Invesco Van Kampen V.I. Comstock Fund Semiannual Report to Shareholders June 30, 2011

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1 Semiannual Report to Shareholders June 30, 2011 The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The Fund s Form N-Q filings are available on the SEC website, sec.gov. Copies of the Fund s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling or , or by electronic request at the following address: publicinfo@sec.gov. The SEC file numbers for the Fund are and The Fund s most recent portfolio holdings, as filed on Form N-Q, have also been made available to insurance companies issuing variable annuity contracts and variable life insurance policies ( variable products ) that invest in the Fund. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov. Information regarding how the Fund voted proxies related to its portfolio securities during the 12 months ended June 30, 2011, is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd. s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. This report must be accompanied or preceded by a currently effective Fund prospectus and variable product prospectus, which contain more complete information, including sales charges and expenses. Investors should read each carefully before investing. Invesco Distributors, Inc. VK-VICOM-SAR-1

2 Fund Performance Performance summary Fund vs. Indexes Cumulative total returns, 12/31/10 to 6/30/11, excluding variable product issuer charges. If variable product issuer charges were included, returns would be lower. Series I Shares 5.70% Series II Shares 5.53 S&P 500 Index (Broad Market Index) 6.01 Russell 1000 Value Index (Style-Specific Index) 5.92 Lipper VUF Large-Cap Value Funds Index (Peer Group Index) 5.49 Lipper Inc. The Fund recently adopted a three-tier benchmark structure to compare its performance to broad market, style-specific and peer group market measures. The S&P 500 Index is an unmanaged index considered representative of the U.S. stock market. The Russell 1000 Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell is a trademark of the Frank Russell Co. The Lipper VUF Large-Cap Value Funds Index is an unmanaged index considered representative of large-cap value variable insurance underlying funds tracked by Lipper. The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not. Average Annual Total Returns As of 6/30/11 Series I Shares Inception (4/30/99) 4.94% 10 Years Years Year Series II Shares Inception (9/18/00) 4.88% 10 Years Years Year Effective June 1, 2010, Class I and Class II shares of the predecessor fund, Van Kampen Life Investment Trust Comstock Portfolio, advised by Van Kampen Asset Management were reorganized into Series I and Series II shares, respectively, of Invesco Van Kampen V.I. Comstock Fund. Returns shown above for Series I and Series II shares are blended returns of the predecessor fund and Invesco Van Kampen V.I. Comstock Fund. Share class returns will differ from the predecessor fund because of different expenses. The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please contact your variable product issuer or financial adviser for the most recent month-end variable product performance. Performance figures reflect Fund expenses, reinvested distributions and changes in net asset value. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares. The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.62% and 0.87%, respectively. 1 The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Series I and Series II shares was 0.85% and 1.10%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report. Invesco Van Kampen V.I. Comstock Fund, a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds), is currently offered through insurance companies issuing variable products. You cannot purchase shares of the Fund directly. Performance figures given represent the Fund and are not intended to reflect actual variable product values. They do not reflect sales charges, expenses and fees assessed in connection with a variable product. Sales charges, expenses and fees, which are determined by the variable product issuers, will vary and will lower the total return. The most recent month-end performance data at the Fund level, excluding variable product charges, is available at As mentioned above, for the most recent month-end performance including variable product charges, please contact your variable product issuer or financial adviser. 1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, See current prospectus for more information.

3 Schedule of Investments June 30, 2011 (Unaudited) Shares Value Shares Value Common Stocks & Other Equity Interests 96.96% (a) Aerospace & Defense 1.24% Honeywell International, Inc. 411,301 $ 24,509,427 Aluminum 1.40% Alcoa Inc. 1,755,760 27,846,354 Asset Management & Custody Banks 2.16% Bank of New York Mellon Corp. 1,299,102 33,282,993 State Street Corp. 209,852 9,462,227 42,745,220 Automobile Manufacturers 1.10% General Motors Co. (b) 720,489 21,874,046 Cable & Satellite 6.27% Comcast Corp. Class A 3,124,459 79,173,791 DIRECTV Class A (b) 199,269 10,126,851 Time Warner Cable, Inc. 447,579 34,929, ,229,707 Communications Equipment 0.78% Cisco Systems, Inc. 984,425 15,366,874 Computer Hardware 3.52% Dell, Inc. (b) 1,517,161 25,291,074 Hewlett-Packard Co. 1,222,063 44,483,093 69,774,167 Data Processing & Outsourced Services 0.30% Western Union Co. 293,036 5,869,511 Department Stores 0.39% Macy s, Inc. 266,199 7,783,659 Diversified Banks 1.95% U.S. Bancorp 416,231 10,618,053 Wells Fargo & Co. 999,474 28,045,240 38,663,293 Drug Retail 1.60% CVS Caremark Corp. 842,920 31,676,934 Electric Utilities 2.41% American Electric Power Co., Inc. 137,142 5,167,511 FirstEnergy Corp. 378,330 16,703,269 PPL Corp. 929,173 25,858,885 47,729,665 Electrical Components & Equipment 0.79% Emerson Electric Co. 276,777 $ 15,568,706 General Merchandise Stores 0.59% Target Corp. 249,090 11,684,812 Health Care Distributors 1.02% Cardinal Health, Inc. 445,416 20,230,795 Home Improvement Retail 1.67% Home Depot, Inc. (The) 472,740 17,122,643 Lowe s Cos., Inc. 686,444 16,001,009 33,123,652 Household Products 0.32% Procter & Gamble Co. (The) 100,077 6,361,895 Hypermarkets & Super Centers 0.97% Wal-Mart Stores, Inc. 363,051 19,292,530 Industrial Conglomerates 2.12% General Electric Co. 1,386,411 26,147,711 Textron Inc. 675,518 15,948,980 42,096,691 Industrial Machinery 1.56% Ingersoll-Rand PLC (Ireland) 682,431 30,989,192 Integrated Oil & Gas 6.15% BP PLC ADR (United Kingdom) 595,284 26,365,128 Chevron Corp. 433,519 44,583,094 Royal Dutch Shell PLC ADR (United Kingdom) 512,454 36,450,853 Total S.A. ADR (France) 250,840 14,508, ,907,661 Integrated Telecommunication Services 2.78% AT&T Inc. 791,208 24,851,843 Verizon Communications Inc. 812,773 30,259,539 55,111,382 Internet Software & Services 3.44% ebay Inc. (b) 1,163,868 37,558,020 Yahoo! Inc. (b) 2,037,870 30,649,565 68,207,585 Investment Banking & Brokerage 2.07% Goldman Sachs Group, Inc. (The) 154,689 20,587,559 Morgan Stanley 886,195 20,391,347 40,978,906 See accompanying Notes to Financial Statements which are an integral part of the financial statements.

4 Shares Value Shares Value IT Consulting & Other Services 0.10% Accenture PLC Class A (Ireland) 32,725 $ 1,977,245 Life & Health Insurance 2.47% Aflac, Inc. 152,674 7,126,822 MetLife, Inc. 631,559 27,706,494 Torchmark Corp. 221,322 14,195,593 49,028,909 Managed Health Care 2.67% UnitedHealth Group, Inc. 704,729 36,349,922 WellPoint Inc. 209,317 16,487,900 52,837,822 Movies & Entertainment 5.30% News Corp. Class B 1,562,235 28,245,209 Time Warner Inc. 651,771 23,704,911 Viacom Inc. Class B 1,039,828 53,031, ,981,348 Multi-Utilities 0.20% Sempra Energy 73,415 3,882,185 Oil & Gas Drilling 0.53% Noble Corp. 267,452 10,540,283 Oil & Gas Equipment & Services 4.29% Halliburton Co. 1,078,661 55,011,711 Weatherford International Ltd. (b) 1,602,828 30,053,025 85,064,736 Oil & Gas Exploration & Production 0.62% Chesapeake Energy Corp. 410,988 12,202,234 Other Diversified Financial Services 6.75% Bank of America Corp. 2,716,933 29,777,586 Citigroup Inc. 1,205,530 50,198,269 JPMorgan Chase & Co. 1,311,266 53,683, ,659,085 Packaged Foods & Meats 4.41% Kraft Foods Inc. Class A 1,323,607 46,630,675 Unilever N.V. New York Shares (Netherlands) 1,240,256 40,742,409 87,373,084 Paper Products 2.93% International Paper Co. 1,948,588 58,106,894 Personal Products 0.44% Avon Products, Inc. 310,348 8,689,744 Pharmaceuticals 8.72% Abbott Laboratories 189,705 $ 9,982,277 Bristol-Myers Squibb Co. 1,446,958 41,903,904 GlaxoSmithKline PLC ADR (United Kingdom) 491,963 21,105,213 Merck & Co., Inc. 911,754 32,175,798 Pfizer Inc. 2,588,600 53,325,160 Roche Holding AG ADR (Switzerland) 340,186 14,211, ,703,792 Property & Casualty Insurance 3.36% Allstate Corp. (The) 1,158,940 35,382,438 Chubb Corp. (The) 351,945 22,035,276 Travelers Cos., Inc. (The) 155,741 9,092,160 66,509,874 Regional Banks 1.50% Fifth Third Bancorp 311,815 3,975,641 PNC Financial Services Group, Inc. 431,663 25,731,432 29,707,073 Semiconductor Equipment 0.32% KLA-Tencor Corp. 154,674 6,261,204 Semiconductors 0.62% Intel Corp. 553,846 12,273,227 Soft Drinks 1.42% Coca-Cola Co. (The) 284,077 19,115,541 PepsiCo, Inc. 129,128 9,094,485 28,210,026 Specialty Stores 0.73% Staples, Inc. 911,978 14,409,252 Systems Software 2.12% Microsoft Corp. 1,614,577 41,979,002 Wireless Telecommunication Services 0.86% Vodafone Group PLC ADR (United Kingdom) 640,564 17,115,870 Total Common Stocks & Other Equity Interests (Cost $1,922,467,308) 1,921,135,553 Money Market Funds 2.67% Liquid Assets Portfolio Institutional Class (c) 26,502,265 26,502,265 Premier Portfolio Institutional Class (c) 26,502,265 26,502,265 Total Money Market Funds (Cost $53,004,530) 53,004,530 TOTAL INVESTMENTS 99.63% (Cost $1,975,471,838) 1,974,140,083 OTHER ASSETS LESS LIABILITIES 0.37% 7,262,657 NET ASSETS % $1,981,402,740 Investment Abbreviations: ADR American Depositary Receipt See accompanying Notes to Financial Statements which are an integral part of the financial statements.

5 Notes to Schedule of Investments: (a) (b) (c) Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor s. Non-income producing security. The money market fund and the Fund are affiliated by having the same investment adviser. Portfolio Composition By sector, based on Net Assets as of June 30, 2011 Financials 20.3% Consumer Discretionary 16.1 Health Care 12.4 Energy 11.6 Information Technology 11.2 Consumer Staples 9.2 Industrials 5.7 Materials 4.3 Telecommunication Services 3.6 Utilities 2.6 Money Market Funds Plus Other Assets Less Liabilities 3.0 See accompanying Notes to Financial Statements which are an integral part of the financial statements.

6 Statement of Assets and Liabilities June 30, 2011 (Unaudited) Statement of Operations For the six months ended June 30, 2011 (Unaudited) Assets: Investments, at value (Cost $1,922,467,308) $1,921,135,553 Investments in affiliated money market funds, at value and cost 53,004,530 Total investments, at value (Cost $1,975,471,838) 1,974,140,083 Receivable for: Investments sold 14,390,308 Fund shares sold 1,617,826 Dividends 3,925,081 Fund expenses absorbed 83,135 Investments for trustee deferred compensation and retirement plans 4,664 Other assets 137 Total assets 1,994,161,234 Liabilities: Payable for: Investments purchased 7,434,555 Fund shares reacquired 1,062,965 Accrued fees to affiliates 4,175,474 Accrued other operating expenses 61,732 Trustee deferred compensation and retirement plans 23,768 Total liabilities 12,758,494 Net assets applicable to shares outstanding $1,981,402,740 Investment income: Dividends (net of foreign withholding taxes of $376,685) $ 22,029,166 Dividends from affiliated money market funds 40,780 Total investment income 22,069,946 Expenses: Advisory fees 5,498,512 Administrative services fees 2,650,081 Distribution fees Series II 2,108,444 Transfer agent fees 15,039 Trustees and officers fees and benefits 37,736 Other (534,328) Total expenses 9,775,484 Less: Fees waived (1,665,981) Net expenses 8,109,503 Net investment income 13,960,443 Net realized gain from investment securities (includes net gains from securities sold to affiliates of $1,332,073) 50,163,736 Change in net unrealized appreciation of investment securities 41,748,891 Net realized and unrealized gain 91,912,627 Net increase in net assets resulting from operations $105,873,070 Net assets consist of: Shares of beneficial interest $2,477,973,318 Undistributed net investment income 13,801,057 Undistributed net realized gain (loss) (509,039,880) Unrealized appreciation (depreciation) (1,331,755) $1,981,402,740 Net Assets: Series I $ 304,490,842 Series II $1,676,911,898 Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized: Series I 24,979,265 Series II 137,885,716 Series I: Net asset value per share $ Series II: Net asset value per share $ See accompanying Notes to Financial Statements which are an integral part of the financial statements.

7 Statement of Changes in Net Assets For the six month ended June 30, 2011 and the year ended December 31, 2010 (Unaudited) Operations: Net investment income $ 13,960,443 $ 26,130,323 Net realized gain 50,163,736 53,876,954 Change in net unrealized appreciation 41,748, ,893,792 Net increase in net assets resulting from operations 105,873, ,901,069 Distributions to shareholders from net investment income: Series I (4,436,682) (193,186) Series II (21,508,918) (2,889,112) Total distributions from net investment income (25,945,600) (3,082,298) Share transactions net: Series I 71,786,212 53,459,524 Series II (58,416,742) (725,552,245) Net increase (decrease) in net assets resulting from share transactions 13,369,470 (672,092,721) Net increase (decrease) in net assets 93,296,940 (425,273,950) Net assets: Beginning of period 1,888,105,800 2,313,379,750 End of period (includes undistributed net investment income of $13,801,057 and $25,786,214, respectively) $1,981,402,740 $1,888,105,800 Notes to Financial Statements June 30, 2011 (Unaudited) NOTE 1 Significant Accounting Policies (the Fund ) is a series portfolio of AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (the Trust ). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act ), as an open-end series management investment company consisting of twenty-eight separate portfolios, (each constituting a Fund ). The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each Fund or class will be voted on exclusively by the shareholders of such Fund or class. Current Securities and Exchange Commission ( SEC ) guidance, however, requires participating insurance companies offering separate accounts to vote shares proportionally in accordance with the instructions of the contract owners whose investments are funded by shares of each Fund or class. The Fund s investment objective is to seek capital growth and income through investments in equity securities, including common stocks, preferred stocks and securities convertible into common and preferred stocks. The Fund currently offers two classes of shares, Series I and Series II, both of which are offered to insurance company separate accounts funding variable annuity contracts and variable life insurance policies ( variable products ). The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. A. Security Valuations Securities, including restricted securities, are valued according to the following policy. A security listed or traded on an exchange (except convertible bonds) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange ( NYSE ). Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.

8 Debt obligations (including convertible bonds) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service 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 specific securities, dividend rate, yield, quality, type of issue, coupon rate, maturity, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and/or principal payments. Foreign securities (including foreign exchange contracts) are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. 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 make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trade is not the current value as of the close of the NYSE. Foreign securities meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economical upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards. Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including Corporate Loans. Securities for which market quotations are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a security s fair value. Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. B. Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held. Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund s net asset value and, accordingly, they reduce the Fund s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser. The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class. C. Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. D. Distributions Distributions from income and net realized capital gain, if any, are generally paid to separate accounts of participating insurance companies annually and recorded on ex-dividend date. E. Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period. F. Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.

9 G. Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ( GAAP ) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. H. Indemnifications Under the Trust s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund s servicing agreements that contain a variety of indemnification clauses. The Fund s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. I. Futures Contracts The Fund may enter into futures contracts to manage exposure to interest rate, equity and market price movements and/or currency risks. A futures contract is an agreement between two parties to purchase or sell a specified underlying security, currency or commodity (or delivery of a cash settlement price, in the case of an index future) for a fixed price at a future date. The Fund currently invests only in exchange-traded futures and they are standardized as to maturity date and underlying financial instrument. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral at the futures commission merchant (broker). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by recalculating the value of the contracts on a daily basis. Subsequent or variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities. When the contracts are closed or expire, the Fund recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Fund s basis in the contract. The net realized gain (loss) and the change in unrealized gain (loss) on futures contracts held during the period is included on the Statement of Operations. The primary risks associated with futures contracts are market risk and the absence of a liquid secondary market. If the Fund were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Fund would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. Futures contracts have minimal counterparty risk since the exchange s clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default. Risks may exceed amounts recognized in the Statement of Assets and Liabilities. NOTE 2 Advisory Fees and Other Fees Paid to Affiliates The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco ). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund s average daily net assets as follows: Average Daily Net Assets First $500 million 0.60% Over $500 million 0.55% Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (formerly Invesco Trimark Ltd.) (collectively, the Affiliated Sub-Advisers ) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s). The Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses to the extent necessary to limit total annual operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Series I shares to 0.62% and Series II shares to 0.87% of average daily net assets. In determining the Adviser s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause total annual operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, Further, the Adviser has contractually agreed, through at least June 30, 2012, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds. For the six months ended June 30, 2011, the Adviser waived advisory fees of $1,665,981. The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco a fee for costs incurred in providing accounting services and fund administrative services to the Fund and to reimburse Invesco for administrative services fees paid to insurance companies that have agreed to provide services to the participants of separate accounts. These administrative services provided by the insurance companies may include, among other things: the printing of prospectuses, financial reports and proxy statements and the delivery of the same to existing participants; the maintenance of master accounts; the facilitation of purchases and redemptions requested by the participants; and the servicing of participants accounts. Pursuant to such agreement, for the six months ended June 30, 2011, Invesco was paid $206,377 for accounting and fund administrative services and reimbursed $2,443,704 for services provided by insurance companies. Rate

10 The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. ( IIS ) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. For the six months ended June 30, 2011, expenses incurred under the agreement are shown in the Statement of Operations as transfer agent fees. The Trust has entered into a master distribution agreement with Invesco Distributors, Inc. ( IDI ) to serve as the distributor for the Fund. The Trust has adopted a plan pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund s Series II shares (the Plan ). The Fund, pursuant to the Plan, pays IDI compensation at the annual rate of 0.25% of the Fund s average daily net assets of Series II shares. Of the Plan payments, up to 0.25% of the average daily net assets of the Series II shares may be paid to insurance companies who furnish continuing personal shareholder services to customers who purchase and own Series II shares of the Fund. For the six months ended June 30, 2011, expenses incurred under the Plan are detailed in the Statement of Operations as distribution fees. Certain officers and trustees of the Trust are officers and directors of the Adviser, Invesco Ltd., IIS and/or IDI. NOTE 3 Additional Valuation Information GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment s assigned level: Level 1 Prices are determined using quoted prices in an active market for identical assets. Level 2 Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. Level 3 Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. The following is a summary of the tiered valuation input levels, as of June 30, The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments. During the six months ended June 30, 2011, there were no significant transfers between investment levels. Level 1 Level 2 Level 3 Total Equity Securities $1,959,928,643 $14,211,440 $ $1,974,140,083 NOTE 4 Security Transactions with Affiliated Funds The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the six months ended June 30, 2011, the Fund engaged in securities purchases of $2,950,607 and securities sales of $3,290,556, which resulted in net realized gains (losses) of $1,332,073. NOTE 5 Trustees and Officers Fees and Benefits Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund. During the six months ended June 30, 2011, the Fund paid legal fees of $1,986 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A partner of that firm is a Trustee of the Trust. NOTE 6 Cash Balances The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian

11 bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate. NOTE 7 Tax Information The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund s fiscal year-end. Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. The Fund utilized $49,021,247 of capital loss carryforward in the prior period to offset net realized capital gain for federal income tax purposes. The Fund had a capital loss carryforward as of December 31, 2010 which expires as follows: Expiration Capital Loss Carryforward* December 31, 2016 $208,187,062 December 31, ,097,829 Total capital loss carryforward $549,284,891 * Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code. To the extent that unrealized gains as of May 2, 2011, the date the reorganization of Invesco Van Kampen V.I. Value Fund into the Fund and realized on securities held in that fund at such date of reorganization, the capital loss carryforward may be further limited for up to five years from the date of the reorganization. NOTE 8 Investment Securities The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended June 30, 2011 was $295,786,509 and $271,027,272, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end. Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis Aggregate unrealized appreciation of investment securities $ 186,468,277 Aggregate unrealized (depreciation) of investment securities (197,842,254) Net unrealized depreciation of investment securities $ (11,373,977) Cost of investments for tax purposes is $1,985,514,060. NOTE 9 Share Information Six months ended June 30, 2011 (a) Summary of Share Activity Year ended December 31, 2010 Shares Amount Shares Amount Sold: Series I 5,753,324 $ 69,093,953 7,436,847 $ 85,067,642 Series II 3,461,850 41,926,632 7,860,095 81,647,180 Issued as reinvestment of dividends: Series I 363,662 4,436,682 18, ,186 Series II 1,767,372 21,508, ,000 2,889,112 Issued in connection with acquisitions (b) : Series I 2,033,402 25,661,404 Series II 1,023 12,889 Reacquired: Series I (2,245,339) (27,405,827) (3,029,626) (31,801,304) Series II (10,041,440) (121,865,181) (79,919,957) (810,088,537) Net increase (decrease) in share activity 1,093,854 $ 13,369,470 (67,357,154) $(672,092,721) (a) There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 73% of the outstanding shares of the Fund. The Fund and the Fund s principal underwriter or advisor, are parties to participation agreements with these entities whereby these entities sell units of interest in separate accounts funding variable products that are invested in the Fund. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to

12 (b) be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, third party record keeping and account servicing and administrative services. The Trust has no knowledge as to whether all or portion of the shares owned of record by these entities are also owned beneficially. As of the opening of business on May 2, 2011, the Fund acquired all of the net assets of Invesco Van Kampen V.I. Value Fund pursuant to a plan of reorganization approved by the Trustees of the Fund on November 10, 2010 and by the shareholders of Invesco Van Kampen V.I. Value Fund on April 1, The acquisition was accomplished by a tax-free exchange of 2,034,425 shares of the Fund for 2,471,069 shares outstanding of Invesco Van Kampen V.I. Value Fund as of the close of business on April 29, Class I and Class II shares of Invesco Van Kampen V.I. Value Fund were exchanged for Class I and Class II shares of the Fund, respectively, based on the relative net asset vale of Invesco Van Kampen V.I. Value Fund to the net asset value of the Fund on the close of business, April 29, Invesco Van Kampen V.I. Value Fund s net assets at that date of $25,674,293, including $4,451,624 of unrealized appreciation, was combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $2,060,987,398. The net assets of the Fund immediately following the acquisition were $2,086,661,691. NOTE 10 Financial Highlights The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated. Net asset value, beginning of period Net investment income (a) Net gains (losses) on securities (both realized and unrealized) Total from investment operations Dividends from net investment income Distributions from net realized gains Total Distributions Net asset value, end of period Total Return Net assets, end of period (000s omitted) Ratio of expenses to average net assets with fee waivers and/or expenses absorbed Ratio of expenses to average net assets without fee waivers and/or expenses absorbed Ratio of net investment income to average net assets Series I (f) Six months ended 06/30/11 $11.71 $0.10 $ 0.57 $ 0.67 $(0.19) $ 0 $(0.19) $ % (c) $ 304, % (d) 0.78% (d) 1.64% (d) 14% Year ended 12/31/ (0.01) 0 (0.01) (c) 223, Year ended 12/31/ (0.42) 0 (0.42) , Year ended 12/31/ (4.93) (4.67) (0.30) (0.64) (0.94) 8.25 (35.67) 192, Year ended 12/31/ (0.60) (0.30) (0.26) (0.33) (0.59) (2.04) 309, Year ended 12/31/ (0.21) (0.84) (1.05) , Series II (f) Six months ended 06/30/ (0.16) 0 (0.16) (c) 1,676, (d) 1.03 (d) 1.39 (d) 14 Year ended 12/31/ (0.01) 0 (0.01) (c) 1,664, Year ended 12/31/ (0.37) 0 (0.37) (e) 2,165, Year ended 12/31/ (4.91) (4.68) (0.26) (0.64) (0.90) 8.22 (35.80) (e) 2,268, Year ended 12/31/ (0.59) (0.33) (0.24) (0.33) (0.57) (2.33) (e) 3,521, Year ended 12/31/ (0.18) (0.84) (1.02) (e) 3,440, (a) (b) (c) (d) (e) (f) Portfolio turnover (b) Calculated using average shares outstanding. Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ended June 30, 2011, the portfolio turnover calculation excludes the value of securities purchased of $21,084,025 and sold of $3,578,203 in the effort to realign the Fund s portfolio holdings after the reorganization of Invesco Van Kampen V.I. Value Fund into the Fund. Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Total returns do not reflect charges assessed in connection with a variable product, which if included would reduce total returns and is not annualized for periods less than one year, if applicable. Ratios are annualized and based on average daily net assets (000 s omitted) of $269,840 and $1,700,734 for Series I and Series II shares, respectively. These returns include combined Rule 12b-1 fees and service fees of up to 0.25%. On June 1, 2010, the Class I and Class II shares of the predecessor fund were reorganized into Series I and Series II shares of the Fund, respectively.