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Invesco Brings Out New K-Share Class


Invesco Funds Group of Denver is adding a new class of shares to the majority of its funds. The new class "K" shares are offered to qualified retirement plans, educational savings programs, and wrap programs through an intermediary and include an extra fee, which will be paid to that intermediary, according to a recent SEC filing.

The proposed new share class is the most recent of a series of moves by Invesco to increase its advisor sales. In February, Invesco added a level load "C" class of shares to six equity funds. In March, the company announced that six funds would be added to the three already sold through Salomon Smith Barney of New York (MFMN 3/16/00). Then, in May, Invesco filed for a new group of funds with the SEC called the Invesco Advantage Fund Series Funds, available exclusively through intermediaries (MFMN 5/8/00). Later that month, the company hired six new wholesalers for its broker sales channel (MFMN 5/8/00). Invesco began the year with 12 wholesalers, has added another eight so far this year, and has a goal to have 33 by the end of the first quarter of 2001, according to Suzanne Smith, a spokesperson for Invesco.

"We are definitely enhancing our wholesaling force," said Smith. "Our advisor sales channel is our fastest-growing channel. A lot of people have increased their net worth and many of them are seeking investment advice."

Invesco's sales through brokers increased from $57 million in 1997 to $570 million in 1998, to $1.4 billion in 1999, and $2.7 billion in the first quarter of 2000 alone. These figures contrast sharply with Invesco's reputation for primarily offering no-load funds sold directly to investors.

"In the past two years, there's been an unspoken industry trend towards broker-load funds," said Ramy Shaalan, a mutual funds analyst at Wiesenberger, Thomson Financial of Rockville, Md. "It is not uncommon for firms to create new load shares on top of no-load shares, so that they are selling both." That is the case with this new class.

"We want to ensure that our products are available to clients in whatever manner they choose to do business," said Smith.

The 12b-1 fee for the new class of shares is 0.45 percent, compared to the 0.25 percent of the direct-sold class, according to the SEC filing. The 0.20 percent increase will go to intermediaries, according to the filing.

Invesco is adding the K shares to groups of four funds at a time, and plans to offer the new class in 27 of its 34 funds by the end of the year, according to Smith.

The class K shares are offered only to qualified retirement plans, retirement savings programs, educational savings programs and wrap programs, according to the filing. This is in response to the current and anticipated increase in retirement investments, (MFMN 10/23/00), according to Smith.

"While the baby boom generation slowly grows older, the retirement market grows larger," said Smith. "Launching a new K shares class will facilitate the expansion of our business into this arena."