INVESCO REAL ESTATE FUND CLASS C

Company Description

TheFund invests, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in securities ofreal estate and real estate-related issuers, and in derivatives and other instruments that have economic characteristics similar to suchsecurities. TheFund invests primarily in real estate investment trusts (REITs) and equity securities, including common and preferred stocks and convertiblesecurities. TheFund concentrates its investments in the securities of domestic and foreignreal estate and real estate-related companies. The Fund considers an issuer to be a real estate or real estate-related company if at least50% of its assets, gross income or net profits are attributable to ownership, construction, management or sale of residential, commercialor industrial real estate. These issuers include (i) REITs or other real estate operating companies that (a) own property, (b) makeor invest in short-term construction and development mortgage loans, or (c) invest in long-term mortgages or mortgage pools, and(ii) issuers whose products and services are related to the real estate industry, such as manufacturers and distributors of buildingsupplies and financial institutions that issue or service mortgages.TheFund may also invest in debt securities, including corporate debt obligationsand commercial mortgage-backed securities. The Fund may invest up to 10% of its net assets in non-investment grade debt securities (commonlyknown as “junk bonds”) of real estate and real estate-related issuers.TheFund may invest in securities of issuers of all capitalization sizes. Realestate companies tend to have smaller asset bases compared with other market sectors, therefore, the Fund may hold a significant amountof securities of small- and mid-capitalization issuers.TheFund may invest up to 25% of its net assets in foreign securities. In regardto foreign security holdings, up to 10% of the Fund’s net assets may be in securities of issuers located in emerging market countries,i.e., those that are generally in the early stages of their industrial cycles.TheFund may engage in short sales of securities. The Fund may engagein short sales with respect to securities it owns or securities it does not own. Generally, the Fund will sell a security short to (1) takeadvantage of an expected decline in the security price in anticipation of purchasing the same security at a later date at a lower price,or (2) to protect a profit in a security that it owns. The Fund will not sell a security short if, as a result of such short sale,the aggregate market value of all securities sold short exceeds 10% of the Fund’s net assets.TheFund can invest in derivative instruments including forward foreign currencycontracts. TheFund can use forward foreign currency contracts to hedge against adversemovements in the foreign currencies in which portfolio securities are denominated; though the Fund has not historically used these instruments.Whenconstructing the portfolio, the portfolio managers use a fundamentals-driveninvestment process, including an evaluation of factors such as property market cycle analysis, property evaluation and management andstructure review to identify securities with characteristics including (i) quality underlying properties, (ii) solid managementteams with the ability to effectively manage capital structure decisions and execute their stated strategic plan, and (iii) attractivevaluations relative to peer investment alternatives.Theportfolio managers focus on equity REITs and real estate operating issuers.Each qualified security in the investment universe is analyzed using fundamental real estate analysis and valuation review to identifysecurities that appear to have relatively favorable long-term prospects and attractive values. Some of the fundamental real estate factorsthat are considered include: forecasted occupancy and rental rates of the various property markets in which a firm may operate, propertylocations, physical attributes, management depth and skill, insider ownership, overall debt levels, percentage of variable rate financingand fixed charge coverage ratios. The issuers that are believed to have the most attractive fundamental real estate attributes are thenevaluated on the basis of relative value. Some of the valuation factors that are considered include: cash flow consistency and growth,dividend yield, dividend coverage and growth, and cash flow and assets to price multiples.Theportfolio managers seek to construct a portfolio with risk characteristicssimilar to the FTSE Nareit All Equity REITs Index (the benchmark index). The Fund uses the benchmark index as a guide in structuring theportfolio, but the Fund is not an index fund.Theportfolio managers seek to limit risk through various controls, such asdiversifying the portfolio property types and geographic areas as well as by considering the relative liquidity of each security and limitingthe size of any one holding. Theportfolio managers will consider selling a security if they conclude (1) itsrelative valuation has fallen below desired levels, (2) its risk/return profile has changed significantly, (3) its fundamentalshave changed, or (4) a more attractive investment opportunity is identified.Aspart of the Fund’s investment process to implement its investment strategyin pursuit of its investment objective, the Fund’s portfolio managers may also consider both qualitative and quantitative environmental,social and governance (“ESG”) factors they believe to be material to understand an issuer’s fundamentals, assess whetherany ESG factors pose a material financial risk or opportunity to the issuer and determine whether such risks are appropriately reflectedin the issuer’s valuation. This analysis may involve the use of third-party research as well as proprietary research. Considerationof ESG factors is just one component of the portfolio managers' assessment of issuers eligible for investment and not necessarily determinativeto an investment decision. Therefore, the Fund’s portfolio managers may still invest in securities of issuers that may be viewedas having a high ESG risk profile. The ESG factors considered by the Fund’s portfolio managers may change over time, one or morefactors may not be relevant with respect to all issuers eligible for investment and ESG considerations may not be applied to each issueror Fund investment.