, it might dilute the interests of other shareholders. However,
the Fund’s use of “fair value pricing” under certain circumstances, to
adjust the closing market prices of foreign securities to reflect what the
investment adviser and the Board believe to be their fair value, may help
deter those activities. |
|
∎
|
|
Globalization Risks. The growing inter-relationship of
global economies and financial markets has increased the effect of
conditions in one country or region on issuers of securities in a
different country or region. In particular, the adoption or prolongation
of protectionist trade policies by one or more countries, changes in
economic or monetary policy in the United States or abroad, or a slowdown
in the U.S. economy, could lead to a decrease in demand for products and
reduced flows of capital and income to companies in other countries.
|
|
∎
|
|
Regional
Focus. At times, the Fund might increase the relative emphasis of its
investments in a particular region of the world. Securities of issuers in
a region might be affected by changes in economic conditions or by changes
in government regulations, availability of basic resources or supplies, or
other events that affect that region more than others. If the Fund has a
greater emphasis on investments in a particular region, it may be subject
to greater risks from adverse events that occur in that region than a fund
that invests in a different region or that is more geographically
diversified. Political, social or economic disruptions in the region may
adversely affect the values of the Fund’s holdings.
|
Risks of Developing and Emerging
Markets. Investments in developing and emerging market countries are subject
to all the risks associated with foreign investing, however, these risks may be
magnified in developing and emerging markets. Investments in securities of
issuers in developing or emerging market countries may be considered
speculative. Additional information regarding certain of the risks associated
with investing in developing and emerging markets is provided below.
|
∎
|
|
Less
Developed Securities Markets. Developing or emerging market countries
may have less well-developed securities markets and exchanges.
Consequently they have lower trading volume than the securities markets of
more developed countries and may be substantially less liquid than those
of more developed countries. |
|
∎
|
|
Transaction Settlement. Settlement procedures in developing
or emerging markets may differ from those of more established securities
markets, and settlement delays may result in the inability to invest
assets or to dispose of portfolio securities in a timely manner. As a
result there could be subsequent declines in the 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. |
|
∎
|
|
Price
Volatility. Securities prices in developing or emerging markets may be
significantly more volatile than is the case in more developed nations of
the world, which may lead to greater difficulties in pricing securities.
|
|
∎
|
|
Less
Developed Governments and Economies. The governments of developing or
emerging market countries may be more unstable than the governments of
more developed countries. In addition, the economies of developing or
emerging market countries may be more dependent on relatively few
industries or investors that may be highly vulnerable to local and global
changes. Developing or emerging market countries may be subject to social,
political, or economic |
26 Invesco
Investment Funds
|
|
instability. Further,
the value of the currency of a developing or emerging market country may
fluctuate more than the currencies of countries with more mature markets.
|
|
∎
|
|
Government
Restrictions. In certain developing or emerging market countries,
government approval may be required for the repatriation of investment
income, capital or the proceeds of sales of securities by foreign
investors. Other government restrictions may include confiscatory
taxation, expropriation or nationalization of company assets, restrictions
on foreign ownership of local companies, protectionist measures, and
practices such as share blocking. |
|
∎
|
|
Privatization Programs. The governments in some developing
or 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 developing or 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. |
Eurozone Investment Risks. The
European Union (EU) is an economic and political union of most western European
countries and a growing number of eastern European countries, collectively known
as “member states.” One of the key mandates of the EU is the establishment and
administration of a common single market, consisting of, among other things, a
single currency and a common trade policy. In order to pursue this goal, member
states established the Economic and Monetary Union (EMU), which sets out
different stages and commitments that member states need to follow to achieve
greater economic and monetary policy coordination, including the adoption of a
single currency, the euro. Many member states have adopted the euro as their
currency and, as a result, are subject to the monetary policies of the European
Central Bank (ECB).
The global economic crisis that began
in 2008 has caused severe financial difficulties for many EU member states,
pushing some to the brink of insolvency and causing others to experience
recession, large public debt, restructuring of government debt, credit rating
downgrades and an overall weakening of banking and financial sectors. Some of
those countries have depended on, and may continue to be dependent on, the
assistance from others such as the ECB, the International Monetary Fund (IMF),
or other governments and institutions to address those issues. Failure by one or
more EU member states to implement reforms or attain a certain performance level
imposed as a condition of assistance, or an insufficient level of assistance,
could deepen or prolong the economic downturn which could have a significant
adverse effect on the value of investments in those and other European
countries. By adopting the euro as its currency, members of the EMU are subject
to fiscal and monetary controls that could limit to some degree the ability to
implement their own economic policies. Additionally, EMU member states could
voluntarily abandon the euro or involuntarily be forced out of the euro,
including by way of a partial or complete dissolution of the EMU. The effects of
such outcomes on the rest of the Eurozone and global markets as a whole are
unpredictable, but are likely to be negative, including adversely impacted
market values of Eurozone and various other securities and currencies,
redenomination of certain securities into less valuable local currencies, and
more volatile and illiquid markets. Under such circumstances, investments
denominated in euros or replacement currencies may be difficult to value, the
ability to operate an investment strategy in connection with euro-denominated
securities may be significantly impaired and the value of euro-denominated
investments may decline significantly and unpredictably. Additionally, the
United Kingdom’s (UK) intended departure from the EU, known as “Brexit,” may
have significant political and financial consequences for Eurozone markets,
including greater market volatility and illiquidity, currency fluctuations,
deterioration in economic activity, a decrease in business confidence and an
increased likelihood of a recession in the UK. Uncertainty relating to the
withdrawal procedures and timeline may have adverse effects on asset valuations
and the renegotiation of current trade agreements, as well as an increase in
financial regulation of UK banks. While the full impact of Brexit
is unknown, market disruption in the EU
and globally may have a negative effect on the value of the Fund’s investments.
Additionally, the risks related to Brexit could be more pronounced if one or
more additional EU member states seek to leave the EU.
Small- and Mid-Cap Companies. Small-cap companies may be either established
or newer companies, including “unseasoned” companies that typically have been in
operation for less than three years. Mid-cap
companies are generally companies that have completed their initial start-up cycle, and in many cases have
established markets and developed seasoned market teams. While smaller companies
might offer greater opportunities for gain than larger companies, they also may
involve greater risk of loss. 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 the Fund to
dispose of its holdings at an acceptable price when it wants to sell them.
Small- and mid-cap companies may not
have established markets for their products or services and may have fewer
customers and product lines. They may have more limited access to financial
resources and may not have the financial strength to sustain them through
business downturns or adverse market conditions. 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. Smaller companies may have
unseasoned management or less depth in management skill than larger, more
established companies. They may be more reliant on the efforts of particular
members of their management team and management changes may pose a greater risk
to the success of the business. Securities of small, unseasoned companies may be
particularly volatile, especially in the short term, and may have very limited
liquidity in a declining market. 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 Fund measures the market
capitalization of an issuer at the time of investment. Because the relative
sizes of companies change over time as the securities market changes, the Fund’s
definition of what is a “small-cap,”
“mid-cap” or “large-cap” company may change over time as
well. After the Fund buys the security of an individual company, that company
may expand or contract and no longer fall within the designated capitalization
range. Although the Fund is not required to sell the securities of companies
whose market capitalizations have grown or decreased beyond the Fund’s
capitalization-range definition, it might sell some of those holdings to try to
adjust the dollar-weighted median capitalization of its portfolio. That might
cause the Fund to realize capital gains on an investment and could increase
taxable distributions to shareholders.
When the Fund invests in smaller
company securities that might trade infrequently, investors might seek to trade
Fund shares based on their knowledge or understanding of the value of those
securities (this is sometimes referred to as “price arbitrage”). If such price
arbitrage were successful, it might interfere with the efficient management of
the Fund’s portfolio and the Fund may be required to sell securities at
disadvantageous times or prices to satisfy the liquidity requirements created by
that activity. Successful price arbitrage might also dilute the value of fund
shares held by other shareholders.
Additional Investment Information.
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
27 Invesco
Investment Funds
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.
Other Investment Strategies and Risks
The Fund can also use the investment
techniques and strategies described below. The Fund might not use all of these
techniques or strategies or might only use them from time to time.
Diversification and Concentration.
The Fund is a diversified fund. It attempts to reduce its exposure to the
risks of individual securities by diversifying its investments across a broad
number of different issuers. The Fund will not concentrate its investments in
issuers in any one industry. At times, however, the Fund may emphasize
investments in some industries or sectors more than others. The prices of
securities of issuers in a particular industry or sector 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. To the extent that the Fund increases the relative
emphasis of its investments in a particular industry or sector, its share values
may fluctuate in response to events affecting that industry or sector. The
Securities and Exchange Commission has taken the position that investment of
more than 25% of a fund’s total assets in issuers in the same industry
constitutes concentration in that industry. That limit does not apply to
securities issued or guaranteed by the U.S. government or its agencies and
instrumentalities. For purposes of compliance with its concentration policy, the
Fund will consider portfolio investments held by underlying investment companies
in which the Fund invests, to the extent that the Fund has sufficient
information about such portfolio investments. The Fund will make reasonable
efforts to obtain such information.
Other Equity Securities. In
addition to common stocks, the Fund can invest in other equity or “equity
equivalents” securities such as preferred stocks, convertible securities, rights
or warrants.
|
∎
|
|
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. The dividends on preferred stock may be
cumulative (they remain a liability of the company until paid) or non-cumulative. The fixed dividend rate
of preferred stocks may cause their prices to behave more like those of
debt securities. If prevailing interest rates rise, the fixed dividend on
preferred stock may be less attractive, which may cause the price of
preferred stock to decline. |
|
∎
|
|
Warrants are
options to purchase equity securities at specific prices that are valid
for a specific period of time. Their prices do not necessarily move
parallel to the prices of the underlying securities, and can be more
volatile than the price of the underlying securities. If the market price
of the underlying security does not exceed the exercise price during the
life of the warrant, the warrant will expire worthless and any amount paid
for the warrant will be lost. The market for warrants may be very limited
and it may be difficult to sell a warrant promptly at an acceptable price.
Rights are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and
warrants have no voting rights, receive no dividends and have no rights
with respect to the assets of the issuer. |
|
∎
|
|
A convertible
security can be converted into or exchanged for a set amount of common
stock of an issuer within a particular period of time at a specified price
or according to a price formula. Convertible debt securities pay interest
and convertible preferred stocks pay dividends until they mature or are
converted, exchanged or redeemed. Some convertible debt securities may be
considered “equity equivalents” because of the feature that makes them
convertible into common stock. Convertible securities may offer the Fund
the ability to participate in stock market movements while also seeking
some cur- |
|
|
rent income. Convertible
securities may provide more income than common stock but they generally
provide less income than comparable non-convertible debt securities.
Convertible securities are subject to credit and interest rate risk,
however credit ratings of convertible securities generally have less
impact on the value of the securities than they do for non-convertible debt securities.
|
Investing in Domestic Securities.
The Fund can invest in common and preferred stocks and debt securities of
U.S. companies. It can also hold U.S. corporate and government debt securities
for defensive and liquidity purposes. Under normal market conditions, the Fund
does not expect to invest a significant amount of its assets in securities of
U.S. issuers.
Debt Securities. Debt securities
can include debt securities of foreign companies and governments, including
those in developing countries. However, the Fund does not invest for income and
does not expect to invest significant amounts in debt securities, unless they
are convertible securities considered to be “equity equivalents,” or debt
securities purchased for temporary defensive or liquidity purposes.
Debt securities may be subject to the
following risks:
|
∎
|
|
Interest
Rate Risk. Interest rate risk is the risk that rising interest rates,
or an expectation of rising interest rates in the near future, will cause
the values of the Fund’s investments in debt securities to decline. The
values of debt securities usually change when prevailing interest rates
change. When interest rates rise, the values of outstanding debt
securities generally fall, and those securities may sell at a discount
from their face amount. Additionally, when interest rates rise, the
decrease in values of outstanding debt securities may not be offset by
higher income from new investments. When interest rates fall, the values
of already-issued debt securities generally rise and the Fund’s
investments in new securities may be at lower yields and may reduce the
Fund’s income. The values of longer-term debt securities usually change
more than the values of shorter-term debt securities when interest rates
change; thus, interest rate risk is usually greater for securities with
longer maturities or durations. “Zero-coupon” or “stripped” securities may
be particularly sensitive to interest rate changes. Risks associated with
rising interest rates are heightened given that interest rates in the U.S.
are near historic lows. Interest rate changes may have different effects
on the values of mortgage-related securities because of prepayment and
extension risks. |
|
∎
|
|
Duration
Risk. Duration is a measure of the price sensitivity of a debt
security or portfolio to interest rate changes. Duration risk is the risk
that longer-duration debt securities are more volatile and thus more
likely to decline in price, and to a greater extent, than shorter-duration
debt securities, in a rising interest-rate environment. “Effective
duration” attempts to measure the expected percentage change in the value
of a bond or portfolio resulting from a change in prevailing interest
rates. The change in the value of a bond or portfolio can be approximated
by multiplying its duration by a change in interest rates. For example, if
a bond has an effective duration of three years, a 1% increase in general
interest rates would be expected to cause the bond’s value to decline
about 3% while a 1% decrease in general interest rates would be expected
to cause the bond’s value to increase 3%. The duration of a debt security
may be equal to or shorter than the full maturity of a debt security.
|
|
∎
|
|
Credit
Risk. Credit risk is the risk that the issuer of a security might not
make interest and principal payments on the security as they become due.
U.S. government securities generally have lower credit risks than
securities issued by private issuers or certain foreign governments. If an
issuer fails to pay interest, the Fund’s income might be reduced, and if
an issuer fails to repay principal, the value of the security might fall
and the Fund could lose the amount of its investment in the security. The
extent of this risk varies based on the terms of the particular security
and the financial condition of the issuer. A downgrade in an issuer’s
credit rating or other adverse news about an issuer, for any reason, can
reduce the market value of that issuer’s securities.
|
28 Invesco
Investment Funds
|
∎
|
|
Credit
Spread Risk. Credit spread risk is the risk that credit spreads (i.e.,
the difference in yield between securities that is due to differences in
their credit quality) may increase when the market expects lower-grade
bonds to default more frequently. Widening credit spreads may quickly
reduce the market values of the Fund’s lower-rated and unrated securities.
Some unrated securities may not have an active trading market or may trade
less actively than rated securities, which means that the Fund might have
difficulty selling them promptly at an acceptable price.
|
|
∎
|
|
Extension
Risk. Extension risk is the risk that, if interest rates rise rapidly,
prepayments on certain debt securities may occur at a slower rate than
expected, and the expected maturity of those securities could lengthen as
a result. Securities that are subject to extension risk generally have a
greater potential for loss when prevailing interest rates rise, which
could cause their values to fall sharply. Extension risk is particularly
prevalent for a callable security where an increase in interest rates
could result in the issuer of that security choosing not to redeem the
security as anticipated on the security’s call date. Such a decision by
the issuer could have the effect of lengthening the debt security’s
expected maturity, making it more vulnerable to interest rate risk and
reducing its market value. |
|
∎
|
|
Reinvestment Risk. Reinvestment risk is the risk that when
interest rates fall, the Fund may be required to reinvest the proceeds
from a security’s sale or redemption at a lower interest rate. Callable
bonds are generally subject to greater reinvestment risk than non-callable bonds.
|
|
∎
|
|
Prepayment
Risk. Certain fixed-income securities (in particular mortgage-related
securities) are subject to the risk of unanticipated prepayment.
Prepayment risk is the risk that, when interest rates fall, the issuer
will redeem the security prior to the security’s expected maturity, or
that borrowers will repay the loans that underlie these fixed-income
securities more quickly than expected, thereby causing the issuer of the
security to repay the principal prior to expected maturity. The Fund may
need to reinvest the proceeds at a lower interest rate, reducing its
income. Securities subject to prepayment risk generally offer less
potential for gains when prevailing interest rates fall. If the Fund buys
those securities at a premium, accelerated prepayments on those securities
could cause the Fund to lose a portion of its principal investment. The
impact of prepayments on the price of a security may be difficult to
predict and may increase the security’s price volatility. Interest-only
and principal-only securities are especially sensitive to interest rate
changes, which can affect not only their prices but can also change the
income flows and repayment assumptions about those investments.
|
|
∎
|
|
Event
Risk. If an issuer of debt securities is the subject of a buyout, debt
restructuring, merger or recapitalization that increases its debt load, it
could interfere with its ability to make timely payments of interest and
principal and cause the value of its debt securities to fall.
|
Fixed-Income Market Risks. The
fixed-income securities market can be susceptible to unusual volatility and
illiquidity. Volatility and illiquidity may be more pronounced in the case of
lower-rated and unrated securities. Liquidity can decline unpredictably in
response to overall economic conditions or credit tightening. Increases in
volatility and decreases in liquidity may be caused by a rise in interest rates
(or the expectation of a rise in interest rates), which are near historic lows
in the U.S. and in other countries. During times of reduced market liquidity,
the Fund may not be able to readily sell bonds at the prices at which they are
carried on the Fund’s books. If the Fund needed to sell large blocks of bonds to
meet shareholder redemption requests or to raise cash, those sales could further
reduce the bonds’ prices. An unexpected increase in Fund redemption requests
(including requests from shareholders who may own a significant percentage of
the Fund’s shares) which may be triggered by market turmoil or an increase in
interest rates, as well as other adverse market and economic developments, could
cause the Fund to sell its holdings at a loss or at undesirable prices and
adversely affect the Fund’s
share price and increase the Fund’s
liquidity risk, Fund expenses and/or taxable distributions, if applicable.
Similarly, the prices of the Fund’s holdings could be adversely affected if an
investment account managed similarly to the Fund was to experience significant
redemptions and that account was required to sell its holdings at an inopportune
time. The liquidity of an issuer’s securities may decrease as a result of a
decline in an issuer’s credit rating, the occurrence of an event that causes
counterparties to avoid transacting with the issuer, or an increase in the
issuer’s cash outflows, as well as other adverse market and economic
developments. A lack of liquidity or other adverse credit market conditions may
hamper the Fund’s ability to sell the debt securities in which it invests or to
find and purchase suitable debt instruments.
Economic and other market developments
can adversely affect fixed-income securities markets in the United States,
Europe and elsewhere. At times, participants in debt securities markets may
develop concerns about the ability of certain issuers of debt securities to make
timely principal and interest payments, or they may develop concerns about the
ability of financial institutions that make markets in certain debt securities
to facilitate an orderly market. Those concerns may impact the market price or
value of those debt securities and may cause increased volatility in those debt
securities or debt securities markets, reducing the willingness of some lenders
to extend credit, and making it more difficult for borrowers to obtain financing
on attractive terms (or at all). Under some circumstances, as was the case
during the latter half of 2008 and early 2009, those concerns could cause
reduced liquidity in certain debt securities markets.
Following the financial crisis, the
Federal Reserve sought to stabilize the economy by keeping the federal funds
rate near zero percent. The Federal Reserve has also purchased large quantities
of securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities, pursuant to its monetary stimulus program known as
“quantitative easing.” As the Federal Reserve has completed the tapering of its
securities purchases pursuant to quantitative easing, it has recently raised
interest rates on multiple occasions, and continues to consider future raises to
the federal funds rate, there is a risk that interest rates may rise and cause
fixed-income investors to move out of fixed-income securities, which may also
increase redemptions in fixed-income mutual funds.
In addition, although the fixed-income
securities markets have grown significantly in the last few decades, regulations
and business practices have led some financial intermediaries to curtail their
capacity to engage in trading (i.e., “market making”) activities for certain
debt securities. As a result, dealer inventories of fixed-income securities,
which provide an indication of the ability of financial intermediaries to make
markets in fixed-income securities, are near historic lows relative to market
size. Because market makers help stabilize the market through their financial
intermediary services, further reductions in dealer inventories could have the
potential to decrease liquidity and increase volatility in the fixed-income
securities markets.
Investing in Special Situations.
At times, the Fund may seek to benefit from what are considered to be
“special situations,” such as mergers, reorganizations, restructurings or other
unusual events, that are expected to affect a particular issuer. There is a risk
that the anticipated change or event might not occur, which could cause the
price of the security to fall, perhaps sharply. In that case, the investment
might not produce the expected gains or might cause a loss. This is an
aggressive investment technique that may be considered speculative.
Derivative Investments. The Fund
can invest in “derivative” instruments. A derivative is an instrument whose
value depends on (or is derived from) the value of an underlying security,
asset, interest rate, index or currency. Derivatives may allow the Fund to
increase or decrease its exposure to certain markets or risks.
The Fund may use derivatives to seek to
increase its investment return or for hedging purposes. The Fund is not required
to use derivatives in seeking its investment objective or for hedging and might
not do so.
Options, futures and forward contracts
are some of the types of derivatives that the Fund can use. The Fund may also
use other types of
29 Invesco
Investment Funds
derivatives that are consistent with
its investment strategies or for hedging purposes.
Hedging. Hedging transactions
are intended to reduce the risks of securities in the Fund’s portfolio. At
times, however, a hedging instrument’s value might not be correlated with the
investment it is intended to hedge, and the hedge might be unsuccessful. If the
Fund uses a hedging instrument at the wrong time or judges market conditions
incorrectly, the strategy could reduce its return or create a loss.
Risks of Derivative Investments.
Derivatives may be volatile and may involve significant risks. The
underlying security, obligor or other instrument on which a derivative is based,
or the derivative itself, may not perform as expected. For some derivatives, it
is possible to lose more than the amount invested in the derivative investment.
In addition, some derivatives have the potential for unlimited loss, regardless
of the size of the Fund’s initial investment. Certain derivative investments
held by the Fund may be illiquid, making it difficult to close out an
unfavorable position. Derivative transactions may require the payment of
premiums and may increase portfolio turnover. Derivatives are subject to credit
risk, since the Fund may lose money on a derivative investment if the issuer or
counterparty fails to pay the amount due. In addition, 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. As a result of these risks,
the Fund could realize little or no income or lose money from the investment, or
the use of a derivative for hedging might be unsuccessful.
In addition, pursuant to rules
implemented under financial reform legislation, certain over-the-counter
derivatives, including certain interest rate swaps and certain
credit default swaps, are required to be executed on a regulated market and/or
cleared through a clearinghouse, which may result in increased margin
requirements and costs for the Fund. Entering into a derivative transaction that
is cleared may entail further risks and costs, including the counterparty risk
of the clearinghouse and the futures commission merchant through which the Fund
accesses the clearinghouse.
Illiquid and Restricted
Investments . Investments that do not have an active
trading market, or that have legal or contractual limitations on their resale,
may be considered to be “illiquid” investments. Illiquid investments may be
difficult to value or to sell promptly at an acceptable price or may require
registration under applicable securities laws before they can be sold publicly.
Securities that have limitations on their resale are referred to as “restricted
securities.” Certain restricted investments that are eligible for resale to
qualified institutional purchasers may not be regarded as illiquid.
The Fund will comply with Rule 22e-4 in managing its illiquid investments.
The Fund’s holdings of illiquid investments are monitored on an ongoing basis to
determine whether to sell any of those investments to maintain adequate
liquidity.
Invesco Oppenhei mer Emerging
Markets Innovators Fund
Objective(s), Principal Investment Strategies and Risks
The Fund’s investment objective is to
seek capital appreciation. The Fund’s investment objective may be changed by the
Board of Trustees (the Board) without shareholder approval.
The following strategies and types of
investments are the ones that the Fund considers to be the most important in
seeking to achieve its investment objective and the following risks are those
the Fund expects its portfolio to be subject to as a whole.
Common Stock and Other Equity
Investments. Equity securities include common stock, preferred stock,
rights, warrants and certain securities that are convertible into common stock.
Equity investments may be exchange-traded or over-the-counter
securities.
The value of the 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 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 equity securities
generally do not all move in the same direction at the same time. 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-cap companies, growth or value stocks, or
stocks of companies in a particular industry) their share values may fluctuate
more in response to events affecting the market for that type of security.
|
∎
|
|
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.
|
|
∎
|
|
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. The dividends on preferred stock may be
cumulative (they remain a liability of the company until paid) or non-cumulative. The fixed dividend rate
of preferred stocks may cause their prices to behave more like those of
debt securities. If prevailing interest rates rise, the fixed dividend on
preferred stock may be less attractive, which may cause the price of
preferred stock to decline. |
|
∎
|
|
Warrants are
options to purchase equity securities at specific prices that are valid
for a specific period of time. Their prices do not necessarily move
parallel to the prices of the underlying securities, and can be more
volatile than the price of the underlying securities. If the market price
of the underlying security does not exceed the exercise price during the
life of the warrant, the warrant will expire worthless and any amount paid
for the warrant will be lost. The market for warrants may be very limited
and it may be difficult to sell a warrant promptly at an acceptable price.
Rights are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and
warrants have no voting rights, receive no dividends and have no rights
with respect to the assets of the issuer. |
|
∎
|
|
Convertible
securities can be converted into or exchanged for a set amount of common
stock of an issuer within a particular period of time at a specified price
or according to a price formula. Convertible debt securities pay interest
and convertible preferred stocks pay dividends until they mature or are
converted, exchanged or redeemed. Some convertible debt securities may be
considered “equity equivalents” because of the feature that makes them
convertible into common stock. The conversion feature of convertible
securities generally causes the market value of convertible securities to
increase when the value of the underlying common stock increases, and to
fall when the stock price falls. The market value of a convertible
security reflects both its “investment value,” which is its expected
income potential, and its “conversion value,” which is its anticipated
market value if it were converted. If its conversion value exceeds its
investment value, the security will generally behave more like an equity
security, in which case its price will tend to fluctuate with the price of
the underlying common stock or other security. If its investment value
exceeds its conversion value, the security will generally behave more like
a debt security, in which case the security’s price will likely increase
when interest rates fall and decrease when interest rates
|
30 Invesco
Investment Funds
|
|
rise. Convertible
securities may offer the Fund the ability to participate in stock market
movements while also seeking some current income. Convertible securities
may provide more income than common stock but they generally provide less
income than comparable non-convertible
debt securities. Most convertible securities will vary, to some
extent, with changes in the price of the underlying common stock and are
therefore subject to the risks of that stock. In addition, convertible
securities may be subject to the risk that the issuer will not be able to
pay interest or dividends when due, and their market value may change
based on changes in the issuer’s credit rating or the market’s perception
of the issuer’s creditworthiness. However, credit ratings of convertible
securities generally have less impact on the value of the securities than
they do for non-convertible debt
securities. Some convertible preferred stocks have a mandatory conversion
feature or a call feature that allows the issuer to redeem the stock on or
prior to a mandatory conversion date. Those features could diminish the
potential for capital appreciation on the investment.
|
Foreign Investing. The Fund may
buy stocks and other equity securities of companies that are organized under the
laws of a foreign country or that have a substantial portion of their operations
or assets in a foreign country or countries, or that derive a substantial
portion of their revenue or profits from businesses, investments or sales
outside of the United States.
The Fund may also buy debt securities
issued by foreign companies and foreign governments or their agencies. The Fund
may purchase American Depositary Shares (ADS) as part of American Depositary
Receipt (ADR) issuances, which are negotiable certificates issued by a U.S. bank
representing a specified number of shares in a foreign stock traded on a U.S.
exchange. ADS and ADRs are subject to some of the special considerations and
risks that apply to foreign securities traded and held abroad.
Risks of Foreign Investing.
Securities traded in foreign markets often involve special risks not present
in U.S. investments that can increase the chances the Fund will lose money.
Additional information regarding certain of the risks associated with foreign
investing is provided below.
|
∎
|
|
Foreign
Market Risk. If there are fewer investors in a particular foreign
market, securities traded in that market may be less liquid and more
volatile than U.S. securities and more difficult to price. Foreign markets
may also be subject to delays in the settlement of transactions and
difficulties in pricing securities. If the Fund is delayed in settling a
purchase or sale transaction, it may not receive any return on the
invested assets or it may lose money if the value of the security
declines. It may also be more expensive for the Fund to buy or sell
securities in certain foreign markets than in the United States, which may
increase the Fund’s expense ratio. |
|
∎
|
|
Foreign
Economy Risk. Foreign economies may be more vulnerable to political or
economic changes than the U.S. economy. They may be more concentrated in
particular industries or may rely on particular resources or trading
partners to a greater extent. Certain foreign economies may be adversely
affected by shortages of investment capital or by high rates of inflation.
Changes in economic or monetary policy in the U.S. or abroad may also have
a greater impact on the economies of certain foreign countries.
|
|
∎
|
|
Foreign
Governmental and Regulatory Risks. Foreign companies may not be
subject to the same accounting and disclosure requirements as U.S.
companies. As a result there may be less accurate information available
regarding a foreign company’s operations and financial condition. Foreign
companies may be subject to capital controls, nationalization, or
confiscatory taxes. There may be less government regulation of foreign
issuers, exchanges and brokers than in the United States. Some countries
also have restrictions that limit foreign ownership and may impose
penalties for increases in the value of the Fund’s investment. The value
of the Fund’s foreign investments may be affected if it experiences
difficulties in enforcing legal judgments in foreign courts.
|
|
∎
|
|
Foreign
Currency Risk. A change in the value of a foreign currency against the
U.S. dollar will result in a change in the U.S. dollar value of securities
denominated in that foreign currency. If the U.S. dollar rises in value
against a foreign currency, a security denominated in that currency will
be worth less in U.S. dollars and if the U.S. dollar decreases in value
against a foreign currency, a security denominated in that currency will
be worth more in U.S. dollars. The dollar value of foreign investments may
also be affected by exchange controls. Foreign currency exchange
transactions may impose additional costs on the Fund. The Fund can also
invest in derivative instruments linked to foreign currencies. The change
in value of a foreign currency against the U.S. dollar will result in a
change in the U.S. dollar value of derivatives linked to that foreign
currency. The investment adviser’s selection of foreign currency
denominated investments may not perform as expected. Currency derivative
investments may be particularly volatile and subject to greater risks than
other types of foreign-currency denominated investments.
|
|
∎
|
|
Foreign
Custody Risk. There may be very limited regulatory oversight of
certain foreign banks or securities depositories that hold foreign
securities and foreign currency and the laws of certain countries may
limit the ability to recover such assets if a foreign bank or depository
or their agents goes bankrupt. There may also be an increased risk of loss
of portfolio securities. |
|
∎
|
|
Time Zone
Arbitrage. If the Fund invests a significant amount of its assets in
foreign securities, it may be exposed to “time-zone arbitrage” attempts by
investors seeking to take advantage of differences in the values of
foreign securities that might result from events that occur after the
close of the foreign securities market on which a security is traded and
before the close of the New York Stock Exchange that day, when the Fund’s
net asset value is calculated. If such time zone arbitrage were
successful, it might dilute the interests of other shareholders. However,
the Fund’s use of “fair value pricing” under certain circumstances, to
adjust the closing market prices of foreign securities to reflect what the
investment adviser and the Board believe to be their fair value, may help
deter those activities. |
|
∎
|
|
Globalization Risks. The growing inter-relationship of
global economies and financial markets has increased the effect of
conditions in one country or region on issuers of securities in a
different country or region. In particular, the adoption or prolongation
of protectionist trade policies by one or more countries, changes in
economic or monetary policy in the United States or abroad, or a slowdown
in the U.S. economy, could lead to a decrease in demand for products and
reduced flows of capital and income to companies in other countries.
|
|
∎
|
|
Regional
Focus. At times, the Fund might increase the relative emphasis of its
investments in a particular region of the world. Securities of issuers in
a region might be affected by changes in economic conditions or by changes
in government regulations, availability of basic resources or supplies, or
other events that affect that region more than others. If the Fund has a
greater emphasis on investments in a particular region, it may be subject
to greater risks from adverse events that occur in that region than a fund
that invests in a different region or that is more geographically
diversified. Political, social or economic disruptions in the region may
adversely affect the values of the Fund’s holdings.
|
Risks of Developing and Emerging
Markets. Investments in developing and emerging market countries are subject
to all the risks associated with foreign investing, however, these risks may be
magnified in developing and emerging markets. Investments in securities of
issuers in developing or emerging market countries may be considered
speculative. Additional information regarding certain of the risks associated
with investing in developing and emerging markets is provided below.
|
∎
|
|
Less
Developed Securities Markets. Developing or emerging market countries
may have less well-developed securities markets and exchanges.
Consequently they have lower trading volume than the
|
31 Invesco
Investment Funds
|
|
securities markets of
more developed countries and may be substantially less liquid than those
of more developed countries. |
|
∎
|
|
Transaction Settlement. Settlement procedures in developing
or emerging markets may differ from those of more established securities
markets, and settlement delays may result in the inability to invest
assets or to dispose of portfolio securities in a timely manner. As a
result there could be subsequent declines in the 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. |
|
∎
|
|
Price
Volatility. Securities prices in developing or emerging markets may be
significantly more volatile than is the case in more developed nations of
the world, which may lead to greater difficulties in pricing securities.
|
|
∎
|
|
Less
Developed Governments and Economies. The governments of developing or
emerging market countries may be more unstable than the governments of
more developed countries. In addition, the economies of developing or
emerging market countries may be more dependent on relatively few
industries or investors that may be highly vulnerable to local and global
changes. Developing or emerging market countries may be subject to social,
political, or economic instability. Further, the value of the currency of
a developing or emerging market country may fluctuate more than the
currencies of countries with more mature markets.
|
|
∎
|
|
Government
Restrictions. In certain developing or emerging market countries,
government approval may be required for the repatriation of investment
income, capital or the proceeds of sales of securities by foreign
investors. Other government restrictions may include confiscatory
taxation, expropriation or nationalization of company assets, restrictions
on foreign ownership of local companies, protectionist measures, and
practices such as share blocking. |
|
∎
|
|
Privatization Programs. The governments in some developing
or 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 developing or 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. |
Frontier Market Risk. The risks
associated with investments in frontier market countries include all the risks
associated with investments in developing and emerging markets. These risks are
magnified for frontier market countries because frontier market countries
generally have smaller economies, even less developed capital markets, and are
traditionally less accessible than traditional emerging and developing markets.
As a result, investments in companies in frontier market countries are generally
subject to a higher risk of loss than investments in companies in traditional
emerging and developing market countries due to less developed securities
markets, different settlement procedures, greater price volatility, less
developed governments and economies, more government restrictions, and the
limited ability of foreign entities to participate in certain privatization
programs. Investments in companies operating in frontier market countries are
highly speculative in nature.
Eurozone Investment Risks. The
European Union (EU) is an economic and political union of most western European
countries and a growing number of eastern European countries, collectively known
as “member states.” One of the key mandates of the EU is the establishment and
administration of a common single market, consisting of, among other things, a
single currency and a common trade policy. In order to pursue this goal, member
states established the Economic and Monetary Union (EMU), which sets out
different stages and commitments that member states need to follow to achieve
greater economic and monetary policy coordination, including the adoption of a
single currency, the euro. Many member states have adopted the euro as their
currency and, as a result, are subject to the monetary policies of the European
Central Bank (ECB).
The global economic crisis that began
in 2008 has caused severe financial difficulties for many EU member states,
pushing some to the brink of insolvency and causing others to experience
recession, large public debt, restructuring of government debt, credit rating
downgrades and an overall weakening of banking and financial sectors. Some of
those countries have depended on, and may continue to be dependent on, the
assistance from others such as the ECB, the International Monetary Fund (IMF),
or other governments and institutions to address those issues. Failure by one or
more EU member states to implement reforms or attain a certain performance level
imposed as a condition of assistance, or an insufficient level of assistance,
could deepen or prolong the economic downturn which could have a significant
adverse effect on the value of investments in those and other European
countries. By adopting the euro as its currency, members of the EMU are subject
to fiscal and monetary controls that could limit to some degree the ability to
implement their own economic policies. Additionally, EMU member states could
voluntarily abandon the euro or involuntarily be forced out of the euro,
including by way of a partial or complete dissolution of the EMU. The effects of
such outcomes on the rest of the Eurozone and global markets as a whole are
unpredictable, but are likely to be negative, including adversely impacted
market values of Eurozone and various other securities and currencies,
redenomination of certain securities into less valuable local currencies, and
more volatile and illiquid markets. Under such circumstances, investments
denominated in euros or replacement currencies may be difficult to value, the
ability to operate an investment strategy in connection with euro-denominated
securities may be significantly impaired and the value of euro-denominated
investments may decline significantly and unpredictably. Additionally, the
United Kingdom’s intended departure from the EU, known as “Brexit,” may have
significant political and financial consequences for Eurozone markets, including
greater market volatility and illiquidity, currency fluctuations, deterioration
in economic activity, a decrease in business confidence and an increased
likelihood of a recession in the United Kingdom. Uncertainty relating to the
withdrawal procedures and timeline may have adverse effects on asset valuations
and the renegotiation of current trade agreements, as well as an increase in
financial regulation of United Kingdom banks. While the full impact of Brexit is
unknown, market disruption in the EU and globally may have a negative effect on
the value of the Fund’s investments. Additionally, the risks related to Brexit
could be more pronounced if one or more additional EU member states seek to
leave the EU.
Investing in China A Shares. The
portfolio managers may pursue the Fund’s investment objective by investing a
portion of the Fund’s assets in China A shares (China A Shares), which are
shares of companies incorporated in the People’s Republic of China (PRC) and
listed on the Shanghai Stock Exchange (SSE) or the Shenzhen Stock Exchange
(SZSE). The China A Shares market is an active Chinese market that includes a
large number of Chinese equities as well as smaller or emerging Chinese
companies that may not list shares elsewhere. The China Securities Regulatory
Commission (CSRC) and the Securities and Futures Commission of Hong Kong have
approved programs which establish mutual stock market access between the PRC and
Hong Kong, via the Shanghai-Hong Kong Stock Connect and the Shenzhen- Hong Kong Stock Connect (Stock
Connect). Stock Connect is a securities trading and clearing program developed
by Hong Kong Exchanges and Clearing Limited, the SSE, the SZSE and China
Securities Depository and Clearing Corporation Limited (ChinaClear) designed to
achieve mutual stock market access between the PRC and Hong Kong.
The Fund may invest directly in certain
eligible China A Shares through Stock Connect or, for operational efficiency and
regulatory considerations, through an investment in private investment vehicle
organized under Delaware law (the China Fund). The China Fund seeks long term
capital appreciation by investing primarily in companies established or
operating in the PRC. It is expected that the China Fund will invest a
substantial portion of its assets in China A Shares and other securities
available to certain qualified investors. The China Fund’s managing member,
Oppenhei-
32 Invesco
Investment Funds
merFunds, has full and exclusive
discretionary authority to manage the day-to-day operations of the China
Fund and to invest its assets. The Fund’s investment in the China Fund may vary
based on the portfolio managers’ use of different types of investments that
provide exposure to Chinese securities, e.g., through Stock Connect. Since the
Fund may invest a portion of its assets in the China Fund, the Fund may be
considered to be investing indirectly in such Chinese securities through the
China Fund.
Risks of Investing through the China
Fund. Investments in Class A shares of Chinese companies involve
certain risks and special considerations not typically associated with
investments in U.S. companies, such as greater government control over the
economy, political and legal uncertainty, currency fluctuations or blockage, the
risk that the Chinese government may decide not to continue to support economic
reform programs and the risk of nationalization or expropriation of assets.
Additionally, the Chinese securities markets are emerging markets and may be
characterized by relatively low trading volume, which may result in
substantially less liquidity and greater price volatility than more developed
markets. Some of these risks may be more pronounced for the China A Shares
market than for Chinese securities markets generally because the A-share market is subject to greater
government restrictions and control. The China Fund’s China A Shares investment
quota may be reduced or revoked by the Chinese government at any time, including
if redemptions reduce the amount invested in China A Shares by the China Fund
below the current quota amount. Further, the China Fund may invest substantially
all of its assets in a limited number of issuers or a single issuer. To the
extent that it does so, the China Fund is more subject to the risks associated
with and developments affecting such issuers than a fund that invests more
widely. In addition, although it is not currently expected to do so, the China
Fund may invest a portion of its assets in certain exchange-traded and over-the-counter
financial instruments from countries other than China.
The Fund will deem its investment in
the China Fund to be illiquid and subject to the Fund’s policy regarding
investments in illiquid investments. Currently, the Fund has a policy of
investing no more than 15% of its net assets in illiquid or restricted
securities. The Fund currently will invest no more than 10% of its net assets in
the China Fund. Interests in the China Fund may be redeemed, and net redemption
proceeds may be repatriated only once each day. In addition, the China Fund is
subject to a monthly accumulated repatriation limit equal to 20% of the China
Fund’s total investment in China A Shares and other qualified foreign
institutional investor (QFII) permitted securities as of the end of the previous
year. The Fund’s redemption of interests from the China Fund may be limited
accordingly.
The China Fund is not registered under
the Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder by the SEC. To the extent a Fund invests in the China
Fund, it will not have all of the protections offered to investors by the
Investment Company Act of 1940. However, pursuant to an exemptive order granted
on October 31, 2017 to the China Fund by the SEC, the China Fund is
required to comply with the substantive requirements of a number of provisions
of the Investment Company Act of 1940 and the regulations thereunder.
Risks of Investing through Stock
Connect. Trading on Stock Connect is subject to an aggregated daily quota on
purchases that can change without notice, restricting the Fund’s ability to
invest in China A Shares on a timely basis. The Stock Exchange of Hong Kong
Limited (SEHK), SSE and SZSE may suspend trading of individual securities or
more broadly in response to market events, which may adversely affecting the
Fund’s ability to access the PRC market. Stock Connect only operates on days
when both markets are open for trading and banks in both markets are also open
on corresponding settlement days, thus the Fund may not be able to trade China A
Shares on days when Stock Connect is not trading but normal trading for the PRC
market otherwise occurs. Prices may fluctuate on China A Shares on days when
Stock Connect is not trading. The Fund’s ability to enter and exit trades via
Stock Connect on a timely basis is also restricted by a prohibition on
turnaround (day) trading on the China A Share market
(i.e., investors cannot purchase and
sell the same securities via Stock Connect in the same trading day). Stock
Connect relies on the maintenance by relevant market participants of certain
information technology, risk management and other requirements. There is no
assurance that relevant exchange trading systems and market participants will
function properly or continue to adapt to changes. If relevant systems fail to
function properly, trading disruptions can occur that adversely affect the
Fund’s ability to access the China A Share market. The Fund is also subject to
risks related to the clearing and settlement of securities, including for
example where a default occurs in connection with the settlement of cross border
trades that could cause potential delays in the Fund’s recovery process or its
ability to fully recover losses. It is expected that the list of eligible
securities on Stock Connect will be subject to review and may change
periodically. Hong Kong and overseas investors are subject to a restriction on
single foreign investors’ holding no more than 10% of the total issue shares, as
well as a restriction that, in the aggregate, foreign investors’ hold no more
than 30% of the total issue shares. Therefore, foreign investors could be
required to unwind their positions if excessive shareholding restrictions are
exceeded.
Regulations and implementation rules
applicable to Stock Connect are novel and untested, and it is uncertain as to
how they will be applied. There is also general uncertainty regarding changes in
government policies, taxation, currency repatriation restrictions, permitted
foreign ownership levels and other laws or regulations that impact Stock
Connect.
Under current PRC and CSRC tax
guidance, capital gains realized by the Fund from trading of eligible China A
Shares on the SSE under Stock Connect may currently enjoy a temporary exemption
from PRC income and business tax. It is not known when such exemption will
expire and whether other taxes will be applicable to trading securities under
Stock Connect in the future. There is no guarantee that relevant tax regulations
and guidance, including the temporary tax exemption with respect to Stock
Connect, will continue to apply, will not be repealed and re-imposed retrospectively, or that no new
tax regulations and practice relating to Stock Connect will not be promulgated
in the future, possibly with retroactive effect. Such changes could have a
significant adverse effect on the Fund, including reducing returns, reducing the
value of the Fund’s investments, and possibly impairing capital invested by the
Fund.
Growth Investing. Growth
companies are companies whose earnings and stock prices are expected to grow at
a faster rate than the overall market. Growth companies can be new companies or
established companies that may be entering a growth cycle in their business.
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 into research,
development or capital assets. Although newer growth companies may not pay any
dividends for some time, their stocks may be valued because of their potential
for price increases.
Small-Cap Companies . Small-cap companies may be either established
or newer companies, including “unseasoned” companies that have typically been in
operation for less than three years. While smaller companies might offer greater
opportunities for gain than larger companies, they also involve greater risk of
loss. 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 the Fund to dispose of its holdings at an acceptable price when
33 Invesco
Investment Funds
it wants to sell them. Smaller
companies may not have established markets for their products or services and
may have fewer customers and product lines. They may have more limited access to
financial resources and may not have the financial strength to sustain them
through business downturns or adverse market conditions. Since smaller 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.
Smaller companies may have unseasoned management or less depth in management
skill than larger, more established companies. They may be more reliant on the
efforts of particular members of their management team and management changes
may pose a greater risk to the success of the business. Securities of small,
unseasoned companies may be particularly volatile, especially in the short-term,
and may have very limited liquidity in a declining market. It may take a
substantial period of time to realize a gain on an investment in a small-cap company, if any gain is realized at
all.
The Fund measures the market
capitalization of an issuer at the time of investment. Because the relative
sizes of companies change over time as the securities market changes, the Fund’s
definition of what is a “small-cap,”
“mid-cap” or “large-cap” company may change over time as
well. After the Fund buys the security of an individual company, that company
may expand or contract and no longer fall within the designated capitalization
range. Although the Fund is not required to sell the securities of companies
whose market capitalizations have grown or decreased beyond the Fund’s
capitalization-range definition, it might sell some of those holdings to try to
adjust the dollar-weighted median capitalization of its portfolio. That might
cause the Fund to realize capital gains on an investment and could increase
taxable distributions to shareholders.
When the Fund invests in smaller
company securities that might trade infrequently, investors might seek to trade
Fund shares based on their knowledge or understanding of the value of those
securities (this is sometimes referred to as “price arbitrage”). If such price
arbitrage were successful, it might interfere with the efficient management of
the Fund’s portfolio and the Fund may be required to sell securities at
disadvantageous times or prices to satisfy the liquidity requirements created by
that activity. Successful price arbitrage might also dilute the value of fund
shares held by other shareholders.
Mid-Cap Companies. Mid-cap companies are generally companies
that have completed their initial start-up
cycle, and in many cases have established markets and developed seasoned
management teams. While mid-cap
companies might offer greater opportunities for gain than larger
companies, they also involve greater risk of loss. They may be more sensitive to
changes in a company’s earnings expectations and may experience more abrupt and
erratic price movements than larger companies. Mid-cap 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
mid-cap companies may be subject to
wider price fluctuations and may be less liquid than securities of larger
exchange-traded issuers, meaning it might be harder for the Fund to dispose of
those holdings at an acceptable price when it wants to sell them. Mid-cap companies may have less established
markets for their products or services and may have fewer customers and product
lines than larger companies. They may have more limited access to financial
resources and may not have the financial strength to sustain them through
business downturns or adverse market conditions. Since 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. Mid-cap companies may have unseasoned
management or less depth in management skill than larger, more established
companies. They may be more reliant on the efforts of particular members of
their management team and management changes may pose a greater risk to the
success of the business. Securities of unseasoned companies may be particularly
volatile, especially in the short term and in periods of market instability, and
may have limited liquidity in a
declining market. It may take a substantial period of time to realize a gain on
an investment in a mid-cap company, if
any gain is realized at all.
The Fund measures the market
capitalization of an issuer at the time of investment. Because the relative
sizes of companies change over time as the securities market changes, the Fund’s
definition of what is a “mid-cap”
company may change over time as well. After the Fund buys their
securities, individual companies may grow and no longer fall within the Fund’s
definition of a “mid-cap” issuer.
Although the Fund is not required to sell the securities of companies whose
market capitalizations have grown beyond the Fund’s mid-cap definition, it might sell some of
those holdings to try to lower the dollar-weighted median capitalization of its
portfolio. That might cause the Fund to realize capital gains on the investment
and could increase taxable distributions to shareholders.
When the Fund invests in smaller
company securities that might trade infrequently, investors might seek to trade
Fund shares based on their knowledge or understanding of the value of those
securities (this is sometimes referred to as “price arbitrage”). If such price
arbitrage were successful, it might interfere with the efficient management of
the Fund’s portfolio and the Fund may be required to sell securities at
disadvantageous times or prices to satisfy the liquidity requirements created by
that activity. Successful price arbitrage might also dilute the value of fund
shares held by other shareholders.
Additional Investment Information.
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.
Other Investment Strategies and Risks
The Fund can also use the investment
techniques and strategies described below. The Fund might not use all of these
techniques or strategies or might only use them from time to time.
Diversification and Concentration
. The Fund is a diversified fund. It attempts to reduce its exposure to the
risks of individual securities by diversifying its investments across a broad
number of different issuers. The Fund will not concentrate its investments in
issuers in any one industry. At times, however, the Fund may emphasize
investments in some industries or sectors more than others. The prices of
securities of issuers in a particular industry or sector 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. To the extent that the Fund increases the relative
emphasis of its investments in a particular industry or sector, its share values
may fluctuate in response to events affecting that industry or sector. The
Securities and Exchange Commission staff has taken the position that investment
of more than 25% of a fund’s total assets in issuers in the same industry
constitutes concentration in that industry. That limit does not apply to
securities issued or guaranteed by the U.S. government or its agencies and
instrumentalities. For purposes of compliance with its concentration policy, the
Fund will consider portfolio investments held by underlying investment companies
in which the Fund invests, to the extent that the Fund has sufficient
information about such portfolio investments. The Fund will make reasonable
efforts to obtain such information.
Investing in Domestic Securities.
The Fund can invest in common and preferred stocks and debt securities of
U.S. companies. It can also hold
34 Invesco
Investment Funds
U.S. corporate and government debt
securities for defensive and liquidity purposes. Under normal market conditions,
the Fund does not expect to invest a significant amount of its assets in
securities of U.S. issuers.
Debt Securities. Debt securities
can include debt securities of foreign companies and governments, including
those in emerging and developing countries. However, the Fund does not invest
for income and does not expect to invest significant amounts in debt securities,
unless they are convertible securities considered to be “equity equivalents,” or
debt securities purchased for temporary defensive or liquidity purposes.
Debt securities may be subject to the
following risks:
|
∎
|
|
Interest
Rate Risk. Interest rate risk is the risk that rising interest rates,
or an expectation of rising interest rates in the near future, will cause
the values of the Fund’s investments in debt securities to decline. The
values of debt securities usually change when prevailing interest rates
change. When interest rates rise, the values of outstanding debt
securities generally fall, and those securities may sell at a discount
from their face amount. Additionally, when interest rates rise, the
decrease in values of outstanding debt securities may not be offset by
higher income from new investments. When interest rates fall, the values
of already-issued debt securities generally rise and the Fund’s
investments in new securities may be at lower yields and may reduce the
Fund’s income. The values of longer-term debt securities usually change
more than the values of shorter-term debt securities when interest rates
change; thus, interest rate risk is usually greater for securities with
longer maturities or durations. “Zero-coupon” or “stripped” securities may
be particularly sensitive to interest rate changes. Risks associated with
rising interest rates are heightened given that interest rates in the U.S.
are near historic lows. Interest rate changes may have different effects
on the values of mortgage-related securities because of prepayment and
extension risks. |
|
∎
|
|
Duration
Risk. Duration is a measure of the price sensitivity of a debt
security or portfolio to interest rate changes. Duration risk is the risk
that longer-duration debt securities are more volatile and thus more
likely to decline in price, and to a greater extent, than shorter-duration
debt securities, in a rising interest-rate environment. “Effective
duration” attempts to measure the expected percentage change in the value
of a bond or portfolio resulting from a change in prevailing interest
rates. The change in the value of a bond or portfolio can be approximated
by multiplying its duration by a change in interest rates. For example, if
a bond has an effective duration of three years, a 1% increase in general
interest rates would be expected to cause the bond’s value to decline
about 3% while a 1% decrease in general interest rates would be expected
to cause the bond’s value to increase 3%. The duration of a debt security
may be equal to or shorter than the full maturity of a debt security.
|
|
∎
|
|
Credit
Risk. Credit risk is the risk that the issuer of a security might not
make interest and principal payments on the security as they become due.
U.S. government securities generally have lower credit risks than
securities issued by private issuers or certain foreign governments. If an
issuer fails to pay interest, the Fund’s income might be reduced, and if
an issuer fails to repay principal, the value of the security might fall
and the Fund could lose the amount of its investment in the security. The
extent of this risk varies based on the terms of the particular security
and the financial condition of the issuer. A downgrade in an issuer’s
credit rating or other adverse news about an issuer, for any reason, can
reduce the market value of that issuer’s securities.
|
|
∎
|
|
Credit
Spread Risk . Credit spread risk is the risk that credit spreads
(i.e., the difference in yield between securities that is due to
differences in their credit quality) may increase when the market expects
lower-grade bonds to default more frequently. Widening credit spreads may
quickly reduce the market values of the Fund’s lower-rated and unrated
securities. Some unrated securities may not have an active trading market
or may trade less actively than rated secu-
|
|
|
rities, which means that
the Fund might have difficulty selling them promptly at an acceptable
price. |
|
∎
|
|
Extension
Risk. Extension risk is the risk that, if interest rates rise rapidly,
prepayments on certain debt securities may occur at a slower rate than
expected, and the expected maturity of those securities could lengthen as
a result. Securities that are subject to extension risk generally have a
greater potential for loss when prevailing interest rates rise, which
could cause their values to fall sharply. Extension risk is particularly
prevalent for a callable security where an increase in interest rates
could result in the issuer of that security choosing not to redeem the
security as anticipated on the security’s call date. Such a decision by
the issuer could have the effect of lengthening the debt security’s
expected maturity, making it more vulnerable to interest rate risk and
reducing its market value. |
|
∎
|
|
Reinvestment Risk. Reinvestment risk is the risk that when
interest rates fall, the Fund may be required to reinvest the proceeds
from a security’s sale or redemption at a lower interest rate. Callable
bonds are generally subject to greater reinvestment risk than non-callable bonds.
|
|
∎
|
|
Prepayment
Risk. Certain fixed-income securities (in particular mortgage-related
securities) are subject to the risk of unanticipated prepayment.
Prepayment risk is the risk that, when interest rates fall, the issuer
will redeem the security prior to the security’s expected maturity, or
that borrowers will repay the loans that underlie these fixed-income
securities more quickly than expected, thereby causing the issuer of the
security to repay the principal prior to expected maturity. The Fund may
need to reinvest the proceeds at a lower interest rate, reducing its
income. Securities subject to prepayment risk generally offer less
potential for gains when prevailing interest rates fall. If the Fund buys
those securities at a premium, accelerated prepayments on those securities
could cause the Fund to lose a portion of its principal investment. The
impact of prepayments on the price of a security may be difficult to
predict and may increase the security’s price volatility. Interest-only
and principal-only securities are especially sensitive to interest rate
changes, which can affect not only their prices but can also change the
income flows and repayment assumptions about those investments.
|
|
∎
|
|
Event Risk
. If an issuer of debt securities is the subject of a buyout, debt
restructuring, merger or recapitalization that increases its debt load, it
could interfere with its ability to make timely payments of interest and
principal and cause the value of its debt securities to fall.
|
Fixed-Income Market Risks . The
fixed-income securities market can be susceptible to unusual volatility and
illiquidity. Volatility and illiquidity may be more pronounced in the case of
lower-rated and unrated securities. Liquidity can decline unpredictably in
response to overall economic conditions or credit tightening. Increases in
volatility and decreases in liquidity may be caused by a rise in interest rates
(or the expectation of a rise in interest rates), which are near historic lows
in the U.S. and in other countries. During times of reduced market liquidity,
the Fund may not be able to readily sell bonds at the prices at which they are
carried on the Fund’s books. If the Fund needed to sell large blocks of bonds to
meet shareholder redemption requests or to raise cash, those sales could further
reduce the bonds’ prices. An unexpected increase in Fund redemption requests
(including requests from shareholders who may own a significant percentage of
the Fund’s shares), which may be triggered by market turmoil or an increase in
interest rates, as well as other adverse market and economic developments, could
cause the Fund to sell its holdings at a loss or at undesirable prices and
adversely affect the Fund’s share price and increase the Fund’s liquidity risk,
Fund expenses and/or taxable distributions, if applicable. Similarly, the prices
of the Fund’s holdings could be adversely affected if an investment account
managed similarly to the Fund was to experience significant redemptions and that
account was required to sell its holdings at an inopportune time. The liquidity
of an issuer’s securities may decrease as a result of a decline in an issuer’s
credit
35 Invesco
Investment Funds
rating, the occurrence of an event that
causes counterparties to avoid transacting with the issuer, or an increase in
the issuer’s cash outflows, as well as other adverse market and economic
developments. A lack of liquidity or other adverse credit market conditions may
hamper the Fund’s ability to sell the debt securities in which it invests or to
find and purchase suitable debt instruments.
Economic and other market developments
can adversely affect fixed-income securities markets in the United States,
Europe and elsewhere. At times, participants in debt securities markets may
develop concerns about the ability of certain issuers of debt securities to make
timely principal and interest payments, or they may develop concerns about the
ability of financial institutions that make markets in certain debt securities
to facilitate an orderly market. Those concerns may impact the market price or
value of those debt securities and may cause increased volatility in those debt
securities or debt securities markets, reducing the willingness of some lenders
to extend credit, and making it more difficult for borrowers to obtain financing
on attractive terms (or at all). Under some circumstances, as was the case
during the latter half of 2008 and early 2009, those concerns could cause
reduced liquidity in certain debt securities markets.
Following the financial crisis, the
Federal Reserve sought to stabilize the economy by keeping the federal funds
rate near zero percent. The Federal Reserve has also purchased large quantities
of securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities, pursuant to its monetary stimulus program known as
“quantitative easing.” As the Federal Reserve has completed the tapering of its
securities purchases pursuant to quantitative easing, it has recently raised
interest rates on multiple occasions, and continues to consider future raises to
the federal funds rate, there is a risk that interest rates may rise and cause
fixed-income investors to move out of fixed-income securities, which may also
increase redemptions in fixed-income mutual funds.
In addition, although the fixed-income
securities markets have grown significantly in the last few decades, regulations
and business practices have led some financial intermediaries to curtail their
capacity to engage in trading (i.e., “market making”) activities for certain
debt securities. As a result, dealer inventories of fixed-income securities,
which provide an indication of the ability of financial intermediaries to make
markets in fixed-income securities, are near historic lows relative to market
size. Because market makers help stabilize the market through their financial
intermediary services, further reductions in dealer inventories could have the
potential to decrease liquidity and increase volatility in the fixed-income
securities markets.
Investing in Special Situations.
At times, investment benefit may be sought from what a portfolio manager
considers to be “special situations,” such as mergers, reorganizations,
restructurings or other unusual events, that are expected to affect a particular
issuer. There is a risk that the expected change or event might not occur, which
could cause the price of the security to fall, perhaps sharply. In that case,
the investment might not produce the expected gains or might cause a loss. This
is an aggressive investment technique that may be considered speculative.
Derivative Investments. The Fund
can invest in “derivative” instruments. A derivative is an instrument whose
value depends on (or is derived from) the value of an underlying security,
asset, interest rate, index or currency. Derivatives may allow the Fund to
increase or decrease its exposure to certain markets or risks.
The Fund may use derivatives to seek to
increase its investment return or for hedging purposes. The Fund is not required
to use derivatives in seeking its investment objective or for hedging and might
not do so.
Options, futures, forward contracts,
swaps and “structured” notes are some of the types of derivatives that the Fund
may use. The Fund may also use other types of derivatives that are consistent
with its investment strategies or for hedging purposes.
Hedging. Hedging transactions
are intended to reduce the risks of securities in the Fund’s portfolio. At
times, however, a hedging instrument’s value might not be correlated with the
investment it is
intended to hedge, and the hedge might
be unsuccessful. If the Fund uses a hedging instrument at the wrong time or
judges market conditions incorrectly, the strategy could reduce its return or
create a loss.
Risks of Derivative Investments.
Derivatives may be volatile and may involve significant risks. The
underlying security, obligor or other instrument on which a derivative is based,
or the derivative itself, may not perform as expected. For some derivatives, it
is possible to lose more than the amount invested in the derivative investment.
In addition, some derivatives have the potential for unlimited loss, regardless
of the size of the Fund’s initial investment. Certain derivative investments
held by the Fund may be illiquid, making it difficult to close out an
unfavorable position. Derivative transactions may require the payment of
premiums and may increase portfolio turnover. Derivatives are subject to credit
risk, since the Fund may lose money on a derivative investment if the issuer or
counterparty fails to pay the amount due. In addition, 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. As a result of these risks,
the Fund could realize little or no income or lose money from the investment, or
the use of a derivative for hedging might be unsuccessful.
In addition, pursuant to rules
implemented under financial reform legislation, certain over-the-counter
derivatives, including certain interest rate swaps and certain
credit default swaps, are required to be executed on a regulated market and/or
cleared through a clearinghouse. Entering into a derivative transaction with a
clearinghouse may entail further risks and costs, including the counterparty
risk of the clearinghouse and the futures commission merchant through which the
Fund accesses the clearinghouse.
Illiquid and Restricted
Investments . Investments that do not have an active
trading market, or that have legal or contractual limitations on their resale,
may be considered to be “illiquid” investments. Illiquid investments may be
difficult to value or to sell promptly at an acceptable price or may require
registration under applicable securities laws before they can be sold publicly.
Securities that have limitations on their resale are referred to as “restricted
securities.” Certain restricted investments that are eligible for resale to
qualified institutional purchasers may not be regarded as illiquid.
The Fund will comply with Rule 22e-4 in managing its illiquid investments.
The Fund’s holdings of illiquid investments are monitored on an ongoing basis to
determine whether to sell any of those investments to maintain adequate
liquidity.
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.
F und Management
The Adv iser(s)
Invesco Advisers, Inc. serves as each
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 1555 Peachtree Street, N.E., 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.
36 Invesco
Investment Funds
Potential New Sub-Advisers (Exemptive Order Structure)
. The SEC has also granted exemptive relief that permits the Adviser,
subject to certain conditions, to enter into new sub-advisory agreements with affiliated or
unaffiliated sub-advisers on behalf of
the Fund without shareholder approval. The exemptive relief also permits
material amendments to existing sub-advisory
agreements with affiliated or unaffiliated sub-advisers (including the Sub-Advisory Agreements with the Sub-Advisers) without shareholder approval.
Under this structure, the Adviser has ultimate responsibility, subject to
oversight of the Board, for overseeing such sub-advisers and recommending to the Board
their hiring, termination, or replacement. The structure does not permit
investment advisory fees paid by the Fund to be increased without shareholder
approval, or change the Adviser’s obligations under the investment advisory
agreement, including the Adviser’s responsibility to monitor and oversee sub-advisory services furnished to the Fund.
Exclusion of Adviser from Commodity Pool Operator Definition
With respect to the Funds, 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 Funds.
The terms of the CPO exclusion require
each 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 Funds are
permitted to invest in these instruments as further described in each Fund’s
SAI. However, the Funds are 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 Funds,
their investment strategies or this prospectus.
Ad viser Compensation
The Adviser receives a fee from the
Invesco Oppenheimer Capital Income Fund, calculated at the annual rate of 0.75%
of the first $100 million, 0.70% of the next $100 million, 0.65% of
the next $100 million, 0.60% of the next $100 million, 0.55% of the
next $100 million, 0.50% of the next $4.5 billion, and 0.48% of the
amount over $5 billion of average daily net assets.
The Adviser receives a fee from the
Invesco Oppenheimer Developing Markets Fund, calculated at the annual rate of
1.00% of the first $250 million, 0.95% of the next $250 million, 0.90%
of the next $500 million, 0.85% of the next $6.0 billion, 0.80% of the
next $3.0 billion, 0.75% of the next $20 billion, 0.74% of the next
$15 billion, and 0.73% of the amount over $45 billion of average daily
net assets.
The Adviser receives a fee from the
Invesco Oppenheimer Emerging Markets Innovators Fund, calculated at the annual
rate of 1.15% of the first $500 million, 1.10% of the next
$500 million, 1.05% of the next $4 billion, and 1.00% of the amount
over $5 billion of average daily net assets.
The advisory fee payable by each Fund
shall be reduced by any amounts paid by the Fund under the administrative
services agreement with the Adviser. Invesco, not the Funds, pays sub-advisory fees, if any.
When issued, a discussion regarding the
basis for the Board’s approval of the investment advisory agreement and
investment sub-advisory agreements of
each Fund will be available in each Fund’s next annual or semi-annual report to
shareholders.
Portfoli o Managers
The following individuals are jointly
and primarily responsible for the day-to-day management of each Fund’s
portfolio, with the exception of Invesco Oppenheimer Developing Markets Fund, in
which the portfolio
manager of the Fund is individually and
primarily responsible for the Fund’s portfolio:
Invesco Oppenheimer Capital Income Fund
∎
|
|
Michelle
Elena Borré Massick (lead manager), Portfolio Manager, who has been
responsible for the Fund since 2019 and has been associated with Invesco
and/or its affiliates since 2019. Prior to the commencement of the Fund’s
operations, Ms. Borré Massick managed the predecessor fund since 2009
and was associated with OppenheimerFunds, a global asset management firm,
since 2003. |
∎
|
|
Krishna
Memani, Portfolio Manager, who has been responsible for the Fund since
2019 and has been associated with Invesco and/or its affiliates since
2019. Prior to the commencement of the Fund’s operations, Mr. Memani
managed the predecessor fund since 2009 and was associated with
OppenheimerFunds, a global asset management firm, since 2009.
|
Invesco Oppenheimer Developing Markets Fund
∎
|
|
Justin
Leverenz, CFA, Portfolio Manager, who has been responsible for the Fund
since 2019 and has been associated with Invesco and/or its affiliates
since 2019. Prior to the commencement of the Fund’s operations,
Mr. Leverenz managed the predecessor fund since 2007 and was
associated with OppenheimerFunds, a global asset management firm, since
2004. |
Invesco Oppenheimer Emerging Markets Innovators Fund
∎
|
|
Heidi
Heikenfeld, CFA, Portfolio Manager, who has been responsible for the Fund
since 2019 and has been associated with Invesco and/or its affiliates
since 2019. Prior to the commencement of the Fund’s operations,
Ms. Heikenfeld managed the predecessor fund since 2014 and was
associated with OppenheimerFunds, a global asset management firm, since
2000. |
∎
|
|
Justin
Leverenz, CFA, Portfolio Manager, who has been responsible for the Fund
since 2019 and has been associated with Invesco and/or its affiliates
since 2019. Prior to the commencement of the Fund’s operations,
Mr. Leverenz managed the predecessor fund since 2014 and was
associated with OppenheimerFunds, a global asset management firm, since
2004. |
All Funds
A lead manager generally has final
authority over all aspects of a Fund’s investment portfolio, including but not
limited to, purchases and sales of individual securities, portfolio construction
techniques, portfolio risk assessment, and the management of daily cash flows in
accordance with portfolio holdings. The degree to which a lead manager may
perform these functions, and the nature of these functions, may change from time
to time.
More information on the portfolio
managers may be found at www.invesco.com/us. The Web site is not part of this
prospectus.
The Funds’ SAI provides additional
information about the portfolio managers’ investments in the Funds, a
description of the compensation structure and information regarding other
accounts managed.
About The China Fund
The China Fund is a limited liability
company organized under the laws of the State of Delaware and is overseen by its
managing member (the Managing Member), OppenheimerFunds. Invesco Oppenheimer
Developing Markets Fund is currently the sole shareholder of the China Fund;
however, an exemptive order has been granted from the Securities and Exchange
Commission to permit units of the China Fund to be sold or offered to other
investors, including other registered investment companies that may be deemed to
be affiliated parties of the Fund. The exemptive order was granted on
October 31, 2017. As additional investors purchase shares of the China
Fund, the China Fund will no longer be wholly-owned by Invesco
37 Invesco
Investment Funds
Oppenheimer Developing Markets Fund. In
addition, as affiliated registered investment companies invest in the China
Fund, pursuant to the exemptive order, the China Fund is subject to significant
limitations on its operations notwithstanding the China Fund’s exclusion from
regulation as a registered investment company, as the exemptive order contains a
condition that would obligate the China Fund to comply with the substantive
requirements of a number of provisions of the Investment Company Act of 1940 and
the regulations thereunder.
Under the China Fund’s limited
liability company operating agreement, the Managing Member has full and
exclusive discretionary authority and responsibility to manage the day-to-day
operations of the China Fund and to invest and reinvest its
assets. The Managing Member does not receive advisory fees from the China Fund.
The China Fund has also entered into separate contracts for the provision of
custody, audit, and legal services, and bears the fees and expenses incurred in
connection with such services. Invesco Oppenheimer Developing Markets Fund
expects that the expenses borne by the China Fund will not be material in
relation to the value of the Fund’s assets. It is further expected that Invesco
Oppenheimer Developing Markets Fund’s investment in the China Fund will not
result in the Fund’s paying duplicative fees for similar services provided to
the Fund and China Fund.
Invesco Oppenheimer Developing Markets
Fund applies its investment restrictions and compliance policies and procedures
on a look-through basis to the China Fund, including, without limitation, those
restrictions, policies and procedures relating to portfolio leverage, liquidity,
brokerage, and the timing and method of the valuation of the China Fund’s
portfolio investments and interests in the China Fund. The Fund’s Chief
Compliance Officer oversees implementation of the policies and procedures
applicable to the China Fund, and makes periodic reports to the Fund’s Board
regarding the China Fund’s compliance with such restrictions, policies and
procedures.
Currently, as a wholly-owned subsidiary
of Invesco Oppenheimer Developing Markets Fund, the China Fund’s financial
statements are consolidated with those of the Fund in the Fund’s Annual and
Semi-Annual Reports provided to shareholders. Copies of the reports are provided
without charge upon request as indicated on the back cover of this prospectus.
Please refer to the SAI for additional information about the organization and
management of the China Fund. As the exemptive order noted above has been
granted, it is anticipated that additional investors will become shareholders of
the China Fund and the China Fund’s financial statements will no longer be
consolidated with those of the Fund.
Other Information
Div idends and Distributions
The Funds expect, based on their
investment objectives and strategies, that their distributions, if any, will
consist of ordinary income, capital gains, or some combination of both.
Dividends
Invesco Oppenheimer Capital Income Fund
generally declares and pays dividends from net investment income, if any,
quarterly.
Invesco Oppenheimer Developing Markets
Fund and Invesco Oppenheimer Emerging Markets Innovators Fund generally declare
and pay dividends from net investment income, if any, annually.
Capital Gains Distributions
Each 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 a Fund’s normal investment
activities and cash flows. During a time of economic volatility, a 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 a
Fund may experience a current year
loss, it may nonetheless distribute prior year capital gains.
Lim ited Fund Offering (Invesco Oppenheimer
Developing Markets Fund)
Effective as of the close of business
on May 24, 2019, the Invesco Oppenheimer Developing Markets Fund closed to new
investors. Investors should note that the Fund reserves the right to refuse any
order that might disrupt the efficient management of the Fund. Investors who
were invested in the Fund on or prior to May 24, 2019, may continue to make
additional purchases in their accounts. Any Employer Sponsored Retirement and
Benefit Plan or its affiliated plans may continue to make additional purchases
of Fund shares and may add new accounts at the plan level that may purchase Fund
shares if the Employer Sponsored Retirement and Benefit Plan or its affiliated
plan had invested in the Fund as of May 24, 2019. New Employer Sponsored
Retirement and Benefit Plans or its affiliated plans authorized prior to May 24,
2019 will have until December 31, 2019 to fund the account. Any brokerage firm
wrap program may continue to make additional purchases of Fund shares and may
add new accounts at the program level that may purchase Fund shares if the
brokerage firm wrap program had invested in the Fund as of May 24, 2019. The
Fund may also accept investments by 529 college savings plans managed by the
Adviser during this limited offering. The Fund may resume sale of shares to new
investors on a future date if the Adviser determines it is appropriate.
Benchmark Descriptions
The Bloomberg Barclays U.S. Aggregate
Bond Index is an unmanaged index considered representative of the US
investment-grade, fixed-rate bond market.
The Custom Invesco Oppenheimer Capital
Income Index is composed of 65% Bloomberg Barclays U.S. Aggregate Bond Index
/35% Russell 3000 Index.
The MSCI Emerging Markets Index is an
unmanaged index considered representative of stocks of developing countries.
The MSCI Emerging Markets Mid Cap Index
is designed to measure equity market performance of mid-capitalization companies
in emerging markets.
The Russell 3000 ®
Index is an unmanaged index considered representative of the US
stock market. The Russell 3000 Index is a trademark/service mark of the Frank
Russell Co. Russell ®
is a trademark of the Frank Russell Co.
38 Invesco
Investment Funds
Fi nancial Highlights
The Funds are new and have no
performance history as of the date of this Prospectus. As a result, the
financial highlights information presented for the Funds is the financial
history of the predecessor funds, which were reorganized into each respective
Fund after the close of business on May 24, 2019. The financial highlights
show each predecessor fund’s financial history for the past five fiscal years
or, if shorter, the period of operations of the predecessor fund or any of its
share classes and the six month period ended February 28, 2019. The financial
highlights table is intended to help you understand each Fund’s and predecessor
fund’s financial performance. Certain information reflects financial results for
a single predecessor fund share.
Class R5 shares had not commenced
operations prior to the Funds’ most recent fiscal year end. Only Class R5 and
Class R6 shares are offered in this prospectus. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the predecessor funds (assuming reinvestment of all dividends and
distributions). The information for the six month period ended February 28, 2019
is unaudited. The information for fiscal years ended prior to May 24, 2019 has
been audited by KPMG LLP, an independent registered public accounting firm,
whose report, along with a predecessor fund’s financial statements, are included
in the respective predecessor fund’s annual report, which is available upon
request.
Oppenheimer Capital Income Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Year Ended August 29, 2014 1
|
Class A |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
10.28
|
|
|
|
$ |
10.14
|
|
|
|
$ |
9.84 |
|
|
|
$ |
9.62 |
|
|
|
$ |
10.03
|
|
|
|
$ |
9.29 |
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
2
|
|
|
|
0.15 |
|
|
|
|
0.28 |
|
|
|
|
0.26 |
|
|
|
|
0.25 |
|
|
|
|
0.25 |
|
|
|
|
0.34 |
|
Net realized and unrealized gain
(loss) |
|
|
|
(0.25
|
) |
|
|
|
0.13 |
|
|
|
|
0.31 |
|
|
|
|
0.25 |
|
|
|
|
(0.35
|
) |
|
|
|
0.71 |
|
Total from investment operations
|
|
|
|
(0.10
|
) |
|
|
|
0.41 |
|
|
|
|
0.57 |
|
|
|
|
0.50 |
|
|
|
|
(0.10
|
) |
|
|
|
1.05 |
|
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
(0.15
|
) |
|
|
|
(0.27
|
) |
|
|
|
(0.27
|
) |
|
|
|
(0.28
|
) |
|
|
|
(0.31
|
) |
|
|
|
(0.31
|
) |
Net asset value , end of
period |
|
|
$ |
10.03
|
|
|
|
$ |
10.28
|
|
|
|
$ |
10.14
|
|
|
|
$ |
9.84 |
|
|
|
$ |
9.62 |
|
|
|
$ |
10.03
|
|
Total Return, at Net Asset
Value 3
|
|
|
|
(0.94
|
)% |
|
|
|
4.10 |
% |
|
|
|
5.84 |
% |
|
|
|
5.31 |
% |
|
|
|
(1.07
|
)% |
|
|
|
11.44
|
% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
1,383,598
|
|
|
|
$ |
1,462,785
|
|
|
|
$ |
1,584,024
|
|
|
|
$ |
1,723,245
|
|
|
|
$ |
1,735,068
|
|
|
|
$ |
1,730,245
|
|
Average net assets (in thousands)
|
|
|
|
1,396,473
|
|
|
|
|
1,524,510
|
|
|
|
|
1,662,753
|
|
|
|
|
1,712,506
|
|
|
|
|
1,764,700
|
|
|
|
|
1,627,867
|
|
Ratios to average net assets:
4,5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
3.03 |
% |
|
|
|
2.79 |
% |
|
|
|
2.63 |
% |
|
|
|
2.66 |
% |
|
|
|
2.54 |
% |
|
|
|
3.55 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
1.04 |
% |
|
|
|
1.04 |
% |
|
|
|
1.05 |
% |
|
|
|
1.05 |
% |
|
|
|
1.05 |
% |
|
|
|
1.04 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00 |
% |
Total expenses 7
|
|
|
|
1.04 |
% |
|
|
|
1.04 |
% |
|
|
|
1.05 |
% |
|
|
|
1.05 |
% |
|
|
|
1.05 |
% |
|
|
|
1.04 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
0.99 |
% |
|
|
|
0.97 |
% |
|
|
|
0.99 |
% |
|
|
|
1.00 |
% |
|
|
|
0.99 |
% |
|
|
|
0.98 |
% |
Portfolio turnover rate
8
|
|
|
|
32 |
% |
|
|
|
88 |
% |
|
|
|
92 |
% |
|
|
|
54 |
% |
|
|
|
79 |
% |
|
|
|
93 |
% |
1. |
Represents
the last business day of the Fund’s reporting period.
|
2. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
3. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
4. |
Annualized
for periods less than one full year. |
5. |
Includes the
Fund’s share of the allocated expenses and/or net investment income from
the master funds. |
7. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
1.05 |
% |
Year Ended August 31, 2018
|
|
|
1.06 |
% |
Year Ended August 31, 2017
|
|
|
1.07 |
% |
Year Ended August 31, 2016
|
|
|
1.07 |
% |
Year Ended August 31, 2015
|
|
|
1.07 |
% |
Year Ended August 29, 2014
|
|
|
1.06 |
% |
8. |
The portfolio
turnover rate excludes purchase and sale transactions of To Be Announced
(TBA) mortgage-related securities as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Purchase Transactions |
|
|
Sale Transactions |
|
Six Months Ended
February 28, 2019 |
|
$
|
2,084,769,197 |
|
|
$
|
2,062,662,366 |
|
Year Ended August 31, 2018
|
|
$
|
4,932,579,131 |
|
|
$
|
5,044,273,340 |
|
Year Ended August 31, 2017
|
|
$
|
4,620,692,203 |
|
|
$
|
4,544,059,262 |
|
Year Ended August 31, 2016
|
|
$
|
4,212,529,231 |
|
|
$
|
4,192,313,269 |
|
Year Ended August 31, 2015
|
|
$
|
4,664,260,054 |
|
|
$
|
4,590,883,479 |
|
Year Ended August 29, 2014
|
|
$
|
2,958,051,509 |
|
|
$
|
2,894,379,022 |
|
39 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Year Ended August 29, 2014 1
|
Class C |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
9.93 |
|
|
|
$ |
9.81 |
|
|
|
$ |
9.52 |
|
|
|
$ |
9.32 |
|
|
|
$ |
9.74 |
|
|
|
$ |
9.03 |
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
2
|
|
|
|
0.11 |
|
|
|
|
0.20 |
|
|
|
|
0.18 |
|
|
|
|
0.17 |
|
|
|
|
0.17 |
|
|
|
|
0.26 |
|
Net realized and unrealized gain
(loss) |
|
|
|
(0.24
|
) |
|
|
|
0.11 |
|
|
|
|
0.30 |
|
|
|
|
0.24 |
|
|
|
|
(0.35
|
) |
|
|
|
0.69 |
|
Total from investment operations
|
|
|
|
(0.13
|
) |
|
|
|
0.31 |
|
|
|
|
0.48 |
|
|
|
|
0.41 |
|
|
|
|
(0.18
|
) |
|
|
|
0.95 |
|
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
(0.11
|
) |
|
|
|
(0.19
|
) |
|
|
|
(0.19
|
) |
|
|
|
(0.21
|
) |
|
|
|
(0.24
|
) |
|
|
|
(0.24
|
) |
Net asset value , end of
period |
|
|
$ |
9.69 |
|
|
|
$ |
9.93 |
|
|
|
$ |
9.81 |
|
|
|
$ |
9.52 |
|
|
|
$ |
9.32 |
|
|
|
$ |
9.74 |
|
Total Return, at Net Asset
Value 3
|
|
|
|
(1.28
|
)% |
|
|
|
3.24 |
% |
|
|
|
5.13 |
% |
|
|
|
4.47 |
% |
|
|
|
(1.89
|
)% |
|
|
|
10.66
|
% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
296,503
|
|
|
|
$ |
321,786
|
|
|
|
$ |
375,081
|
|
|
|
$ |
420,117
|
|
|
|
$ |
403,758
|
|
|
|
$ |
296,136
|
|
Average net assets (in thousands)
|
|
|
|
303,250
|
|
|
|
|
350,563
|
|
|
|
|
400,146
|
|
|
|
|
413,522
|
|
|
|
|
369,218
|
|
|
|
|
230,619
|
|
Ratios to average net assets:
4,5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
2.26 |
% |
|
|
|
2.02 |
% |
|
|
|
1.87 |
% |
|
|
|
1.87 |
% |
|
|
|
1.75 |
% |
|
|
|
2.76 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
1.81 |
% |
|
|
|
1.80 |
% |
|
|
|
1.81 |
% |
|
|
|
1.82 |
% |
|
|
|
1.81 |
% |
|
|
|
1.82 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00 |
% |
Total expenses 7
|
|
|
|
1.81 |
% |
|
|
|
1.80 |
% |
|
|
|
1.81 |
% |
|
|
|
1.82 |
% |
|
|
|
1.81 |
% |
|
|
|
1.82 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
1.76 |
% |
|
|
|
1.73 |
% |
|
|
|
1.75 |
% |
|
|
|
1.76 |
% |
|
|
|
1.75 |
% |
|
|
|
1.76 |
% |
Portfolio turnover rate
8
|
|
|
|
32 |
% |
|
|
|
88 |
% |
|
|
|
92 |
% |
|
|
|
54 |
% |
|
|
|
79 |
% |
|
|
|
93 |
% |
1. |
Represents
the last business day of the Fund’s reporting period.
|
2. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
3. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
4. |
Annualized
for periods less than one full year. |
5. |
Includes the
Fund’s share of the allocated expenses and/or net investment income from
the master funds. |
7. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
1.82 |
% |
Year Ended August 31, 2018
|
|
|
1.82 |
% |
Year Ended August 31, 2017
|
|
|
1.83 |
% |
Year Ended August 31, 2016
|
|
|
1.84 |
% |
Year Ended August 31, 2015
|
|
|
1.83 |
% |
Year Ended August 29, 2014
|
|
|
1.84 |
% |
8. |
The portfolio
turnover rate excludes purchase and sale transactions of To Be Announced
(TBA) mortgage-related securities as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Purchase Transactions |
|
|
Sale Transactions |
|
Six Months Ended
February 28, 2019 |
|
$
|
2,084,769,197 |
|
|
$
|
2,062,662,366 |
|
Year Ended August 31, 2018
|
|
$
|
4,932,579,131 |
|
|
$
|
5,044,273,340 |
|
Year Ended August 31, 2017
|
|
$
|
4,620,692,203 |
|
|
$
|
4,544,059,262 |
|
Year Ended August 31, 2016
|
|
$
|
4,212,529,231 |
|
|
$
|
4,192,313,269 |
|
Year Ended August 31, 2015
|
|
$
|
4,664,260,054 |
|
|
$
|
4,590,883,479 |
|
Year Ended August 29, 2014
|
|
$
|
2,958,051,509 |
|
|
$
|
2,894,379,022 |
|
40 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Period Ended August 29, 2014 1,2
|
Class I |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
10.27
|
|
|
|
$ |
10.14
|
|
|
|
$ |
9.84 |
|
|
|
$ |
9.62 |
|
|
|
$ |
10.03
|
|
|
|
$ |
9.60 |
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
3
|
|
|
|
0.17 |
|
|
|
|
0.32 |
|
|
|
|
0.30 |
|
|
|
|
0.30 |
|
|
|
|
0.29 |
|
|
|
|
0.26 |
|
Net realized and unrealized gain
(loss) |
|
|
|
(0.24
|
) |
|
|
|
0.12 |
|
|
|
|
0.31 |
|
|
|
|
0.24 |
|
|
|
|
(0.35
|
) |
|
|
|
0.31 |
|
Total from investment operations
|
|
|
|
(0.07
|
) |
|
|
|
0.44 |
|
|
|
|
0.61 |
|
|
|
|
0.54 |
|
|
|
|
(0.06
|
) |
|
|
|
0.57 |
|
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
(0.17
|
) |
|
|
|
(0.31
|
) |
|
|
|
(0.31
|
) |
|
|
|
(0.32
|
) |
|
|
|
(0.35
|
) |
|
|
|
(0.14
|
) |
Net asset value , end of
period |
|
|
$ |
10.03
|
|
|
|
$ |
10.27
|
|
|
|
$ |
10.14
|
|
|
|
$ |
9.84 |
|
|
|
$ |
9.62 |
|
|
|
$ |
10.03
|
|
Total Return, at Net Asset
Value 4
|
|
|
|
(0.63
|
)% |
|
|
|
4.44 |
% |
|
|
|
6.29 |
% |
|
|
|
5.78 |
% |
|
|
|
(0.65
|
)% |
|
|
|
6.01 |
% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
123,349
|
|
|
|
$ |
130,976
|
|
|
|
$ |
20,176
|
|
|
|
$ |
15,142
|
|
|
|
$ |
12,625
|
|
|
|
$ |
10,894
|
|
Average net assets (in thousands)
|
|
|
|
124,907
|
|
|
|
|
105,548
|
|
|
|
|
16,342
|
|
|
|
|
14,088
|
|
|
|
|
12,629
|
|
|
|
|
7,047
|
|
Ratios to average net assets:
5,6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
3.42 |
% |
|
|
|
3.19 |
% |
|
|
|
3.04 |
% |
|
|
|
3.08 |
% |
|
|
|
2.96 |
% |
|
|
|
3.87 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
0.64 |
% |
|
|
|
0.63 |
% |
|
|
|
0.62 |
% |
|
|
|
0.63 |
% |
|
|
|
0.62 |
% |
|
|
|
0.64 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00 |
% |
Total expenses 8
|
|
|
|
0.64 |
% |
|
|
|
0.63 |
% |
|
|
|
0.62 |
% |
|
|
|
0.63 |
% |
|
|
|
0.62 |
% |
|
|
|
0.64 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
0.59 |
% |
|
|
|
0.57 |
% |
|
|
|
0.56 |
% |
|
|
|
0.57 |
% |
|
|
|
0.56 |
% |
|
|
|
0.58 |
% |
Portfolio turnover rate
9
|
|
|
|
32 |
% |
|
|
|
88 |
% |
|
|
|
92 |
% |
|
|
|
54 |
% |
|
|
|
79 |
% |
|
|
|
93 |
% |
1. |
Represents
the last business day of the Fund’s reporting period.
|
2. |
For the
period from December 27, 2013 (inception of offering) to
August 29, 2014. |
3. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
4. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
5. |
Annualized
for periods less than one full year. |
6. |
Includes the
Fund’s share of the allocated expenses and/or net investment income from
the master funds. |
8. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
0.65 |
% |
Year Ended August 31, 2018
|
|
|
0.65 |
% |
Year Ended August 31, 2017
|
|
|
0.64 |
% |
Year Ended August 31, 2016
|
|
|
0.65 |
% |
Year Ended August 31, 2015
|
|
|
0.64 |
% |
Period Ended August 29, 2014
|
|
|
0.66 |
% |
9. |
The portfolio
turnover rate excludes purchase and sale transactions of To Be Announced
(TBA) mortgage-related securities as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Purchase Transactions |
|
|
Sale Transactions |
|
Six Months Ended
February 28, 2019 |
|
$
|
2,084,769,197 |
|
|
$
|
2,062,662,366 |
|
Year Ended August 31, 2018
|
|
$
|
4,932,579,131 |
|
|
$
|
5,044,273,340 |
|
Year Ended August 31, 2017
|
|
$
|
4,620,692,203 |
|
|
$
|
4,544,059,262 |
|
Year Ended August 31, 2016
|
|
$
|
4,212,529,231 |
|
|
$
|
4,192,313,269 |
|
Year Ended August 31, 2015
|
|
$
|
4,664,260,054 |
|
|
$
|
4,590,883,479 |
|
Period Ended August 29, 2014
|
|
$
|
2,958,051,509 |
|
|
$
|
2,894,379,022 |
|
41 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Year Ended August 29, 2014 1
|
Class R |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
10.12
|
|
|
|
$ |
10.00
|
|
|
|
$ |
9.71 |
|
|
|
$ |
9.50 |
|
|
|
$ |
9.91 |
|
|
|
$ |
9.18 |
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
2
|
|
|
|
0.13 |
|
|
|
|
0.25 |
|
|
|
|
0.23 |
|
|
|
|
0.23 |
|
|
|
|
0.22 |
|
|
|
|
0.31 |
|
Net realized and unrealized gain
(loss) |
|
|
|
(0.23
|
) |
|
|
|
0.12 |
|
|
|
|
0.30 |
|
|
|
|
0.24 |
|
|
|
|
(0.35
|
) |
|
|
|
0.70 |
|
Total from investment operations
|
|
|
|
(0.10
|
) |
|
|
|
0.37 |
|
|
|
|
0.53 |
|
|
|
|
0.47 |
|
|
|
|
(0.13
|
) |
|
|
|
1.01 |
|
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
(0.14
|
) |
|
|
|
(0.25
|
) |
|
|
|
(0.24
|
) |
|
|
|
(0.26
|
) |
|
|
|
(0.28
|
) |
|
|
|
(0.28
|
) |
Net asset value , end of
period |
|
|
$ |
9.88 |
|
|
|
$ |
10.12
|
|
|
|
$ |
10.00
|
|
|
|
$ |
9.71 |
|
|
|
$ |
9.50 |
|
|
|
$ |
9.91 |
|
Total Return, at Net Asset
Value 3
|
|
|
|
(1.00
|
)% |
|
|
|
3.73 |
% |
|
|
|
5.57 |
% |
|
|
|
5.02 |
% |
|
|
|
(1.32
|
)% |
|
|
|
11.15
|
% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
69,978
|
|
|
|
$ |
74,277
|
|
|
|
$ |
51,324
|
|
|
|
$ |
31,806
|
|
|
|
$ |
27,151
|
|
|
|
$ |
23,798
|
|
Average net assets (in thousands)
|
|
|
|
70,578
|
|
|
|
|
70,353
|
|
|
|
|
37,273
|
|
|
|
|
28,769
|
|
|
|
|
25,957
|
|
|
|
|
22,251
|
|
Ratios to average net assets:
4,5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
2.76 |
% |
|
|
|
2.53 |
% |
|
|
|
2.33 |
% |
|
|
|
2.39 |
% |
|
|
|
2.28 |
% |
|
|
|
3.27 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
1.30 |
% |
|
|
|
1.30 |
% |
|
|
|
1.30 |
% |
|
|
|
1.31 |
% |
|
|
|
1.30 |
% |
|
|
|
1.32 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00 |
% |
Total expenses 7
|
|
|
|
1.30 |
% |
|
|
|
1.30 |
% |
|
|
|
1.30 |
% |
|
|
|
1.31 |
% |
|
|
|
1.30 |
% |
|
|
|
1.32 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
1.25 |
% |
|
|
|
1.23 |
% |
|
|
|
1.24 |
% |
|
|
|
1.25 |
% |
|
|
|
1.24 |
% |
|
|
|
1.26 |
% |
Portfolio turnover rate
8
|
|
|
|
32 |
% |
|
|
|
88 |
% |
|
|
|
92 |
% |
|
|
|
54 |
% |
|
|
|
79 |
% |
|
|
|
93 |
% |
1. |
Represents
the last business day of the Fund’s reporting period.
|
2. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
3. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
4. |
Annualized
for periods less than one full year. |
5. |
Includes the
Fund’s share of the allocated expenses and/or net investment income from
the master funds. |
7. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
1.31 |
% |
Year Ended August 31, 2018
|
|
|
1.32 |
% |
Year Ended August 31, 2017
|
|
|
1.32 |
% |
Year Ended August 31, 2016
|
|
|
1.33 |
% |
Year Ended August 31, 2015
|
|
|
1.32 |
% |
Year Ended August 29, 2014
|
|
|
1.34 |
% |
8. |
The portfolio
turnover rate excludes purchase and sale transactions of To Be Announced
(TBA) mortgage-related securities as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Purchase Transactions |
|
|
Sale Transactions |
|
Six Months Ended
February 28, 2019 |
|
$
|
2,084,769,197 |
|
|
$
|
2,062,662,366 |
|
Year Ended August 31, 2018
|
|
$
|
4,932,579,131 |
|
|
$
|
5,044,273,340 |
|
Year Ended August 31, 2017
|
|
$
|
4,620,692,203 |
|
|
$
|
4,544,059,262 |
|
Year Ended August 31, 2016
|
|
$
|
4,212,529,231 |
|
|
$
|
4,192,313,269 |
|
Year Ended August 31, 2015
|
|
$
|
4,664,260,054 |
|
|
$
|
4,590,883,479 |
|
Year Ended August 29, 2014
|
|
$
|
2,958,051,509 |
|
|
$
|
2,894,379,022 |
|
42 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Year Ended August 29, 2014 1
|
Class Y |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
10.27
|
|
|
|
$ |
10.14
|
|
|
|
$ |
9.84 |
|
|
|
$ |
9.62 |
|
|
|
$ |
10.03
|
|
|
|
$ |
9.29 |
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
2
|
|
|
|
0.16 |
|
|
|
|
0.31 |
|
|
|
|
0.28 |
|
|
|
|
0.27 |
|
|
|
|
0.27 |
|
|
|
|
0.37 |
|
Net realized and unrealized gain
(loss) |
|
|
|
(0.24
|
) |
|
|
|
0.11 |
|
|
|
|
0.31 |
|
|
|
|
0.25 |
|
|
|
|
(0.35
|
) |
|
|
|
0.70 |
|
Total from investment operations
|
|
|
|
(0.08
|
) |
|
|
|
0.42 |
|
|
|
|
0.59 |
|
|
|
|
0.52 |
|
|
|
|
(0.08
|
) |
|
|
|
1.07 |
|
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
(0.16
|
) |
|
|
|
(0.29
|
) |
|
|
|
(0.29
|
) |
|
|
|
(0.30
|
) |
|
|
|
(0.33
|
) |
|
|
|
(0.33
|
) |
Net asset value , end of
period |
|
|
$ |
10.03
|
|
|
|
$ |
10.27
|
|
|
|
$ |
10.14
|
|
|
|
$ |
9.84 |
|
|
|
$ |
9.62 |
|
|
|
$ |
10.03
|
|
Total Return, at Net Asset
Value 3
|
|
|
|
(0.72
|
)% |
|
|
|
4.25 |
% |
|
|
|
6.21 |
% |
|
|
|
5.47 |
% |
|
|
|
(0.82
|
)% |
|
|
|
11.74
|
% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
448,017
|
|
|
|
$ |
536,085
|
|
|
|
$ |
622,331
|
|
|
|
$ |
480,847
|
|
|
|
$ |
447,319
|
|
|
|
$ |
280,000
|
|
Average net assets (in thousands)
|
|
|
|
491,120
|
|
|
|
|
598,353
|
|
|
|
|
534,372
|
|
|
|
|
453,299
|
|
|
|
|
401,249
|
|
|
|
|
162,609
|
|
Ratios to average net assets:
4,5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
3.26 |
% |
|
|
|
3.02 |
% |
|
|
|
2.85 |
% |
|
|
|
2.86 |
% |
|
|
|
2.74 |
% |
|
|
|
3.77 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
0.81 |
% |
|
|
|
0.80 |
% |
|
|
|
0.81 |
% |
|
|
|
0.82 |
% |
|
|
|
0.82 |
% |
|
|
|
0.81 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00 |
% |
Total expenses 7
|
|
|
|
0.81 |
% |
|
|
|
0.80 |
% |
|
|
|
0.81 |
% |
|
|
|
0.82 |
% |
|
|
|
0.82 |
% |
|
|
|
0.81 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
0.76 |
% |
|
|
|
0.73 |
% |
|
|
|
0.75 |
% |
|
|
|
0.76 |
% |
|
|
|
0.76 |
% |
|
|
|
0.75 |
% |
Portfolio turnover rate
8
|
|
|
|
32 |
% |
|
|
|
88 |
% |
|
|
|
92 |
% |
|
|
|
54 |
% |
|
|
|
79 |
% |
|
|
|
93 |
% |
1. |
Represents
the last business day of the Fund’s reporting period.
|
2. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
3. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
4. |
Annualized
for periods less than one full year. |
5. |
Includes the
Fund’s share of the allocated expenses and/or net investment income from
the master funds. |
7. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
0.82 |
% |
Year Ended August 31, 2018
|
|
|
0.82 |
% |
Year Ended August 31, 2017
|
|
|
0.83 |
% |
Year Ended August 31, 2016
|
|
|
0.84 |
% |
Year Ended August 31, 2015
|
|
|
0.84 |
% |
Year Ended August 29, 2014
|
|
|
0.83 |
% |
8. |
The portfolio
turnover rate excludes purchase and sale transactions of To Be Announced
(TBA) mortgage-related securities as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Purchase Transactions |
|
|
Sale Transactions |
|
Six Months Ended
February 28, 2019 |
|
$
|
2,084,769,197 |
|
|
$
|
2,062,662,366 |
|
Year Ended August 31, 2018
|
|
$
|
4,932,579,131 |
|
|
$
|
5,044,273,340 |
|
Year Ended August 31, 2017
|
|
$
|
4,620,692,203 |
|
|
$
|
4,544,059,262 |
|
Year Ended August 31, 2016
|
|
$
|
4,212,529,231 |
|
|
$
|
4,192,313,269 |
|
Year Ended August 31, 2015
|
|
$
|
4,664,260,054 |
|
|
$
|
4,590,883,479 |
|
Year Ended August 29, 2014
|
|
$
|
2,958,051,509 |
|
|
$
|
2,894,379,022 |
|
43 Invesco
Investment Funds
Oppenheimer Developing Markets Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Year Ended August 29, 2014 1
|
Class A |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
42.01
|
|
|
|
$ |
41.49
|
|
|
|
$ |
33.45
|
|
|
|
$ |
30.06
|
|
|
|
$ |
41.30
|
|
|
|
$ |
33.94
|
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
2
|
|
|
|
(0.05
|
) |
|
|
|
0.06 |
|
|
|
|
0.13 |
|
|
|
|
0.12 |
|
|
|
|
0.17 |
|
|
|
|
0.14 |
|
Net realized and unrealized gain
(loss) |
|
|
|
0.41 |
|
|
|
|
0.59 |
|
|
|
|
7.98 |
|
|
|
|
3.40 |
|
|
|
|
(10.71
|
) |
|
|
|
7.44 |
|
Total from investment operations
|
|
|
|
0.36 |
|
|
|
|
0.65 |
|
|
|
|
8.11 |
|
|
|
|
3.52 |
|
|
|
|
(10.54
|
) |
|
|
|
7.58 |
|
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
(0.11
|
) |
|
|
|
(0.13
|
) |
|
|
|
(0.07
|
) |
|
|
|
(0.13
|
) |
|
|
|
(0.10
|
) |
|
|
|
(0.04
|
) |
Distributions from net realized
gain |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.60
|
) |
|
|
|
(0.18
|
) |
Total dividends and/or
distributions to shareholders |
|
|
|
(0.11
|
) |
|
|
|
(0.13
|
) |
|
|
|
(0.07
|
) |
|
|
|
(0.13
|
) |
|
|
|
(0.70
|
) |
|
|
|
(0.22
|
) |
Net asset value , end of
period |
|
|
$ |
42.26
|
|
|
|
$ |
42.01
|
|
|
|
$ |
41.49
|
|
|
|
$ |
33.45
|
|
|
|
$ |
30.06
|
|
|
|
$ |
41.30
|
|
Total Return, at Net Asset
Value 3
|
|
|
|
0.84 |
% |
|
|
|
1.59 |
% |
|
|
|
24.32
|
% |
|
|
|
11.74
|
% |
|
|
|
(25.84
|
)% |
|
|
|
22.38
|
% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
4,942,749
|
|
|
|
$ |
5,277,791
|
|
|
|
$ |
6,350,957
|
|
|
|
$ |
6,574,857
|
|
|
|
$ |
7,679,026
|
|
|
|
$ |
12,573,313
|
|
Average net assets (in thousands)
|
|
|
|
4,781,522
|
|
|
|
|
6,132,474
|
|
|
|
|
6,236,473
|
|
|
|
|
6,903,922
|
|
|
|
|
10,303,699
|
|
|
|
|
13,256,077
|
|
Ratios to average net assets:
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
|
(0.23
|
)% |
|
|
|
0.13 |
% |
|
|
|
0.37 |
% |
|
|
|
0.38 |
% |
|
|
|
0.47 |
% |
|
|
|
0.36 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
1.28 |
% |
|
|
|
1.29 |
% |
|
|
|
1.32 |
% |
|
|
|
1.32 |
% |
|
|
|
1.31 |
% |
|
|
|
1.32 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00 |
% |
Total expenses 6
|
|
|
|
1.28 |
% |
|
|
|
1.29 |
% |
|
|
|
1.32 |
% |
|
|
|
1.32 |
% |
|
|
|
1.31 |
% |
|
|
|
1.32 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
1.28
|
% 7
|
|
|
|
1.28 |
% |
|
|
|
1.31 |
% |
|
|
|
1.32
|
% 7
|
|
|
|
1.30 |
% |
|
|
|
1.31 |
% |
Portfolio turnover rate
|
|
|
|
12 |
% |
|
|
|
36 |
% |
|
|
|
33 |
% |
|
|
|
18 |
% |
|
|
|
36 |
% |
|
|
|
26 |
% |
1. |
Represents
the last business day of the Fund’s reporting period.
|
2. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
3. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
4. |
Annualized
for periods less than one full year. |
6. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended February 28, 2019
|
|
|
1.28 |
% |
Year Ended August 31, 2018
|
|
|
1.29 |
% |
Year Ended August 31, 2017
|
|
|
1.32 |
% |
Year Ended August 31, 2016
|
|
|
1.32 |
% |
Year Ended August 31, 2015
|
|
|
1.31 |
% |
Year Ended August 29, 2014
|
|
|
1.33 |
% |
7. |
Waiver was
less than 0.005%. |
44 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Year Ended August 29, 2014 1
|
Class C |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
39.10
|
|
|
|
$ |
38.79
|
|
|
|
$ |
31.44
|
|
|
|
$ |
28.35
|
|
|
|
$ |
39.17
|
|
|
|
$ |
32.40
|
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss 2
|
|
|
|
(0.18
|
) |
|
|
|
(0.25
|
) |
|
|
|
(0.13
|
) |
|
|
|
(0.11
|
) |
|
|
|
(0.10
|
) |
|
|
|
(0.13
|
) |
Net realized and unrealized gain
(loss) |
|
|
|
0.37 |
|
|
|
|
0.56 |
|
|
|
|
7.48 |
|
|
|
|
3.20 |
|
|
|
|
(10.12
|
) |
|
|
|
7.08 |
|
Total from investment operations
|
|
|
|
0.19 |
|
|
|
|
0.31 |
|
|
|
|
7.35 |
|
|
|
|
3.09 |
|
|
|
|
(10.22
|
) |
|
|
|
6.95 |
|
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
Distributions from net realized
gain |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.60
|
) |
|
|
|
(0.18
|
) |
Total dividends and/or
distributions to shareholders |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.60
|
) |
|
|
|
(0.18
|
) |
Net asset value , end of
period |
|
|
$ |
39.29
|
|
|
|
$ |
39.10
|
|
|
|
$ |
38.79
|
|
|
|
$ |
31.44
|
|
|
|
$ |
28.35
|
|
|
|
$ |
39.17
|
|
Total Return, at Net Asset
Value 3
|
|
|
|
0.48 |
% |
|
|
|
0.80 |
% |
|
|
|
23.38
|
% |
|
|
|
10.90
|
% |
|
|
|
(26.39
|
)% |
|
|
|
21.50
|
% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
748,798
|
|
|
|
$ |
826,481
|
|
|
|
$ |
973,031
|
|
|
|
$ |
1,046,894
|
|
|
|
$ |
1,311,171
|
|
|
|
$ |
2,190,364
|
|
Average net assets (in thousands)
|
|
|
|
739,784
|
|
|
|
|
943,157
|
|
|
|
|
964,547
|
|
|
|
|
1,114,383
|
|
|
|
|
1,785,113
|
|
|
|
|
2,180,118
|
|
Ratios to average net assets:
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
|
(0.98
|
)% |
|
|
|
(0.62
|
)% |
|
|
|
(0.39
|
)% |
|
|
|
(0.39
|
)% |
|
|
|
(0.29
|
)% |
|
|
|
(0.37
|
)% |
Expenses excluding specific
expenses listed below |
|
|
|
2.04 |
% |
|
|
|
2.05 |
% |
|
|
|
2.07 |
% |
|
|
|
2.07 |
% |
|
|
|
2.06 |
% |
|
|
|
2.04 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00 |
% |
Total expenses 6
|
|
|
|
2.04 |
% |
|
|
|
2.05 |
% |
|
|
|
2.07 |
% |
|
|
|
2.07 |
% |
|
|
|
2.06 |
% |
|
|
|
2.04 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
2.04
|
% 7
|
|
|
|
2.04 |
% |
|
|
|
2.06 |
% |
|
|
|
2.07
|
% 7
|
|
|
|
2.05 |
% |
|
|
|
2.03 |
% |
Portfolio turnover rate
|
|
|
|
12 |
% |
|
|
|
36 |
% |
|
|
|
33 |
% |
|
|
|
18 |
% |
|
|
|
36 |
% |
|
|
|
26 |
% |
1. |
Represents
the last business day of the Fund’s reporting period.
|
2. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
3. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
4. |
Annualized
for periods less than one full year. |
6. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
2.04 |
% |
Year Ended August 31, 2018
|
|
|
2.05 |
% |
Year Ended August 31, 2017
|
|
|
2.07 |
% |
Year Ended August 31, 2016
|
|
|
2.07 |
% |
Year Ended August 31, 2015
|
|
|
2.06 |
% |
Year Ended August 29, 2014
|
|
|
2.05 |
% |
7. |
Waiver was
less than 0.005%. |
45 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Year Ended August 29, 2014 1
|
Class I |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
41.52
|
|
|
|
$ |
41.01
|
|
|
|
$ |
33.09
|
|
|
|
$ |
29.77
|
|
|
|
$ |
40.94
|
|
|
|
$ |
33.65
|
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
2
|
|
|
|
0.04 |
|
|
|
|
0.23 |
|
|
|
|
0.31 |
|
|
|
|
0.26 |
|
|
|
|
0.34 |
|
|
|
|
0.33 |
|
Net realized and unrealized gain
(loss) |
|
|
|
0.38 |
|
|
|
|
0.59 |
|
|
|
|
7.84 |
|
|
|
|
3.36 |
|
|
|
|
(10.61
|
) |
|
|
|
7.35 |
|
Total from investment operations
|
|
|
|
0.42 |
|
|
|
|
0.82 |
|
|
|
|
8.15 |
|
|
|
|
3.62 |
|
|
|
|
(10.27
|
) |
|
|
|
7.68 |
|
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
(0.30
|
) |
|
|
|
(0.31
|
) |
|
|
|
(0.23
|
) |
|
|
|
(0.30
|
) |
|
|
|
(0.30
|
) |
|
|
|
(0.21
|
) |
Distributions from net realized
gain |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.60
|
) |
|
|
|
(0.18
|
) |
Total dividends and/or
distributions to shareholders |
|
|
|
(0.30
|
) |
|
|
|
(0.31
|
) |
|
|
|
(0.23
|
) |
|
|
|
(0.30
|
) |
|
|
|
(0.90
|
) |
|
|
|
(0.39
|
) |
Net asset value , end of
period |
|
|
$ |
41.64
|
|
|
|
$ |
41.52
|
|
|
|
$ |
41.01
|
|
|
|
$ |
33.09
|
|
|
|
$ |
29.77
|
|
|
|
$ |
40.94
|
|
Total Return, at Net Asset
Value 3
|
|
|
|
1.06 |
% |
|
|
|
2.00 |
% |
|
|
|
24.84
|
% |
|
|
|
12.22
|
% |
|
|
|
(25.50
|
)% |
|
|
|
22.95
|
% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
15,267,516
|
|
|
|
$ |
13,987,540
|
|
|
|
$ |
11,559,582
|
|
|
|
$ |
7,861,500
|
|
|
|
$ |
6,201,064
|
|
|
|
$ |
7,445,448
|
|
Average net assets (in thousands)
|
|
|
|
13,824,433
|
|
|
|
|
13,484,000
|
|
|
|
|
9,305,452
|
|
|
|
|
6,593,711
|
|
|
|
|
6,961,648
|
|
|
|
|
3,901,775
|
|
Ratios to average net assets:
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
0.18 |
% |
|
|
|
0.55 |
% |
|
|
|
0.87 |
% |
|
|
|
0.87 |
% |
|
|
|
0.95 |
% |
|
|
|
0.87 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
0.87 |
% |
|
|
|
0.87 |
% |
|
|
|
0.88 |
% |
|
|
|
0.88 |
% |
|
|
|
0.87 |
% |
|
|
|
0.86 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00
|
% 5
|
|
|
|
0.00 |
% |
Total expenses 6
|
|
|
|
0.87 |
% |
|
|
|
0.87 |
% |
|
|
|
0.88 |
% |
|
|
|
0.88 |
% |
|
|
|
0.87 |
% |
|
|
|
0.86 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
0.87
|
% 7
|
|
|
|
0.87
|
% 7
|
|
|
|
0.88
|
% 7
|
|
|
|
0.88
|
% 7
|
|
|
|
0.86 |
% |
|
|
|
0.85 |
% |
Portfolio turnover rate
|
|
|
|
12 |
% |
|
|
|
36 |
% |
|
|
|
33 |
% |
|
|
|
18 |
% |
|
|
|
36 |
% |
|
|
|
26 |
% |
1. |
Represents
the last business day of the Fund’s reporting period.
|
2. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
3. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
4. |
Annualized
for periods less than one full year. |
6. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
0.87 |
% |
Year Ended August 31, 2018
|
|
|
0.87 |
% |
Year Ended August 31, 2017
|
|
|
0.88 |
% |
Year Ended August 31, 2016
|
|
|
0.88 |
% |
Year Ended August 31, 2015
|
|
|
0.87 |
% |
Year Ended August 29, 2014
|
|
|
0.87 |
% |
7. |
Waiver was
less than 0.005%. |
46 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Year Ended August 29, 2014 1
|
Class R |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
40.32
|
|
|
|
$ |
39.84
|
|
|
|
$ |
32.13
|
|
|
|
$ |
28.88
|
|
|
|
$ |
39.74
|
|
|
|
$ |
32.72
|
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
2
|
|
|
|
(0.09
|
) |
|
|
|
(0.05
|
) |
|
|
|
0.05 |
|
|
|
|
0.04 |
|
|
|
|
0.08 |
|
|
|
|
0.04 |
|
Net realized and unrealized gain
(loss) |
|
|
|
0.38 |
|
|
|
|
0.58 |
|
|
|
|
7.66 |
|
|
|
|
3.27 |
|
|
|
|
(10.30
|
) |
|
|
|
7.16 |
|
Total from investment operations
|
|
|
|
0.29 |
|
|
|
|
0.53 |
|
|
|
|
7.71 |
|
|
|
|
3.31 |
|
|
|
|
(10.22
|
) |
|
|
|
7.20 |
|
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
0.00 |
|
|
|
|
(0.05
|
) |
|
|
|
(0.00
|
) 3
|
|
|
|
(0.06
|
) |
|
|
|
(0.04
|
) |
|
|
|
0.00 |
|
Distributions from net realized
gain |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.60
|
) |
|
|
|
(0.18
|
) |
Total dividends and/or
distributions to shareholders |
|
|
|
0.00 |
|
|
|
|
(0.05
|
) |
|
|
|
(0.00
|
) |
|
|
|
(0.06
|
) |
|
|
|
(0.64
|
) |
|
|
|
(0.18
|
) |
Net asset value , end of
period |
|
|
$ |
40.61
|
|
|
|
$ |
40.32
|
|
|
|
$ |
39.84
|
|
|
|
$ |
32.13
|
|
|
|
$ |
28.88
|
|
|
|
$ |
39.74
|
|
Total Return, at Net Asset
Value 4
|
|
|
|
0.72 |
% |
|
|
|
1.32 |
% |
|
|
|
24.01
|
% |
|
|
|
11.47
|
% |
|
|
|
(26.03
|
)% |
|
|
|
22.05
|
% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
519,586
|
|
|
|
$ |
585,385
|
|
|
|
$ |
680,861
|
|
|
|
$ |
634,007
|
|
|
|
$ |
657,581
|
|
|
|
$ |
972,479
|
|
Average net assets (in thousands)
|
|
|
|
517,440
|
|
|
|
|
667,630
|
|
|
|
|
626,788
|
|
|
|
|
627,034
|
|
|
|
|
832,613
|
|
|
|
|
922,384
|
|
Ratios to average net assets:
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
|
(0.48
|
)% |
|
|
|
(0.12
|
)% |
|
|
|
0.14 |
% |
|
|
|
0.14 |
% |
|
|
|
0.23 |
% |
|
|
|
0.10 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
1.53 |
% |
|
|
|
1.55 |
% |
|
|
|
1.57 |
% |
|
|
|
1.57 |
% |
|
|
|
1.56 |
% |
|
|
|
1.64 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00 |
% |
Total expenses 7
|
|
|
|
1.53 |
% |
|
|
|
1.55 |
% |
|
|
|
1.57 |
% |
|
|
|
1.57 |
% |
|
|
|
1.56 |
% |
|
|
|
1.64 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
1.53
|
% 8
|
|
|
|
1.54 |
% |
|
|
|
1.56 |
% |
|
|
|
1.57
|
% 8
|
|
|
|
1.55 |
% |
|
|
|
1.58 |
% |
Portfolio turnover rate
|
|
|
|
12 |
% |
|
|
|
36 |
% |
|
|
|
33 |
% |
|
|
|
18 |
% |
|
|
|
36 |
% |
|
|
|
26 |
% |
1. |
Represents
the last business day of the Fund’s reporting period.
|
2. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
3. |
Less than
$0.005 per share. |
4. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
5. |
Annualized
for periods less than one full year. |
7. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
1.53 |
% |
Year Ended August 31, 2018
|
|
|
1.55 |
% |
Year Ended August 31, 2017
|
|
|
1.57 |
% |
Year Ended August 31, 2016
|
|
|
1.57 |
% |
Year Ended August 31, 2015
|
|
|
1.56 |
% |
Year Ended August 29, 2014
|
|
|
1.65 |
% |
8. |
Waiver was
less than 0.005%. |
47 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Year Ended August 29, 2014 1
|
Class Y |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
41.48
|
|
|
|
$ |
40.98
|
|
|
|
$ |
33.06
|
|
|
|
$ |
29.73
|
|
|
|
$ |
40.88
|
|
|
|
$ |
33.62
|
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
2
|
|
|
|
0.00
|
3
|
|
|
|
0.16 |
|
|
|
|
0.24 |
|
|
|
|
0.19 |
|
|
|
|
0.26 |
|
|
|
|
0.25 |
|
Net realized and unrealized gain
(loss) |
|
|
|
0.39 |
|
|
|
|
0.59 |
|
|
|
|
7.85 |
|
|
|
|
3.36 |
|
|
|
|
(10.59
|
) |
|
|
|
7.35 |
|
Total from investment operations
|
|
|
|
0.39 |
|
|
|
|
0.75 |
|
|
|
|
8.09 |
|
|
|
|
3.55 |
|
|
|
|
(10.33
|
) |
|
|
|
7.60 |
|
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
(0.23
|
) |
|
|
|
(0.25
|
) |
|
|
|
(0.17
|
) |
|
|
|
(0.22
|
) |
|
|
|
(0.22
|
) |
|
|
|
(0.16
|
) |
Distributions from net realized
gain |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.60
|
) |
|
|
|
(0.18
|
) |
Total dividends and/or
distributions to shareholders |
|
|
|
(0.23
|
) |
|
|
|
(0.25
|
) |
|
|
|
(0.17
|
) |
|
|
|
(0.22
|
) |
|
|
|
(0.82
|
) |
|
|
|
(0.34
|
) |
Net asset value , end of
period |
|
|
$ |
41.64
|
|
|
|
$ |
41.48
|
|
|
|
$ |
40.98
|
|
|
|
$ |
33.06
|
|
|
|
$ |
29.73
|
|
|
|
$ |
40.88
|
|
Total Return, at Net Asset
Value 4
|
|
|
|
0.98 |
% |
|
|
|
1.82 |
% |
|
|
|
24.61
|
% |
|
|
|
12.04
|
% |
|
|
|
(25.66
|
)% |
|
|
|
22.72
|
% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
18,410,717
|
|
|
|
$ |
17,898,340
|
|
|
|
$ |
17,496,988
|
|
|
|
$ |
13,551,480
|
|
|
|
$ |
15,358,492
|
|
|
|
$ |
21,476,284
|
|
Average net assets (in thousands)
|
|
|
|
16,929,302
|
|
|
|
|
18,317,515
|
|
|
|
|
14,523,085
|
|
|
|
|
13,507,017
|
|
|
|
|
19,567,341
|
|
|
|
|
19,215,510
|
|
Ratios to average net assets:
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
0.02 |
% |
|
|
|
0.38 |
% |
|
|
|
0.67 |
% |
|
|
|
0.62 |
% |
|
|
|
0.74 |
% |
|
|
|
0.67 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
1.03 |
% |
|
|
|
1.05 |
% |
|
|
|
1.07 |
% |
|
|
|
1.07 |
% |
|
|
|
1.06 |
% |
|
|
|
1.04 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00 |
% |
Total expenses 7
|
|
|
|
1.03 |
% |
|
|
|
1.05 |
% |
|
|
|
1.07 |
% |
|
|
|
1.07 |
% |
|
|
|
1.06 |
% |
|
|
|
1.04 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
1.03
|
% 8
|
|
|
|
1.04 |
% |
|
|
|
1.06 |
% |
|
|
|
1.07
|
% 8
|
|
|
|
1.05 |
% |
|
|
|
1.03 |
% |
Portfolio turnover rate
|
|
|
|
12 |
% |
|
|
|
36 |
% |
|
|
|
33 |
% |
|
|
|
18 |
% |
|
|
|
36 |
% |
|
|
|
26 |
% |
1. |
Represents
the last business day of the Fund’s reporting period.
|
2. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
3. |
Less than
$0.005 per share. |
4. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
5. |
Annualized
for periods less than one full year. |
7. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
1.03 |
% |
Year Ended August 31, 2018
|
|
|
1.05 |
% |
Year Ended August 31, 2017
|
|
|
1.07 |
% |
Year Ended August 31, 2016
|
|
|
1.07 |
% |
Year Ended August 31, 2015
|
|
|
1.06 |
% |
Year Ended August 29, 2014
|
|
|
1.05 |
% |
8. |
Waiver was
less than 0.005%. |
48 Invesco
Investment Funds
Oppenheimer Emerging Markets Innovators Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Period Ended August 29, 2014 1,2
|
Class A |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
10.38
|
|
|
|
$ |
10.67
|
|
|
|
$ |
8.87 |
|
|
|
$ |
8.22 |
|
|
|
$ |
9.93 |
|
|
|
$ |
10.00
|
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
3
|
|
|
|
(0.04
|
) |
|
|
|
(0.02
|
) |
|
|
|
(0.03
|
) |
|
|
|
(0.03
|
) |
|
|
|
(0.02
|
) |
|
|
|
0.02 |
|
Net realized and unrealized gain
(loss) |
|
|
|
(0.46
|
) |
|
|
|
(0.25
|
) |
|
|
|
1.83 |
|
|
|
|
0.68 |
|
|
|
|
(1.67
|
) |
|
|
|
(0.09
|
) |
Total from investment operations
|
|
|
|
(0.50
|
) |
|
|
|
(0.27
|
) |
|
|
|
1.80 |
|
|
|
|
0.65 |
|
|
|
|
(1.69
|
) |
|
|
|
(0.07
|
) |
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
0.00 |
|
|
|
|
(0.02
|
) |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.01
|
) |
|
|
|
0.00 |
|
Distributions from net realized
gain |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.01
|
) |
|
|
|
0.00 |
|
Total dividends and/or
distributions to shareholders |
|
|
|
0.00 |
|
|
|
|
(0.02
|
) |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.02
|
) |
|
|
|
0.00 |
|
Net asset value , end of
period |
|
|
$ |
9.88 |
|
|
|
$ |
10.38
|
|
|
|
$ |
10.67
|
|
|
|
$ |
8.87 |
|
|
|
$ |
8.22 |
|
|
|
$ |
9.93 |
|
Total Return, at Net Asset
Value 4
|
|
|
|
(4.82
|
)% |
|
|
|
(2.52
|
)% |
|
|
|
20.29
|
% |
|
|
|
7.91 |
% |
|
|
|
(17.10
|
)% |
|
|
|
(0.70
|
)% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
88,894
|
|
|
|
$ |
97,641
|
|
|
|
$ |
84,324
|
|
|
|
$ |
64,713
|
|
|
|
$ |
41,993
|
|
|
|
$ |
60,956
|
|
Average net assets (in thousands)
|
|
|
|
85,169
|
|
|
|
|
111,837
|
|
|
|
|
65,566
|
|
|
|
|
55,666
|
|
|
|
|
61,498
|
|
|
|
|
56,084
|
|
Ratios to average net assets:
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
|
(0.92
|
)% |
|
|
|
(0.18
|
)% |
|
|
|
(0.35
|
)% |
|
|
|
(0.31
|
)% |
|
|
|
(0.21
|
)% |
|
|
|
1.37 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
1.71 |
% |
|
|
|
1.70 |
% |
|
|
|
1.77 |
% |
|
|
|
1.75 |
% |
|
|
|
1.71 |
% |
|
|
|
1.75 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00 |
% |
Total expenses |
|
|
|
1.71
|
% 7
|
|
|
|
1.70
|
% 7
|
|
|
|
1.77
|
% 7
|
|
|
|
1.75
|
% 7
|
|
|
|
1.71
|
% 7
|
|
|
|
1.75 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
1.70 |
% |
|
|
|
1.69 |
% |
|
|
|
1.70 |
% |
|
|
|
1.71 |
% |
|
|
|
1.70 |
% |
|
|
|
1.65 |
% |
Portfolio turnover rate
|
|
|
|
12 |
% |
|
|
|
24 |
% |
|
|
|
23 |
% |
|
|
|
26 |
% |
|
|
|
34 |
% |
|
|
|
3 |
% |
1. |
For the
period from June 30, 2014 (commencement of operations) to
August 29, 2014. |
2. |
Represents
the last business day of the Fund’s reporting period.
|
3. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
4. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
5. |
Annualized
for periods less than one full year. |
7. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
1.72 |
% |
Year Ended August 31, 2018
|
|
|
1.71 |
% |
Year Ended August 31, 2017
|
|
|
1.78 |
% |
Year Ended August 31, 2016
|
|
|
1.76 |
% |
Year Ended August 31, 2015
|
|
|
1.72 |
% |
49 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Period Ended August 29, 2014 1,2
|
Class C |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
10.09
|
|
|
|
$ |
10.42
|
|
|
|
$ |
8.74 |
|
|
|
$ |
8.16 |
|
|
|
$ |
9.92 |
|
|
|
$ |
10.00
|
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss 3
|
|
|
|
(0.08
|
) |
|
|
|
(0.10
|
) |
|
|
|
(0.10
|
) |
|
|
|
(0.09
|
) |
|
|
|
(0.08
|
) |
|
|
|
(0.00
|
) 4
|
Net realized and unrealized gain
(loss) |
|
|
|
(0.45
|
) |
|
|
|
(0.23
|
) |
|
|
|
1.78 |
|
|
|
|
0.67 |
|
|
|
|
(1.67
|
) |
|
|
|
(0.08
|
) |
Total from investment operations
|
|
|
|
(0.53
|
) |
|
|
|
(0.33
|
) |
|
|
|
1.68 |
|
|
|
|
0.58 |
|
|
|
|
(1.75
|
) |
|
|
|
(0.08
|
) |
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
Distributions from net realized
gain |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.01
|
) |
|
|
|
0.00 |
|
Total dividends and/or
distributions to shareholders |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.01
|
) |
|
|
|
0.00 |
|
Net asset value , end of
period |
|
|
$ |
9.56 |
|
|
|
$ |
10.09
|
|
|
|
$ |
10.42
|
|
|
|
$ |
8.74 |
|
|
|
$ |
8.16 |
|
|
|
$ |
9.92 |
|
Total Return, at Net Asset
Value 5
|
|
|
|
(5.25
|
)% |
|
|
|
(3.17
|
)% |
|
|
|
19.22
|
% |
|
|
|
7.24 |
% |
|
|
|
(17.80
|
)% |
|
|
|
(0.80
|
)% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
33,569
|
|
|
|
$ |
38,156
|
|
|
|
$ |
30,168
|
|
|
|
$ |
19,616
|
|
|
|
$ |
10,795
|
|
|
|
$ |
2,987
|
|
Average net assets (in thousands)
|
|
|
|
33,304
|
|
|
|
|
39,496
|
|
|
|
|
22,635
|
|
|
|
|
15,335
|
|
|
|
|
7,615
|
|
|
|
|
1,591
|
|
Ratios to average net assets:
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
|
|
(1.68
|
)% |
|
|
|
(0.94
|
)% |
|
|
|
(1.11
|
)% |
|
|
|
(1.10
|
)% |
|
|
|
(0.88
|
)% |
|
|
|
(0.31
|
)% |
Expenses excluding specific
expenses listed below |
|
|
|
2.45 |
% |
|
|
|
2.46 |
% |
|
|
|
2.52 |
% |
|
|
|
2.50 |
% |
|
|
|
2.69 |
% |
|
|
|
2.56 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00 |
% |
Total expenses |
|
|
|
2.45
|
% 8
|
|
|
|
2.46
|
% 8
|
|
|
|
2.52
|
% 8
|
|
|
|
2.50
|
% 8
|
|
|
|
2.69
|
% 8
|
|
|
|
2.56 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
2.44 |
% |
|
|
|
2.45 |
% |
|
|
|
2.50 |
% |
|
|
|
2.49 |
% |
|
|
|
2.50 |
% |
|
|
|
2.42 |
% |
Portfolio turnover rate
|
|
|
|
12 |
% |
|
|
|
24 |
% |
|
|
|
23 |
% |
|
|
|
26 |
% |
|
|
|
34 |
% |
|
|
|
3 |
% |
1. |
For the
period from June 30, 2014 (commencement of operations) to
August 29, 2014. |
2. |
Represents
the last business day of the Fund’s reporting period.
|
3. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
4. |
Less than
$0.005 per share. |
5. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
6. |
Annualized
for periods less than one full year. |
8. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
2.46 |
% |
Year Ended August 31, 2018
|
|
|
2.47 |
% |
Year Ended August 31, 2017
|
|
|
2.53 |
% |
Year Ended August 31, 2016
|
|
|
2.51 |
% |
Year Ended August 31, 2015
|
|
|
2.70 |
% |
50 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Period Ended August 29, 2014 1,2
|
Class I |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
10.54
|
|
|
|
$ |
10.82
|
|
|
|
$ |
8.96 |
|
|
|
$ |
8.26 |
|
|
|
$ |
9.94 |
|
|
|
$ |
10.00
|
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
3
|
|
|
|
(0.02
|
) |
|
|
|
0.03 |
|
|
|
|
0.03 |
|
|
|
|
0.06 |
|
|
|
|
0.05 |
|
|
|
|
0.03 |
|
Net realized and unrealized gain
(loss) |
|
|
|
(0.47
|
) |
|
|
|
(0.25
|
) |
|
|
|
1.83 |
|
|
|
|
0.64 |
|
|
|
|
(1.70
|
) |
|
|
|
(0.09
|
) |
Total from investment operations
|
|
|
|
(0.49
|
) |
|
|
|
(0.22
|
) |
|
|
|
1.86 |
|
|
|
|
0.70 |
|
|
|
|
(1.65
|
) |
|
|
|
(0.06
|
) |
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
0.00 |
|
|
|
|
(0.06
|
) |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.02
|
) |
|
|
|
0.00 |
|
Distributions from net realized
gain |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.01
|
) |
|
|
|
0.00 |
|
Total dividends and/or
distributions to shareholders |
|
|
|
0.00 |
|
|
|
|
(0.06
|
) |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.03
|
) |
|
|
|
0.00 |
|
Net asset value , end of
period |
|
|
$ |
10.05
|
|
|
|
$ |
10.54
|
|
|
|
$ |
10.82
|
|
|
|
$ |
8.96 |
|
|
|
$ |
8.26 |
|
|
|
$ |
9.94 |
|
Total Return, at Net Asset
Value 4
|
|
|
|
(4.65
|
)% |
|
|
|
(2.06
|
)% |
|
|
|
20.89
|
% |
|
|
|
8.35 |
% |
|
|
|
(16.68
|
)% |
|
|
|
(0.60
|
)% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
277,371
|
|
|
|
$ |
105,736
|
|
|
|
$ |
23,879
|
|
|
|
$ |
7,332
|
|
|
|
$ |
102 |
|
|
|
$ |
10 |
|
Average net assets (in thousands)
|
|
|
|
187,877
|
|
|
|
|
49,969
|
|
|
|
|
11,916
|
|
|
|
|
2,128
|
|
|
|
|
64 |
|
|
|
|
11 |
|
Ratios to average net assets:
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
|
(0.49
|
)% |
|
|
|
0.26 |
% |
|
|
|
0.30 |
% |
|
|
|
0.65 |
% |
|
|
|
0.54 |
% |
|
|
|
1.58 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
1.27 |
% |
|
|
|
1.29 |
% |
|
|
|
1.32 |
% |
|
|
|
1.33 |
% |
|
|
|
1.60 |
% |
|
|
|
1.41 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00
|
% 6
|
|
|
|
0.00 |
% |
Total expenses |
|
|
|
1.27
|
% 7
|
|
|
|
1.29
|
% 7
|
|
|
|
1.32
|
% 7
|
|
|
|
1.33
|
% 7
|
|
|
|
1.60
|
% 7
|
|
|
|
1.41 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
1.25 |
% |
|
|
|
1.25 |
% |
|
|
|
1.25 |
% |
|
|
|
1.24 |
% |
|
|
|
1.25 |
% |
|
|
|
1.17 |
% |
Portfolio turnover rate
|
|
|
|
12 |
% |
|
|
|
24 |
% |
|
|
|
23 |
% |
|
|
|
26 |
% |
|
|
|
34 |
% |
|
|
|
3 |
% |
1. |
For the
period from June 30, 2014 (commencement of operations) to
August 29, 2014. |
2. |
Represents
the last business day of the Fund’s reporting period.
|
3. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
4. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
5. |
Annualized
for periods less than one full year. |
7. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
1.28 |
% |
Year Ended August 31, 2018
|
|
|
1.30 |
% |
Year Ended August 31, 2017
|
|
|
1.33 |
% |
Year Ended August 31, 2016
|
|
|
1.34 |
% |
Year Ended August 31, 2015
|
|
|
1.61 |
% |
51 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Period Ended August 29, 2014 1,2
|
Class R |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
10.29
|
|
|
|
$ |
10.59
|
|
|
|
$ |
8.83 |
|
|
|
$ |
8.20 |
|
|
|
$ |
9.93 |
|
|
|
$ |
10.00
|
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment gain (loss)
3
|
|
|
|
(0.05
|
) |
|
|
|
(0.05
|
) |
|
|
|
(0.05
|
) |
|
|
|
(0.05
|
) |
|
|
|
(0.03
|
) |
|
|
|
0.00
|
4
|
Net realized and unrealized gain
(loss) |
|
|
|
(0.46
|
) |
|
|
|
(0.24
|
) |
|
|
|
1.81 |
|
|
|
|
0.68 |
|
|
|
|
(1.69
|
) |
|
|
|
(0.07
|
) |
Total from investment operations
|
|
|
|
(0.51
|
) |
|
|
|
(0.29
|
) |
|
|
|
1.76 |
|
|
|
|
0.63 |
|
|
|
|
(1.72
|
) |
|
|
|
(0.07
|
) |
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
0.00 |
|
|
|
|
(0.01
|
) |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
Distributions from net realized
gain |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.01
|
) |
|
|
|
0.00 |
|
Total dividends and/or
distributions to shareholders |
|
|
|
0.00 |
|
|
|
|
(0.01
|
) |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.01
|
) |
|
|
|
0.00 |
|
Net asset value , end of
period |
|
|
$ |
9.78 |
|
|
|
$ |
10.29
|
|
|
|
$ |
10.59
|
|
|
|
$ |
8.83 |
|
|
|
$ |
8.20 |
|
|
|
$ |
9.93 |
|
Total Return, at Net Asset
Value 5
|
|
|
|
(4.96
|
)% |
|
|
|
(2.77
|
)% |
|
|
|
19.93
|
% |
|
|
|
7.68 |
% |
|
|
|
(17.38
|
)% |
|
|
|
(0.70
|
)% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
6,921
|
|
|
|
$ |
6,884
|
|
|
|
$ |
3,606
|
|
|
|
$ |
1,692
|
|
|
|
$ |
966 |
|
|
|
$ |
127 |
|
Average net assets (in thousands)
|
|
|
|
6,352
|
|
|
|
|
6,023
|
|
|
|
|
2,336
|
|
|
|
|
1,253
|
|
|
|
|
555 |
|
|
|
|
47 |
|
Ratios to average net assets:
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
|
(1.18
|
)% |
|
|
|
(0.45
|
)% |
|
|
|
(0.55
|
)% |
|
|
|
(0.60
|
)% |
|
|
|
(0.36
|
)% |
|
|
|
0.07 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
1.95 |
% |
|
|
|
1.97 |
% |
|
|
|
2.03 |
% |
|
|
|
2.02 |
% |
|
|
|
2.24 |
% |
|
|
|
2.05 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00 |
% |
Total expenses |
|
|
|
1.95
|
% 8
|
|
|
|
1.97
|
% 8
|
|
|
|
2.03
|
% 8
|
|
|
|
2.02
|
% 8
|
|
|
|
2.24
|
% 8
|
|
|
|
2.05 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
1.94 |
% |
|
|
|
1.96 |
% |
|
|
|
2.00 |
% |
|
|
|
2.00 |
% |
|
|
|
2.00 |
% |
|
|
|
1.93 |
% |
Portfolio turnover rate
|
|
|
|
12 |
% |
|
|
|
24 |
% |
|
|
|
23 |
% |
|
|
|
26 |
% |
|
|
|
34 |
% |
|
|
|
3 |
% |
1. |
For the
period from June 30, 2014 (commencement of operations) to
August 29, 2014. |
2. |
Represents
the last business day of the Fund’s reporting period.
|
3. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
4. |
Less than
$0.005 per share. |
5. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
6. |
Annualized
for periods less than one full year. |
8. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
1.96 |
% |
Year Ended August 31, 2018
|
|
|
1.98 |
% |
Year Ended August 31, 2017
|
|
|
2.04 |
% |
Year Ended August 31, 2016
|
|
|
2.03 |
% |
Year Ended August 31, 2015
|
|
|
2.25 |
% |
52 Invesco
Investment Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended February 28, 2019
(Unaudited) |
|
Year Ended
August 31, |
|
Period Ended August 29, 2014 1,2
|
Class Y |
|
2018
|
|
2017
|
|
2016
|
|
2015
|
Per Share Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value ,
beginning of period |
|
|
$ |
10.47
|
|
|
|
$ |
10.75
|
|
|
|
$ |
8.92 |
|
|
|
$ |
8.24 |
|
|
|
$ |
9.94 |
|
|
|
$ |
10.00
|
|
Income (loss) from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
3
|
|
|
|
(0.03
|
) |
|
|
|
0.01 |
|
|
|
|
(0.01
|
) |
|
|
|
(0.00
|
) 4
|
|
|
|
0.01 |
|
|
|
|
0.01 |
|
Net realized and unrealized gain
(loss) |
|
|
|
(0.46
|
) |
|
|
|
(0.25
|
) |
|
|
|
1.84 |
|
|
|
|
0.68 |
|
|
|
|
(1.68
|
) |
|
|
|
(0.07
|
) |
Total from investment operations
|
|
|
|
(0.49
|
) |
|
|
|
(0.24
|
) |
|
|
|
1.83 |
|
|
|
|
0.68 |
|
|
|
|
(1.67
|
) |
|
|
|
(0.06
|
) |
Dividends and/or distributions
to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment
income |
|
|
|
0.00 |
|
|
|
|
(0.04
|
) |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.02
|
) |
|
|
|
0.00 |
|
Distributions from net realized
gain |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.01
|
) |
|
|
|
0.00 |
|
Total dividends and/or
distributions to shareholders |
|
|
|
0.00 |
|
|
|
|
(0.04
|
) |
|
|
|
0.00 |
|
|
|
|
0.00 |
|
|
|
|
(0.03
|
) |
|
|
|
0.00 |
|
Net asset value , end of
period |
|
|
$ |
9.98 |
|
|
|
$ |
10.47
|
|
|
|
$ |
10.75
|
|
|
|
$ |
8.92 |
|
|
|
$ |
8.24 |
|
|
|
$ |
9.94 |
|
Total Return, at Net Asset
Value 5
|
|
|
|
(4.68
|
)% |
|
|
|
(2.23
|
)% |
|
|
|
20.52
|
% |
|
|
|
8.25 |
% |
|
|
|
(16.92
|
)% |
|
|
|
(0.60
|
)% |
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in
thousands) |
|
|
$ |
245,281
|
|
|
|
$ |
281,465
|
|
|
|
$ |
193,261
|
|
|
|
$ |
162,599
|
|
|
|
$ |
68,697
|
|
|
|
$ |
12,062
|
|
Average net assets (in thousands)
|
|
|
|
240,256
|
|
|
|
|
253,099
|
|
|
|
|
153,808
|
|
|
|
|
128,076
|
|
|
|
|
38,619
|
|
|
|
|
6,734
|
|
Ratios to average net assets:
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
|
|
(0.67
|
)% |
|
|
|
0.06 |
% |
|
|
|
(0.10
|
)% |
|
|
|
(0.03
|
)% |
|
|
|
0.14 |
% |
|
|
|
0.38 |
% |
Expenses excluding specific
expenses listed below |
|
|
|
1.46 |
% |
|
|
|
1.46 |
% |
|
|
|
1.52 |
% |
|
|
|
1.50 |
% |
|
|
|
1.72 |
% |
|
|
|
1.59 |
% |
Interest and fees from borrowings
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00
|
% 7
|
|
|
|
0.00 |
% |
Total expenses |
|
|
|
1.46
|
% 8
|
|
|
|
1.46
|
% 8
|
|
|
|
1.52
|
% 8
|
|
|
|
1.50
|
% 8
|
|
|
|
1.72
|
% 8
|
|
|
|
1.59 |
% |
Expenses after payments, waivers
and/or reimbursements and reduction to custodian expenses |
|
|
|
1.45 |
% |
|
|
|
1.45 |
% |
|
|
|
1.45 |
% |
|
|
|
1.45 |
% |
|
|
|
1.45 |
% |
|
|
|
1.40 |
% |
Portfolio turnover rate
|
|
|
|
12 |
% |
|
|
|
24 |
% |
|
|
|
23 |
% |
|
|
|
26 |
% |
|
|
|
34 |
% |
|
|
|
3 |
% |
1. |
For the
period from June 30, 2014 (commencement of operations) to
August 29, 2014. |
2. |
Represents
the last business day of the Fund’s reporting period.
|
3. |
Per share
amounts calculated based on the average shares outstanding during the
period. |
4. |
Less than
$0.005 per share. |
5. |
Assumes an
initial investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional
shares on the reinvestment date, and redemption at the net asset value
calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction
of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. |
6. |
Annualized
for periods less than one full year. |
8. |
Total
expenses including indirect expenses from affiliated fund fees and
expenses were as follows: |
|
|
|
|
|
Six Months Ended
February 28, 2019 |
|
|
1.47 |
% |
Year Ended August 31, 2018
|
|
|
1.47 |
% |
Year Ended August 31, 2017
|
|
|
1.53 |
% |
Year Ended August 31, 2016
|
|
|
1.51 |
% |
Year Ended August 31, 2015
|
|
|
1.73 |
% |
53 Invesco
Investment Funds
Shareholder Account Information
In addition to the Fund(s), the Adviser
serves as investment adviser to many other Invesco mutual funds. The following
information is about the Class R5 and Class R6 shares of the Invesco mutual
funds (Invesco Funds or Funds), which are offered only to certain eligible
investors. The Funds also offer other share classes that have different fees and
expenses, which are described in the prospectuses for the applicable share
classes. Prior to September 24, 2012, Class R5 shares were known as
Institutional Class shares.
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 Employer
Sponsored 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.
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 access,” then click on “Account
Access” under “Accounts & Services.” 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.
Eligibility for Investors
Class R5 and R6 shares of the Funds
(except for the Invesco Oppenheimer Master Event-Linked Bond Fund, Invesco
Oppenheimer Master Inflation Protected Securities Fund and Invesco Oppenheimer
Master Loan Fund) are available for use by Employer Sponsored Retirement and
Benefit Plans, held either at the plan level or through omnibus accounts, that
generally process no more than one net redemption and one net purchase
transaction each day. There is no minimum initial investment for an Employer
Sponsored Retirement and Benefit Plan 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.
Class R5 and R6 shares of the Funds are
also available to institutional investors. Institutional investors are: banks,
trust companies, collective trust funds, entities acting for the account of a
public entity (e.g., Taft-Hartley funds, states, cities or government agencies),
funds of funds or other pooled investment vehicles, 529 college savings plans,
financial intermediaries and corporations investing for their own accounts,
endowments and foundations.
The minimum initial investment for
institutional investors is $1 million, unless such investment is made by
(i) an investment company, as defined under the 1940 Act, as amended, 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.
Class R6 shares of the Funds are also
available through an intermediary that has agreed with Invesco Distributors,
Inc. to make such shares available for use in retail omnibus accounts that
generally process no more than one net redemption and one net purchase
transaction each day. There are no minimum investment amounts for Class R6
shares held through retail omnibus accounts where the intermediary:
|
∎
|
|
generally
charges an asset-based fee or commission in addition to those described in
this prospectus; and |
|
∎
|
|
maintains
Class R6 shares and makes them available to retail investors.
|
The Invesco Oppenheimer Master
Event-Linked Bond Fund, Invesco Oppenheimer Master Inflation Protected
Securities Fund and Invesco Oppenheimer Master Loan Fund are only available for
purchase by other Funds in the Invesco fund family and other Invesco pooled
investment vehicles.
Shareholders eligible to purchase Class
R6 Shares must meet the requirements specified by their intermediary. Not all
intermediaries offer Class R6 Shares to their customers.
Purchasing Shares
You may purchase Fund shares with a
wire transfer or, in certain instances if approved by the Fund, securities in
which the Fund is authorized to invest. Non-retirement retail investors,
including high net worth investors investing directly or through a financial
intermediary, are not eligible for Class R5 shares. IRAs and Employer Sponsored
IRAs are also not eligible for Class R5 shares. If you hold your shares through
a financial intermediary, the terms by which you purchase, redeem and exchange
shares may differ than the terms in this prospectus depending upon the policies
and procedures of your financial intermediary. Notwithstanding the foregoing,
each shareholder must still meet the Fund’s eligibility requirements applicable
to the share class to be purchased.
Shares Sold Without Sales Charges
You will not pay an initial or
contingent deferred sales charge (CDSC) on purchases of any Class R5 or Class R6
shares.
How to Purchase Shares
|
|
|
|
|
Purchase Options
|
|
|
Opening An Account
|
|
Adding To An Account
|
Through a
Financial Adviser or Financial Intermediary |
|
Contact your
financial adviser or financial intermediary. The financial adviser or
financial intermediary should mail your completed account application to
the Funds’ transfer agent, |
|
Contact your
financial adviser or financial intermediary. |
|
|
Invesco Investment Services,
Inc.,
P.O. Box 219078,
Kansas City, MO 64121-9078.
|
|
|
The financial adviser or financial intermediary should call the
Funds’ transfer agent at (800) 959-4246 to receive a reference
number. Then, use the following wire instructions: |
|
|
Beneficiary Bank
ABA/Routing #: 011001234
Beneficiary Account Number:
729639
Beneficiary Account Name: Invesco
Investment Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account # |
By Telephone and Wire |
|
Open your
account through a financial adviser or financial intermediary as described
above. |
|
Call the
Funds’ transfer agent at (800) 959-4246 and wire payment for your purchase
order in accordance with the wire instructions listed above.
|
A-1 The
Invesco Funds—Class R5 and R6 Shares
R5/R6—12/18
Purchase orders will not be processed
unless the account application and purchase payment are received in good order.
In accordance with the USA PATRIOT Act, if you fail to provide all the required
information requested in the current account application, your purchase order
will not be processed. Additionally, federal law requires that the Funds verify
and record your identifying information.
Automatic Dividend and Distribution Investment
All of your dividends and distributions
may be paid in cash or reinvested in the same Fund at net asset value. Unless
you specify otherwise, your dividends and distributions will automatically be
reinvested in the same Fund.
Redeeming Shares
Your broker or financial intermediary
may charge service fees for handling redemption transactions.
|
|
|
How to Redeem
Shares |
Through a
Financial Adviser or Financial Intermediary |
|
Contact your
financial adviser or financial intermediary. Redemption proceeds will be
sent in accordance with the wire instructions specified in the account
application provided to the Funds’ transfer agent. The Funds’ transfer
agent must receive your financial adviser’s or financial intermediary’s
call before the close of the customary trading session of the New York
Stock Exchange (NYSE) on days the NYSE is open for business in order to
effect the redemption at that day’s closing price. Please contact your
financial adviser or financial intermediary with respect to reporting of
cost basis and available elections for your account. |
By Telephone |
|
A person who has been authorized
in the account application to effect transactions may make redemptions by
telephone. You must call the Funds’ transfer agent before the close of the
customary trading session of the NYSE on days the NYSE is open for
business in order to effect the redemption at that day’s closing price.
|
Timing and Method of Payment
The Funds’ transfer agent typically
expects to pay redemption proceeds to redeeming shareholders within one business
day after a redemption request is received in good order, regardless of the
method a Fund uses to make such payment. However, a Fund may take up to seven
days to process a redemption request. “Good order” means that all necessary
information and documentation related to the redemption request have been
provided to the Funds’ transfer agent. If your request is not in good order, the
Funds’ transfer agent may require additional documentation in order to redeem
your shares. Payment may be postponed under unusual circumstances, as allowed by
the SEC, such as when the NYSE restricts or suspends trading.
In addition, a temporary hold may be
placed on the disbursement of redemption proceeds from an account if there is a
reasonable belief that financial exploitation of a Specified Adult (as defined
below) has occurred, is occurring, has been attempted, or will be attempted.
Notice of such a delay will be provided in accordance with regulatory
requirements. This temporary hold will be for an initial period of no more than
15 business days while an internal review is performed. Should the internal
review support the belief that financial exploitation has occurred, is
occurring, has been attempted or will be attempted, the temporary hold may be
extended for up to 10 additional business days. Both the initial and subsequent
hold on the disbursement may be terminated or extended by a state regulator or
an agency or court of competent jurisdiction. For purposes of this paragraph,
the term “Specified Adult” refers to an individual who is (a) a natural person
age 65 and older, or (b) a natural person age 18 and older who is reasonably
believed to have a mental or physical impairment that renders the individual
unable to protect his or her own interests.
If you redeem by telephone, the Funds’
transfer agent will transmit the amount of redemption proceeds electronically to
your pre-authorized bank account.
The Funds’ transfer agent uses
reasonable procedures to confirm that instructions communicated via telephone
are genuine, and the Funds and the Funds’ transfer agent are not liable for
losses arising from actions taken in accordance with instructions that are
reasonably believed to be genuine.
A Fund typically expects to use
holdings of cash and cash equivalents and sales of portfolio assets to meet
redemption requests, both regularly and in stressed market conditions. The Funds
also have the ability to redeem in kind as further described below under
“Redemptions in Kind.” Invesco Floating Rate Fund has a revolving line of credit
that may be used to meet redemptions in stressed market conditions.
Redemptions in Kind
Although the Funds generally intend to
pay redemption proceeds solely in cash, the Funds reserve the right to determine
in their sole discretion, whether to satisfy redemption requests by making
payment in securities or other property (known as a redemption in kind).
Redemptions in kind may result in transaction costs and/or market fluctuations
associated with liquidating or holding the securities, respectively.
Redemptions Initiated by the Funds
If a Fund determines that you have not
provided a correct Social Security or other tax identification number on your
account application, or the Fund is not able to verify your identity as required
by law, the Fund may, at its discretion, redeem the account and distribute the
proceeds to you.
Suspension of Redemptions
The right of redemption may be
suspended or the date of payment postponed when (a) trading on the NYSE is
restricted, as determined by applicable rules and regulations of the SEC,
(b) the NYSE is closed for other than customary weekend and holiday
closings, (c) the SEC has by order permitted such suspension, or
(d) an emergency as determined by the SEC exists making disposition of
portfolio securities or the valuation of the net assets of the Fund not
reasonably practicable. With respect to Invesco Government Money Market Fund,
Invesco Oppenheimer Government Money Market Fund, Invesco Oppenheimer Government
Cash Reserves Fund, and Invesco Tax-Exempt Cash Fund, in the event that the
Fund, at the end of a business day, has invested less than 10% of its total
assets in weekly liquid assets or, with respect to the retail and government
money market funds, the Fund’s price per share as computed for the purpose of
distribution, redemption and repurchase, rounded to the nearest 1%, has deviated
from the stable price established by the Fund’s Board of Trustees (Board) or the
Board, including a majority of trustees who are not interested persons as
defined in the 1940 Act, determines that such a deviation is likely to occur,
and the Board, including a majority of trustees who are not interested persons
of the Fund, irrevocably has approved the liquidation of the Fund, the Fund’s
Board has the authority to suspend redemptions of Fund shares.
Liquidity Fees and Redemption Gates
For Invesco Tax-Exempt Cash Fund, if
the Fund’s weekly liquid assets fall below 30% of its total assets, the Board,
in its discretion, may impose liquidity fees of up to 2% of the value of the
shares redeemed and/or suspend redemptions (redemption gates). In addition, if
the Fund’s weekly liquid assets fall below 10% of its total assets at the end of
any business day, the Fund must impose a 1% liquidity fee on shareholder
redemptions unless the Board determines that not doing so is in the best
interests of the Fund.
Liquidity fees and redemption gates are
most likely to be imposed, if at all, during times of extraordinary market
stress. In the event that a liquidity fee or redemption gate is imposed, the
Board expects that for the duration of its implementation and the day after
which such gate or fee is terminated, the Fund would strike only one net asset
value per day, at the Fund’s last scheduled net asset value calculation time.
The imposition and termination of a
liquidity fee or redemption gate will be reported by the Fund to the SEC on Form
N-CR. Such information will also be available on the Fund’s website. In
addition, the Fund will communicate such action through a supplement to its
registration statement and may further communicate such action through a press
release or by other means. If a liquidity fee is applied by the Board, it will
be charged on all redemption orders submitted after the effective time of the
imposition of the fee by the Board. Liquidity fees would reduce the amount you
receive
A-2 The
Invesco Funds—Class R5 and R6 Shares
upon redemption of your shares. In the
event the Fund imposes a redemption gate, the Fund or any financial intermediary
on its behalf will not accept redemption requests until the Fund provides notice
that the redemption gate has been terminated.
Redemption requests submitted while a
redemption gate is imposed will be cancelled without further notice. If
shareholders still wish to redeem their shares after a redemption gate has been
lifted, they will need to submit a new redemption request.
Liquidity fees and redemption gates
will generally be used to assist the Fund to help preserve its market-based NAV
per share. It is possible that a liquidity fee will be returned to shareholders
in the form of a distribution. The Board may, in its discretion, terminate a
liquidity fee or redemption gate at any time if it believes such action to be in
the best interest of the Fund. Also, liquidity fees and redemption gates will
automatically terminate at the beginning of the next business day once the
Fund’s weekly liquid assets reach at least 30% of its total assets. Redemption
gates may only last up to 10 business days in any 90-day period. When a fee or a
gate is in place, the Fund may elect not to permit the purchase of shares or to
subject the purchase of shares to certain conditions, which may include
affirmation of the purchaser’s knowledge that a fee or a gate is in effect. When
a fee or a gate is in place, shareholders will not be permitted to exchange into
or out of the Fund.
There is some degree of uncertainty
with respect to the tax treatment of liquidity fees received by the Fund, and
such tax treatment may be the subject to future IRS guidance. If the Fund
receives liquidity fees, it will consider the appropriate tax treatment of such
fees to the Fund at such time.
Financial intermediaries are required
to promptly take the steps requested by the Fund or its designees to impose or
help to implement a liquidity fee or redemption gate as requested from time to
time, including the rejection of orders due to the imposition of a fee or gate
or the prompt re-confirmation of orders following a notification regarding the
implementation of a fee or gate. If a liquidity fee is imposed, these steps are
expected to include the submission of separate, rather than combined, purchase
and redemption orders from the time of the effectiveness of the liquidity fee or
redemption gate and the submission of such order information to the Fund or its
designee prior to the next calculation of the Fund’s net asset value. Unless
otherwise agreed to between the Fund and financial intermediary, the Fund will
withhold liquidity fees on behalf of financial intermediaries. With regard to
such orders, a redemption request that the Fund determines in its sole
discretion has been received in good order by the Fund or its designated agent
prior to the imposition of a liquidity fee or redemption gate may be paid by the
Fund despite the imposition of a redemption gate or without the deduction of a
liquidity fee. If a liquidity fee is imposed during the day, an intermediary who
receives both purchase and redemption orders from a single account holder is not
required to net the purchase and redemption orders. However, the intermediary is
permitted to apply the liquidity fee to the net amount of redemptions (even if
the purchase order was received prior to the time the liquidity fee was
imposed).
Where a Financial Intermediary serves
as the Fund’s agent for the purpose of receiving orders, trades that are not
transmitted to the Fund by the Financial Intermediary before the time required
by the Fund or the transfer agent may, in the Fund’s discretion, be processed on
an as-of basis, and any cost or loss to the Fund or transfer agent or their
affiliates, from such transactions shall be borne exclusively by the Financial
Intermediary.
Exchanging Shares
You may, under certain circumstances,
exchange shares in one Fund for those of another Fund. An exchange is the
purchase of shares in one Fund which is paid for with the proceeds from a
redemption of shares of another Fund effectuated on the same day. Any gain on
the transaction may be subject to federal income tax. Accordingly, the
procedures and processes applicable to redemptions of Fund shares, as discussed
under the heading
“Redeeming Shares” above, will apply.
Before requesting an exchange, review the prospectus of the Fund you wish to
acquire.
All exchanges are subject to the
limitations set forth in the prospectuses of the Funds. If you wish to exchange
shares of one Fund for those of another Fund, you must consult the prospectus of
the Fund whose shares you wish to acquire to determine whether the Fund is
offering shares to new investors and whether you are eligible to acquire shares
of that Fund.
Permitted Exchanges
Except as otherwise provided herein or
in the SAI, you generally may exchange your shares for shares of the same class
of another Fund. The following table shows permitted exchanges from one Fund to
another Fund:
|
|
|
Exchange From
|
|
Exchange To
|
Class R5 |
|
Class R5 |
Class R6 |
|
Class R6
|
Exchange Conditions
Shares must have been held for at least
one day prior to the exchange with the exception of dividends and distributions
that are reinvested.
Under unusual market conditions, a Fund
may delay the exchange of shares for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. The exchange privilege is not an option or right to purchase shares.
Any of the participating Funds or the distributor may modify or terminate this
privilege at any time.
Share Class Conversions
Shares of one class of a Fund may be
converted into shares of another class of the same Fund, provided that you are
eligible to buy that share class. Investors who hold Fund shares through a
financial intermediary that does not have an agreement to make certain share
classes of the Funds available or that cannot systematically support the
conversion may not be eligible to convert their shares. Furthermore, your
financial intermediary may have discretion to effect a conversion on your
behalf. Consult with your financial intermediary for details. The conversion of
shares of one class of a Fund into shares of another class of the same Fund is
not taxable for federal income tax purposes and no gain or loss will be reported
on the transaction. See the applicable prospectus for share class information.
Fees and expenses differ between share
classes. You should read the prospectus for the share class into which you are
seeking to convert your shares prior to the conversion.
Rights Reserved by the Funds
Each Fund and its agent reserves the
right at any time to:
∎
|
|
Reject or
cancel all or any part of any purchase or exchange order.
|
∎
|
|
Modify any
terms or conditions related to the purchase, redemption or exchange of
shares of any Fund. |
∎
|
|
Suspend,
change or withdraw all or any part of the offering made by this
prospectus. |
Excessive Short-Term Trading Activity
(Market Timing) Disclosures
While the Funds provide their
shareholders with daily liquidity, their investment programs are designed to
serve long-term investors and are not designed to accommodate excessive
short-term trading activity in violation of our policies described below.
Excessive short-term trading activity in the Funds’ shares (i.e., a purchase of
Fund shares followed shortly thereafter by a redemption of such shares, or vice
versa) may hurt the long-term performance of certain Funds by requiring them to
maintain an excessive amount of cash or to liquidate portfolio holdings at a
disadvantageous time, thus interfering with the efficient management of such
Funds by causing them to incur increased brokerage and administrative costs.
Where excessive short-term trading activity seeks to take advantage of arbitrage
opportunities from stale prices for portfolio securities, the value of Fund
shares held by long-term investors may be diluted. The Board has adopted
A-3 The
Invesco Funds—Class R5 and R6 Shares
policies and procedures designed to
discourage excessive or short-term trading of Fund shares for all Funds except
the money market funds. However, there is the risk that these Funds’ policies
and procedures will prove ineffective in whole or in part to detect or prevent
excessive or short-term trading. These Funds may alter their policies at any
time without prior notice to shareholders if the Adviser believes the change
would be in the best interests of long-term shareholders.
Invesco and certain of its corporate
affiliates (Invesco and such affiliates, collectively, the Invesco Affiliates)
currently use the following tools designed to discourage excessive short-term
trading in the Funds:
∎
|
|
Trade
activity monitoring. |
∎
|
|
Discretion to
reject orders. |
∎
|
|
The use of
fair value pricing consistent with procedures approved by the Board.
|
Each of these tools is described in
more detail below. Although these tools are designed to discourage excessive
short-term trading, you should understand that none of these tools alone nor all
of them taken together eliminate the possibility that excessive short-term
trading activity in the Funds will occur. Moreover, each of these tools involves
judgments that are inherently subjective. Invesco Affiliates seek to make these
judgments to the best of their abilities in a manner that they believe is
consistent with long-term shareholder interests.
Money Market Funds. The Boards
of Invesco Government Money Market Fund, Invesco Tax-Exempt Cash Fund, Invesco
Oppenheimer Government Cash Reserves Fund, Invesco Oppenheimer Government Money
Market Fund, Invesco Premier Portfolio, Invesco Premier Tax-Exempt Portfolio and
Invesco Premier U.S. Government Money Portfolio (the money market funds) have
not adopted any policies and procedures that would limit frequent purchases and
redemptions of such Funds’ shares. The Boards of the money market funds
considered the risks of not having a specific policy that limits frequent
purchases and redemptions, and determined that those risks were minimal.
Nonetheless, to the extent that a money market fund must maintain additional
cash and/or securities with short-term durations in greater amounts than may
otherwise be required or borrow to honor redemption requests, the money market
fund’s yield could be negatively impacted.
The Boards of the money market funds do
not believe that it is appropriate to adopt any such policies and procedures for
the money market funds for the following reasons:
∎
|
|
The money
market funds are offered to investors as cash management vehicles;
therefore, investors should be able to purchase and redeem shares
regularly and frequently. |
∎
|
|
One of the
advantages of a money market fund as compared to other investment options
is liquidity. Any policy that diminishes the liquidity of the money market
funds will be detrimental to the continuing operations of such Funds.
|
∎
|
|
With respect
to the money market funds maintaining a constant net asset value, the
money market funds’ portfolio securities are valued on the basis of
amortized cost, and such Funds seek to maintain a constant net asset
value. As a result, the money market funds are not subject to price
arbitrage opportunities. |
∎
|
|
With respect
to the money market funds maintaining a constant net asset value, because
such Funds seek to maintain a constant net asset value, investors are more
likely to expect to receive the amount they originally invested in the
Funds upon redemption than other mutual funds.
|
Trade Activity Monitoring
Invesco Affiliates monitor selected
trades on a daily basis in an effort to detect excessive short-term trading
activities. If, as a result of this monitoring, Invesco Affiliates believe that
a shareholder has engaged in excessive short-term trading, they will seek to act
in a manner that they believe is consistent with the best interests of long-term
investors, which may include taking steps such as (i) asking the
shareholder to take action to stop such activities or
(ii) refusing to process future
purchases or exchanges related to such activities in the shareholder’s accounts
other than exchanges into a money market fund. Invesco Affiliates will use
reasonable efforts to apply the Funds’ policies uniformly given the practical
limitations described above.
The ability of Invesco Affiliates to
monitor trades that are made through accounts that are maintained by
intermediaries (rather than the Funds’ transfer agent) and through conduit
investment vehicles may be severely limited or non-existent.
Discretion to Reject Orders
If a Fund or an Invesco Affiliate
determines, in its sole discretion, that your short-term trading activity is
excessive, the Fund may, in its sole discretion, reject any additional purchase
and exchange orders. This discretion may be exercised with respect to purchase
or exchange orders placed directly with the Funds’ transfer agent or through a
financial intermediary.
Purchase Blocking Policy
The Funds (except those listed below)
have adopted a policy under which any shareholder redeeming shares having a
value of $50,000 or more from a Fund on any trading day will be precluded from
investing in that Fund for 30 calendar days after the redemption transaction
date. The policy applies to redemptions and purchases that are part of exchange
transactions. Under the purchase blocking policy, certain purchases will not be
prevented and certain redemptions will not trigger a purchase block, such as:
purchases and redemptions of shares having a value of less than $50,000;
systematic purchase, redemption and exchange account options; transfers of
shares within the same Fund; non-discretionary rebalancing in fund-of-funds;
asset allocation features; fee-based accounts; account maintenance fees; small
balance account fees; plan-level omnibus Retirement and Benefit Plans; death and
disability and hardship distributions; loan transactions; transfers of assets;
Retirement and Benefit Plan rollovers; IRA conversions and re-characterizations;
and mandatory distributions from Retirement and Benefit plans.
The Funds reserve the right to modify
any of the parameters (including those not listed above) of the purchase
blocking policy at any time. Further, the purchase blocking policy may be waived
with respect to specific shareholder accounts in those instances where the
Adviser determines that its surveillance procedures are adequate to detect
frequent trading in Fund shares.
If an account is maintained by a
financial intermediary whose systems are unable to apply Invesco’s purchase
blocking policy, the Adviser will accept the establishment of an account only if
the Adviser believes the policies and procedures are reasonably designed to
enforce the frequent trading policies of the Funds. You should refer to
disclosures provided by the financial intermediary with which you have an
account to determine the specific trading restrictions that apply to you. If the
Adviser identifies any activity that may constitute frequent trading, it
reserves the right to contact the intermediary and request that the intermediary
either provide information regarding an account owner’s transactions or restrict
the account owner’s trading. There is no guarantee that all instances of
frequent trading in Fund shares will be prevented.
The purchase blocking policy does not
apply to Invesco Government Money Market Fund, Invesco Oppenheimer Government
Money Market Fund, Invesco Oppenheimer Government Cash Reserves Fund, and
Invesco Tax-Exempt Cash Fund.
Pricing of Shares
Determination of Net Asset Value
The price of each Fund’s shares is the
Fund’s net asset value per share. The Funds (except Invesco Government Money
Market Fund, Invesco Oppenheimer Government Cash Reserves Fund and Invesco
Oppenheimer Government Money Market Fund) value portfolio securities for which
market quotations are readily available at market value. Securities and other
assets quoted in foreign currencies are valued in U.S. dollars based on the
prevailing exchange rates on that day. The Funds (except Invesco Government
Money Market Fund, Invesco Oppenheimer Government Cash
A-4 The
Invesco Funds—Class R5 and R6 Shares
Reserves Fund and Invesco Oppenheimer
Government Money Market Fund) value securities and assets for which market
quotations are unavailable at their “fair value,” which is described below.
Invesco Government Money Market Fund, Invesco Oppenheimer Government Cash
Reserves Fund and Invesco Oppenheimer Government Money Market Fund value
portfolio securities on the basis of amortized cost, which approximates market
value. This method of valuation is designed to enable a Fund to price its shares
at $1.00 per share. The Funds cannot guarantee their net asset value will always
remain at $1.00 per share.
Even when market quotations are
available, they may be stale or unreliable because the security is not traded
frequently, trading on the security ceased before the close of the trading
market or issuer specific events occurred after the security ceased trading or
because of the passage of time between the close of the market on which the
security trades and the close of the NYSE and when the Fund calculates its net
asset value. Issuer specific events may cause the last market quotation to be
unreliable. Such events may include a merger or insolvency, events that affect a
geographical area or an industry segment, such as political events or natural
disasters, or market events, such as a significant movement in the U.S. market.
Where the Adviser determines that the closing price of the security is stale or
unreliable, the Adviser will value the security at its fair value.
Fair value is that amount that the
owner might reasonably expect to receive for the security upon its current sale.
A fair value price is an estimated price that requires consideration of all
appropriate factors, including indications of fair value available from pricing
services. Fair value pricing involves judgment and a Fund that uses fair value
methodologies may value securities higher or lower than another Fund using
market quotations or its own fair value methodologies to price the same
securities. Investors who purchase or redeem Fund shares on days when the Fund
is holding fair-valued securities may receive a greater or lesser number of
shares, or higher or lower redemption proceeds, than they would have received if
the Fund had not fair-valued the security or had used a different methodology.
The Board has delegated the daily
determination of fair value prices to the Adviser’s valuation committee, which
acts in accordance with Board approved policies. Fair value pricing methods and
pricing services can change from time to time as approved by the Board.
The intended effect of applying fair
value pricing is to compute an NAV that accurately reflects the value of a
Fund’s portfolio at the time that the NAV is calculated. An additional intended
effect is to discourage those seeking to take advantage of arbitrage
opportunities resulting from “stale” prices and to mitigate the dilutive impact
of any such arbitrage. However, the application of fair value pricing cannot
eliminate the possibility that arbitrage opportunities will exist.
Specific types of securities are valued
as follows:
Senior Secured Floating Rate Loans
and Senior Secured Floating Rate Debt Securities. Senior secured floating
rate loans and senior secured floating rate debt securities are fair valued
using evaluated quotes provided by an independent pricing service. Evaluated
quotes provided by the pricing service may reflect appropriate factors such as
market quotes, ratings, tranche type, industry, company performance, spread,
individual trading characteristics, institution-size trading in similar groups
of securities and other market data.
Domestic Exchange Traded Equity
Securities. Market quotations are generally available and reliable for
domestic exchange traded equity securities. If market quotations are not
available or are unreliable, the Adviser will value the security at fair value
in good faith using procedures approved by the Board.
Foreign Securities. If market
quotations are available and reliable for foreign exchange traded equity
securities, the securities will be valued at the market quotations. Because
trading hours for certain foreign securities end before the close of the NYSE,
closing market quotations may become unreliable. If between the time trading
ends on a particular security and the close of the customary trading session on
the NYSE events occur that are significant and may make the closing price
unreliable, the Fund may fair value the security. If an issuer specific event
has occurred that the Adviser
determines, in its judgment, is likely
to have affected the closing price of a foreign security, it will price the
security at fair value. The Adviser also relies on a screening process from a
pricing vendor to indicate the degree of certainty, based on historical data,
that the closing price in the principal market where a foreign security trades
is not the current market value as of the close of the NYSE. For foreign
securities where the Adviser believes, at the approved degree of certainty, that
the price is not reflective of current market value, the Adviser will use the
indication of fair value from the pricing service to determine the fair value of
the security. The pricing vendor, pricing methodology or degree of certainty may
change from time to time.
Fund securities primarily traded on
foreign markets may trade on days that are not business days of the Fund.
Because the net asset value of Fund shares is determined only on business days
of the Fund, the value of the portfolio securities of a Fund that invests in
foreign securities may change on days when you will not be able to purchase or
redeem shares of the Fund.
Fixed Income Securities. Fixed
income securities, such as government, corporate, asset-backed and municipal
bonds, convertible securities, including high yield or junk bonds, and loans,
normally are valued on the basis of prices provided by independent pricing
services. Prices provided by the pricing services may be determined without
exclusive reliance on quoted prices, and may reflect appropriate factors such as
institution-size trading in similar groups of securities, developments related
to special securities, dividend rate, maturity and other market data. Pricing
services generally value fixed income securities assuming orderly transactions
of institutional round lot size, but a Fund may hold or transact in the same
securities in smaller, odd lot sizes. Odd lots often trade at lower prices than
institutional round lots. Prices received from pricing services are fair value
prices. In addition, if the price provided by the pricing service and
independent quoted prices are unreliable, the Adviser’s valuation committee will
fair value the security using procedures approved by the Board.
Short-term Securities.
Invesco Limited Term Municipal Income Fund, Invesco Oppenheimer
Government Cash Reserves Fund, and Invesco Oppenheimer Government Money Market
Fund value variable rate securities that have an unconditional demand or put
feature exercisable within seven days or less at par, which reflects the market
value of such securities.
Futures and Options. Futures
contracts are valued at the final settlement price set by the exchange on which
they are principally traded. Options are valued on the basis of market
quotations, if available.
Swap Agreements. Swap Agreements
are fair valued using an evaluated quote provided by an independent pricing
service. Evaluated quotes provided by the pricing service are based on a model
that may include end of day net present values, spreads, ratings, industry and
company performance.
Open-end Funds. If a Fund
invests in other open-end funds, other than open-end funds that are exchange
traded, the investing Fund will calculate its net asset value using the net
asset value of the underlying fund in which it invests, and the prospectuses for
such other open-end funds explain the circumstances under which they will use
fair value pricing and the effects of using fair value pricing.
Each Fund, except for Invesco
Government Money Market Fund, determines the net asset value of its shares on
each day the NYSE is open for business (a business day), as of the close of the
customary trading session, or earlier NYSE closing time that day. Invesco
Government Money Market Fund will generally determine the net asset value of its
shares at 5:30 p.m. Eastern Time on each business day. A business day for the
Fund is any day that (1) both the Federal Reserve Bank of New York and a
Fund’s custodian are open for business and (2) the primary trading markets
for the Fund’s portfolio instruments are open and the Fund’s management believes
there is an adequate market to meet purchase and redemption requests. Invesco
Government Money Market Fund is authorized not to open for trading on a day that
is otherwise a business day if the Securities Industry and Financial Markets
Association (SIFMA) recommends that government securities dealers not open for
trading; any such day will not be considered a business day. The Fund also may
close early on a business
A-5 The
Invesco Funds—Class R5 and R6 Shares
day if SIFMA recommends that government
securities dealers close early. If Invesco Government Money Market Fund uses its
discretion to close early on a business day, the Fund will calculate its net
asset value as of the time of such closing. Invesco Oppenheimer Government Cash
Reserves Fund and Invesco Oppenheimer Government Money Market Fund are
authorized to not open for trading on a day that is otherwise a business day if
the NYSE recommends that government securities dealers not open for trading; any
such day will not be considered a business day. Invesco Oppenheimer Government
Cash Reserves Fund and Invesco Oppenheimer Government Money Market Fund also may
close early on a business day if the NYSE recommends that government securities
dealers close early.
For financial reporting purposes and
shareholder transactions on the last day of the fiscal quarter, transactions are
normally accounted for on a trade date basis. For purposes of executing
shareholder transactions in the normal course of business (other than
shareholder transactions at a fiscal period-end), each Fund’s portfolio
securities transactions are recorded no later than the first business day
following the trade date.
The Invesco Balanced-Risk Allocation
Fund, Invesco Balanced-Risk Commodity Strategy Fund, Invesco Emerging Markets
Flexible Bond Fund, Invesco Macro Allocation Strategy Fund, Invesco Global
Targeted Returns Fund, Invesco Multi-Asset Income Fund, Invesco Oppenheimer
Capital Income Fund, Invesco Oppenheimer Global High Yield Fund, Invesco
Oppenheimer Global Multi-Asset Growth Fund, Invesco Oppenheimer Global Strategic
Income Fund, Invesco Oppenheimer Gold & Special Minerals Fund, Invesco
Oppenheimer International Bond Fund, Invesco Oppenheimer Global Allocation Fund,
and Invesco Oppenheimer Fundamental Alternatives Fund may each invest up to 25%
of their total assets in shares of their respective subsidiaries (the
Subsidiaries). The Subsidiaries offer to redeem all or a portion of their shares
at the current net asset value per share every regular business day. The value
of shares of the Subsidiaries will fluctuate with the value of the respective
Subsidiary’s portfolio investments. The Subsidiaries price their portfolio
investments pursuant to the same pricing and valuation methodologies and
procedures used by the Funds, which require, among other things, that each of
the Subsidiaries’ portfolio investments be marked-to-market (that is, the value
on each of the Subsidiaries’ books changes) each business day to reflect changes
in the market value of the investment.
Each Fund’s current net asset value per
share is made available on the Funds’ website at www.invesco.com/us.
Fair Value Pricing
Securities owned by a Fund (except
Invesco Government Money Market Fund, Invesco Tax-Exempt Cash Fund, Invesco
Oppenheimer Government Cash Reserves Fund and Invesco Oppenheimer Government
Money Market Fund) are to be valued at current market value if market quotations
are readily available. All other securities and assets of a Fund for which
market quotations are not readily available are to be valued at fair value
determined in good faith using procedures approved by the Board. An effect of
fair value pricing may be to reduce the ability of frequent traders to take
advantage of arbitrage opportunities resulting from potentially “stale” prices
of portfolio holdings. However, it cannot eliminate the possibility of frequent
trading.
Timing of Orders
You can purchase, exchange or redeem
shares on each business day prior to the close of the customary trading session
or any earlier NYSE closing time that day. The Funds price purchase, exchange
and redemption orders at the net asset value calculated after the Funds’
transfer agent or an authorized agent or its designee receives an order in good
order.
Additional Information Regarding Deferred Tax Liability (only
applicable to certain Invesco Oppenheimer Funds and the Invesco MLP Fund)
In calculating the Fund’s daily NAV,
the Fund will, among other things, account for its deferred tax liability and/or
asset balances. As a result, any
deferred tax liability and/or asset is
reflected in the Fund’s daily NAV.
The Fund will accrue a deferred income
tax liability balance, at the applicable U.S. federal corporate income tax rate
plus an estimated state and local income tax rate for its future tax liability
associated with that portion of MLP distributions considered to be a
tax-deferred return of capital, as well as for its future tax liability
associated with the capital appreciation of its investments. The Fund’s current
and deferred tax liability, if any, will depend upon the Fund’s net investment
gains and losses and realized and unrealized gains and losses on investments and
therefore may vary greatly from year to year depending on the nature of the
Fund’s investments, the performance of those investments and general market
conditions. Any deferred tax liability balance will reduce the Fund’s NAV. Upon
the Fund’s sale of an MLP security, the Fund may be liable for previously
deferred taxes.
The Fund will accrue, in accordance
with generally accepted accounting principles, a deferred tax asset balance,
which reflects an estimate of the Fund’s future tax benefit associated with net
operating losses and unrealized losses. Any deferred tax asset balance will
increase the Fund’s NAV. To the extent the Fund has a deferred tax asset
balance, the Fund will assess, in accordance with generally accepted accounting
principles, whether a valuation allowance, which would offset the value of some
or all of the Fund’s deferred tax asset balance, is required. Pursuant to
Financial Accounting Standards Board Accounting Standards Codification 740 (FASB
ASC 740), the Fund will assess a valuation allowance to reduce some or all of
the deferred tax asset balance if, based on the weight of all available
evidence, both negative and positive, it is more likely than not that some or
all of the deferred tax asset will not be realized. The Fund will use judgment
in considering the relative impact of negative and positive evidence. The weight
given to the potential effect of negative and positive evidence will be
commensurate with the extent to which such evidence can be objectively verified.
The Fund’s assessment considers, among other matters, the nature, frequency and
severity of current and cumulative losses, forecasts of future profitability
(which are dependent on, among other factors, future MLP cash distributions),
the duration of statutory carryforward periods and the associated risk that
operating loss carryforwards may be limited or expire unused. However, this
assessment generally may not consider the potential for market value increases
with respect to the Fund’s investments in equity securities of MLPs or any other
securities or assets. Significant weight is given to the Fund’s forecast of
future taxable income, which is based on, among other factors, the expected
continuation of MLP cash distributions at or near current levels. Consideration
is also given to the effects of the potential of additional future realized and
unrealized gains or losses on investments and the period over which deferred tax
assets can be realized, as federal tax net operating loss carryforwards do not
expire and federal capital loss carryforwards expire in five years. Recovery of
a deferred tax asset is dependent on continued payment of the MLP cash
distributions at or near current levels in the future and the resultant
generation of taxable income. The Fund will assess whether a valuation allowance
is required to offset some or all of any deferred tax asset in connection with
the calculation of the Fund’s NAV per share each day; however, to the extent the
final valuation allowance differs from the estimates the Fund used in
calculating the Fund’s daily NAV, the application of such final valuation
allowance could have a material impact on the Fund’s NAV.
The Fund’s deferred tax asset and/or
liability balances are estimated using estimates of effective tax rates expected
to apply to taxable income in the years such balances are realized. The Fund
will rely to some extent on information provided by MLPs in determining the
extent to which distributions received from MLPs constitute a return of capital,
which may not be provided to the Fund on a timely basis, to estimate the Fund’s
deferred tax liability and/or asset balances for purposes of financial statement
reporting and determining its NAV. If such information is not received from such
MLPs on a timely basis, the Fund will estimate the extent to which distributions
received from MLPs constitute a return of capital based on average historical
tax characterization of distributions made by MLPs. The
A-6 The
Invesco Funds—Class R5 and R6 Shares
Fund’s estimates regarding its deferred
tax liability and/or asset balances are made in good faith; however, the daily
estimate of the Fund’s deferred tax liability and/or asset balances used to
calculate the Fund’s NAV could vary dramatically from the Fund’s actual tax
liability. Actual income tax expense, if any, will be incurred over many years,
depending on if and when investment gains and losses are realized, the
then-current basis of the Fund’s assets and other factors. As a result, the
determination of the Fund’s actual tax liability may have a material impact on
the Fund’s NAV. The Fund’s daily NAV calculation will be based on then current
estimates and assumptions regarding the Fund’s deferred tax liability and/or
asset balances and any applicable valuation allowance, based on all information
available to the Fund at such time. From time to time, the Fund may modify its
estimates or assumptions regarding its deferred tax liability and/or asset
balances and any applicable valuation allowance as new information becomes
available. Modifications of the Fund’s estimates or assumptions regarding its
deferred tax liability and/or asset balances and any applicable valuation
allowance, changes in generally accepted accounting principles or related
guidance or interpretations thereof, limitations imposed on net operating losses
(if any) and changes in applicable tax law could result in increases or
decreases in the Fund’s NAV per share, which could be material.
Taxes (applicable to all Funds except
for certain Invesco Oppenheimer Funds and the Invesco MLP Fund)
A Fund intends to qualify each year as
a regulated investment company (RIC) and, as such, is not subject to
entity-level tax on the income and gain it distributes to shareholders. If you
are a taxable investor, dividends and distributions you receive from a Fund
generally are taxable to you whether you reinvest distributions in additional
Fund shares or take them in cash. Every year, you will be sent information
showing the amount of dividends and distributions you received from a Fund
during the prior calendar year. In addition, investors in taxable accounts
should be aware of the following basic tax points as supplemented below where
relevant:
Fund Tax Basics
∎
|
|
A Fund earns
income generally in the form of dividends or interest on its investments.
This income, less expenses incurred in the operation of a Fund,
constitutes the Fund’s net investment income from which dividends may be
paid to you. If you are a taxable investor, distributions of net
investment income generally are taxable to you as ordinary income.
|
∎
|
|
Distributions
of net short-term capital gains are taxable to you as ordinary income. A
Fund with a high portfolio turnover rate (a measure of how frequently
assets within a Fund are bought and sold) is more likely to generate
short-term capital gains than a Fund with a low portfolio turnover rate.
|
∎
|
|
Distributions
of net long-term capital gains are taxable to you as long-term capital
gains no matter how long you have owned your Fund shares.
|
∎
|
|
A portion of
income dividends paid by a Fund to you may be reported as qualified
dividend income eligible for taxation by individual shareholders at
long-term capital gain rates, provided certain holding period requirements
are met. These reduced rates generally are available for dividends derived
from a Fund’s investment in stocks of domestic corporations and qualified
foreign corporations. In the case of a Fund that invests primarily in debt
securities, either none or only a nominal portion of the dividends paid by
the Fund will be eligible for taxation at these reduced rates.
|
∎
|
|
The use of
derivatives by a Fund may cause the Fund to realize higher amounts of
ordinary income or short-term capital gain, distributions from which are
taxable to individual shareholders at ordinary income tax rates rather
than at the more favorable tax rates for long-term capital gain.
|
∎
|
|
Distributions
declared to shareholders with a record date in December—if paid to you by
the end of January—are taxable for federal income tax purposes as if
received in December. |
∎
|
|
Any long-term
or short-term capital gains realized on sale or redemption of your Fund
shares will be subject to federal income tax. For tax purposes an
|
|
exchange of your shares
for shares of another Fund is the same as a sale. An exchange occurs when
the purchase of shares of a Fund is made using the proceeds from a
redemption of shares of another Fund and is effectuated on the same day as
the redemption. Your gain or loss is calculated by subtracting from the
gross proceeds your cost basis. Gross proceeds and, for shares acquired on
or after January 1, 2012 and disposed of after that date, cost basis
will be reported to you and the Internal Revenue Service (IRS). Cost basis
will be calculated using the Fund’s default method of average cost, unless
you instruct the Fund to use a different calculation method. As a service
to you, the Fund will continue to provide to you (but not the IRS) cost
basis information for shares acquired before 2012, when available, using
the average cost method. Shareholders should carefully review the cost
basis information provided by a Fund and make any additional basis,
holding period or other adjustments that are required when reporting these
amounts on their federal income tax returns. If you hold your Fund shares
through a broker (or other nominee), please contact that broker (nominee)
with respect to reporting of cost basis and available elections for your
account. For more information about the cost basis methods offered by
Invesco, please refer to the Tax Center located under the
Accounts & Services menu of our website at www.Invesco.com/us.
|
∎
|
|
The
conversion of shares of one class of a Fund into shares of another class
of the same Fund is not taxable for federal income tax purposes and no
gain or loss will be reported on the transaction. This is true whether the
conversion occurs automatically pursuant to the terms of the class or is
initiated by the shareholder. |
∎
|
|
At the time
you purchase your Fund shares, the Fund’s net asset value may reflect
undistributed income or undistributed capital gains. A subsequent
distribution to you of such amounts, although constituting a return of
your investment, would be taxable. Buying shares in a Fund just before it
declares an income dividend or capital gains distribution is sometimes
known as “buying a dividend.” In addition, a Fund’s net asset value may,
at any time, reflect net unrealized appreciation, which may result in
future taxable distributions to you. |
∎
|
|
By law, if
you do not provide a Fund with your proper taxpayer identification number
and certain required certifications, you may be subject to backup
withholding on any distributions of income, capital gains, or proceeds
from the sale of your shares. A Fund also must withhold if the IRS
instructs it to do so. When withholding is required, the amount will be
24% of any distributions or proceeds paid. |
∎
|
|
An additional
3.8% Medicare tax is imposed on certain net investment income (including
ordinary dividends and capital gain distributions received from a Fund and
net gains from redemptions or other taxable dispositions of Fund shares)
of U.S. individuals, estates and trusts to the extent that such person’s
“modified adjusted gross income” (in the case of an individual) or
“adjusted gross income” (in the case of an estate or trust) exceeds a
threshold amount. This Medicare tax, if applicable, is reported by you on,
and paid with, your federal income tax return.
|
∎
|
|
You will not
be required to include the portion of dividends paid by a Fund derived
from interest on U.S. government obligations in your gross income for
purposes of personal and, in some cases, corporate income taxes in many
state and local tax jurisdictions. The percentage of dividends that
constitutes dividends derived from interest on federal obligations will be
determined annually. This percentage may differ from the actual percentage
of interest received by the Fund on federal obligations for the particular
days on which you hold shares. |
∎
|
|
Fund
distributions and gains from sale or exchange of your Fund shares
generally are subject to state and local income taxes.
|
∎
|
|
If a Fund
qualifies to pass through to you the tax benefits from foreign taxes it
pays on its investments, and elects to do so, then any foreign taxes it
pays on these investments may be passed through to you as a foreign tax
credit. You will then be required to include your pro-rata share of these
taxes in gross income, even though not actually received by you, and will
be entitled either to deduct your share of these taxes in computing your
taxable income, or to claim a foreign tax credit for these taxes against
your U.S. federal income tax. |
A-7 The
Invesco Funds—Class R5 and R6 Shares
∎
|
|
Foreign
investors should be aware that U.S. withholding, special
certification requirements to avoid U.S. backup withholding and claim
any treaty benefits, and estate taxes may apply to an investment in a
Fund. |
∎
|
|
Under the
Foreign Account Tax Compliance Act (FATCA), a Fund will be required to
withhold a 30% tax on income dividends made by the Fund to certain foreign
entities, referred to as foreign financial institutions or non-financial
foreign entities, that fail to comply (or be deemed compliant) with
extensive reporting and withholding requirements designed to inform the
U.S. Department of the Treasury of U.S.-owned foreign investment accounts.
After December 31, 2018, FATCA withholding also would have applied to
certain capital gain distributions, return of capital distributions and
the proceeds arising from the sale of Fund shares; however, based on
proposed regulations issued by the IRS, which can be relied upon
currently, such withholding is no longer required unless final regulations
provide otherwise (which is not expected). A Fund may disclose the
information that it receives from its shareholders to the IRS, non-U.S.
taxing authorities or other parties as necessary to comply with FATCA or
similar laws. Withholding also may be required if a foreign entity that is
a shareholder of a Fund fails to provide the Fund with appropriate
certifications or other documentation concerning its status under FATCA.
|
∎
|
|
If a Fund
invests in an underlying fund taxed as a RIC, please see any relevant
section below for more information regarding the Fund’s investment in such
underlying fund. |
The above discussion concerning the
taxability of Fund dividends and distributions and of redemptions and exchanges
of Fund shares is inapplicable to investors holding shares through a
tax-advantaged arrangement, such as Retirement and Benefit Plans or 529 college
savings plans. Such investors should refer to the applicable account
documents/program description for that arrangement for more information
regarding the tax consequences of holding and redeeming Fund shares.
Funds Investing in Municipal Securities
∎
|
|
You will not
be required to include the “exempt-interest” portion of dividends paid by
the Fund in either your gross income for federal income tax purposes or
your net investment income subject to the additional 3.8% Medicare tax.
You will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on your federal income tax returns. The
percentage of dividends that constitutes exempt-interest dividends will be
determined annually. This percentage may differ from the actual percentage
of exempt interest received by the Fund for the particular days in which
you hold shares. |
∎
|
|
A Fund may
invest in municipal securities the interest on which constitutes an item
of tax preference and could give rise to a federal alternative minimum tax
liability for noncorporate shareholders, unless such municipal securities
were issued in 2009 or 2010. |
∎
|
|
Exempt-interest dividends from interest earned on municipal
securities of a state, or its political subdivisions, generally are exempt
from that state’s personal income tax. Most states, however, do not grant
tax-free treatment to interest from municipal securities of other states.
|
∎
|
|
A Fund may
invest a portion of its assets in securities that pay income that is not
tax-exempt. To the extent that dividends paid by a Fund are derived from
taxable investments or realized capital gains, they will be taxable as
ordinary income or long-term capital gains.
|
∎
|
|
A Fund
may distribute to you any market discount and net short-term capital gains
from the sale of its portfolio securities. If you are a taxable investor,
Fund distributions from this income are taxable to you as ordinary income,
and generally will neither qualify for the dividends-received deduction in
the case of corporate shareholders nor as qualified dividend income
subject to reduced rates of taxation in the case of noncorporate
shareholders. |
∎
|
|
Exempt-interest dividends from a Fund are taken into account when
determining the taxable portion of your social security or railroad
retirement benefits, may be subject to state and local income taxes, may
affect the deductibility of interest on certain indebtedness, and may have
other collateral federal income tax consequences for you.
|
∎
|
|
There are
risks that: (a) a security issued as tax-exempt may be reclassified
by the IRS or a state tax authority as taxable and/or (b) future
legislative, administrative or court actions could adversely impact the
qualification of income from a tax-exempt security as tax-free. Such
reclassifications or actions could cause interest from a security to
become taxable, possibly retroactively, subjecting you to increased tax
liability. In addition, such reclassifications or actions could cause the
value of a security, and therefore, the value of the Fund’s shares, to
decline. |
Money Market Funds
∎
|
|
A Fund does
not anticipate realizing any long-term capital gains.
|
∎
|
|
If a Fund
expects to maintain a stable net asset value of $1.00 per share, investors
should not have any gain or loss on sale or exchange of Fund shares
(unless the investor incurs a liquidity fee on such sale or exchange). See
“Liquidity Fees and Redemption Gates.” |
∎
|
|
There is some
degree of uncertainty with respect to the tax treatment of liquidity fees
received by a Fund, and such tax treatment may be the subject of future
IRS guidance. If a Fund receives liquidity fees, it will consider the
appropriate tax treatment of such fees to the Fund at such time.
|
Funds Investing in Real Estate Securities
∎
|
|
Because of “noncash” expenses such as property depreciation,
the cash flow of a REIT that owns properties will exceed its taxable
income. The REIT, and in turn a Fund, may distribute this excess cash to
shareholders. Such a distribution is classified as a return of capital.
Return of capital distributions generally are not taxable to you. Your
cost basis in your Fund shares will be decreased by the amount of any
return of capital. Any return of capital distributions in excess of your
cost basis will be treated as capital gains.
|
∎
|
|
Dividends
paid to shareholders from the Funds’ investments in U.S. REITs generally
will not qualify for taxation at long-term capital gain rates applicable
to qualified dividend income. |
∎
|
|
The Fund may
derive “excess inclusion income” from certain equity interests in mortgage
pooling vehicles either directly or through an investment in a U.S. REIT.
Please see the SAI for a discussion of the risks and special tax
consequences to shareholders in the event the Fund realizes excess
inclusion income in excess of certain threshold amounts.
|
∎
|
|
Under the Tax
Cuts and Jobs Act, “qualified REIT dividends” (i.e., ordinary REIT
dividends other than capital gain dividends and portions of REIT dividends
designated as qualified dividend income) are treated as eligible for a 20%
deduction by noncorporate taxpayers. Proposed regulations issued by the
IRS, which can be relied upon currently, enable the Fund to pass through
the special character of “qualified REIT dividends” to a shareholder,
provided both the Fund and a shareholder meet certain holding period
requirements with respect to their shares. |
∎
|
|
The Fund’s
foreign shareholders should see the SAI for a discussion of the risks and
special tax consequences to them from a sale of a U.S. real property
interest by a REIT in which the Fund invests.
|
Funds Investing in Partnerships
∎
|
|
Taxes,
penalties, and interest associated with an audit of a partnership are
generally required to be assessed and collected at the partnership level.
Therefore, an adverse federal income tax audit of a partnership that a
Fund invests in (including MLPs taxed as partnerships) could result in the
Fund being required to pay federal income tax. A Fund may have little
input in any audit asserted against a partnership and may be contractually
or legally obligated to make payments in regard to deficiencies asserted
without the ability to put forward an independent defense. Accordingly,
even if a partnership in which the Fund invests were to remain classified
as a partnership (instead of as a corporation), it could be required to
pay additional taxes, interest and penalties as a result of an audit
adjustment, and the Fund, as a direct or indirect partner of such
partnership, could be required to bear the economic burden of those taxes,
interest and penalties, which would reduce the value of Fund shares.
|
A-8 The
Invesco Funds—Class R5 and R6 Shares
∎
|
|
Under the Tax
Cuts and Jobs Act “qualified publicly traded partnership income” is
treated as eligible for a 20% deduction by noncorporate taxpayers. The
legislation does not contain a provision permitting a RIC, such as a Fund,
to pass the special character of this income through to its shareholders.
It is uncertain whether a future technical corrections bill or regulations
issued by the IRS will address this issue to enable a Fund to pass through
the special character of “qualified publicly traded partnership income” to
its shareholders. |
∎
|
|
Some amounts
received by a Fund from the MLPs in which it invests likely will be
treated as returns of capital to such Fund because of accelerated
deductions available to the MLPs. The receipt of returns of capital from
the MLPs in which a Fund invests could cause some or all of the Fund’s
distributions to be classified as a return of capital. Return of capital
distributions generally are not taxable to you. Your cost basis in your
Fund shares will be decreased by the amount of any return of capital. Any
return of capital distributions in excess of your cost basis will be
treated as capital gains. |
Funds Investing in Commodities
∎
|
|
The Funds’
strategies of investing through their respective Subsidiary in derivatives
and other financially linked instruments whose performance is expected to
correspond to the commodity markets may cause the Funds to recognize more
ordinary income and short-term capital gains taxable as ordinary income
than would be the case if the Funds invested directly in commodities.
|
∎
|
|
The Funds
must meet certain requirements under the Code for favorable tax treatment
as a RIC, including asset diversification and income requirements. The
Funds intend to treat the income each derives from commodity-linked notes
as qualifying income based on an opinion from counsel confirming that
income from such investments should be qualifying income because such
commodity-linked notes constitute securities under section 2(a)(36) of the
1940 Act. Each Subsidiary will be classified for federal income tax
purposes as a controlled foreign corporation (CFC) with respect to the
Fund. As such, the Fund will be required to include in its gross income
each year amounts earned by the Subsidiary during that year (“Subpart F”
income), whether or not such earnings are distributed by the Subsidiary to
the Fund (deemed inclusions). Recently released Treasury Regulations
permit the Fund to treat such deemed inclusions of “Subpart F” income from
the Subsidiary as qualifying income to the Fund, even if the Subsidiary
does not make a distribution of such income. Consequently, the Fund and
the Subsidiary reserve the right to rely on deemed inclusions being
treated as qualifying income to the Fund consistent with recently released
Treasury Regulations. If, contrary to the opinion of counsel or other
guidance issued by the IRS, the IRS were to determine that income from
direct investment in commodity-linked notes is non-qualifying, a Fund
might fail to satisfy the income requirement. In lieu of disqualification,
the Funds are permitted to pay a tax for certain failures to satisfy the
asset diversification or income requirements, which, in general, are
limited to those due to reasonable cause and not willful neglect. The
Funds intend to limit their investments in their respective Subsidiary to
no more than 25% of the value of each Fund’s total assets in order to
satisfy the asset diversification requirement.
|
∎
|
|
The Invesco
Balanced-Risk Commodity Strategy Fund received a PLR from the IRS holding
that income from a form of commodity-linked note is qualifying income.
However, the IRS has revoked the ruling on a prospective basis, thus
allowing the Fund to continue to rely on its private letter ruling to
treat income from commodity-linked notes purchased on or before
June 30, 2017 as qualifying income. After that time the Invesco
Balanced-Risk Commodity Strategy Fund expects to rely on the opinion of
counsel described above. |
Funds Investing in Foreign Currencies
∎
|
|
The Funds may
realize gains from the sale or other disposition of foreign currencies
(including but not limited to gains from options, futures or forward
contracts) derived from investing in securities or foreign currencies. The
U.S. |
|
|
Treasury Department is
authorized to issue regulations on whether the realization of such foreign
currency gains is qualified income for the Funds. If such regulations are
issued, each Fund may not qualify as a RIC and/or the Fund may change its
investment policy. As of the date of this prospectus, no regulations have
been issued pursuant to this authorization. It is possible, however, that
such regulations may be issued in the future. Additionally, the IRS has
not issued any guidance on how to apply the asset diversification test to
such foreign currency positions. Thus, the IRS’ determination as to how to
treat such foreign currency positions for purposes of satisfying the asset
diversification test might differ from that of each Fund resulting in the
Fund’s failure to qualify as a RIC. In lieu of disqualification, each Fund
is permitted to pay a tax for certain failures to satisfy the asset
diversification or income requirements, which, in general, are limited to
those due to reasonable cause and not willful neglect.
|
∎
|
|
The Funds’
transactions in foreign currencies may give rise to ordinary income or
loss to the extent such income or loss results from fluctuations in the
value of the foreign currency concerned. This treatment could increase or
decrease the Funds’ ordinary income distributions to you, and may cause
some or all of the Funds’ previously distributed income to be classified
as a return of capital. Return of capital distributions generally are not
taxable to you. Your cost basis in your Fund shares will be decreased by
the amount of any return of capital. Any return of capital distributions
in excess of your cost basis will be treated as capital gains.
|
This discussion of
“Taxes” is for general information only and not tax advice. All investors should
consult their own tax advisers as to the federal, state, local and foreign tax
provisions applicable to them.
Taxes (only applicable to certain
Invesco Oppenheimer Funds and the Invesco MLP Fund)
Although the Code generally provides
that a RIC does not pay an entity-level income tax, provided that it distributes
all or substantially all of its income, the Fund is not and does not anticipate
becoming eligible to elect to be treated as a RIC because most or substantially
all of the Fund’s investments will consist of investments in MLP securities. The
RIC tax rules therefore have no application to the Fund or to its shareholders.
As a result, the Fund is treated as a regular corporation, or “C” corporation,
for U.S. federal income tax purposes, and generally is subject to U.S. federal
income tax on its taxable income at the corporate income tax rate. In addition,
as a regular corporation, the Fund will be subject to state and local taxes by
reason of its tax status and its investments in MLPs. Therefore, the Fund may
have federal, multiple state, and local tax, which would reduce the Fund’s cash
available to make distributions to shareholders. An estimate for federal, state,
and local tax liabilities will reduce the fund’s net asset value. The extent to
which the Fund is required to pay U.S. federal, state or local corporate income,
franchise or other corporate taxes could materially reduce the Fund’s cash
available to make distributions to shareholders. In addition, investors in
taxable accounts should be aware of the following basic tax points as
supplemented below where relevant:
Fund Tax Basics
∎
|
|
The Fund
intends to invest a significant portion of its assets in MLPs, which are
generally treated as partnerships for U.S. federal income tax purposes. To
the extent that the Fund invests in equity securities of an MLP, the Fund
will be a partner in such MLP. Accordingly, the Fund will be required to
take into account the Fund’s allocable share of the income, gains, losses,
deductions, and credits recognized by each such MLP, regardless of whether
the MLP distributes cash to the Fund. MLP distributions to partners, such
as the Fund, are not taxable unless the cash amount (or in certain cases,
the fair market value of marketable securities) distributed exceeds the
Fund’s basis in its MLP interest. The Fund expects that the cash
distributions it will receive with respect to its investments in equity
securities of MLPs will exceed the net taxable income allocated to the
Fund from such MLPs because of tax deductions such as depreciation,
amortization and depletion that will be allocated to the Fund from the
MLPs. No assurance, however, can be given in this
|
A-9 The
Invesco Funds—Class R5 and R6 Shares
|
|
regard. If this
expectation is not realized, the Fund will have a larger corporate income
tax expense than expected, which will result in less cash available for
distribution to shareholders. |
∎
|
|
The Fund will
recognize gain or loss on the sale, exchange or other taxable disposition
of its portfolio assets, including equity securities of MLPs, equal to the
difference between the amount realized by the Fund on the sale, exchange
or other taxable disposition and the Fund’s adjusted tax basis in such
assets. Any such gain will be subject to U.S. federal income tax at the
corporate income tax rate, regardless of how long the Fund has held such
assets since preferential capital gain rates do not apply to regular
corporations such as the Fund. The amount realized by the Fund in any case
generally will be the amount paid by the purchaser of the assets plus, in
the case of MLP equity securities, the Fund’s allocable share, if any, of
the MLP’s debt that will be allocated to the purchaser as a result of the
sale, exchange or other taxable disposition. The Fund’s tax basis in its
equity securities in an MLP generally is equal to the amount the Fund paid
for the equity securities, (i) increased by the Fund’s allocable
share of the MLP’s net taxable income and certain MLP debt, if any, and
(ii) decreased by the Fund’s allocable share of the MLP’s net losses
and any distributions received by the Fund from the MLP. Although any
distribution by an MLP to the Fund in excess of the Fund’s allocable share
of such MLP’s net taxable income may create a temporary economic benefit
to the Fund, net of a deferred tax liability, such distribution will
decrease the Fund’s tax basis in its MLP investment and will therefore
increase the amount of gain (or decrease the amount of loss) that will be
recognized on the sale of an equity security in the MLP by the Fund. To
the extent that the Fund has a net capital loss in any year, the net
capital loss can be carried back three taxable years and forward five
taxable years to reduce the Fund’s capital gains in such years. In the
event a capital loss carryover cannot be utilized in the carryover
periods, the Fund’s federal income tax liability may be higher than
expected, which will result in less cash available to distribute to
shareholders. |
∎
|
|
Distributions
by the Fund of cash or property in respect of the shares (other than
certain distributions in redemption of shares) will be treated as
dividends for U.S. federal income tax purposes to the extent paid from the
Fund’s current or accumulated earnings and profits (as determined under
U.S. federal income tax principles). Generally, the Fund’s earnings and
profits are computed based upon the Fund’s taxable income (loss), with
certain specified adjustments. Any such dividend likely will be eligible
for the dividends-received deduction if received by an otherwise
qualifying corporate U.S. shareholder that meets certain holding period
and other requirements for the dividends-received deduction. Dividends
paid by the Fund to certain non-corporate U.S. shareholders (including
individuals), generally are eligible for U.S. federal income taxation at
the rates generally applicable to long-term capital gains for individuals
provided that the U.S. shareholder receiving the dividend satisfies
applicable holding period and other requirements. Otherwise, dividends
paid by the Fund to non-corporate U.S. Shareholders (including
individuals) will be taxable at ordinary income rates.
|
∎
|
|
If the amount
of a Fund distribution exceeds the Fund’s current and accumulated earnings
and profits, such excess will be treated first as a tax- deferred return
of capital to the extent of, and in reduction of, a shareholder’s tax
basis in the shares, and thereafter as capital gain to the extent the
shareholder held the shares as a capital asset. Any such capital gain will
be long-term capital gain if such shareholder has held the applicable
shares for more than one year. The portion of the distribution received by
a shareholder from the Fund that is treated as a return of capital will
decrease the shareholder’s tax basis in his or her Fund shares (but not
below zero), which will result in an increase in the amount of gain (or
decrease in the amount of loss) that will be recognized by the shareholder
for tax purposes on the later sale of such Fund shares.
|
∎
|
|
The Fund
anticipates that the cash distributions it will receive with respect to
its investments in equity securities of MLPs and which it will distribute
to its shareholders will exceed the Fund’s current and accumulated
earnings |
|
|
and profits.
Accordingly, the Fund expects that only a part of its distributions to
shareholders with respect to the shares will be treated as dividends for
U.S. federal income tax purposes. No assurance, however, can be given in
this regard. |
∎
|
|
Special rules
may apply to the calculation of the Fund’s earnings and profits. For
example, the Fund’s earnings and profits will be calculated using the
straight-line depreciation method rather than the accelerated depreciation
method. This difference in treatment may, for example, result in the
Fund’s earnings and profits being higher than the Fund’s taxable income or
loss in a particular year if the MLPs in which the Fund invests calculate
their income using accelerated depreciation. Because of these special
earnings profits rules, the Fund may make distributions in a particular
year out of earnings and profits (treated as dividends) in excess of the
amount of the Fund’s taxable income or loss for such year, which means
that a larger percentage of the Fund’s distributions could be taxable to
shareholders as ordinary income instead of tax-deferred return of capital
or capital gain. |
∎
|
|
Shareholders
that receive distributions in shares rather than in cash will be treated
for U.S. federal income tax purposes as having (i) received a cash
distribution equal to the fair market value of the shares received and
(ii) reinvested such amount in shares.
|
∎
|
|
A redemption
of shares will be treated as a sale or exchange of such shares, provided
the redemption is not essentially equivalent to a dividend, is a
substantially disproportionate redemption, is a complete redemption of a
shareholder’s entire interest in the Fund, or is in partial liquidation of
such Fund. Redemptions that do not qualify for sale or exchange treatment
will be treated as distributions as described above. Upon a redemption
treated as a sale or exchange under these rules, a shareholder generally
will recognize capital gain or loss equal to the difference between the
adjusted tax basis of his or her shares and the amount received when they
are sold. |
∎
|
|
If the Fund
is required to sell portfolio securities to meet redemption requests, the
Fund may recognize income and gains for U.S. federal, state and local
income and other tax purposes, which may result in the imposition of
corporate income or other taxes on the Fund and may increase the Fund’s
current and accumulated earnings and profits, which will result in a
greater portion of distributions to Fund shareholders being treated as
dividends. Any long-term or short-term capital gains realized on sale or
redemption of your Fund shares will be subject to federal income tax. For
tax purposes an exchange of your shares for shares of another Fund is the
same as a sale. An exchange occurs when the purchase of shares of a Fund
is made using the proceeds from a redemption of shares of another Fund and
is effectuated on the same day as the redemption. Your gain or loss is
calculated by subtracting from the gross proceeds your cost basis. Gross
proceeds and, for shares acquired on or after January 1, 2012 and
disposed of after that date, cost basis will be reported to you and the
IRS. Cost basis will be calculated using the Fund’s default method of
first-in, first-out (FIFO), unless you instruct the Fund to use a
different calculation method. Shareholders should carefully review the
cost basis information provided by a Fund and make any additional basis,
holding period or other adjustments that are required when reporting these
amounts on their federal income tax returns. If you hold your Fund shares
through a broker (or other nominee), please contact that broker (nominee)
with respect to reporting of cost basis and available elections for your
account. For more information about the cost basis methods offered by
Invesco, please refer to the Tax Center located under the
Accounts & Services menu of our website at www.invesco.com/us.
|
∎
|
|
The
conversion of shares of one class of a Fund into shares of another class
of the same Fund is not taxable for federal income tax purposes and no
gain or loss will be reported on the transaction. This is true whether the
conversion occurs automatically pursuant to the terms of the class or is
initiated by the shareholder. |
A-10 The
Invesco Funds—Class R5 and R6 Shares
∎
|
|
At the time
you purchase your Fund shares, the Fund’s net asset value may reflect
undistributed income. A subsequent distribution to you of such amounts,
although constituting a return of your investment, would be taxable.
Buying shares in a Fund just before it declares an income dividend is
sometimes known as “buying a dividend.” In addition, a Fund’s net asset
value may, at any time, reflect net unrealized appreciation, which may
result in future taxable distributions to you.
|
∎
|
|
By law, if
you do not provide a Fund with your proper taxpayer identification number
and certain required certifications, you may be subject to backup
withholding on any distributions of income, capital gains, or proceeds
from the sale of your shares. A Fund also must withhold if the IRS
instructs it to do so. When withholding is required, the amount will be
24% of any distributions or proceeds paid. |
∎
|
|
A 3.8%
Medicare tax is imposed on certain net investment income (including
ordinary dividends received from a Fund and net gains from redemptions or
other taxable dispositions of Fund shares) of U.S. individuals, estates
and trusts to the extent that such person’s “modified adjusted gross
income” (in the case of an individual) or “adjusted gross income” (in the
case of an estate or trust) exceeds a threshold amount. This Medicare tax,
if applicable, is reported by you on, and paid with, your federal income
tax return. |
∎
|
|
Fund
distributions and gains from sale or exchange of your Fund shares
generally are subject to state and local income taxes.
|
∎
|
|
Foreign
investors should be aware that U.S. withholding, special certification
requirements to avoid U.S. backup withholding and claim any treaty
benefits, and estate taxes may apply to an investment in a Fund.
|
∎
|
|
Under the
Foreign Account Tax Compliance Act (FATCA), a Fund will be required to
withhold a 30% tax on income dividends made by the Fund to certain foreign
entities, referred to as foreign financial institutions or non-financial
foreign entities, that fail to comply (or be deemed compliant) with
extensive reporting and withholding requirements designed to inform the
U.S. Department of the Treasury of U.S.-owned foreign investment accounts.
After December 31, 2018, FATCA withholding also would have applied to
certain capital gain distributions, return of capital distributions and
the proceeds arising from the sale of Fund shares; however, based on
proposed regulations issued by the IRS, which can be relied upon
currently, such withholding is no longer required unless final regulations
provide otherwise (which is not expected). A Fund may disclose the
information that it receives from its shareholders to the IRS, non-U.S.
taxing authorities or other parties as necessary to comply with FATCA or
similar laws. Withholding also may be required if a foreign entity that is
a shareholder of a Fund fails to provide the Fund with appropriate
certifications or other documentation concerning its status under FATCA.
|
∎
|
|
Taxes,
penalties, and interest associated with an audit of a partnership are
generally required to be assessed and collected at the partnership level.
Therefore, an adverse federal income tax audit of an MLP taxed as a
partnership that the Fund invests in could result in the Fund being
required to pay federal income tax. The Fund may have little input in any
audit asserted against an MLP and may be contractually or legally
obligated to make payments in regard to deficiencies asserted without the
ability to put forward an independent defense. Accordingly, even if an MLP
in which the Fund invests were to remain classified as a partnership, it
could be required to pay additional taxes, interest and penalties as a
result of an audit adjustment, and the Fund, as a direct or indirect
partner of such MLP, could be required to bear the economic burden of
those taxes, interest and penalties, which would reduce the value of Fund
shares. |
∎
|
|
Under the Tax
Cuts and Jobs Act certain “qualified publicly traded partnership income”
(e.g., certain income from certain of the MLPs in which the Fund invests)
is treated as eligible for a 20% deduction by noncorporate taxpayers. The
Tax Cuts and Jobs Act does not contain a provision permitting an entity,
such as the Fund, to benefit from this deduction (since the Fund is taxed
as a “C” corporation) or pass the |
|
|
special character of
this income through to its shareholders. Qualified publicly traded
partnership income allocated to a noncorporate investor investing directly
in an MLP might, however, be eligible for the deduction.
|
The above discussion concerning the
taxability of Fund dividends and distributions and of redemptions and exchanges
of Fund shares is inapplicable to investors holding shares through a
tax-advantaged arrangement, such as Retirement and Benefit Plans or 529 college
savings plans. Such investors should refer to the applicable account
documents/program description for that arrangement for more information
regarding the tax consequences of holding and redeeming Fund shares.
This discussion of
“Taxes” is for general information only and not tax advice. All investors should
consult their own tax advisers as to the federal, state, local and foreign tax
provisions applicable to them.
Federal Income Taxes
(applicable to Invesco Oppenheimer Master Loan Fund, Invesco Oppenheimer Master
Inflation Protected Securities Fund and Invesco Oppenheimer Master Event-Linked
Bond Fund only)
United States taxes
The Fund is classified as a partnership
and will not be a regulated investment company for US federal income tax
purposes. As a partnership, the Fund is not a taxable entity for federal income
tax purposes and, subject to the application of the partnership audit rules
described below, incurs no federal income tax liability. Each Investor is
required to take into account its proportionate share of items of income, gain,
loss and deduction of the partnership in computing its federal income tax
liability regardless of whether or not cash or property distributions are then
made by the Fund. Following the close of the Fund’s taxable year end, Investors
will receive a tax statement entitled Schedule K-1 Partner’s Share of Income,
Deductions, Credits, etc., which reports the tax status of their distributive
share of the Fund’s items for the previous year.
Taxation of distributions, sales and exchanges
In general, distributions of money by
the Fund to an Investor will represent a non-taxable return of capital up to the
amount of an Investor’s adjusted tax basis in its shares. An Investor will
recognize gain to the extent that any money distributed by the Fund exceeds the
Investor’s adjusted tax basis in its shares. In the case of a non-taxable return
of capital by the Fund to an Investor, other than in liquidation of the
Investor’s interest in the Fund, the tax basis of his shares will be reduced
(but not below zero) and will result in an increase in the amount of gain (or
decrease in the amount of loss) that will be recognized by the Investor on the
later sale of its shares. A distribution in partial or complete redemption of
your shares in the Fund is taxable as a sale or exchange only to the extent the
amount of money received exceeds the tax basis of your entire interest in the
Fund. Any loss may be recognized only if you redeem your entire interest in the
Fund for money.
When you sell shares of the Fund, you
may have a capital gain or loss.
Derivatives
The use of derivatives by the Fund may
cause the Fund to realize higher amounts of ordinary income or short-term
capital gain, allocations of which are taxable to individual Investors at
ordinary income tax rates rather than at the more favorable tax rates for
long-term capital gain. 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 the Fund from using certain types of derivative
instruments as part of its investment strategy.
Risk of audit of the Fund
Under the new partnership audit rules,
which are generally applicable to tax years beginning after December 31,
2017, the Internal Revenue Service (“IRS”) may collect any taxes resulting from
audit adjustments to the Fund’s
A-11 The
Invesco Funds—Class R5 and R6 Shares
income tax returns (including any
applicable penalties and interest) directly from the Fund. In that case, current
Investors would bear some or all of the tax liability resulting from such audit
adjustment, even if they did not own interests in the Fund during the tax year
under audit. The Fund may have the ability to shift any such tax liability to
the Investors in accordance with their interests in the Fund during the year
under audit, but there can be no assurance that the Fund will be able to do so
under all circumstances. For taxable years not subject to the new audit rules,
items of Fund income, gain, loss, deduction and credit will be determined at the
Fund level in a unified audit. NO REPRESENTATION OR WARRANTY OF ANY KIND IS MADE
WITH RESPECT TO THE TAXATION, DEDUCTIBILITY OR CAPITALIZATION OF ANY ITEM BY THE
FUND OR INVESTOR. In addition, the “partnership representative” (tax matters
partner, for taxable years before the partnership audit rules become effective)
will have the sole authority to act on the Fund’s behalf for purposes of, among
other things, federal income tax audits and judicial review of administrative
adjustments by the IRS, and any such actions will be binding on the Fund and all
of the Investors.
Unrelated business taxable income
An allocable share of a tax-exempt
Investor’s income will be “unrelated business taxable income” (“UBTI”) to the
extent that the Fund borrows money to acquire property or invests in assets that
produce UBTI.
Medicare tax
An additional 3.8% Medicare tax is
imposed on certain net investment income of US individuals, estates and trusts
to the extent that such person’s “modified adjusted gross income” (in the case
of an individual) or “adjusted gross income” (in the case of an estate or trust)
exceeds a threshold amount. “Net investment income,” for these purposes, means
investment income (including (i) net gains from the taxable disposition of
shares of a Fund to the extent the net gain would be taken into account by the
Investor if the Fund sold all of its property for fair market value immediately
before the disposition of the shares of the Fund, and (ii) an allocable
share of a Fund’s interest, dividends and net gains) reduced by the deductions
properly allocable to such income. This Medicare tax, if applicable, is reported
by Investors on, and paid with, the Investor’s federal income tax return.
State, local and non-US tax matters
An Investor’s distributive share of the
Fund’s income, and gains from the sale or exchange of an Investor’s Fund shares,
generally are subject to state and local taxes in the jurisdiction in which the
Investor resides or is otherwise subject to tax.
Prospective investors should consider
their individual state and local tax consequences of an investment in the Fund.
Tax considerations for non-US investors
If, as anticipated, the Fund is not
deemed to be engaged in a US trade or business, the Fund generally will be
required to withhold tax on the distributive share of certain items of gross
income from US sources allocated to non-US Investors at a 30% (or lower treaty)
rate. Certain categories of income, including portfolio interest, are not
subject to US withholding tax. Capital gains (other than gain realized on
disposition of US real property interests) are not subject to US withholding tax
unless the non-US Investor is a nonresident alien individual present in the
United States for a period or periods aggregating 183 days or more during the
taxable year. If, on the other hand, the Fund derives income which is
effectively connected with a US trade or business carried on by the Fund, this
30% tax will not apply to such effectively connected income of the Fund, and the
Fund generally will be required to withhold tax from the amount of effectively
connected income allocable to non-US Investors at the highest rate of tax
applicable to US residents, and non-US Investors generally would be required to
file US income tax returns and be subject to US income tax on a net basis. Gain
or loss on a sale of shares will be treated as effectively connected with a U.S.
trade or business to the extent that a foreign corporation or foreign individual
that owns the shares (whether directly or indirectly through other
partnerships) would have had
effectively connected gain or loss had the partnership sold its underlying
assets and applicable US withholding tax will apply. Non-US Investors may be
subject to US estate tax and are subject to special US tax certification
requirements.
Other reporting and withholding requirements
Under the Foreign Account Tax
Compliance Act (“FATCA”), the Fund will be required to withhold at a 30% rate on
certain US source payments (such as interest, and dividends) to certain
Investors if the Investor fails to provide the Fund with the information which
identifies its direct and indirect US ownership. After December 31, 2018,
FATCA withholding also would have applied to certain capital gain distributions,
return of capital distributions and the proceeds arising from the sale of Fund
shares; however, based on proposed regulations issued by the IRS, which can be
relied upon currently, such withholding is no longer required unless final
regulations provide otherwise (which is not expected). A Fund may disclose the
information that it receives from an Investor to the IRS, non-US taxing
authorities or other parties as necessary to comply with FATCA or similar laws.
Withholding also may be required if a foreign entity that is an Investor fails
to provide the Fund with appropriate certifications or other documentation
concerning its status under FATCA.
For a more complete discussion of the
federal income tax consequences of investing in the Fund, see the Statement of
Additional Information.
This discussion of
“Federal Income Taxes” is not intended or written to be used as tax advice.
Because everyone’s tax situation is unique, Investors should consult their tax
professional about federal, state, local or foreign tax consequences before
making an investment in the Fund.
Payments to Financial
Intermediaries-Class R5
Invesco Distributors, Inc. and other
Invesco Affiliates may make cash payments to financial intermediaries in
connection with the promotion and sale of Class R5 shares of the Funds.
These cash payments may include cash payments and other payments for certain
marketing and support services. Invesco Affiliates make these payments from
their own resources. In the context of this prospectus, “financial
intermediaries” include any broker, dealer, bank (including bank trust
departments), registered investment adviser, financial planner, retirement plan
administrator, insurance company and any other financial intermediary having a
selling, administration or similar agreement with Invesco Affiliates.
The benefits Invesco Affiliates receive
when they make these payments include, among other things, placing the Fund on
the financial intermediary’s fund sales system, and access (in some cases on a
preferential basis over other competitors) to individual members of the
financial intermediary’s sales force or to the financial intermediary’s
management. These payments are sometimes referred to as “shelf space” payments
because the payments compensate the financial intermediary for including the
Funds in its fund sales system (on its “sales shelf”). Invesco Affiliates
compensate financial intermediaries differently depending typically on the level
and/or type of considerations provided by the financial intermediary. The
payments Invesco Affiliates make may be calculated based on sales of Class R5
shares of the Funds (Sales-Based Payments), in which case the total amount of
such payments shall not exceed 0.10% of the public offering price of all
Class R5 shares sold by the financial intermediary during the particular
period. Payments may also be calculated based on the average daily net assets of
the applicable Funds attributable to that particular financial intermediary
(Asset-Based Payments), in which case the total amount of such cash payments
shall not exceed 0.25% per annum of those assets during a defined period.
Sales-Based Payments primarily create incentives to make new sales of
Class R5 shares of the Funds and Asset-Based Payments primarily create
incentives to retain previously sold Class R5 shares of the Funds in
investor accounts. Invesco Affiliates may pay a financial intermediary either or
both Sales-Based Payments and Asset-Based Payments.
A-12 The
Invesco Funds—Class R5 and R6 Shares
Invesco Affiliates are motivated to
make these payments as they promote the sale of Fund Class R5 shares and
the retention of those investments by clients of financial intermediaries. To
the extent the financial intermediaries sell more Class R5 shares of the
Funds or retain Class R5 shares of the Funds in their clients’ accounts,
Invesco Affiliates benefit from the incremental management and other fees paid
to Invesco Affiliates by the Funds with respect to those assets.
The Funds’ transfer agent may make
payments to certain financial intermediaries for certain administrative
services, including record keeping and sub-accounting of shareholder accounts
pursuant to a sub-transfer agency, omnibus account service or sub-accounting
agreement. All fees payable by Invesco Affiliates under this category of
services are charged back to the Funds, subject to certain limitations approved
by the Board.
You can find further details in the
Fund’s SAI about these payments and the services provided by financial
intermediaries. In certain cases these payments could be significant to the
financial intermediaries. Your financial adviser may charge you additional fees
or commissions other than those disclosed in this prospectus. You can ask your
financial adviser about any payments it receives from Invesco Affiliates or the
Funds, as well as about fees and/or commissions it charges.
Important Notice Regarding Delivery of
Security Holder Documents
To reduce Fund expenses, only one copy
of most shareholder documents may be mailed to shareholders with multiple
accounts at the same address (Householding). Mailing of your shareholder
documents may be householded indefinitely unless you instruct us otherwise. If
you do not want the mailing of these documents to be combined with those for
other members of your household, please contact the Funds’ transfer agent at
800-959-4246
or contact your financial institution. The Funds’ transfer agent
will begin sending you individual copies for each account within thirty days
after receiving your request.
A-13 The
Invesco Funds—Class R5 and R6 Shares
Obtaini ng Additional Information
More information may be obtained free
of charge upon request. The SAI, a current version of which is on file with the
SEC, contains more details about the Funds and is incorporated by reference into
this prospectus (is legally a part of this prospectus). When issued, annual and
semi-annual reports to shareholders will contain additional information about
the Funds’ investments. The Funds’ annual report will also discuss the market
conditions and investment strategies that significantly affected the Funds’
performance during its last fiscal year. Each Fund will also file its complete
schedule of portfolio holdings with the SEC for the 1st and 3rd quarters of each
fiscal year on Form N-Q (or any
successor Form).
If you have questions about an Invesco
Fund or your account, or you wish to obtain a free copy of the Funds’ current
SAI, annual or semi-annual reports or Form N-Q
(or any successor Form), please contact us.
|
|
|
By Mail:
|
|
Invesco
Investment Services, Inc. P.O. Box 219078 Kansas City, MO
64121-9078 |
By Telephone:
|
|
(800) 959-4246 |
On the Internet:
|
|
You can send
us a request by e-mail or download prospectuses, SAIs, annual or
semi-annual reports via our Web site: www.invesco.com/us
|
Reports and other information about the
Fund are available on the EDGAR Database on the SEC’s Internet site at
http://www.sec.gov, and copies of this information may be obtained, after paying
a duplicating fee, by electronic request at the following e-mail address: [email protected].
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Invesco Oppenheimer Capital Income Fund
|
|
Invesco Oppenheimer Emerging Markets Innovators Fund
|
|
|
Invesco Oppenheimer Developing Markets Fund
|
|
|
|
|
SEC 1940 Act file number: 811-05426 |
|
|
invesco.com/us O-AIF-PRO-0831
|
|
|