<PAGE>
[LOGO OF AIM APPEARS HERE]
[GRAPHIC COLLAGE APPEARS HERE]
AIM CHARTER FUND
SEMIANNUAL REPORT
APRIL 30, 1995
<PAGE>
FUNDAMENTALS
AIM CHARTER FUND
(RETAIL CLASS)
seeks to provide growth of capital, with current income as a secondary
objective. To accomplish its objectives, the Fund invests primarily in
dividend-paying common stocks which have prospects for both growth of capital
and dividend income.
PORTFOLIO DATA
TOP 10 EQUITY HOLDINGS
1. Philip Morris Companies, Inc.
2. International Business Machines Corp.
3. Pfizer Inc.
4. Texas Instruments Inc.
5. Xerox Corp.
6. Johnson & Johnson
7. Procter & Gamble Co.
8. General Electric Co.
9. Abbott Laboratories
10. Intel Corp.
TOP 10 INDUSTRIES
1. Medical (Drugs)
2. Semiconductors
3. Electronic Components/Miscellaneous
4. Computer Software/Services
5. Medical (Patient Services)
6. Cosmetics and Toiletries
7. Retail (Stores)
8. Tobacco
9. Business Services
10. Oil & Gas Services
This table represents a summary of the Fund's portfolio as of April 30, 1995,
the close of the six-month reporting period. The Fund's composition may change
and there is no assurance the Fund will continue to hold the same securities.
AVERAGE ANNUAL TOTAL RETURNS
Through 3/31/95 (Most recent calendar quarter)
<TABLE>
<CAPTION>
With Sales Excluding Sales
Charge Charge
<S> <C> <C>
Ten Years 13.28% 13.91%
Five Years 10.85% 12.11%
One Year 1.86% 7.81%
</TABLE>
GROWTH OF A
HYPOTHETICAL
$10,000
INVESTMENT
10 YEARS ENDED 4/30/95
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period AIM Charter Fund(1) Lipper Growth & Income Index(2) S&P 500(1)
4/30/85 - 4/30/95 (In Dollars) (In Dollars) (In Dollars)
<S> <C> <C> <C>
4/85 9,447 10,000 10,000
4/86 12,522 13,520 13,624
4/87 15,799 16,340 17,236
4/88 14,156 15,752 16,115
4/89 17,212 19,002 19,804
4/90 19,743 20,030 21,888
4/91 25,569 22,826 25,735
4/92 29,503 25,821 29,338
4/93 31,404 29,107 32,043
4/94 32,676 31,279 33,745
4/95 36,221 35,104 39,630
</TABLE>
Past performance cannot guarantee comparable future results.
Sources: (1)Towers Data Systems HYPO(R), (2)Lipper Analytical Services, Inc.
AIM Charter Fund performance figures are historical and reflect reinvestment of
all dividends and capital gains distributions, changes in net asset value, and
the effect of the 5.50% maximum sales charge, unless otherwise indicated. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Lipper Analytical Services, Inc., is an independent mutual fund performance
monitor. The unmanaged Lipper Growth & Income Index represents an average of the
performance of the 30 largest growth-and-income funds. Standard & Poor's Corp.
is a credit-rating agency. The Standard & Poor's Composite Index of 500 Stocks
(S&P 500) is a group of unmanaged securities widely regarded by investors to be
representative of the stock market in general. An investment cannot be made in
the indexes listed. Index results include reinvested dividends and do not
reflect sales charges.
<PAGE>
CHAIRMAN'S LETTER
Dear Fellow Shareholder:
For the six months covered by this report, AIM Charter Fund
carried on a 27-year tradition of solid performance. The value of
your investment rose 8.01%, assuming reinvestment of dividends
of $0.12 per share and capital gains distributions of $0.325 per
share, and excluding the maximum sales charge of 5.50%. Net
assets managed by your Fund grew from $1.58 billion to $1.61
[PHOTO billion.
Charles T. Your Fund's total return outpaced the 7.48% total return of
Bauer, the Lipper Growth & Income Index, which averages the performance
Chairman of of the 30 largest mutual funds that pursue a growth-and-income
the Board of strategy like that of AIM Charter Fund.
the Fund, AIM Charter Fund's performance reflects, in part, a stock
APPEARS HERE] market that favored large-capitalization companies in which your
Fund invests. These companies tend to be established, with a
history of stable earnings and dividends. The resurgence of
large-capitalization growth stocks may represent a back-to-basics
trend. In 1994, shocks such as the Orange County, California,
bankruptcy, the failure of British investment bank Barings PLC, and December's
Mexican peso crisis may have led many market participants back to a greater
emphasis on choosing quality investments rather than on reaching for higher
yield. A review of the economy, your Fund's portfolio strategy, and our outlook
for the months ahead follows on page 2 of this report.
AIM Charter Fund has built an impressive record of long-term results, as shown
in the 10-year performance numbers summarized in this report's Fundamentals
page, opposite. It is important to keep in mind that throughout this period,
your Fund and the stock market in general have experienced a variety of up and
down years. Shareholders who have retained a long-term perspective have enjoyed
the greatest returns on their investment. Although past performance does not
ensure comparable future results, we believe shareholders who keep a long-term
perspective will have greater opportunity for reaping rewards over time. We
remain confident in managing the Fund according to our disciplined, earnings-
driven investment strategy.
While your Fund's management team has been working to maximize the return on
your investment and help you achieve your long-term financial goals, AIM has
continued a commitment to customer service by expanding our shareholder service
operation. We have also improved our toll-free 24-hour AIM Investor Line so that
you can now access information on current yield and total return of your AIM
Fund in addition to data on your individual account simply by calling
800-246-5463.
We are pleased to send you this shareholder report for the Retail Class of AIM
Charter Fund, and we are equally pleased to respond to any questions or comments
you may have.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE>
DISCUSSION & ANALYSIS
AIM CHARTER FUND ADVANCES SMARTLY
IN MARKET LED BY LARGE-CAPITALIZATION STOCKS
----------
Though often
thought of as the
arena of startups,
the technology universe
includes a number
of large, dividend-paying
companies of the
type in which
AIM Charter Fund
invests.
----------
As the period covered by this report opened, financial markets were affected by
the Federal Reserve Board's effort to use rising interest rates to slow an
economy it feared was overheating.
While corporate earnings were robust, rising rates lured investors
away from the potential volatility of stock markets, resulting in a flat equity
market. During the first half of the reporting period, the Standard & Poor's
Composite Index of 500 Stocks (S&P 500)* gained a mere 0.32%.
The second half of the reporting period differed dramatically, as investors
anticipated that the Fed's policy would succeed in checking inflation while
fostering sustainable economic growth. The S&P 500 rose 10.10% in the three
months ended April 30, closing the period at 514.71, an all-time high.
The market rally was distinguished by the strength of large-company stocks, in
contrast to the past few years, when small, emerging-growth companies were
market darlings.
YOUR INVESTMENT PORTFOLIO
In this favorable environment, AIM Charter Fund produced robust total returns of
8.01%, excluding sales charges, for the six months ended April 30, 1995.
The portfolio's holdings were modified somewhat over the reporting period. At
the end of April, almost 25% of the Fund's holdings were in technology stocks,
up from about 10% six months earlier. Fund managers define the technology sector
broadly, to include telecommunications, for example, as well as computer parts,
peripherals, and software. The strength of this sector contines unabated,
nurtured by the interconnections among technology industries.
Consider the much-publicized introduction of Windows 95. Most computer users
will require more memory in order to use it, and many new software programs will
be written that complement and take advantage of this new operating system.
Thus, one new technology product stimulates production of others. The 1990s may
well be remembered as the technology decade as these inter-connections produce
numerous opportunities for winning stocks.
Though often thought of as the arena of startups, the technology universe
includes a number of large, dividend-paying companies of the type in which AIM
Charter Fund invests. A list of the companies representing the portfolio's 10
largest holdings as a percent of net assets appears on this report's
Fundamentals page.
While increasing its technology sector holdings, the Fund remained well
diversified, holding more than 200 names. Approximately 78% of the portfolio's
holdings are common stocks, and about 17% are convertible securities. In keeping
with a strategic bias in favor of being fully invested, particularly in a
favorable market, the Fund's cash position was quite small as the reporting
period closed. Of course, the Fund's composition may change, and there is no
assurance it will continue to hold the same securities.
OUTLOOK FOR THE FUTURE
Many analysts agree that the exceptional earnings growth reported by many U.S.
companies during the first four months of 1995 is unlikely to continue at such
a phenomenal rate. Nevertheless, we believe a projected slowing of the domestic
economy, combined with the declining value of the dollar overseas, represents a
potentially great competitive advantage for U.S. companies. As a result,
earnings for an unusually large number of companies should continue to
be robust.
One of the dynamic forces driving the market in the months to come will be
whose earnings expectations are too high and whose are too low.
In this economic environment, finding stocks that qualify under AIM's
earnings-driven investment philosophy would seem to be a simple task. If
anything, however, the large number of stocks reporting better-than-expected
earnings has forced us to work even harder to find the companies with the very
best potential, the one or two companies out of 10 that are going to produce
superior earnings growth. And that's what we believe we do best.
*The S&P 500 is an unmanaged index of 500 securities widely regarded by
investors to be representative of the stock market in general. S&P
performance figures assume reinvestment of all dividends. An investment
cannot be made in an index.
2
<PAGE>
FINANCIALS
SCHEDULE OF INVESTMENTS
April 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<C> <S> <C>
COMMON STOCKS-77.76%
ADVERTISING/BROADCASTING-0.41%
120,000 Omnicom Group, Inc. $ 6,675,000
- -----------------------------------------------------------------------
AEROSPACE/DEFENSE-0.83%
120,000 Boeing Co. (The) 6,600,000
- -----------------------------------------------------------------------
160,000 Rockwell International Corp. 6,980,000
- -----------------------------------------------------------------------
13,580,000
- -----------------------------------------------------------------------
AUTOMOBILE (MANUFACTURERS)-0.54%
80,000 Chrysler Corp. 3,450,000
- -----------------------------------------------------------------------
120,000 General Motors Corp. 5,415,000
- -----------------------------------------------------------------------
8,865,000
- -----------------------------------------------------------------------
AUTOMOBILE/TRUCKS PARTS & TIRES-1.01%
240,000 Dana Corp. 6,180,000
- -----------------------------------------------------------------------
120,000 Echlin Inc. 4,380,000
- -----------------------------------------------------------------------
120,000 Goodyear Tire & Rubber Co. 4,560,000
- -----------------------------------------------------------------------
60,000 Smith (A.O.) Corp. 1,432,500
- -----------------------------------------------------------------------
16,552,500
- -----------------------------------------------------------------------
BANKING-1.12%
80,000 Bankers Trust New York Corp. 4,340,000
- -----------------------------------------------------------------------
120,000 First Interstate Bancorp. 9,225,000
- -----------------------------------------------------------------------
120,000 Mellon Bank Corp. 4,710,000
- -----------------------------------------------------------------------
18,275,000
- -----------------------------------------------------------------------
BANKING (MONEY CENTER)-1.32%
160,000 BankAmerica Corp. 7,920,000
- -----------------------------------------------------------------------
200,000 Chemical Banking Corp. 8,350,000
- -----------------------------------------------------------------------
80,000 Morgan (J.P.) & Co., Inc. 5,250,000
- -----------------------------------------------------------------------
21,520,000
- -----------------------------------------------------------------------
BEVERAGES-2.28%
120,000 Buenos Aires Embotelladora S.A.-ADR 3,300,000
- -----------------------------------------------------------------------
240,000 Coca-Cola Co. (The) 13,950,000
- -----------------------------------------------------------------------
480,000 PepsiCo Inc. 19,980,000
- -----------------------------------------------------------------------
37,230,000
- -----------------------------------------------------------------------
BIOTECHNOLOGY-0.57%
72,700 AMGEN Inc.(a) 5,284,385
- -----------------------------------------------------------------------
80,000 Genentech, Inc.(a) 4,030,000
- -----------------------------------------------------------------------
9,314,385
- -----------------------------------------------------------------------
</TABLE>
3
<PAGE>
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<C> <S> <C>
BUILDING MATERIALS-0.37%
200,000 Black & Decker Corp. (The) $ 6,000,000
- -----------------------------------------------------------------------
BUSINESS SERVICES-2.89%
160,000 Block (H & R), Inc. 6,740,000
- -----------------------------------------------------------------------
200,000 Diebold, Inc. 8,300,000
- -----------------------------------------------------------------------
537,000 Equifax, Inc. 17,385,375
- -----------------------------------------------------------------------
106,800 Manpower Inc. 3,564,450
- -----------------------------------------------------------------------
240,000 Sensormatic Electronics Corp. 7,140,000
- -----------------------------------------------------------------------
120,000 Value Health, Inc.(a) 4,140,000
- -----------------------------------------------------------------------
47,269,825
- -----------------------------------------------------------------------
CHEMICALS-1.29%
120,000 Dow Chemical Co. 8,340,000
- -----------------------------------------------------------------------
69,100 Hanna (M. A.) Co. 1,718,862
- -----------------------------------------------------------------------
160,000 PPG Industries, Inc. 6,300,000
- -----------------------------------------------------------------------
80,000 Rohm & Haas Co. 4,650,000
- -----------------------------------------------------------------------
21,008,862
- -----------------------------------------------------------------------
CHEMICALS (SPECIALTY)-1.24%
80,000 Air Products & Chemicals, Inc. 4,030,000
- -----------------------------------------------------------------------
120,000 Dexter Corp. 2,745,000
- -----------------------------------------------------------------------
240,000 Engelhard Corp. 9,210,000
- -----------------------------------------------------------------------
80,000 Grace (W.R.) & Co. 4,290,000
- -----------------------------------------------------------------------
20,275,000
- -----------------------------------------------------------------------
COMPUTER MAINFRAMES-2.32%
400,000 International Business Machines Corp. 37,900,000
- -----------------------------------------------------------------------
COMPUTER MINI/PCS-0.93%
100,000 Digital Equipment Corp.(a) 4,612,500
- -----------------------------------------------------------------------
160,000 Hewlett Packard Co. 10,580,000
- -----------------------------------------------------------------------
15,192,500
- -----------------------------------------------------------------------
COMPUTER NETWORKING-1.43%
160,000 Bay Networks, Inc.(a) 5,820,000
- -----------------------------------------------------------------------
120,000 Cabletron Systems, Inc.(a) 5,700,000
- -----------------------------------------------------------------------
160,000 Cisco Systems, Inc.(a) 6,380,000
- -----------------------------------------------------------------------
320,000 ECI Telecom Ltd. 5,400,000
- -----------------------------------------------------------------------
23,300,000
- -----------------------------------------------------------------------
COMPUTER PERIPHERALS-1.23%
240,000 Adaptec, Inc.(a) 7,680,000
- -----------------------------------------------------------------------
440,005 EMC Corp.(a) 8,690,098
- -----------------------------------------------------------------------
120,000 Oracle Systems Corp.(a) 3,660,000
- -----------------------------------------------------------------------
20,030,098
- -----------------------------------------------------------------------
</TABLE>
4
<PAGE>
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<C> <S> <C>
COMPUTER SOFTWARE/SERVICES-2.28%
200,000 Acclaim Entertainment, Inc.(a) $ 3,000,000
- --------------------------------------------------------------------------
80,000 Adobe Systems, Inc. 4,660,000
- --------------------------------------------------------------------------
131,100 Autodesk Inc. 4,465,593
- --------------------------------------------------------------------------
80,000 BMC Software, Inc.(a) 4,980,000
- --------------------------------------------------------------------------
160,000 Computer Associates International, Inc. 10,300,000
- --------------------------------------------------------------------------
120,000 Microsoft Corp.(a) 9,810,000
- --------------------------------------------------------------------------
37,215,593
- --------------------------------------------------------------------------
CONGLOMERATES-2.23%
160,000 Allied-Signal Inc. 6,340,000
- --------------------------------------------------------------------------
200,000 Du Pont (E.I.) de Nemours & Co. 13,175,000
- --------------------------------------------------------------------------
40,000 ITT Corp. 4,180,000
- --------------------------------------------------------------------------
120,000 Olin Corp. 6,705,000
- --------------------------------------------------------------------------
80,000 TRW, Inc. 5,950,000
- --------------------------------------------------------------------------
36,350,000
- --------------------------------------------------------------------------
CONTAINERS-0.25%
120,000 Ball Corp. 4,110,000
- --------------------------------------------------------------------------
COSMETICS & TOILETRIES-3.63%
80,000 Clorox Co. 4,700,000
- --------------------------------------------------------------------------
160,000 Colgate-Palmolive Co. 11,240,000
- --------------------------------------------------------------------------
160,000 Gillette Co. (The) 13,120,000
- --------------------------------------------------------------------------
360,000 Procter & Gamble Co. 25,155,000
- --------------------------------------------------------------------------
120,000 Tambrands Inc. 4,995,000
- --------------------------------------------------------------------------
59,210,000
- --------------------------------------------------------------------------
ELECTRONIC COMPONENTS/MISCELLANEOUS-4.23%
100,000 AMP Inc. 4,275,000
- --------------------------------------------------------------------------
100,000 Emerson Electric Co. 6,725,000
- --------------------------------------------------------------------------
400,000 General Electric Co. 22,400,000
- --------------------------------------------------------------------------
200,000 General Signal Corp. 7,425,000
- --------------------------------------------------------------------------
240,000 Philips Electronics N.V.-New York Shares-ADR 9,240,000
- --------------------------------------------------------------------------
120,000 Symbol Technologies, Inc.(a) 3,975,000
- --------------------------------------------------------------------------
200,000 Tektronix, Inc. 9,100,000
- --------------------------------------------------------------------------
400,000 Westinghouse Electric Corp. 6,000,000
- --------------------------------------------------------------------------
69,140,000
- --------------------------------------------------------------------------
</TABLE>
5
<PAGE>
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<C> <S> <C>
ELECTRONIC/DEFENSE-0.75%
120,000 Loral Corp. $ 5,640,000
- --------------------------------------------------------------------
120,000 Sundstrand Corp. 6,660,000
- --------------------------------------------------------------------
12,300,000
- --------------------------------------------------------------------
ELECTRONIC/PC DISTRIBUTORS-0.72%
200,000 Avnet, Inc. 8,900,000
- --------------------------------------------------------------------
120,000 Wyle Electronics 2,940,000
- --------------------------------------------------------------------
11,840,000
- --------------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-0.55%
160,000 Merrill Lynch & Co., Inc. 7,280,000
- --------------------------------------------------------------------
96,300 PaineWebber Group, Inc. 1,649,137
- --------------------------------------------------------------------
8,929,137
- --------------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-2.50%
200,000 American Express Co. 6,950,000
- --------------------------------------------------------------------
120,000 Federal Home Loan Mortgage Association 7,830,000
- --------------------------------------------------------------------
80,000 Federal National Mortgage Association 7,060,000
- --------------------------------------------------------------------
200,000 Household International, Inc. 9,375,000
- --------------------------------------------------------------------
320,000 MBNA Corp. 9,680,000
- --------------------------------------------------------------------
40,895,000
- --------------------------------------------------------------------
FOOD/PROCESSING-0.21%
120,000 Sara Lee Corp. 3,345,000
- --------------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-0.40%
160,000 Lincoln National Corp. 6,520,000
- --------------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY)-2.48%
160,000 Aetna Life & Casualty Co. 9,120,000
- --------------------------------------------------------------------
320,000 Allstate Financial Corp. 9,720,000
- --------------------------------------------------------------------
240,000 American General Corp. 7,920,000
- --------------------------------------------------------------------
120,000 CIGNA Corp. 8,715,000
- --------------------------------------------------------------------
120,000 Travelers Group, Inc. 4,965,000
- --------------------------------------------------------------------
40,440,000
- --------------------------------------------------------------------
LEISURE & RECREATION-1.17%
200,000 Brunswick Corp. 4,275,000
- --------------------------------------------------------------------
200,000 Walt Disney Co. (The) 11,075,000
- --------------------------------------------------------------------
160,000 Mattel, Inc. 3,800,000
- --------------------------------------------------------------------
19,150,000
- --------------------------------------------------------------------
</TABLE>
6
<PAGE>
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<C> <S> <C>
MACHINE TOOLS-0.09%
80,000 Giddings & Lewis, Inc. $ 1,450,000
- ----------------------------------------------------------------------
MACHINERY (HEAVY)-1.10%
240,000 Case Corp. 6,090,000
- ----------------------------------------------------------------------
120,000 Caterpillar Inc. 7,020,000
- ----------------------------------------------------------------------
60,000 Deere & Co. 4,920,000
- ----------------------------------------------------------------------
18,030,000
- ----------------------------------------------------------------------
MEDICAL (DRUGS)-9.83%
560,000 Abbott Laboratories 22,050,000
- ----------------------------------------------------------------------
200,000 American Home Products Corp. 15,425,000
- ----------------------------------------------------------------------
240,000 Glaxo Wellcome PLC-ADR 5,670,000
- ----------------------------------------------------------------------
200,000 Ivax Corp. 5,175,000
- ----------------------------------------------------------------------
400,000 Johnson & Johnson 26,000,000
- ----------------------------------------------------------------------
200,000 Lilly (Eli) & Co. 14,950,000
- ----------------------------------------------------------------------
240,000 Merck & Co., Inc. 10,290,000
- ----------------------------------------------------------------------
400,000 Pfizer Inc. 34,650,000
- ----------------------------------------------------------------------
160,000 Schering-Plough Corp. 12,060,000
- ----------------------------------------------------------------------
120,000 SmithKline Beecham PLC-ADR 4,665,000
- ----------------------------------------------------------------------
280,000 Teva Pharmaceuticals Industries Ltd.-ADR 9,590,000
- ----------------------------------------------------------------------
160,525,000
- ----------------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-1.81%
200,000 Columbia/HCA Healthcare Corp. 8,400,000
- ----------------------------------------------------------------------
160,000 Horizon Healthcare Corp.(a) 3,340,000
- ----------------------------------------------------------------------
320,000 Humana Inc.(a) 6,240,000
- ----------------------------------------------------------------------
300,000 Mid-Atlantic Medical Services, Inc.(a) 5,175,000
- ----------------------------------------------------------------------
240,000 U.S. Healthcare Corp. 6,420,000
- ----------------------------------------------------------------------
29,575,000
- ----------------------------------------------------------------------
MEDICAL INSTRUMENTS/PRODUCTS-0.80%
60,000 Medtronic, Inc. 4,462,500
- ----------------------------------------------------------------------
200,000 St. Jude Medical Inc. 8,600,000
- ----------------------------------------------------------------------
13,062,500
- ----------------------------------------------------------------------
METALS (MISCELLANEOUS)-0.25%
80,000 Illinois Tool Works, Inc. 4,010,000
- ----------------------------------------------------------------------
OFFICE AUTOMATION-1.81%
240,000 Xerox Corp. 29,550,000
- ----------------------------------------------------------------------
</TABLE>
7
<PAGE>
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<C> <S> <C>
OIL & GAS SERVICES-3.07%
60,000 Atlantic Richfield Co. $ 6,870,000
- ------------------------------------------------------------------------
160,000 Exxon Corp. 11,140,000
- ------------------------------------------------------------------------
200,000 Mobil Corp. 18,975,000
- ------------------------------------------------------------------------
80,000 Royal Dutch Petroleum Co.-ADR 9,920,000
- ------------------------------------------------------------------------
160,000 Yacimientos Petroliferos Fiscales S.A.-ADR 3,240,000
- ------------------------------------------------------------------------
50,145,000
- ------------------------------------------------------------------------
OIL EQUIPMENT & SUPPLIES-0.54%
140,000 Schlumberger Ltd. 8,802,500
- ------------------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.36%
80,000 Albany International Corp.-Class A 1,750,000
- ------------------------------------------------------------------------
80,000 Mead Corp. (The) 4,140,000
- ------------------------------------------------------------------------
5,890,000
- ------------------------------------------------------------------------
POLLUTION CONTROL-0.83%
280,000 Browning-Ferris Industries, Inc. 9,240,000
- ------------------------------------------------------------------------
160,000 WMX Technologies Inc. 4,360,000
- ------------------------------------------------------------------------
13,600,000
- ------------------------------------------------------------------------
PUBLISHING-0.43%
120,000 Tribune Co. 7,095,000
- ------------------------------------------------------------------------
RETAIL (FOOD & DRUG)-0.84%
200,000 Rite Aid Corp. 4,650,000
- ------------------------------------------------------------------------
240,000 Safeway Inc.(a) 9,000,000
- ------------------------------------------------------------------------
13,650,000
- ------------------------------------------------------------------------
RETAIL (STORES)-2.39%
180,000 Ann Taylor Stores Corp.(a) 4,522,500
- ------------------------------------------------------------------------
120,000 Circuit City Stores, Inc. 3,105,000
- ------------------------------------------------------------------------
160,000 Heilig-Meyers Co. 3,360,000
- ------------------------------------------------------------------------
360,000 Home Depot, Inc. 15,030,000
- ------------------------------------------------------------------------
120,000 Limited (The), Inc. 2,565,000
- ------------------------------------------------------------------------
200,000 Pep Boys-Manny, Moe & Jack 5,150,000
- ------------------------------------------------------------------------
120,000 Shopko Stores, Inc. 1,335,000
- ------------------------------------------------------------------------
160,000 Toys "R' Us Inc.(a) 4,040,000
- ------------------------------------------------------------------------
39,107,500
- ------------------------------------------------------------------------
SCIENTIFIC INSTRUMENTS-0.68%
240,000 Varian Associates, Inc. 11,040,000
- ------------------------------------------------------------------------
</TABLE>
8
<PAGE>
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<C> <S> <C>
SEMICONDUCTORS-5.19%
200,000 Applied Materials, Inc.(a) $ 12,325,000
- -------------------------------------------------------------------
120,000 Atmel Corp.(a) 5,280,000
- -------------------------------------------------------------------
200,000 Intel Corp. 20,475,000
- -------------------------------------------------------------------
100,000 Micron Technology Inc. 8,225,000
- -------------------------------------------------------------------
80,000 Motorola, Inc. 4,550,000
- -------------------------------------------------------------------
320,000 Texas Instruments Inc. 33,920,000
- -------------------------------------------------------------------
84,775,000
- -------------------------------------------------------------------
TELECOMMUNICATIONS-1.68%
160,000 ALC Communications Corp.(a) 6,100,000
- -------------------------------------------------------------------
200,000 DSC Communications Corp.(a) 7,400,000
- -------------------------------------------------------------------
127,000 Northern Telecom Ltd. 4,619,625
- -------------------------------------------------------------------
140,000 Telefonaktiebolaget L.M. Ericsson-ADR 9,388,750
- -------------------------------------------------------------------
27,508,375
- -------------------------------------------------------------------
TELEPHONE-1.57%
92,400 ALLTEL Corp. 2,286,900
- -------------------------------------------------------------------
160,000 Ameritech Corp. 7,200,000
- -------------------------------------------------------------------
80,000 Cincinnati Bell, Inc. 1,920,000
- -------------------------------------------------------------------
160,000 GTE Corp. 5,460,000
- -------------------------------------------------------------------
200,000 Southwestern Bell Corp. 8,825,000
- -------------------------------------------------------------------
25,691,900
- -------------------------------------------------------------------
TOBACCO-3.31%
600,000 Philip Morris Companies Inc. 40,650,000
- -------------------------------------------------------------------
200,000 RJR Nabisco Holdings Corp. 5,475,000
- -------------------------------------------------------------------
280,000 UST Inc. 7,875,000
- -------------------------------------------------------------------
54,000,000
- -------------------------------------------------------------------
Total Common Stocks 1,269,940,675
- -------------------------------------------------------------------
</TABLE>
9
<PAGE>
FINANCIALS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
<C> <S> <C>
CONVERTIBLE CORPORATE BONDS-12.67%
BANKING (FOREIGN)-0.17%
$ 4,000,000 Banco de Galicia y Buenos Aires S.A., Conv. Sub. Notes, 7.00%, 08/01/00 $ 2,800,000
- -------------------------------------------------------------------------------------------------------------
BUSINESS SERVICES-0.27%
4,000,000 Olsten Corp., Conv. Sub. Deb., 4.875%, 05/15/03 4,351,000
- --------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES-1.41%
8,000,000 Automatic Data Processing, Sub. Liquid Yield Option Notes, 5.25%, 02/20/12(b) 3,540,000
- --------------------------------------------------------------------------------------------------------------
3,000,000 Network Equipment Technologies, Conv. Sub. Deb., 7.25%, 05/15/14 2,662,350
- --------------------------------------------------------------------------------------------------------------
15,000,000 Silicon Graphics Inc., Conv. Sub. Deb., 4.15%, 11/02/13(b)(c) 9,395,250
(Acquired 10/26/93-04/22/94; cost $6,747,930)
- --------------------------------------------------------------------------------------------------------------
6,000,000 Sterling Software Inc., Conv. Sub. Deb., 5.75%, 02/01/03 7,502,400
- --------------------------------------------------------------------------------------------------------------
23,100,000
- --------------------------------------------------------------------------------------------------------------
COMPUTER NETWORKING-0.28%
4,000,000 3Com Corp., Conv. Sub. Notes, 10.25%, 11/01/01(c) 4,630,000
(Acquired 11/08/94; cost $4,000,000)
- --------------------------------------------------------------------------------------------------------------
COMPUTER PERIPHERALS-0.69%
8,000,000 EMC Corp., Conv. Sub. Notes, 4.25%, 01/01/01 9,130,000
- --------------------------------------------------------------------------------------------------------------
2,000,000 Quantum Corp., Conv. Sub. Deb., 6.375%, 04/01/02 2,195,000
- --------------------------------------------------------------------------------------------------------------
11,325,000
- --------------------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS/MISCELLANEOUS-0.56%
6,000,000 Technology Resources Industries Berhad, Conv. Deb., 2.75%, 11/28/04(c) 5,940,000
(Acquired 11/17/94; cost $6,000,000)
- --------------------------------------------------------------------------------------------------------------
3,000,000 VLSI Technology, Inc., Conv. Sub. Deb., 7.00%, 05/01/12 3,240,000
- --------------------------------------------------------------------------------------------------------------
9,180,000
- --------------------------------------------------------------------------------------------------------------
ELECTRONIC/PC DISTRIBUTORS-0.35%
4,000,000 Arrow Electronics Inc., Conv. Sub. Deb., 5.75%, 10/15/02 5,730,000
- --------------------------------------------------------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-0.29%
4,000,000 First Financial Management Corp., Sr. Conv. Deb., 5.00%, 12/15/99 4,795,000
- --------------------------------------------------------------------------------------------------------------
FUNERAL SERVICES-0.34%
4,000,000 Service Corp. International, Conv. Sub. Deb., 6.50%, 09/01/01 5,470,000
- --------------------------------------------------------------------------------------------------------------
LEISURE & RECREATION-0.13%
7,250,000 Coleman Worldwide Corp., Sr. Liquid Yield Option Notes, 7.25%, 05/27/13(b) 2,102,500
- --------------------------------------------------------------------------------------------------------------
MACHINERY (MISCELLANEOUS)-0.42%
4,000,000 Thermo Electron Corp., Sr. Conv. Deb., 4.625%, 08/01/97(c) 6,825,800
(Acquired 09/28/94; cost $5,779,440)
- --------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
FINANCIALS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
<C> <S> <C>
MEDICAL (DRUGS)-0.80%
$16,000,000 Elan International Finance, Sub. Liquid Yield Option Notes, 5.75%, 10/16/12(b) $ 6,580,000
- --------------------------------------------------------------------------------------------------------------
2,800,000 ICN Pharmaceuticals Inc., Conv. Sub. Notes, 8.50%, 11/15/99 2,772,000
- --------------------------------------------------------------------------------------------------------------
10,000,000 Roche Holdings, Inc., Liquid Yield Option Notes, 7.00%, 04/20/10(b)(c) 3,750,000
(Acquired 04/12/95; cost $3,562,800)
- --------------------------------------------------------------------------------------------------------------
13,102,000
- --------------------------------------------------------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-1.95%
4,000,000 Healthsouth Rehabilitation Corp., Conv. Sub. Deb., 5.00%, 04/01/01 4,655,800
- --------------------------------------------------------------------------------------------------------------
5,000,000 Integrated Health Services Inc., Conv. Sub. Deb., 6.00%, 01/01/03 5,721,500
- --------------------------------------------------------------------------------------------------------------
5,000,000 Integrated Health Services Inc., Sr. Conv. Sub. Deb., 5.75%, 01/01/01 5,885,250
- --------------------------------------------------------------------------------------------------------------
2,000,000 Multicare Companies, Conv. Sub. Deb., 7.00%, 03/15/03(c) 1,979,900
(Acquired 03/09/95; cost $2,000,000)
- --------------------------------------------------------------------------------------------------------------
4,000,000 Prime Hospitality Corp., Conv. Sub. Notes, 7.00%, 04/15/02 4,105,000
- --------------------------------------------------------------------------------------------------------------
5,000,000 Theratx Inc., Conv. Sub. Notes, 8.00%, 02/01/02(c) 4,525,000
(Acquired 03/09/95-04/26/95; cost $4,930,999)
- --------------------------------------------------------------------------------------------------------------
4,000,000 Vencor, Inc., Conv. Sub. Deb., 6.00%, 10/01/02 4,930,000
- --------------------------------------------------------------------------------------------------------------
31,802,450
- --------------------------------------------------------------------------------------------------------------
OFFICE AUTOMATION-0.34%
5,000,000 Danka Business Systems, Conv. Sub. Deb., 6.75%, 04/01/02(c) 5,562,500
(Acquired 03/06/95; cost $5,000,000)
- --------------------------------------------------------------------------------------------------------------
PUBLISHING-0.25%
4,000,000 Time-Warner Inc., Conv. Sub. Deb., 8.75%, 01/10/15 4,010,000
- --------------------------------------------------------------------------------------------------------------
RETAIL (STORES)-1.12%
6,000,000 Lowes Companies, Inc., Conv. Sub. Notes, 3.00%, 07/22/03 6,945,000
- --------------------------------------------------------------------------------------------------------------
5,000,000 Office Depot Inc., Sub. Liquid Yield Option Notes, 5.00%, 12/11/07(b) 3,475,000
- --------------------------------------------------------------------------------------------------------------
7,500,000 Office Depot Inc., Sub. Liquid Yield Option Notes, 4.00%, 11/01/08(b) 4,171,875
- --------------------------------------------------------------------------------------------------------------
3,000,000 Staples Inc. Corp., Conv. Sub. Deb., 5.00%, 11/01/99 3,645,000
- --------------------------------------------------------------------------------------------------------------
18,236,875
- --------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS-2.11%
3,000,000 Cypress Semiconductors Corp., Conv. Sub. Notes, 6.04%, 03/15/01(b) 3,423,750
- --------------------------------------------------------------------------------------------------------------
2,350,000 LAM Research Corp., Conv. Sub. Deb., 6.00%, 05/01/03 4,838,062
- --------------------------------------------------------------------------------------------------------------
3,000,000 LSI Logic Corp., Conv. Sub. Notes, 5.50%, 03/15/01(c) 8,280,000
(Acquired 03/30/94-04/21/95; cost $4,395,500)
- --------------------------------------------------------------------------------------------------------------
5,000,000 Motorola Inc., Sub. Liquid Yield Option Notes, 6.00%, 09/07/09(b) 5,194,950
- --------------------------------------------------------------------------------------------------------------
10,000,000 Motorola Inc., Sub. Liquid Yield Option Notes, 2.25%, 09/27/13(b) 7,225,000
- --------------------------------------------------------------------------------------------------------------
9,000,000 Solectron Corp., Conv. Liquid Yield Option Notes, 7.00%, 05/02/12(b) 5,535,000
- --------------------------------------------------------------------------------------------------------------
34,496,762
- --------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
FINANCIALS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
<C> <S> <C>
TELECOMMUNICATIONS-0.93%
$10,000,000 General Instrument Corp., Jr. Conv. Sub. Notes, 5.00%, 06/15/00 $ 15,131,300
- --------------------------------------------------------------------------------------------------------------
UTILITIES-0.26%
2,000,000 California Energy Co., Inc., Conv. Sub. Deb., 5.00%, 07/31/00(c) 1,788,100
(Acquired 04/26/95; cost $1,797,500)
- --------------------------------------------------------------------------------------------------------------
2,500,000 Compania Telefonos de Chile, S.A., Conv. Sub. Deb., 4.50%, 01/15/03 2,475,000
- --------------------------------------------------------------------------------------------------------------
4,263,100
- --------------------------------------------------------------------------------------------------------------
Total Convertible Corporate Bonds 206,914,287
- --------------------------------------------------------------------------------------------------------------
SHARES
CONVERTIBLE PREFERRED STOCKS-4.71%
AUTOMOBILE (MANUFACTURERS)-0.94%
60,000 Ford Motor Co.-Series A, $4.20 Conv. Pfd. 5,287,500
- --------------------------------------------------------------------------------------------------------------
160,000 General Motors Corp.-Class C, $3.25 Dep. Conv. Pfd. 10,020,000
- --------------------------------------------------------------------------------------------------------------
15,307,500
- --------------------------------------------------------------------------------------------------------------
BANKING (MONEY CENTER)-0.47%
60,000 Citicorp-$5.375 Dep. Conv. Pfd. 7,649,460
- --------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES-0.57%
120,000 Ceridian Corp.-$2.75 Conv. Pfd. 9,300,000
- --------------------------------------------------------------------------------------------------------------
CONGLOMERATES-0.25%
80,000 Corning Delaware LP-$3.00 Conv. Pfd. 4,120,000
- --------------------------------------------------------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-0.28%
120,000 First USA-$1.9922 Conv. Pfd. 4,635,000
- --------------------------------------------------------------------------------------------------------------
FOOD/PROCESSING-0.17%
80,000 Conagra Inc.-$1.6875 Conv. Pfd. 2,730,000
- --------------------------------------------------------------------------------------------------------------
FUNERAL SERVICES-0.27%
80,000 Service Corp.-$3.125 Conv. Pfd. 4,440,000
- --------------------------------------------------------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY)-0.18%
80,000 Allstate Corp.-$2.2984 Conv. Pfd. 2,890,000
- --------------------------------------------------------------------------------------------------------------
MACHINERY (HEAVY)-0.26%
60,000 AGCO Corp.-$1.625 Conv. Pfd. 4,226,250
- --------------------------------------------------------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-0.28%
80,000 Beverly Enterprises, Inc.-$2.75 Exch. Conv. Pfd. 4,620,000
- ---------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS-0.60%
120,000 National Semiconductors-$3.25 Conv. Pfd. 9,960,000
- --------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
FINANCIALS
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<C> <S> <C>
TELECOMMUNICATIONS-0.44%
60,000 Compania de Inversiones en Telecommunicaciones, S.A.- $5.04 Conv. Pfd.(c) $ 3,015,000
(Acquired 03/23/95-03/27/95; cost $2,860,000)
- --------------------------------------------------------------------------------------------------------------
120,000 LCI International, Inc.-$1.25 Exch. Conv. Pfd. 4,095,000
- --------------------------------------------------------------------------------------------------------------
7,110,000
- --------------------------------------------------------------------------------------------------------------
Total Convertible Preferred Stocks 76,988,210
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
U.S. TREASURY SECURITIES-5.19%
$ 6,500,000 U.S. Treasury Notes, 5.50%, 04/30/96 6,449,690
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 5.875%, 05/31/96 6,467,630
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 6.00%, 06/30/96 6,472,895
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 6.125%, 07/31/96 6,477,380
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 6.25%, 08/31/96 6,481,735
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 6.50%, 09/30/96 6,504,420
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 6.875%, 10/31/96 6,536,465
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 7.25%, 11/30/96 6,570,070
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 7.50%, 12/31/96 6,600,815
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 7.50%, 01/31/97 6,601,010
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 6.875%, 02/28/97 6,534,775
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 6.625%, 03/31/97 6,506,630
- --------------------------------------------------------------------------------------------------------------
6,500,000 U.S. Treasury Notes, 6.50%, 04/30/97 6,490,445
- --------------------------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 84,693,960
- --------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT-0.70%(d)
Goldman, Sachs & Co., 5.92%, 05/01/95(e) 11,458,517
- --------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-101.03% 1,649,995,649
- --------------------------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-(1.03)% (16,877,128)
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS-100.00% $1,633,118,521
==============================================================================================================
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) Zero coupon bond. The interest rate shown represents the rate of the
original issue discount.
(c) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Directors. The
aggregate market value of these securities at April 30, 1995 was
$55,691,550, which represented 3.41% of the net assets.
(d) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102 percent of the sales price of
the repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds managed by
the investment advisor.
(e) Joint repurchase agreement entered into 04/28/95 with a maturing value of
$403,984,662. Collateralized by $400,123,000 U.S. Treasury obligations,
0.00% to 8.875% due 10/12/95 to 02/15/21.
ABBREVIATIONS:
ADR-American Depository Receipt Dep.-Depositary Pfd.-Preferred
Conv.-Convertible Exch.-Exchangeable Sr.-Senior
Deb.-Debentures Jr.-Junior Sub.-Subordinated
See Notes to Financial Statements.
13
<PAGE>
FINANCIALS
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1995
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $1,465,073,617) $ 1,649,995,649
- --------------------------------------------------------------------------
Receivables for:
- --------------------------------------------------------------------------
Investments sold 50,936,604
- --------------------------------------------------------------------------
Capital stock sold 4,325,642
- --------------------------------------------------------------------------
Dividends and interest 5,466,230
- --------------------------------------------------------------------------
Investment for deferred compensation plan 12,966
- --------------------------------------------------------------------------
Other assets 29,913
- --------------------------------------------------------------------------
Total assets 1,710,767,004
- --------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 69,655,424
- --------------------------------------------------------------------------
Capital stock reacquired 6,171,356
- --------------------------------------------------------------------------
Deferred compensation 12,966
- --------------------------------------------------------------------------
Accrued advisory fees 847,609
- --------------------------------------------------------------------------
Accrued administrative service fees 9,483
- --------------------------------------------------------------------------
Accrued distribution fees 542,821
- --------------------------------------------------------------------------
Accrued transfer agent fees 154,792
- --------------------------------------------------------------------------
Accrued operating expenses 254,032
- --------------------------------------------------------------------------
Total liabilities 77,648,483
- --------------------------------------------------------------------------
Net assets applicable to shares outstanding $ 1,633,118,521
==========================================================================
NET ASSETS:
Institutional Class $ 20,603,772
==========================================================================
Retail Class $ 1,612,514,749
==========================================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Institutional Class:
Authorized 200,000,000
- --------------------------------------------------------------------------
Outstanding 2,255,026
==========================================================================
Retail Class:
Authorized 750,000,000
- --------------------------------------------------------------------------
Outstanding 176,954,857
==========================================================================
INSTITUTIONAL CLASS:
Net asset value, offering and redemption price per share $9.14
==========================================================================
RETAIL CLASS:
Net asset value and redemption price per share $9.11
==========================================================================
Offering price per share:
(Net asset value of $9.11 divided by 94.50%) $9.64
==========================================================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
FINANCIALS
STATEMENT OF OPERATIONS
For the six months ended April 30, 1995
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 15,464,279
- -----------------------------------------------------------------------------------------------------------
Interest 8,051,797
- -----------------------------------------------------------------------------------------------------------
Total investment income 23,516,076
- -----------------------------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 4,898,753
- -----------------------------------------------------------------------------------------------------------
Administrative service fees 52,749
- -----------------------------------------------------------------------------------------------------------
Directors' fees 7,311
- -----------------------------------------------------------------------------------------------------------
Distribution fees 2,259,068
- -----------------------------------------------------------------------------------------------------------
Transfer agent fees 1,228,818
- -----------------------------------------------------------------------------------------------------------
Other 404,438
- -----------------------------------------------------------------------------------------------------------
Total expenses 8,851,137
- -----------------------------------------------------------------------------------------------------------
Net investment income 14,664,939
- -----------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES AND FUTURES CONTRACTS:
Net realized gain (loss) on sales of:
Investment securities 4,573,884
- -----------------------------------------------------------------------------------------------------------
Futures contracts (2,153,330)
- -----------------------------------------------------------------------------------------------------------
2,420,554
- -----------------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 101,579,650
- -----------------------------------------------------------------------------------------------------------
Net gain on investment securities and futures contracts 104,000,204
- -----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $118,665,143
===========================================================================================================
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
FINANCIALS
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 1995 and the year ended October 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1995 1994
<S> <C> <C>
OPERATIONS:
Net investment income $ 14,664,939 $ 37,921,889
- ------------------------------------------------------------------------------
Net realized gain on sales of investment
securities and futures contracts 2,420,554 56,414,638
- ------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of
investment securities and futures
contracts 101,579,650 (136,629,171)
- ------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 118,665,143 (42,292,644)
- ------------------------------------------------------------------------------
Dividends to shareholders from net investment
income (21,297,511) (29,198,024)
- ------------------------------------------------------------------------------
Distributions to shareholders from net
realized gains on investments (57,304,395) (28,498,470)
- ------------------------------------------------------------------------------
Net equalization credits (charges) (347,124) (146,699)
- ------------------------------------------------------------------------------
Share transactions-net:
- ------------------------------------------------------------------------------
Institutional Class (1,649,676) (1,032,133)
- ------------------------------------------------------------------------------
Retail Class (5,861,704) (12,596,188)
- ------------------------------------------------------------------------------
Net increase (decrease) in net assets 32,204,733 (113,764,158)
- ------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,600,913,788 1,714,677,946
- ------------------------------------------------------------------------------
End of period $1,633,118,521 $1,600,913,788
==============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $1,446,098,975 $1,453,610,355
- ------------------------------------------------------------------------------
Undistributed net investment income 1,597,470 8,577,166
- ------------------------------------------------------------------------------
Undistributed net realized gain on sales of
investment securities and futures
contracts 500,044 55,383,885
- ------------------------------------------------------------------------------
Unrealized appreciation of investment
securities and futures contracts 184,922,032 83,342,382
- ------------------------------------------------------------------------------
$1,633,118,521 $1,600,913,788
==============================================================================
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
FINANCIALS
NOTES TO FINANCIAL STATEMENTS
April 30, 1995
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Charter Fund (the "Fund") is a series portfolio of AIM Equity Funds, Inc.
(the "Company"). The Company is a Maryland corporation registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of four diversified portfolios:
AIM Charter Fund, AIM Weingarten Fund, AIM Constellation Fund and AIM
Aggressive Growth Fund. The Fund, AIM Weingarten Fund and AIM Constellation
Fund currently offer two different classes of shares: the Retail Class and the
Institutional Class. AIM Aggressive Growth Fund currently offers only one class
of shares. Matters affecting each portfolio or class will be voted on
exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
A. Security Valuations - A security listed or traded on an exchange is valued
at its last sales price on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the mean between the closing bid and asked prices on that day. Each security
traded in the over-the-counter market (but not including securities reported
on the NASDAQ National Market System) is valued at the mean between the last
bid and asked prices based upon quotes furnished by market makers for such
securities. Each security reported on the NASDAQ National Market System is
valued at the last sales price on the valuation date. Debt obligations that
are issued or guaranteed by the U.S. Treasury are valued on the basis of
prices provided by an independent pricing service. Prices provided by the
pricing service may be determined without exclusive reliance on quoted
prices, and may reflect appropriate factors such as yield, type of issue,
coupon rate and maturity date. Securities for which market prices are not
provided by the pricing service are valued at the mean between last bid and
asked prices based upon quotes furnished by independent sources. Securities
for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the supervision of the
Company's officers in a manner specifically authorized by the Board of
Directors of the Company. Short-term obligations having 60 days or less to
maturity are valued at amortized cost which approximates market value.
B. Securities Transactions, Investment Income and Distributions - 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 as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
C. Federal Income Taxes - The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
D. Expenses - Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to both
classes, e.g. advisory fees, are allocated between them.
E. Equalization - The Fund follows the accounting practice known as
equalization by which a portion of the proceeds from sales and costs of
repurchases of Fund shares, equivalent on a per share basis to the amount of
undistributed net investment income, is credited or charged to undistributed
net income when the transaction is recorded so that the undistributed net
investment income per share is unaffected by sales or redemptions of Fund
shares.
F. Foreign Currency Translations - Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions.
G. Foreign Currency Contracts - A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a forward contract for the purchase or sale of
a security denominated in a foreign currency in order to "lock in" the U.S.
dollar price of that security. The Fund could be exposed to risk if
counterparties to the contracts are unable to meet the terms of their
contracts.
17
<PAGE>
FINANCIALS
H. Stock Index Futures Contracts - The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities as collateral for the account of
the broker (the Fund's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the contracts
are recognized as unrealized gains or losses by "marking to market" on a
daily basis to reflect the market value of the contracts at the end of each
day's trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contracts are
closed, 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. Risks include the possibility of an illiquid
market and the change in the value of the contracts may not correlate with
changes in the value of the securities being hedged.
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 1.0% of
the first $30 million of the Fund's average daily net assets, plus 0.75% of the
Fund's average daily net assets in excess of $30 million to and including $150
million, plus 0.625% of the Fund's average daily net assets in excess of $150
million. AIM has agreed to voluntarily waive a portion of its advisory fees
paid by the Fund to AIM to the extent necessary to reduce the fees paid by the
Fund at net asset levels higher than those currently incorporated in the
present advisory fee schedule. AIM will receive a fee calculated at the annual
rate of 1.0% of the first $30 million of the Fund's average daily net assets,
plus 0.75% of the Fund's average daily net assets in excess of $30 million to
and including $150 million, plus 0.625% of the Fund's average daily net assets
in excess of $150 million to and including $2 billion, plus 0.60% of the Fund's
average daily net assets in excess of $2 billion. Under the terms of a master
sub-advisory agreement between AIM and A I M Capital Management, Inc. ("AIM
Capital"), AIM pays AIM Capital 50% of the amount paid by the Fund to AIM.
These agreements require AIM to reduce its fees or, if necessary, make payments
to the Fund to the extent required to satisfy any expense limitations imposed
by the securities laws or regulations thereunder of any state in which the
Fund's shares are qualified for sale.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting and shareholder services to the Fund. During the six months ended
April 30, 1995, AIM was reimbursed $52,749 for such services.
The Fund, pursuant to a transfer agency and services agreement, has agreed to
reimburse A I M Fund Services, Inc. ("AFS") for certain costs incurred in
providing transfer agency services to the Retail Class. During the six months
ended April 30, 1995, AFS was reimbursed $543,601 for such services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Retail Class and a master distribution agreement with Fund Management Company
("FMC") to serve as the distributor for the Institutional Class. The Company
has adopted a Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan") with
respect to the Retail Class. The Fund, pursuant to the Plan, will pay AIM
Distributors an annual rate of 0.30% of the average daily net assets
attributable to the Retail Class. The Plan is designed to compensate AIM
Distributors for certain promotional and other sales related costs and to
implement a program which provides periodic payments to selected dealers and
financial institutions, in amounts of up to 0.25% of the average net assets of
the Retail Class attributable to the customers of such dealers or financial
institutions, who furnish continuing personal shareholder services to their
customers who purchase and own Shares of the Retail Class. Any amounts not paid
as a service fee under the Plan would constitute an asset-based sales charge.
The Plan also imposes a cap on the total amount of sales charges, including
asset-based sales charges, that may be paid by the Company with respect to the
Fund's Retail Class. During the six months ended April 30, 1995, the Retail
Class paid AIM Distributors $2,259,068 as compensation under the Plan.
AIM Distributors received commissions of $407,495 from sales of shares of the
Retail Class' capital stock during the six months ended April 30, 1995. Such
commissions are not an expense of the Fund. They are deducted from, and are not
included in, the proceeds from sales of capital stock. Certain officers and
directors of the Company are officers and directors of AIM, AIM Capital, AIM
Distributors, AFS and FMC.
During the six months ended April 30, 1995, the Fund paid legal fees of $2,153
for services rendered by Kramer, Levin, Naftalis, Nessen, Kamin & Frankel as
counsel to the Company's directors. A member of that firm is a director of the
Company.
18
<PAGE>
FINANCIALS
NOTE 3 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of the Company. The Company may invest directors'
fees, if so elected by a director, in mutual fund shares in accordance with a
deferred compensation plan.
NOTE 4 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold by the Fund during the six months ended April
30, 1995 was $1,210,515,129 and $1,164,478,327, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of April 30, 1995, on a tax basis, is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $204,383,395
- ---------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (19,475,152)
- ---------------------------------------------------------------------------
Net unrealized appreciation of investment securities $184,908,243
===========================================================================
</TABLE>
Cost of investments for tax purposes is $1,465,087,406.
NOTE 5 - CAPITAL STOCK
Changes in the Retail Class capital stock outstanding for the six months ended
April 30, 1995 and the year ended October 31, 1994 were as follows:
<TABLE>
<CAPTION>
APRIL 30, 1995 OCTOBER 31 1994
------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Sold 16,669,615 $142,695,559 40,711,895 $ 363,174,892
- ---------------------------------------------------------------------------------------------
Issued as reinvestment of dividends 8,969,059 72,595,828 4,862,946 43,539,217
- ------------------------------------------------------------------------------
Reacquired (26,037,138) (221,153,091) (46,996,269) (419,310,297)
- ---------------------------------------------------------------------------------------------
(398,464) $ (5,861,704) (1,421,428) $ (12,596,188)
=============================================================================================
</TABLE>
19
<PAGE>
FINANCIALS
NOTE 6 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share outstanding
during the six months ended April 30, 1995 and each of the years in the nine-
year period ended October 31, 1994.
<TABLE>
<CAPTION>
APRIL 30,
----------
1995
----------
<S> <C>
Net asset value,
beginning of period $ 8.90
- ----------------------- ----------
Income from investment
operations:
Net investment income 0.08
- ----------------------- ----------
Net gains (losses) on
securities (both
realized
and unrealized) 0.58
- ----------------------- ----------
Total from investment
operations 0.66
- ----------------------- ----------
Less distributions:
Dividends from net
investment income (0.12)
- ----------------------- ----------
Distributions from
capital gains (0.33)
- ----------------------- ----------
Total distributions (0.45)
- ----------------------- ----------
Net asset value, end of
period $ 9.11
======================= ==========
Total return(b) 8.01%(c)
======================= ==========
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $1,612,515
======================= ==========
Ratio of expenses to
average net assets 1.17%(d)
======================= ==========
Ratio of net investment
income to average net
assets 1.91%(d)
======================= ==========
Portfolio turnover rate 77%
======================= ==========
<CAPTION>
OCTOBER 31,
--------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986(a)
------------ ----------- ----------- --------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 9.46 $ 8.36 $ 8.42 $ 6.55 $ 6.97 $ 5.40 $ 6.61 $ 8.18 $ 6.83
- ------------------------ ------------ ----------- ----------- --------- --------- -------- -------- -------- --------
Income from investment
operations:
Net investment income 0.21 0.17 0.18 0.18 0.18 0.21 0.15 0.09 0.16
- ------------------------ ------------ ----------- ----------- --------- --------- -------- -------- -------- --------
Net gains (losses) on
securities (both
realized
and unrealized) (0.45) 1.22 0.16 2.15 0.08 1.55 0.16 0.35 1.87
- ------------------------ ------------ ----------- ----------- --------- --------- -------- -------- -------- --------
Total from investment
operations (0.24) 1.39 0.34 2.33 0.26 1.76 0.31 0.44 2.03
- ------------------------ ------------ ----------- ----------- --------- --------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income (0.16) (0.29) (0.17) (0.15) (0.26) (0.19) (0.12) (0.14) (0.17)
- ------------------------ ------------ ----------- ----------- --------- --------- -------- -------- -------- --------
Distributions from
capital gains (0.16) -- (0.23) (0.31) (0.42) -- (1.40) (1.87) (0.51)
- ------------------------ ------------ ----------- ----------- --------- --------- -------- -------- -------- --------
Total distributions (0.32) (0.29) (0.40) (0.46) (0.68) (0.19) (1.52) (2.01) (0.68)
- ------------------------ ------------ ----------- ----------- --------- --------- -------- -------- -------- --------
Net asset value, end of
period $ 8.90 $ 9.46 $ 8.36 $ 8.42 $ 6.55 $ 6.97 $ 5.40 $ 6.61 $ 8.18
======================== =========== =========== =========== ========= ========= ======== ======== ======== ========
Total return(b) (2.55)% 16.92% 4.17% 37.65% 3.86% 33.68% 5.90% 6.72% 31.59%
======================== ============ =========== =========== ========= ========= ======== ======== ======== ========
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $1,579,074 $1,690,482 $1,256,151 $443,546 $102,499 $70,997 $65,799 $82,756 $81,985
======================== ============ =========== =========== ========= ========= ======== ======== ======== ========
Ratio of expenses to
average net assets 1.17% 1.17% 1.17% 1.29% 1.35% 1.35% 1.46% 1.15% 1.21%
======================== ============ =========== =========== ========= ========= ======== ======== ======== ========
Ratio of net investment
income to average net
assets 2.32% 1.89% 2.14% 2.14% 2.51% 3.73% 2.83% 1.57% 1.91%
======================== ============ =========== =========== ========= ========= ======== ======== ======== ========
Portfolio turnover rate 126% 144% 95% 144% 215% 131% 247% 225% 75%
======================== ============ =========== =========== ========= ========= ======== ======== ======== ========
</TABLE>
(a) The Fund changed investment advisers on May 2, 1986.
(b) Does not deduct sales charges.
(c) Total return is not annualized.
(d) Ratios are annualized and based on average net assets of $1,518,526,465.
20
<PAGE>
DIRECTORS & OFFICERS
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman and Chief Executive Officer Chairman Suite 1919
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham (800) 347-1919
Bruce L. Crockett President
President and Chief Executive Officer INVESTMENT ADVISER
COMSAT Corporation John J. Arthur
Senior Vice President and Treasurer A I M Advisors, Inc.
Owen Daly II 11 Greenway Plaza
Director Gary T. Crum Suite 1919
Cortland Trust Inc. Senior Vice President Houston, TX 77046
Carl Frischling Jonathan C. Schoolar TRANSFER AGENT
Partner Senior Vice President
Kramer, Levin, Naftalis, Nessen, A I M Fund Services, Inc.
Kamin & Frankel Carol F. Relihan P.O. Box 4739
Vice President and Secretary Houston, TX 77210-4739
Robert H. Graham
President Melville B. Cox CUSTODIAN
A I M Management Group Inc. Vice President
State Street Bank and Trust
John F. Kroeger Dana R. Sutton Company
Formerly, Consultant Vice President 225 Franklin Street
Wendell & Stockel Associates, Inc. and Assistant Treasurer Boston, MA 02110
Lewis F. Pennock P. Michelle Grace COUNSEL TO THE FUND
Attorney Assistant Secretary
Ballard Spahr
Ian W. Robinson Nancy L. Martin Andrews & Ingersoll
Consultant; Former Executive Assistant Secretary 1735 Market Street, 51st Floor
Vice President and Philadelphia, PA 19103
Chief Financial Officer Ofelia M. Mayo
Bell Atlantic Management Assistant Secretary COUNSEL TO THE DIRECTORS
Services, Inc.
Kathleen J. Pflueger Kramer, Levin, Naftalis,
Louis S. Sklar Assistant Secretary Nessen, Kamin & Frankel
Executive Vice President 919 Third Avenue
Hines Interests Samuel D. Sirko New York, NY 10022
Limited Partnership Assistant Secretary
DISTRIBUTOR
Stephen I. Winer
Assistant Secretary A I M Distributors, Inc.
11 Greenway Plaza
Mary J. Benson Suite 1919
Assistant Treasurer Houston, TX 77046
</TABLE>
This report may be distributed only to current shareholders or to persons who
have received a current prospectus of the Fund.
21
<PAGE>
[LOGO OF AIM APPEARS HERE] A I M Distributors, Inc. BULK RATE
11 Greenway Plaza, Suite 1919 U.S. POSTAGE
Houston, Texas 77046 PAID
Houston, TX
Permit No.2332
THE AIM FAMILY OF FUNDS(R)
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Constellation Fund
AIM Global Aggressive Growth Fund
GROWTH
AIM Global Growth Fund
AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME
AIM Balanced Fund
AIM Charter Fund
INCOME AND GROWTH
AIM Global Utilities Fund
HIGH CURRENT INCOME
AIM High Yield Fund
CURRENT INCOME [FULL PAGE PHOTO OF AIM MANAGEMENT
AIM Global Income Fund GROUP OFFICE BUILDING]
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Conn.
AIM Tax-Free Intermediate Shares
CURRENT INCOME AND HIGH DEGREE OF SAFETY
AIM Government Securities Fund
HIGH DEGREE OF SAFETY AND CURRENT INCOME
AIM Limited Maturity Treasury Shares
STABILITY, LIQUIDITY, AND CURRENT INCOME
AIM Money Market Fund
STABILITY, LIQUIDITY, AND CURRENT TAX-FREE INCOME
AIM Tax-Exempt Cash Fund
* AIM Aggressive Growth Fund was closed to new investors on May 2, 1994. For
more complete information about any AIM Fund, including sales charges and
expenses, ask your investment broker or securities dealer for a free
prospectus(es). Please read the prospectus(es) carefully before you invest or
send money.
