<PAGE>
[AIM LOGO APPEARS HERE]
[COLLAGE APPEARS HERE]
AIM AGGRESSIVE GROWTH FUND
ANNUAL REPORT
OCTOBER 31, 1995
<PAGE>
AIM AGGRESSIVE GROWTH FUND
For shareholders who seek long-term growth of capital by investing in a
portfolio consisting primarily of small-company stocks which management believes
will have earnings growth well in excess of the general economy.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
* AIM Aggressive Growth Fund's performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value. Unless
otherwise indicated, the Fund's performance is computed without a sales
charge. When sales charges are included, Fund performance reflects the
maximum 5.50% sales charge.
* The Fund's 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.
* The Fund's portfolio composition may change and there is no assurance the
Fund will continue to hold any particular securities.
* Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
* Standard & Poor's Corporation (S&P) is a credit-rating agency. The unmanaged
Standard & Poor's Composite Index of 500 Stocks is widely regarded by
investors as representative of the stock market in general. The Dow Jones
Industrial Average (DJIA) is an unmanaged composite of the performance of 30
large-company stocks.
* Lipper Analytical Services, Inc., is an independent mutual fund performance
monitor. The unmanaged Lipper Small Company Growth Fund Index represents an
average of the performance of the 30 largest small-capitalization growth
funds.
* The unmanaged Russell 2000 Index and the NASDAQ (National Association of
Securities Dealers Automated Quotation System) Composite Index both are
generally representative of the performance of the stocks of small-
capitalization companies.
* An investment cannot be made in any indexes listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE>
A Message from
the Chairman
Dear Fellow Shareholder:
It was an exemplary year for AIM Aggressive Growth Fund. We
[PHOTO OF are pleased to report the Fund logged a total return of
CHARLES T. BAUER 41.45% for the year ended October 31, 1995, enough to
CHAIRMAN OF THE outperform all major benchmark indexes as well as results
BOARD OF THE charted for similar funds. For its efforts, the Fund's
FUND APPEARS performance was widely recognized in such popular
HERE] publications as The Wall Street Journal, Investor's
Business Daily, Barron's, and Kiplingers' Personal Finance.
For the record, key indexes posted the following one-year
total returns for the reporting period: the DJIA and the S&P 500, two broad
market averages, 24.92% and 26.36%, respectively; the NASDAQ Composite and the
Russell 2000, two measures of small company stock performance, 33.26% and
18.35%, respectively. Similar small-company stock funds, as measured by the
Lipper Small Company Growth Fund Index, posted a one-year total return of
23.58%.
The Fund managed its strong showing in a market that, for much of 1995,
favored large-capitalization companies over the small-capitalization companies
in which the Fund invests. The key to the Fund's performance was disciplined
stock selection and a diversified portfolio of approximately 300 stocks. A more
complete discussion of market conditions during the reporting period and the
Fund's investment strategy is provided on page 2 of this report.
Net assets in the Fund increased dramatically during the year to $2.246
billion as of October 31, 1995. While the Fund's favorable market performance
was largely responsible, we also appreciate the continued participation from our
shareholders, particularly in July, when the Fund was briefly reopened to new
investors.
Although it has been a good year for AIM Aggressive Growth Fund, it is but one
year. We are reminded that market cycles come and go, and such performance as we
have enjoyed the past 12 months is unlikely to continue uninterrupted. Chicago-
based Ibbotson Associates has reported that returns of small company stocks have
averaged 12.6% per year since January 1926.
Therefore, even as we relish the success of a good year, we are already
looking ahead to next year. AIM's disciplined, earnings-driven strategy is an
ongoing evaluation of market opportunity, and as the market continues to climb,
our job becomes more challenging.
On a personal level, the year to come has important investment implications
for all of us. Clouds on the horizon in the form of the budget debate over
retirement benefits such as Medicare and Social Security programs accentuate the
need to build your own retirement nest egg, independent of any benefits which
may--or may not--be available to you when the time comes. For many in the baby
boomer generation, that's just 10 years away.
It is our hope that you continue to rely on AIM Aggressive Growth Fund to help
build your financial future. As always, we are ready to respond to your
questions or comments about this report. Please call Client Services at 800-959-
4246 during normal business hours. For automated account information 24 hours a
day, call the AIM Investor Line toll-free at 800-246-5463.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE>
Management's
Discussion & Analysis
TECHNOLOGY STOCKS PROPEL MARKETS
TO RECORD LEVELS
---------
Expanding market
penetration and
product innovations
propelled many
technology stocks
in which
AIM Aggressive
Growth Fund invests
to unprecedented
levels.
---------
Healthy corporate profits exceeded analysts expectations and propelled stocks
through record highs in 1995. The strength was broad-based, resuscitating large-
capitalization stocks which had been out of favor for three years. The popular
DJIA sailed past 4000 on February 23, 1995, and then topped 5000 on November 21.
Spearheaded by the powerful technology stock advance, the broader NASDAQ
overtook its large-cap cousins in June to finish the reporting period well ahead
of the pack.
The stars of the technology group were inarguably the semiconductor stocks. As
of June 30, 1995, semiconductor stocks were up an astonishing 94% in just six
months, according to Barron's. Other technology sectors were also strong, such
as aerospace and defense, software, and industrial technology companies. Also
strong were such beneficiaries of stable interest rates as banks and thrifts,
and consumer cyclical stocks in airlines, leisure and recreation companies, and
restaurants.
In September and October, the market took a well-deserved respite as concern
surfaced that third-quarter 1995 earnings reports, particularly in the
technology group, would fall below expectations. Some earnings disappointments
in some big names such as Intel, Microsoft, Nokia, and International Business
Machines initiated profit-taking which temporarily suspended the market's
advance. Of the companies reporting earnings in the third quarter of 1995,
I/B/E/S International Inc. reported in The Wall Street Journal that 55% were
higher than analysts expectations, with 14% on target, and 31% below
expectations. These results compared favorably with second quarter reports, of
which 57% exceeded expectations and 30% were below target.
With investor confidence renewed, at least for the near term, the market
gathered strength for its next advance. Focus turned from corporate earnings to
the growing gridlock in Congress over the proposals to balance the burgeoning
budget. The Federal Reserve Board declined to implement its much-anticipated
interest rate cut pending some positive resolution to the budget debate.
YOUR INVESTMENT PORTFOLIO
A glance at the Fund's top 10 holdings confirms a successful theme for AIM
Aggressive Growth Fund during the reporting period. Technology companies, which
comprise roughly 45% of the Fund's holdings, continue to offer outstanding
value. Look again, and you can identify the watchword for this dynamic
group--change. Eight of the top 10 holdings were new to the portfolio during the
last 12 months. Still, the criteria remains the same: the Fund looks for
companies demonstrating strong earnings momentum in high-growth industries. Of
course, the Fund's portfolio composition may change and there is no assurance
the Fund will continue to hold any particular security.
Expanding market penetration and product innovations propelled many technology
stocks to unprecedented levels. Semiconductor chip maker Oak Technologies
reported a fourfold increase in net
- --------------------------------------------------------------------------------
MORNINGSTAR RATINGS* (as of 10/31/95)
<TABLE>
<CAPTION>
FUNDS IN
PERIOD RATING EQUITY CATEGORIES
- ------ ------ -----------------
<S> <C> <C>
Overall ***** N/A
10 Years **** 487
5 Years ***** 931
3 Years ***** 1,300
</TABLE>
- --------------------------------------------------------------------------------
LIPPER RANKINGS** (as of 10/31/95)
<TABLE>
<CAPTION>
AIM AGGRESSIVE ALL
PERIOD GROWTH FUND MUTUAL FUNDS TOP%
------ ----------- ------------ ----
<S> <C> <C> <C>
10 Years 29 1,189 3%
5 Years 4 2,727 1
3 Years 9 3,921 1
1 Year 58 7,234 1
</TABLE>
*Morningstar's rating system of one (lowest) to five (highest) stars is based on
risk and return ratios for three-, five-, and 10-year periods and considers all
loads and fees. Ratings compare funds of similar investment objectives and
represent past performance. **Fund total return performance rankings are vs. all
mutual funds tracked by Lipper, excluding all sales charges, and including fees
and expenses. Of course, past performance cannot guarantee comparable future
results.
See important Fund disclosure on inside front cover.
2
<PAGE>
- --------------------------------------------------------------------------------
TOP 10 EQUITY HOLDINGS
(as of 10/31/95)
1. OAK TECHNOLOGY, INC.
2. COMPUTERVISION CORP.
3. MEDAPHIS CORP.
4. FORE SYSTEMS, INC.
5. PAIRGAIN TECHNOLOGIES, INC.
6. NETWORK GENERAL CORP.
7. MEDIC COMPUTER SYSTEMS, INC.
8. ALANTEC CORP.
9. US ROBOTICS CORP.
10. HEALTHSOUTH CORP.
- --------------------------------------------------------------------------------
income in one year. Net income for Computer-vision Corporation, a design
automation software producer, was up 287% in its latest year. FORE Systems,
Inc., the worldwide leader in local area network products, announced a number of
strategic alliances with such industry leaders as Premisys and Sprint.
Technologies Inc. enjoyed a 94% increase in revenue on sales of its innovative
CopperOptics(TM) digital signal processing systems to enhance telecommunications
transmissions.
The Fund did not invest exclusively in technology companies, an advantage
which improved the Fund's resilience to market pressures when the sector was
periodically subject to profit-taking. The Fund's earnings-driven strategy
uncovered value in two other key areas: health care (about 18% of the portfolio)
and consumer cyclicals (about 14%).
The continuing profit drivers for the health-care sector are three: an aging
baby-boomer population, improving cost containment, and anticipation of
universal coverage for all. The Fund chose to address these themes by
emphasizing those companies most likely to benefit. Nursing homes will service
an increasing number of patients over time; medical instruments and devices
companies help improve overall efficiencies for care-givers. Health maintenance
organizations, hospitals, and medical services distributors are beginning to
reap benefits from ongoing cost-containment campaigns.
A new focus in the Fund during the reporting period was specialty retailers.
The Fund was attracted to two interesting trends: independent "superstores"
which have attracted significant business away from community malls, and the
emerging niche retailers which target mail order customers by offering
attractive pricing, better selection, superior distribution systems, and the
convenience of catalogue shopping. Of the superstores, the Fund selected a
number of promising candidates such as Bed Bath & Beyond, Petco Animal Supplies,
and The Sports Authority. Similarly, the Fund added mail order retailers Micro
Warehouse and Corporate Express, Inc., which stand ready to deliver computers,
software, and office supplies. The Fund was also interested in medical supply
mail order vendors Cardinal Health Inc. and Omnicare Inc.
OUTLOOK FOR THE FUTURE
At this writing, the market has surpassed the Dow 5100 level. Yet many analysts
maintain that this aging bull market--the Dow has gone a record 61 months
without experiencing a 10% correction--may have plenty of steam left. Barron's
recently reported analysts' estimates which projected the Dow well past 5500
during the coming year.
Of course, a significant complement of market strategists also believe a
correction is due.
Rather than make any projections of future market performance, AIM remains
committed to its disciplined investment strategy which helps us determine, on a
company-by-company basis, which stocks to own and which to sell--without the
guesswork of market timing. Our time-tested, earnings-driven strategy has been
largely responsible for the attractive performance of AIM Aggressive Growth Fund
in the years that AIM has successfully managed the Fund.
THE TECHNOLOGY CYCLE: A SELF-PROPELLED ENGINE
The dynamic technology sector is broad and complex--and fast-paced. The daily
challenge for an investment manager is to identify those companies with
accelerating rates of growth, as well as companies that have lost earnings
momentum.
However, AIM has identified a continuing theme in technology companies which
should drive profits in this sector well into the next decade. We see it as a
self-propelled engine which shows no signs of slowing:
1) NEW TECHNOLOGIES INCREASE PRODUCTIVITY, which
2) INCREASES CORPORATE PROFITS, attracting
3) INCREASED COMPETITION, which
4) DRIVES DOWN PRICES, resulting in
5) HIGHER DEMAND AND INCREASED APPLI-
CATION TO MORE END MARKETS, thus
encouraging the
6) DEVELOPMENT OF NEW TECHNOLOGIES.
And so, the cycle continues.
See important Fund disclosure on inside front cover.
3
<PAGE>
Long-Term
Performance
GROWTH OF A $10,000 INVESTMENT
AVERAGE ANNUAL TOTAL RETURNS
For periods ended October 31, 1995
10 Years 18.04%
5 Years 37.51
1 Year 33.68
<TABLE>
<CAPTION>
AIM AGGRESSIVE RUSSELL 2000 LIPPER SMALL COMPANY
DATE GROWTH FUND STOCK INDEX GROWTH FUND INDEX
- ---- -------------- ------------ --------------------
<S> <C> <C> <C>
10/85 $ 9,453 $10,000 $10,000
10/86 11,036 12,221 11,936
10/87 8,885 10,547 10,788
10/88 10,708 13,420 13,248
10/89 12,636 15,514 16,007
10/90 10,096 11,282 12,436
10/91 18,876 17,897 19,407
10/92 20,688 19,596 20,766
10/93 31,219 25,948 26,891
10/94 37,140 25,856 27,453
10/95 52,535 30,601 33,927
Past performance cannot guarantee comparable future results.
</TABLE>
AIM Aggressive Growth Fund's performance figures are historical and reflect
reinvestment of all distributions, changes in net asset value, and the maximum
5.50% sales charge. The Fund's 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 Small Company Growth Fund Index represents an
average of the performance of the 30 largest small-capitalization growth funds.
The unmanaged Russell 2000 Index is generally representative of the performance
of the stocks of small-capitalization companies.
An investment cannot be made in any indexes listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect sales
charges.
4
<PAGE>
For
Consideration
TECHNOLOGY-LOOK HOW FAR WE HAVE COME
* Since 1983, the U.S. work force has added 25 million computers.
* Cellular phone subscribers have jumped to 16 million from none in 1983.
* Some 19 million people carry pagers.
* Almost 12 billion messages were left in voice mailboxes in 1993 alone.
* E-mail addresses have increased by more than 26 million since 1987.
* Homes and offices have added 10 million fax machines since 1987.
* The year 1991 marked the first time companies spent more on computing and
communications gear than the combined money spent on industrial, farm, and
construction.
We often discuss the future of computer technology and how it may change our
lives. But can we really guess? Consider how far we have come since ENIAC,
commonly thought of as the first computer, was built in 1944.
The size of an 18-wheeler, ENIAC weighed 25 tons, consumed 140,000 watts of
electricity, and executed 5,000 basic arithmetic operations per second.
By comparison, today's 486 microprocessor is the size of a dime, weighs less
than a packet of Sweet 'N Low, and uses less than 2 watts of electricity--yet it
can execute up to 54 million instructions per second.
Faster, smaller, and cheaper are the themes which have driven computer
advancements during the past 50 years.
A greeting card that plays "Happy Birthday" contains more computing power than
any computer which existed prior to 1950.
Randall Tobias, former Vice Chairman of AT&T, estimates "computer power is
8,000 times cheaper than it was 30 years ago. If we had similar progress in
automotive technology today, you could buy a Lexus for about $2. It would travel
at the speed of sound and go about 600 miles on a thimble of gas."
Probably the most profound growth of computer technology has been in the
workplace. Ideas that were unheard of just decades ago have become commonplace.
Most of these advances have been achieved to help us handle the tremendous
volume of data produced today.
It is estimated that more information has been produced in the last 30 years
than in the prior 5,000.
A weekday edition of The New York Times contains more information than the
average person was likely to come across in a lifetime during 17th century
England.
As the demand grows for even more complex technology, no one knows what our
workplace will be like in 10 years. We can only imagine what rich opportunities
will open to us as beneficiaries of the extraordinary ongoing legacy of computer
technology.
Source: The Employee Handbook of New Work Habits For A Radically Changing World.
Published in 1993 by Price Pritchett, Pritchett & Associates, Inc. Dallas, TX.
5
<PAGE>
Financials
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
COMMON STOCKS - 87.67%
ADVERTISING/BROADCASTING - 0.55%
50,000 Clear Channel Communications, Inc.(a) $ 4,100,000
- -----------------------------------------------------------------------
150,000 Heritage Media Corp.-Class A(A) 4,162,500
- -----------------------------------------------------------------------
100,000 Meredith Corp. 3,575,000
- -----------------------------------------------------------------------
21,300 Sinclair Broadcast Group, Inc.-Class A(a) 441,975
- -----------------------------------------------------------------------
12,279,475
- -----------------------------------------------------------------------
AUTOMOBILE/TRUCKS PARTS & TIRES - 0.44%
150,000 Borg-Warner Automotive, Inc. 4,425,000
- -----------------------------------------------------------------------
300,000 Thompson PBE, Inc.(a) 5,475,000
- -----------------------------------------------------------------------
9,900,000
- -----------------------------------------------------------------------
BEVERAGES - 0.42%
195,000 Canandaigua Wine Co., Inc.-Class A(a) 9,360,000
- -----------------------------------------------------------------------
BUILDING MATERIALS - 0.10%
70,000 Danaher Corp. 2,170,000
- -----------------------------------------------------------------------
BUSINESS SERVICES - 0.79%
195,000 Alternative Resources Corp.(a) 6,045,000
- -----------------------------------------------------------------------
167,700 Brandon Systems Corp. 3,018,600
- -----------------------------------------------------------------------
159,500 Healthcare COMPARE Corp.(a) 5,901,500
- -----------------------------------------------------------------------
200,000 Sterling Healthcare Group(a) 2,750,000
- -----------------------------------------------------------------------
17,715,100
- -----------------------------------------------------------------------
CHEMICALS - 0.12%
175,000 Applied Extrusion Technologies, Inc.(a) 2,690,625
- -----------------------------------------------------------------------
CHEMICALS (SPECIALTY) - 0.58%
355,500 Airgas Inc.(a) 9,465,188
- -----------------------------------------------------------------------
150,000 Mississippi Chemical Corp. 3,618,750
- -----------------------------------------------------------------------
13,083,938
- -----------------------------------------------------------------------
COMPUTER MINI/PCS - 0.28%
400,000 Rational Software Corp.(a) 6,250,000
- -----------------------------------------------------------------------
</TABLE>
6
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
COMPUTER NETWORKING - 4.93%
400,000 ALANTEC Corp.(a) $ 14,300,000
- ---------------------------------------------------------------------
160,000 Ascend Communications, Inc.(a) 10,400,000
- ---------------------------------------------------------------------
300,000 Auspex Systems, Inc.(a) 4,237,500
- ---------------------------------------------------------------------
125,000 Belden, Inc. 3,015,625
- ---------------------------------------------------------------------
350,000 Black Box Corp.(a) 5,687,500
- ---------------------------------------------------------------------
120,600 Cascade Communications Corp.(a) 8,592,750
- ---------------------------------------------------------------------
500,000 Cheyenne Software, Inc.(a) 10,437,500
- ---------------------------------------------------------------------
100,000 CIDCO, Inc.(a) 2,962,500
- ---------------------------------------------------------------------
315,000 DSP Group, Inc.(a) 5,118,750
- ---------------------------------------------------------------------
279,300 FORE Systems, Inc.(a) 14,802,900
- ---------------------------------------------------------------------
150,000 InterVoice, Inc.(a) 2,737,500
- ---------------------------------------------------------------------
100,000 Lannet Data Communications, Ltd.(a) 2,875,000
- ---------------------------------------------------------------------
230,000 Madge, N.V.(a) 9,631,250
- ---------------------------------------------------------------------
300,000 Microtest, Inc.(a) 4,650,000
- ---------------------------------------------------------------------
200,000 Network Equipment Technologies, Inc.(a) 6,525,000
- ---------------------------------------------------------------------
155,300 Optical Data Systems, Inc.(a) 4,639,588
- ---------------------------------------------------------------------
110,613,363
- ---------------------------------------------------------------------
COMPUTER PERIPHERALS - 3.79%
337,500 Alliance Semiconductor Corp.(a) 10,378,125
- ---------------------------------------------------------------------
210,000 Dialogic Corp.(a) 6,090,000
- ---------------------------------------------------------------------
100,000 Digi International, Inc.(a) 2,675,000
- ---------------------------------------------------------------------
135,000 Eltron International, Inc.(a) 4,387,500
- ---------------------------------------------------------------------
100,000 Filenet Corp.(a) 4,537,500
- ---------------------------------------------------------------------
210,250 Microchip Technology, Inc.(a) 8,344,297
- ---------------------------------------------------------------------
600,000 Mylex Corp.(a) 11,175,000
- ---------------------------------------------------------------------
310,000 Oak Technology, Inc.(a) 16,972,500
- ---------------------------------------------------------------------
190,000 Read-Rite Corp.(a) 6,626,250
- ---------------------------------------------------------------------
150,000 U.S. Robotics Corp.(a) 13,875,000
- ---------------------------------------------------------------------
85,061,172
- ---------------------------------------------------------------------
</TABLE>
7
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
COMPUTER SOFTWARE/SERVICES - 14.90%
325,000 Acclaim Entertainment, Inc.(a) $ 7,678,125
- ---------------------------------------------------------------------
400,000 Activision, Inc.(a) 6,700,000
- ---------------------------------------------------------------------
39,000 Adobe Systems, Inc. 2,223,000
- ---------------------------------------------------------------------
225,000 Affiliated Computer Services, Inc.(a) 7,537,500
- ---------------------------------------------------------------------
190,000 Analysts International Corp. 5,628,750
- ---------------------------------------------------------------------
48,800 Astea International, Inc.(a) 878,400
- ---------------------------------------------------------------------
150,000 Atria Software, Inc.(a) 5,362,500
- ---------------------------------------------------------------------
78,500 Bell & Howell Co.(a) 1,962,500
- ---------------------------------------------------------------------
112,500 Cadence Design Systems, Inc.(a) 3,628,125
- ---------------------------------------------------------------------
212,100 Cerner Corp.(a) 5,620,650
- ---------------------------------------------------------------------
46,100 Checkfree Corp.(a) 973,863
- ---------------------------------------------------------------------
1,300,000 Computervision Corp.(a) 15,275,000
- ---------------------------------------------------------------------
39,800 Computron Software, Inc.(a) 676,600
- ---------------------------------------------------------------------
300,000 Corel Corp.(a) 5,137,500
- ---------------------------------------------------------------------
200,000 CyCare Systems, Inc.(a) 6,200,000
- ---------------------------------------------------------------------
18,000 DataWorks Corp.(a) 249,750
- ---------------------------------------------------------------------
200,000 Diamond Multimedia Systems, Inc.(a) 5,900,000
- ---------------------------------------------------------------------
20,000 Edmark Corp.(a) 860,000
- ---------------------------------------------------------------------
50,000 Electronics for Imaging, Inc.(a) 4,112,500
- ---------------------------------------------------------------------
325,000 Expert Software, Inc.(a) 6,743,750
- ---------------------------------------------------------------------
200,000 FTP Software, Inc.(a) 5,400,000
- ---------------------------------------------------------------------
100,000 HBO & Co. 7,075,000
- ---------------------------------------------------------------------
276,600 HCIA, Inc.(a) 7,537,350
- ---------------------------------------------------------------------
32,000 HPR Inc.(a) 832,000
- ---------------------------------------------------------------------
200,000 Hummingbird Communications Ltd.(a) 8,600,000
- ---------------------------------------------------------------------
160,000 Hyperion Software Corp.(a) 7,880,000
- ---------------------------------------------------------------------
215,200 Imnet Systems, Inc.(a) 5,460,700
- ---------------------------------------------------------------------
10,000 Integrated Measurement Systems, Inc.(a) 135,000
- ---------------------------------------------------------------------
250,000 Integrated Silicon Systems, Inc.(a) 7,343,750
- ---------------------------------------------------------------------
288,000 Integrated Systems, Inc.(a) 10,080,000
- ---------------------------------------------------------------------
365,500 Intersolv Inc.(a) 5,756,625
- ---------------------------------------------------------------------
20,500 Logic Works, Inc.(a) 312,625
- ---------------------------------------------------------------------
200,000 Macromedia, Inc.(a) 7,400,000
- ---------------------------------------------------------------------
</TABLE>
8
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
Computer Software/Services - (continued)
270,000 Medic Computer Systems, Inc.(a) $ 14,377,500
- ----------------------------------------------------------------------
500,000 Mentor Graphics Corp.(a) 10,500,000
- ----------------------------------------------------------------------
305,000 Microcom, Inc.(a) 6,671,875
- ----------------------------------------------------------------------
140,000 NetManage, Inc.(a) 2,852,500
- ----------------------------------------------------------------------
350,000 Network General Corp.(a) 14,525,000
- ----------------------------------------------------------------------
40,500 ON Technology Corp.(a) 486,000
- ----------------------------------------------------------------------
340,000 PairGain Technologies, Inc.(a) 14,535,000
- ----------------------------------------------------------------------
75,000 PeopleSoft, Inc.(a) 6,450,000
- ----------------------------------------------------------------------
245,900 Phamis, Inc.(a) 6,208,975
- ----------------------------------------------------------------------
250,000 Pinnacle Systems, Inc.(a) 7,843,750
- ----------------------------------------------------------------------
200,000 Planar Systems Inc.(a) 3,475,000
- ----------------------------------------------------------------------
150,000 Platinum Technology, Inc.(a) 2,737,500
- ----------------------------------------------------------------------
50,000 Policy Management Systems Corp.(a) 2,356,250
- ----------------------------------------------------------------------
49,300 Premenos Technology Corp.(a) 1,935,025
- ----------------------------------------------------------------------
200,000 Project Software & Development, Inc.(a) 5,300,000
- ----------------------------------------------------------------------
85,000 Pure Software, Inc.(a) 3,123,750
- ----------------------------------------------------------------------
500,000 S3, Inc.(a) 8,562,500
- ----------------------------------------------------------------------
325,000 Shared Medical Systems Corp. 12,553,125
- ----------------------------------------------------------------------
30,100 Smith Micro Software, Inc.(a) 368,725
- ----------------------------------------------------------------------
290,000 Softdesk, Inc.(a) 6,742,500
- ----------------------------------------------------------------------
250,000 SoftKey International, Inc.(a) 7,875,000
- ----------------------------------------------------------------------
100,000 Sterling Software, Inc.(a) 4,612,500
- ----------------------------------------------------------------------
400,000 Symantec Corp.(a) 9,725,000
- ----------------------------------------------------------------------
10,500 Synopsys, Inc.(a) 393,750
- ----------------------------------------------------------------------
16,500 Unison Software, Inc.(a) 206,250
- ----------------------------------------------------------------------
31,300 Vantive Corp.(a) 500,800
- ----------------------------------------------------------------------
24,500 Verity, Inc.(a) 900,375
- ----------------------------------------------------------------------
170,000 Viasoft, Inc.(a) 2,210,000
- ----------------------------------------------------------------------
350,000 Wind River Systems, Inc.(a) 9,450,000
- ----------------------------------------------------------------------
334,640,213
- ----------------------------------------------------------------------
</TABLE>
9
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
CONSUMER NON-DURABLES - 0.26%
121,600 Department 56, Inc.(a) $ 5,517,600
- -------------------------------------------------------------------------
15,900 USA Detergents, Inc.(a) 405,450
- -------------------------------------------------------------------------
5,923,050
- -------------------------------------------------------------------------
CONTAINERS - 0.18%
150,000 Sealed Air Corp.(a) 3,956,250
- -------------------------------------------------------------------------
COSMETICS & TOILETRIES - 0.09%
101,800 Helen of Troy, Ltd.(a) 1,921,475
- -------------------------------------------------------------------------
ELECTRONIC COMPONENTS/MISCELLANEOUS - 5.39%
202,500 Aetrium, Inc.(a) 4,404,375
- -------------------------------------------------------------------------
200,000 Ametek, Inc. 3,525,000
- -------------------------------------------------------------------------
200,000 Amphenol Corp.(a) 4,325,000
- -------------------------------------------------------------------------
70,000 BMC Industries, Inc. 2,703,750
- -------------------------------------------------------------------------
150,000 Brooks Automation, Inc.(a) 2,700,000
- -------------------------------------------------------------------------
200,000 California Amplifier, Inc.(a) 5,400,000
- -------------------------------------------------------------------------
300,000 Electro Scientific Industries, Inc.(a) 9,300,000
- -------------------------------------------------------------------------
50,000 Franklin Electronic Publishers, Inc.(a) 2,068,750
- -------------------------------------------------------------------------
224,700 General Scanning, Inc.(a) 2,696,400
- -------------------------------------------------------------------------
126,000 Harman International Industries, Inc. 5,811,750
- -------------------------------------------------------------------------
175,000 Integrated Silicon Solution, Inc.(a) 5,479,688
- -------------------------------------------------------------------------
29,200 Mackie Designs, Inc.(a) 372,300
- -------------------------------------------------------------------------
125,000 Methode Electronics, Inc. 2,875,000
- -------------------------------------------------------------------------
46,875 Molex, Inc. 1,546,875
- -------------------------------------------------------------------------
52,800 Oak Industries, Inc.(a) 1,102,200
- -------------------------------------------------------------------------
200,000 Perceptron, Inc.(a) 5,350,000
- -------------------------------------------------------------------------
250,000 PRI Automation, Inc.(a) 9,250,000
- -------------------------------------------------------------------------
425,000 PSC, Inc.(a) 4,356,250
- -------------------------------------------------------------------------
225,000 Recoton Corp.(a) 5,006,250
- -------------------------------------------------------------------------
104,500 Semitool, Inc.(a) 1,698,125
- -------------------------------------------------------------------------
62,000 Smartflex Systems, Inc.(a) 906,750
- -------------------------------------------------------------------------
300,000 Symbol Technologies, Inc.(a) 10,462,500
- -------------------------------------------------------------------------
100,000 Tektronix, Inc. 5,925,000
- -------------------------------------------------------------------------
500,000 Telxon Corp. 11,562,500
- -------------------------------------------------------------------------
369,000 Teradyne, Inc.(a) 12,315,375
- -------------------------------------------------------------------------
121,143,838
- -------------------------------------------------------------------------
</TABLE>
10
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
ELECTRONIC/DEFENSE - 0.35%
200,000 Alpha Industries, Inc.(a) $ 3,100,000
- -----------------------------------------------------------------
100,000 Watkins-Johnson Co. 4,812,500
- -----------------------------------------------------------------
7,912,500
- -----------------------------------------------------------------
ELECTRONIC/PC DISTRIBUTORS - 0.73%
250,000 Kent Electronics Corp.(a) 12,187,500
- -----------------------------------------------------------------
300,000 Pioneer-Standard Electronics, Inc. 4,162,500
- -----------------------------------------------------------------
16,350,000
- -----------------------------------------------------------------
FINANCE (CONSUMER CREDIT) - 2.87%
220,000 Aames Financial Corp. 5,500,000
- -----------------------------------------------------------------
100,000 CMAC Investment Corp. 4,750,000
- -----------------------------------------------------------------
200,050 Concord EFS, Inc.(a) 6,901,725
- -----------------------------------------------------------------
500,000 Credit Acceptance Corp.(a) 11,750,000
- -----------------------------------------------------------------
153,800 General Acceptance Corp.(a) 4,075,700
- -----------------------------------------------------------------
475,000 Medaphis Corp.(a) 15,081,250
- -----------------------------------------------------------------
225,000 Money Store Inc. (The) 9,000,000
- -----------------------------------------------------------------
150,000 PMT Services, Inc.(a) 4,031,250
- -----------------------------------------------------------------
40,500 WFS Financial, Inc.(a) 673,312
- -----------------------------------------------------------------
200,000 World Acceptance Corp.(a) 2,600,000
- -----------------------------------------------------------------
64,363,237
- -----------------------------------------------------------------
FINANCE (LEASING COMPANIES) - 0.26%
225,000 Oxford Resources Corp.(a) 5,906,250
- -----------------------------------------------------------------
FINANCE (SAVINGS & LOAN) - 0.20%
75,000 TCF Financial Corp. 4,406,250
- -----------------------------------------------------------------
FUNERAL SERVICES - 0.41%
32,500 Equity Corporation International(a) 682,500
- -----------------------------------------------------------------
250,000 Stewart Enterprises Inc.-Class A 8,437,500
- -----------------------------------------------------------------
9,120,000
- -----------------------------------------------------------------
GAMING - 0.25%
75,000 Grand Casinos, Inc.(a) 2,981,250
- -----------------------------------------------------------------
250,000 Players International, Inc.(a) 2,687,500
- -----------------------------------------------------------------
5,668,750
- -----------------------------------------------------------------
</TABLE>
11
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
HOTELS/MOTELS - 0.40%
175,000 La Quinta Motor Inns, Inc. $ 4,506,250
- ---------------------------------------------------------------------
450,000 Prime Hospitality Corp.(a) 4,443,750
- ---------------------------------------------------------------------
8,950,000
- ---------------------------------------------------------------------
INSURANCE (LIFE & HEALTH) - 0.32%
100,000 American Travelers Corp.(a) 2,237,500
- ---------------------------------------------------------------------
175,000 United Companies Financial Corp. 4,943,750
- ---------------------------------------------------------------------
7,181,250
- ---------------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY) - 0.84%
60,000 Allied Group, Inc. 1,950,000
- ---------------------------------------------------------------------
319,500 HCC Insurance Holdings, Inc.(a) 11,102,625
- ---------------------------------------------------------------------
34,200 United Dental Care, Inc.(a) 1,043,100
- ---------------------------------------------------------------------
119,000 Vesta Insurance Group, Inc. 4,804,625
- ---------------------------------------------------------------------
18,900,350
- ---------------------------------------------------------------------
LEISURE & RECREATION - 1.67%
158,800 Avid Technology, Inc.(a) 6,947,500
- ---------------------------------------------------------------------
400,000 Cannondale Corp.(a) 6,400,000
- ---------------------------------------------------------------------
50,000 Coleman Co., Inc.(a) 1,712,500
- ---------------------------------------------------------------------
287,500 Guest Supply, Inc.(a) 5,426,562
- ---------------------------------------------------------------------
300,000 Moovies, Inc.(a) 4,912,500
- ---------------------------------------------------------------------
250,000 Ride, Inc.(a) 6,031,250
- ---------------------------------------------------------------------
200,000 West Marine, Inc.(a) 6,100,000
- ---------------------------------------------------------------------
37,530,312
- ---------------------------------------------------------------------
MACHINE TOOLS - 0.47%
200,000 Acme-Cleveland Corp. 4,375,000
- ---------------------------------------------------------------------
100,000 Applied Power, Inc.-Class A 3,037,500
- ---------------------------------------------------------------------
100,000 Kennametal Inc. 3,112,500
- ---------------------------------------------------------------------
10,525,000
- ---------------------------------------------------------------------
MACHINERY (HEAVY) - 0.27%
34,000 AGCO Corp. 1,521,500
- ---------------------------------------------------------------------
285,000 Tractor Supply Co.(a) 4,488,750
- ---------------------------------------------------------------------
6,010,250
- ---------------------------------------------------------------------
</TABLE>
12
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
MACHINERY (MISCELLANEOUS) - 0.17%
100,000 Kulicke & Soffa Industries, Inc.(a) $ 3,500,000
- ---------------------------------------------------------------------------
37,500 TransPro, Inc. 412,500
- ---------------------------------------------------------------------------
3,912,500
- ---------------------------------------------------------------------------
MEDICAL (DRUGS) - 1.16%
100,000 Alpharma, Inc.-Class A 2,400,000
- ---------------------------------------------------------------------------
79,500 Arbor Drugs, Inc. 1,470,750
- ---------------------------------------------------------------------------
225,000 Cardinal Health, Inc. 11,559,375
- ---------------------------------------------------------------------------
75,000 Express Scripts, Inc.-Class A(a) 2,850,000
- ---------------------------------------------------------------------------
29,000 Gulf South Medical Supply, Inc.(a) 601,750
- ---------------------------------------------------------------------------
160,000 Watson Pharmaceuticals, Inc.(a) 7,160,000
- ---------------------------------------------------------------------------
26,041,875
- ---------------------------------------------------------------------------
MEDICAL (PATIENT SERVICES) - 8.79%
420,000 AHI Healthcare Systems, Inc.(a) 5,880,000
- ---------------------------------------------------------------------------
400,000 American Medical Response, Inc.(a) 11,550,000
- ---------------------------------------------------------------------------
400,000 Apria Healthcare Group, Inc.(a) 8,650,000
- ---------------------------------------------------------------------------
390,000 Arbor Health Care Co.(a) 6,630,000
- ---------------------------------------------------------------------------
300,000 Community Health Systems, Inc.(a) 9,525,000
- ---------------------------------------------------------------------------
145,800 Enterprise Systems, Inc.(a) 3,408,075
- ---------------------------------------------------------------------------
300,000 Genesis Health Ventures, Inc.(a) 8,662,500
- ---------------------------------------------------------------------------
350,000 Health Care and Retirement Corp.(a) 10,281,250
- ---------------------------------------------------------------------------
491,775 Health Management Associates, Inc.-Class A(a) 10,573,163
- ---------------------------------------------------------------------------
250,000 Healthsource, Inc.(a) 13,250,000
- ---------------------------------------------------------------------------
525,530 HEALTHSOUTH Corp.(a) 13,729,470
- ---------------------------------------------------------------------------
200,000 Horizon Healthcare Corp.(a) 4,050,000
- ---------------------------------------------------------------------------
150,000 Integrated Health Services, Inc. 3,431,250
- ---------------------------------------------------------------------------
425,000 Lincare Holdings, Inc.(a) 10,571,875
- ---------------------------------------------------------------------------
268,600 Living Centers of America, Inc.(a) 6,950,025
- ---------------------------------------------------------------------------
250,000 Multicare Companies, Inc. (The)(a) 4,687,500
- ---------------------------------------------------------------------------
27,800 Myraid Genetics, Inc.(a) 750,600
- ---------------------------------------------------------------------------
250,000 OrNda HealthCorp(a) 4,406,250
- ---------------------------------------------------------------------------
100,000 Oxford Health Plans, Inc.(a) 7,825,000
- ---------------------------------------------------------------------------
117,500 Pediatrix Medical Group, Inc.(a) 2,540,938
- ---------------------------------------------------------------------------
115,000 PhyCor, Inc.(a) 4,226,250
- ---------------------------------------------------------------------------
</TABLE>
13
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
Medical (Patient Services) - (continued)
134,500 Physician Reliance Network, Inc.(a) $ 4,472,125
- ----------------------------------------------------------------------
400,000 Quorum Health Group, Inc.(a) 8,575,000
- ----------------------------------------------------------------------
400,000 Rotech Medical Corp.(a) 9,100,000
- ----------------------------------------------------------------------
120,000 Sierra Health Services, Inc.(a) 3,435,000
- ----------------------------------------------------------------------
250,000 Summit Care Corp.(a) 5,187,500
- ----------------------------------------------------------------------
239,400 TheraTx Inc.(a) 2,693,250
- ----------------------------------------------------------------------
200,000 Tokos Medical Corp.(a) 1,850,000
- ----------------------------------------------------------------------
99,500 Value Health, Inc.(a) 2,276,062
- ----------------------------------------------------------------------
300,000 Vencor, Inc.(a) 8,325,000
- ----------------------------------------------------------------------
197,493,083
- ----------------------------------------------------------------------
MEDICAL INSTRUMENTS/PRODUCTS - 3.46%
297,000 Conmed Corp.(a) 10,395,000
- ----------------------------------------------------------------------
52,300 Cordis Corp.(a) 5,779,150
- ----------------------------------------------------------------------
18,300 De Rigo S.p.A.-ADR(a) 377,437
- ----------------------------------------------------------------------
250,000 Empi Inc.(a) 5,562,500
- ----------------------------------------------------------------------
250,000 Haemonetics Corp.(a) 4,718,750
- ----------------------------------------------------------------------
69,800 Heart Technology, Inc.(a) 1,989,300
- ----------------------------------------------------------------------
150,000 MiniMed, Inc.(a) 1,387,500
- ----------------------------------------------------------------------
190,500 Nellcor Puritan Bennett, Inc.(a) 10,953,750
- ----------------------------------------------------------------------
250,000 Omnicare Inc. 9,062,500
- ----------------------------------------------------------------------
250,000 Patterson Dental Co.(a) 6,250,000
- ----------------------------------------------------------------------
200,000 ResMed, Inc.(a) 3,000,000
- ----------------------------------------------------------------------
300,000 Sybron International Corp.(a) 12,750,000
- ----------------------------------------------------------------------
70,000 Target Therapeutics, Inc.(a) 5,425,000
- ----------------------------------------------------------------------
77,650,887
- ----------------------------------------------------------------------
OFFICE AUTOMATION - 0.70%
200,000 Danka Business Systems PLC-ADR 6,700,000
- ----------------------------------------------------------------------
275,000 In Focus Systems, Inc.(a) 9,040,625
- ----------------------------------------------------------------------
15,740,625
- ----------------------------------------------------------------------
</TABLE>
14
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
POLLUTION CONTROL - 0.73%
185,000 Asyst Technologies, Inc.(a) $ 7,770,000
- -------------------------------------------------------------------
50,000 Sanifill, Inc.(a) 1,575,000
- -------------------------------------------------------------------
70,000 United Waste Systems, Inc.(a) 2,765,000
- -------------------------------------------------------------------
206,500 USA Waste Services, Inc.(a) 4,336,500
- -------------------------------------------------------------------
16,446,500
- -------------------------------------------------------------------
PUBLISHING - 0.08%
61,000 Media General, Inc.-Class A 1,692,750
- -------------------------------------------------------------------
RESTAURANTS - 1.74%
251,562 Apple South, Inc. 5,157,020
- -------------------------------------------------------------------
350,000 Buffets, Inc.(a) 4,375,000
- -------------------------------------------------------------------
300,000 Daka International, Inc.(a) 9,112,500
- -------------------------------------------------------------------
700,000 Landry's Seafood Restaurants, Inc.(a) 9,450,000
- -------------------------------------------------------------------
500,000 Sonic Corp.(a) 11,000,000
- -------------------------------------------------------------------
39,094,520
- -------------------------------------------------------------------
RETAIL (FOOD & DRUG) - 0.36%
200,000 Big B, Inc. 2,950,000
- -------------------------------------------------------------------
220,000 Casey's General Stores, Inc. 5,060,000
- -------------------------------------------------------------------
8,010,000
- -------------------------------------------------------------------
RETAIL (STORES) - 6.01%
155,000 Baby Superstore, Inc.(a) 7,323,750
- -------------------------------------------------------------------
200,000 Bed Bath & Beyond, Inc.(a) 6,250,000
- -------------------------------------------------------------------
101,700 CDW Computer Centers, Inc.(a) 4,932,450
- -------------------------------------------------------------------
85,000 CompUSA, Inc.(a) 3,251,250
- -------------------------------------------------------------------
199,100 Corporate Express, Inc.(a) 5,201,488
- -------------------------------------------------------------------
300,000 Creative Computers, Inc.(a) 8,700,000
- -------------------------------------------------------------------
200,100 Duty Free International, Inc. 2,851,425
- -------------------------------------------------------------------
208,600 Eastbay, Inc.(a) 4,432,750
- -------------------------------------------------------------------
35,300 Gadzooks, Inc.(a) 653,050
- -------------------------------------------------------------------
250,000 Global DirectMail Corp.(a) 6,812,500
- -------------------------------------------------------------------
350,000 Gymboree Corp.(a) 7,918,750
- -------------------------------------------------------------------
375,000 Hollywood Entertainment Corp.(a) 10,031,250
- -------------------------------------------------------------------
100,000 Just for Feet, Inc.(a) 2,362,500
- -------------------------------------------------------------------
300,000 Men's Wearhouse, Inc. (The)(a) 11,700,000
- -------------------------------------------------------------------
</TABLE>
15
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
Retail (Stores) - (continued)
265,800 Micro Warehouse, Inc.(a) $ 11,828,100
- --------------------------------------------------------------------
115,000 Movie Gallery, Inc.(a) 4,427,500
- --------------------------------------------------------------------
100,000 Oakley, Inc.(a) 3,450,000
- --------------------------------------------------------------------
150,000 Performance Food Group Co.(a) 3,487,500
- --------------------------------------------------------------------
285,000 Petco Animal Supplies, Inc.(a) 7,980,000
- --------------------------------------------------------------------
59,900 Proffitt's, Inc.(a) 1,400,162
- --------------------------------------------------------------------
20,000 Regis Corp.(a) 455,000
- --------------------------------------------------------------------
425,000 Sports Authority, Inc. (The)(a) 9,243,750
- --------------------------------------------------------------------
300,000 Sunglass Hut International, Inc.(a) 8,175,000
- --------------------------------------------------------------------
150,000 Zale Corp.(a) 2,212,500
- --------------------------------------------------------------------
135,080,675
- --------------------------------------------------------------------
SCIENTIFIC INSTRUMENTS - 0.40%
100,000 Dynatech Corp.(a) 1,500,000
- --------------------------------------------------------------------
200,000 Input/Output, Inc.(a) 7,475,000
- --------------------------------------------------------------------
8,975,000
- --------------------------------------------------------------------
SEMICONDUCTORS - 14.34%
129,100 Advanced Technology Materials, Inc.(a) 1,403,963
- --------------------------------------------------------------------
190,000 Altera Corp.(a) 11,495,000
- --------------------------------------------------------------------
125,000 ASM Lithography Holding N.V.(a) 6,203,125
- --------------------------------------------------------------------
300,000 Atmel Corp.(a) 9,375,000
- --------------------------------------------------------------------
250,000 Burr-Brown Corp.(a) 8,125,000
- --------------------------------------------------------------------
300,000 Chips and Technologies, Inc.(a) 2,625,000
- --------------------------------------------------------------------
130,000 Cirrus Logic, Inc.(a) 5,476,250
- --------------------------------------------------------------------
500,000 Computer Products, Inc.(a) 5,812,500
- --------------------------------------------------------------------
225,000 Credence Systems Corp.(a) 8,409,375
- --------------------------------------------------------------------
350,000 Cypress Semiconductor Corp.(a) 12,337,500
- --------------------------------------------------------------------
265,000 Elantec Semiconductor, Inc.(a) 1,921,250
- --------------------------------------------------------------------
85,000 Electroglas, Inc.(a) 5,971,250
- --------------------------------------------------------------------
14,900 ESS Technology, Inc.(a) 447,000
- --------------------------------------------------------------------
250,000 Exar Corp.(a) 5,937,500
- --------------------------------------------------------------------
270,000 FSI International, Inc.(a) 6,412,500
- --------------------------------------------------------------------
95,000 GaSonics International Corp.(a) 3,135,000
- --------------------------------------------------------------------
220,000 HADCO Corp.(a) 6,160,000
- --------------------------------------------------------------------
</TABLE>
16
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
Semiconductors - (continued)
250,000 Information Storage Devices, Inc.(a) $ 5,437,500
- -------------------------------------------------------------------
600,000 Integrated Device Technology, Inc.(a) 11,400,000
- -------------------------------------------------------------------
150,000 Integrated Process Equipment Corp.(a) 5,568,750
- -------------------------------------------------------------------
175,000 International Rectifier Corp.(a) 7,896,875
- -------------------------------------------------------------------
400,000 Jabil Circuit, Inc.(a) 6,750,000
- -------------------------------------------------------------------
275,000 KEMET Corp.(a) 9,487,500
- -------------------------------------------------------------------
150,000 KLA Instruments Corp.(a) 6,412,500
- -------------------------------------------------------------------
150,000 LAM Research Corp.(a) 9,131,250
- -------------------------------------------------------------------
214,800 Lattice Semiconductor Corp.(a) 8,430,900
- -------------------------------------------------------------------
200,000 Linear Technology Corp. 8,750,000
- -------------------------------------------------------------------
200,000 LSI Logic Corp.(a) 9,425,000
- -------------------------------------------------------------------
81,000 Maxim Integrated Products, Inc.(a) 6,054,750
- -------------------------------------------------------------------
400,000 MEMC Electronic Materials, Inc.(a) 12,800,000
- -------------------------------------------------------------------
142,200 Merix Corp.(a) 5,261,400
- -------------------------------------------------------------------
100,000 Novellus Systems, Inc.(a) 6,887,500
- -------------------------------------------------------------------
350,000 Paradigm Technology, Inc.(a) 7,700,000
- -------------------------------------------------------------------
97,500 Photronics, Inc.(a) 2,876,250
- -------------------------------------------------------------------
125,000 Sanmina Corp.(a) 6,750,000
- -------------------------------------------------------------------
336,400 SCI Systems, Inc.(a) 11,816,050
- -------------------------------------------------------------------
300,000 Sierra Semiconductor Corp.(a) 5,362,500
- -------------------------------------------------------------------
200,000 Silicon Valley Group, Inc.(a) 6,475,000
- -------------------------------------------------------------------
180,200 Tencor Instruments(a) 7,681,025
- -------------------------------------------------------------------
350,000 Tower Semiconductor Ltd.(a) 10,587,500
- -------------------------------------------------------------------
227,200 Triquint Semiconductor, Inc.(a) 5,168,800
- -------------------------------------------------------------------
350,000 Tylan General, Inc.(a) 5,600,000
- -------------------------------------------------------------------
203,200 Ultratech Stepper, Inc.(a) 8,128,000
- -------------------------------------------------------------------
400,000 Vitesse Semiconductor Corp.(a) 4,700,000
- -------------------------------------------------------------------
475,000 VLSI Technology, Inc.(a) 11,162,500
- -------------------------------------------------------------------
200,000 Zilog, Inc.(a) 7,100,000
- -------------------------------------------------------------------
322,048,763
- -------------------------------------------------------------------
</TABLE>
17
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
SHOES & RELATED APPAREL - 0.36%
145,000 Maxwell Shoe Co., Inc. - Class A $ 652,500
- -------------------------------------------------------------------
250,000 Wolverine World Wide, Inc. 7,500,000
- -------------------------------------------------------------------
8,152,500
- -------------------------------------------------------------------
STEEL - 0.13%
34,100 J & L Specialty Steel, Inc. 558,388
- -------------------------------------------------------------------
112,500 Synalloy Corp. 2,306,250
- -------------------------------------------------------------------
2,864,638
- -------------------------------------------------------------------
TELECOMMUNICATIONS - 5.99%
140,000 ADC Telecommunications, Inc.(a) 5,600,000
- -------------------------------------------------------------------
150,000 Allen Group, Inc.(a) 3,675,000
- -------------------------------------------------------------------
200,000 Andrew Corp.(a) 8,450,000
- -------------------------------------------------------------------
225,000 Aspect Telecommunications Corp.(a) 7,734,375
- -------------------------------------------------------------------
406,250 Brightpoint, Inc.(a) 7,718,750
- -------------------------------------------------------------------
57,500 Brite Voice Systems, Inc.(a) 955,938
- -------------------------------------------------------------------
150,000 DSC Communications Corp.(a) 5,550,000
- -------------------------------------------------------------------
450,000 EIS International, Inc.(a) 8,325,000
- -------------------------------------------------------------------
75,000 Glenayre Technologies, Inc.(a) 4,818,750
- -------------------------------------------------------------------
285,000 Inter-Tel, Inc.(a) 4,239,375
- -------------------------------------------------------------------
160,000 LCI International, Inc.(a) 2,880,000
- -------------------------------------------------------------------
150,000 Microdyne Corp.(a) 4,162,500
- -------------------------------------------------------------------
300,000 Nera AS-ADR(a) 10,650,000
- -------------------------------------------------------------------
170,900 Octel Communications Corp.(a) 5,831,962
- -------------------------------------------------------------------
174,300 Periphonics Corp.(a) 4,270,350
- -------------------------------------------------------------------
75,000 Premisys Communications, Inc.(a) 6,712,500
- -------------------------------------------------------------------
150,000 StrataCom, Inc.(a) 9,225,000
- -------------------------------------------------------------------
223,800 Tekelec(a) 3,245,100
- -------------------------------------------------------------------
75,200 Tel-Save Holdings, Inc.(a) 1,043,400
- -------------------------------------------------------------------
100,000 Tellabs, Inc.(a) 3,400,000
- -------------------------------------------------------------------
300,000 Teltrend, Inc.(a) 8,850,000
- -------------------------------------------------------------------
175,000 TESSCO Technologies, Inc.(a) 4,593,750
- -------------------------------------------------------------------
200,000 Transaction Network Services, Inc.(a) 4,700,000
- -------------------------------------------------------------------
200,000 U.S. Long Distance Corp.(a) 2,575,000
- -------------------------------------------------------------------
300,000 VTEL Corp.(a) 5,400,000
- -------------------------------------------------------------------
134,606,750
- -------------------------------------------------------------------
</TABLE>
18
<PAGE>
Financials
<TABLE>
<C> <S> <C>
SHARES MARKET VALUE
TEXTILES - 1.27%
100,000 Cutter & Buck, Inc.(a) $ 650,000
- --------------------------------------------------------------------------
225,000 Nautica Enterprises, Inc.(a) 7,706,250
- --------------------------------------------------------------------------
212,100 Quicksilver, Inc.(a) 6,575,100
- --------------------------------------------------------------------------
125,000 St. John's Knits, Inc. 5,984,375
- --------------------------------------------------------------------------
198,600 Tommy Hilfiger Corp.(a) 7,571,625
- --------------------------------------------------------------------------
28,487,350
- --------------------------------------------------------------------------
TRANSPORTATION - 0.12%
80,000 Fritz Companies, Inc.(a) 2,800,000
- --------------------------------------------------------------------------
Total Common Stocks 1,968,631,064
- --------------------------------------------------------------------------
PRINCIPAL
AMOUNT
U.S. TREASURY SECURITIES - 11.32%
U.S. TREASURY BILLS - 11.14%(b)
$ 68,000,000(e) 5.41%, 01/11/96 67,297,560
- --------------------------------------------------------------------------
185,000,000(e) 5.415%, 01/18/96 182,900,250
- --------------------------------------------------------------------------
250,197,810
- --------------------------------------------------------------------------
U.S. TREASURY NOTES - 0.18%
4,000,000 4.625%, 02/29/96 3,988,640
- --------------------------------------------------------------------------
Total U.S. Treasury Securities 254,186,450
- --------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.17%(c)
48,714,848 Daiwa Securities America Inc., 5.90%,
11/01/95(d) 48,714,848
- --------------------------------------------------------------------------
TOTAL INVESTMENTS - 101.16% 2,271,532,362
- --------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES - (1.16%) (25,978,432)
- --------------------------------------------------------------------------
NET ASSETS - 100.00% $2,245,553,930
==========================================================================
</TABLE>
Abbreviations:
ADR - American Depository Receipts
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(c) 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.
(d) Joint repurchase agreement entered into 10/31/95 with a maturing value of
$401,494,601. Collateralized by $353,853,000 U.S. Treasury obligations,
8.375% due 08/15/08.
(e) A portion of the principal balance was pledged as collateral to cover
margin requirements for open futures contracts. See Note 6.
See Notes to Financial Statements.
19
<PAGE>
Financials
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $1,831,391,083) $2,271,532,362
- ------------------------------------------------------------------
Foreign currencies, at market value (cost $1,871) 1,913
- ------------------------------------------------------------------
Receivables for:
Investments sold 3,491,766
- ------------------------------------------------------------------
Capital stock sold 7,728,042
- ------------------------------------------------------------------
Dividends and interest 153,869
- ------------------------------------------------------------------
Investment for deferred compensation plan 12,996
- ------------------------------------------------------------------
Other assets 163,005
- ------------------------------------------------------------------
Total assets 2,283,083,953
- ------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 27,426,798
- ------------------------------------------------------------------
Capital stock reacquired 6,342,346
- ------------------------------------------------------------------
Variation margin 1,282,500
- ------------------------------------------------------------------
Deferred compensation 12,996
- ------------------------------------------------------------------
Accrued advisory fees 1,190,410
- ------------------------------------------------------------------
Accrued administrative services fees 5,770
- ------------------------------------------------------------------
Accrued distribution fees 738,680
- ------------------------------------------------------------------
Accrued directors' fees 1,536
- ------------------------------------------------------------------
Accrued transfer agent fees 300,608
- ------------------------------------------------------------------
Accrued operating expenses 228,379
- ------------------------------------------------------------------
Total liabilities 37,530,023
- ------------------------------------------------------------------
Net assets applicable to shares outstanding $2,245,553,930
==================================================================
CAPITAL STOCK, $.001 PAR VALUE PER SHARE:
Authorized 750,000,000
- ------------------------------------------------------------------
Outstanding 55,963,906
==================================================================
Net asset value and redemption price per share $ 40.13
==================================================================
Offering price per share:
(Net asset value of $40.13/94.50%) $ 42.47
==================================================================
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
Financials
STATEMENT OF OPERATIONS
For the year ended October 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 9,289,821
- ----------------------------------------------------------------------------
Dividends 1,512,937
- ----------------------------------------------------------------------------
Total investment income 10,802,758
- ----------------------------------------------------------------------------
EXPENSES:
Advisory fees 7,763,206
- ----------------------------------------------------------------------------
Custodian fees 142,952
- ----------------------------------------------------------------------------
Directors' fees 13,172
- ----------------------------------------------------------------------------
Distribution fees 3,023,937
- ----------------------------------------------------------------------------
Administrative services fees 71,528
- ----------------------------------------------------------------------------
Transfer agent fees 2,258,078
- ----------------------------------------------------------------------------
Other 637,102
- ----------------------------------------------------------------------------
Total expenses 13,909,975
- ----------------------------------------------------------------------------
Less fees waived by advisor (788,943)
- ----------------------------------------------------------------------------
Net expenses 13,121,032
- ----------------------------------------------------------------------------
Net investment income (loss) (2,318,274)
- ----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES,
FUTURES CONTRACTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on sales of:
Investment securities 49,680,708
- ----------------------------------------------------------------------------
Futures contracts 2,612,770
- ----------------------------------------------------------------------------
Foreign currencies (3,040)
- ----------------------------------------------------------------------------
52,290,438
- ----------------------------------------------------------------------------
Unrealized appreciation of:
Investment securities 307,131,729
- ----------------------------------------------------------------------------
Futures contracts 7,624,500
- ----------------------------------------------------------------------------
Foreign currencies 42
- ----------------------------------------------------------------------------
314,756,271
- ----------------------------------------------------------------------------
Net gain on investment securities, futures contracts and for-
eign currencies 367,046,709
- ----------------------------------------------------------------------------
Net increase in net assets resulting from operations $364,728,435
============================================================================
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
Financials
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (2,318,274) $ (1,178,968)
- -------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment
securities, futures contracts and foreign
currencies 52,290,438 (2,796,834)
- -------------------------------------------------------------------------------
Net unrealized appreciation of investment
securities, futures contracts and foreign
currencies 314,756,271 95,272,310
- -------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 364,728,435 91,296,508
- -------------------------------------------------------------------------------
Distributions to shareholders from net realized
gains on investment securities -- (25,209)
- -------------------------------------------------------------------------------
Net increase from capital stock transactions 1,193,587,768 378,710,145
- -------------------------------------------------------------------------------
Net increase in net assets 1,558,316,203 469,981,444
- -------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 687,237,727 217,256,283
- -------------------------------------------------------------------------------
End of period $2,245,553,930 $687,237,727
===============================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $1,748,790,238 $557,508,624
- -------------------------------------------------------------------------------
Undistributed net investment income (loss) (16,714) --
- -------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales
of investment securities and foreign
currencies 49,014,585 (3,280,447)
- -------------------------------------------------------------------------------
Unrealized appreciation of investment
securities and foreign currencies 447,765,821 133,009,550
- -------------------------------------------------------------------------------
$2,245,553,930 $687,237,727
===============================================================================
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
Financials
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Aggressive Growth 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 Aggressive Growth Fund, AIM Weingarten Fund, AIM Charter Fund
and AIM Constellation Fund. The Fund has temporarily discontinued public sales
of its shares to new investors. 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 or absent a
last sales price, at the mean of the closing bid and asked prices.
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.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of the New York Stock Exchange. The
values of such securities used in computing the net asset value of the
Fund's shares are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of the New York Stock
Exchange. Occasionally, events affecting the values of such securities and
such exchange rates may occur between the times at which they are determined
and the close of the New York Stock Exchange which will not be reflected in
the computation of the Fund's net asset value. If events materially
affecting the value of such securities occur during such period, then these
securities will be valued at their fair value as determined in good faith by
or under the supervision of the Board of Directors.
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. On October 31, 1995,
$4,594 was reclassified from undistributed net realized gains to
undistributed net investment income (loss) as a result of differing book/tax
treatments of foreign currency transactions. In addition, $2,306,154 was
reclassified from net investment income (loss) to paid-in capital as a
result of a net operating tax loss. Net assets of the Fund were unaffected
by the reclassifications discussed above.
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. 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 that a change in the value of contracts may not correlate with
changes in the value of the securities being hedged.
E. 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.
F. 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.
23
<PAGE>
Financials
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 0.80% of
the first $150 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $150 million. This agreement
requires 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. During the year ended October 31, 1995, AIM
waived fees of $788,943. The master investment advisory agreement was amended
on November 14, 1994 with respect to the Fund. The amendment to the master
investment advisory agreement was approved by the Fund's shareholders at a
special meeting held on November 14, 1994. Of the 12,005,913 shares voted at
the meeting, 8,253,959 shares voted for the amendment, 3,243,846 voted against
the amendment, and 508,108 shares abstained. Under the previous terms, the Fund
paid an advisory fee to AIM at the annual rate of 0.60% of the first $200
million of the Fund's average daily net assets, plus 0.50% of the Fund's
average daily net assets in excess of $200 million to and including $500
million, plus 0.40% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.30% of the Fund's average daily net
assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended October 31, 1995, AIM
was reimbursed $71,528 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") for certain costs incurred in providing
transfer agency services to the Fund. During the year ended October 31, 1995,
AFS was paid $1,198,145 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
Fund. The Company has adopted a Plan pursuant to Rule 12b-1 under the 1940 Act
(the "Plan"), whereby the Fund pays AIM Distributors an annual rate of 0.25% of
the Fund's average daily net assets as compensation for services related to the
sales and distribution of the Fund's shares. The Plan provides that payments to
dealers and financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions, may be characterized as a
service fee. 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 shares. During the year ended
October 31, 1995, the Fund paid AIM Distributors $3,023,937 as compensation
under the Plan.
AIM Distributors received commissions of $8,232,597 from sales of shares of
the Fund's capital stock during the year ended October 31, 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, AFS and AIM
Distributors.
During the year ended October 31, 1995, the Fund paid legal fees of $4,657 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.
NOTE 3 - AFFILIATED COMPANY TRANSACTIONS
Affiliated issuers, as defined in the 1940 Act, are issuers in which the Fund
held 5% or more of the outstanding voting securities. A summary of transactions
for each issuer who is or was an affiliate at or during the year ended October
31, 1995, were as follows:
<TABLE>
<CAPTION>
SHARE BALANCE REALIZED SHARE BALANCE MARKET VALUE
OCTOBER 31, PURCHASES SALES GAIN DIVIDEND OCTOBER 31, OCTOBER 31,
NAME OF ISSUER: 1994 COST COST (LOSS) INCOME 1995 1995
<S> <C> <C> <C> <C> <C> <C> <C>
Arbor Health Care Co. -0- $7,817,338 $191,250 $(6,250) -0- 390,000 $6,630,000
- --------------------------------------------------------------------------------------------------------
Brightpoint Inc. -0- 6,938,635 -0- -0- -0- 406,250 7,718,750
- --------------------------------------------------------------------------------------------------------
Cannondale Corp. -0- 6,794,126 -0- -0- -0- 400,000 6,400,000
- --------------------------------------------------------------------------------------------------------
Daka International, Inc. -0- 8,952,002 -0- -0- -0- 300,000 9,112,500
- --------------------------------------------------------------------------------------------------------
General Acceptance Corp. -0- 3,547,890 -0- -0- -0- 153,800 4,075,700
- --------------------------------------------------------------------------------------------------------
General Scanning, Inc. -0- 2,932,596 -0- -0- -0- 224,700 2,696,400
- --------------------------------------------------------------------------------------------------------
Paradigm Technology,
Inc. -0- 10,111,543 -0- -0- -0- 350,000 7,700,000
- --------------------------------------------------------------------------------------------------------
Softdesk, Inc. 175,000 2,417,125 -0- -0- -0- 290,000 6,742,500
- --------------------------------------------------------------------------------------------------------
Tylan General, Inc. -0- 3,553,875 -0- -0- -0- 350,000 5,600,000
========================================================================================================
</TABLE>
24
<PAGE>
Financials
NOTE 4 - BANK BORROWINGS
The Fund has a $14,900,000 committed line of credit with a financial
institution syndicate with Chemical Bank of New York as the administrative
agent. Interest on borrowings under the line of credit is payable on maturity
or prepayment date. During the period July 20, 1995 (effective date of Credit
Agreement) through October 31, 1995, the Fund did not borrow under the line of
credit agreement. The Fund is charged a commitment fee, payable quarterly, at
the rate of 1/10 of 1% per annum on the unused balance of the Fund's
commitment.
NOTE 5 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold by the Fund during the year ended October 31,
1995 was $1,518,659,088 and $556,317,049, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of October 31, 1995, on a tax basis, is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $485,803,064
- ---------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (45,844,209)
- ---------------------------------------------------------------------------
Net unrealized appreciation of investment securities $439,958,855
===========================================================================
</TABLE>
Cost of investments for tax purposes is $1,831,573,507.
NOTE 6 - FUTURES CONTRACTS
On October 31, 1995, $10,003,000 U.S. Treasury bills were pledged as collateral
to cover margin requirements for futures contracts.
Futures contracts outstanding at October 31, 1995:
(Contracts - $500 times index/delivery month/commitment)
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
------------
<S> <C>
S&P 500 Index 900 contracts/Dec/buy $7,624,500
=================================================
</TABLE>
NOTE 7 - DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if
so elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 8 - CAPITAL STOCK
Changes in the Fund's capital stock outstanding during the years ended October
31, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold 53,971,580 $1,912,251,434 37,245,080 $ 938,440,033
- --------------------------------------------------------------------------------
Issued as reinvestment
of dividends -- -- 759 16,782
- --------------------------------------------------------------------------------
Reacquired (22,228,120) (718,663,666) (22,135,293) (559,746,670)
- --------------------------------------------------------------------------------
31,743,460 $1,193,587,768 15,110,546 $ 378,710,145
================================================================================
</TABLE>
25
<PAGE>
Financials
NOTE 9 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a share of the Fund
outstanding during each of the years in the two-year period ended October 31,
1995, the ten month period ended October 31, 1993 and each of the years in the
seven-year period ended December 31, 1992.
<TABLE>
<CAPTION>
OCTOBER 31,
-----------------------------------
1995 1994 1993
---------- -------- --------
<S> <C> <C> <C>
Net asset value,
beginning of period $ 28.37 $ 23.85 $ 18.52
- ----------------------- ---------- -------- --------
Income from investment
operations:
Net investment income
(loss) (0.04) (0.05) (0.02)
- ----------------------- ---------- -------- --------
Net gains (losses) on
securities
(both realized and
unrealized) 11.80 4.57 5.35
- ----------------------- ---------- -------- --------
Total from investment
operations 11.76 4.52 5.33
- ----------------------- ---------- -------- --------
Less distributions:
Dividends from net
investment income -- -- --
- ----------------------- ---------- -------- --------
Distributions from
capital gains -- -- --
- ----------------------- ---------- -------- --------
Total distributions -- -- --
- ----------------------- ---------- -------- --------
Net asset value, end of
period $ 40.13 $ 28.37 $ 23.85
======================= ========== ======== ========
Total return(b) 41.45% 18.96% 28.78%
======================= ========== ======== ========
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $2,245,554 $687,238 $217,256
======================= ========== ======== ========
Ratio of expenses to
average net assets(c) 1.08%(e) 1.07% 1.00%(f)
======================= ========== ======== ========
Ratio of net investment
income (loss) to
average net assets(d) (0.19)%(e) (0.26)% (0.24)%(f)
======================= ========== ======== ========
Portfolio turnover rate 52% 75% 61%
======================= ========== ======== ========
<CAPTION>
DECEMBER 31,
-----------------------------------------------------------------
1992(a) 1991 1990 1989 1988 1987 1986
--------- --------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 16.06 $ 11.85 $13.30 $ 11.07 $ 9.86 $ 12.10 $ 12.61
- ------------------------- --------- --------- -------- -------- -------- --------- --------
Income from investment
operations:
Net investment income
(loss) (0.03) (0.04) 0.08 0.03 0.05 -- 0.01
- ------------------------- --------- --------- -------- -------- -------- --------- --------
Net gains (losses) on
securities
(both realized and
unrealized) 3.41 7.29 (0.95) 2.28 1.21 (1.38) 0.05
- ------------------------- --------- --------- -------- -------- -------- --------- --------
Total from investment
operations 3.38 7.25 (0.87) 2.31 1.26 (1.38) 0.06
- ------------------------- --------- --------- -------- -------- -------- --------- --------
Less distributions:
Dividends from net
investment income -- -- (0.09) (0.03) (0.05) -- (0.08)
- ------------------------- --------- --------- -------- -------- -------- --------- --------
Distributions from
capital gains (0.92) (3.04) (0.49) (0.05) -- (0.86) (0.49)
- ------------------------- --------- --------- -------- -------- -------- --------- --------
Total distributions (0.92) (3.04) (0.58) (0.08) (0.05) (0.86) (0.57)
- ------------------------- --------- --------- -------- -------- -------- --------- --------
Net asset value, end of
period $ 18.52 $ 16.06 $11.85 $ 13.30 $ 11.07 $ 9.86 $ 12.10
========================= ========= ========= ======== ======== ======== ========= ========
Total return(b) 21.34% 63.90% (6.50)% 20.89% 12.77% (11.52)% 0.37%
========================= ========= ========= ======== ======== ======== ========= ========
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $38,238 $16,218 $9,234 $11,712 $12,793 $13,991 $18,547
========================= ========= ========= ======== ======== ======== ========= ========
Ratio of expenses to
average net assets(c) 1.25% 1.25% 1.25% 1.25% 1.22% 1.20% 1.19%
========================= ========= ========= ======== ======== ======== ========= ========
Ratio of net investment
income (loss) to
average net assets(d) (0.59)% (0.31)% 0.62% 0.24% 0.38% 0.01% 0.11%
========================= ========= ========= ======== ======== ======== ========= ========
Portfolio turnover rate 164% 165% 137% 69% 56% 118% 106%
========================= ========= ========= ======== ======== ======== ========= ========
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.
(c) Ratios of expenses to average net assets prior to reduction of advisory
fees and expense reimbursements were 1.15%, 1.09%, 1.17% (annualized),
1.65%, 1.83%, 1.99%, 1.80%, 1.56%, 1.29% and 1.32% for 1995-86,
respectively.
(d) Ratios of net investment income (loss) to average net assets prior to
reduction of advisory fees and expense reimbursements were (0.26)%,
(0.28)%, (0.41)% (annualized), (0.99)%, (0.89)%, (0.11)%, (0.31)%, 0.04%,
(0.08)% and (0.02)%, for 1995-86, respectively.
(e) Ratios are based on average net assets of $1,209,574,872.
(f) Annualized.
26
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
AIM Aggressive Growth Fund:
We have audited the accompanying statement of assets and liabilities of the AIM
Aggressive Growth Fund (a portfolio of AIM Equity Funds, Inc.), including the
schedule of investments, as of October 31, 1995, the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the years in the two-year period then ended and the financial
highlights for each of the years in the two-year period then ended and the ten
month period ended October 31, 1993. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of AIM
Aggressive Growth Fund as of October 31, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the years in
the two-year period then ended and the financial highlights for each of the
years in the two-year period then ended and the ten month period ended October
31, 1993, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
December 8, 1995
27
<PAGE>
This page intentionally left blank.
28
<PAGE>
<TABLE>
<CAPTION>
Directors & Officers
<S> <C> <C>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
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
Bruce L. Crockett President INVESTMENT ADVISOR
Director, President, and Chief
Executive Officer John J. Arthur A I M Advisors, Inc.
COMSAT Corporation Senior Vice President and Treasurer 11 Greenway Plaza
Suite 1919
Owen Daly II Gary T. Crum Houston, TX 77046
Director Senior Vice President
Cortland Trust Inc. TRANSFER AGENT
Jonathan C. Schoolar
Carl Frischling Senior Vice President A I M Fund Services, Inc.
Partner 11 Greenway Plaza
Kramer, Levin, Naftalis, Nessen, Carol F. Relihan Suite 1919
Kamin & Frankel Vice President and Secretary Houston, TX 77046
Robert H. Graham Melville B. Cox CUSTODIAN
President and Chief Operating Officer Vice President
A I M Management Group Inc. State Street Bank & Trust Company
Dana R. Sutton 225 Franklin Street
John F. Kroeger Vice President and Assistant Treasurer Boston, MA 02110
Formerly, Consultant
Wendell & Stockel Associates, Inc. P. Michelle Grace COUNSEL TO THE FUND
Assistant Secretary
Lewis F. Pennock Ballard Spahr
Attorney Nancy L. Martin Andrews & Ingersoll
Assistant Secretary 1735 Market Street
Ian W. Robinson Philadelphia, PA 19103
Consultant; Former Executive Ofelia M. Mayo
Vice President and Assistant Secretary COUNSEL TO THE DIRECTORS
Chief Financial Officer
Bell Atlantic Management Kathleen J. Pflueger Kramer, Levin, Naftalis,
Services, Inc. Assistant Secretary Nessen, Kamin & Frankel
919 Third Avenue
Louis S. Sklar Samuel D. Sirko New York, NY 10022
Executive Vice President Assistant Secretary
Hines Interests DISTRIBUTOR
Limited Partnership Stephen I. Winer
Assistant Secretary A I M Distributors, Inc.
11 Greenway Plaza
Mary J. Benson Suite 1919
Assistant Treasurer Houston, TX 77046
AUDITORS
KPMG Peat Marwick LLP
700 Louisiana
NationsBank Bldg.
Houston, TX 77002
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[PICTURE THE AIM FAMILY OF FUNDS(R)
APPEARS
HERE] 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
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of CT
AIM Tax-Free Intermediate Shares
CURRENT INCOME AND HIGH DEGREE
OF SAFETY
AIM Intermediate Government 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 July 18, 1995. **On
May 1, 1995, AIM Utilities Fund broadened
its investment strategy to permit up to
80% of its total assets to be invested in
foreign securities, and was renamed
AIM Management Group has provided leadership AIM Global Utilities Fund. ***On
in the mutual fund industry since 1976 and September 25, 1995, AIM Government
currently manages approximately $40 billion Securities Fund became AIM Intermediate
in assets for more than 2 million shareholders, Government Fund. For more complete
including individual investors, corporate clients, information about any AIM Fund(s), including
and financial institutions. The AIM Family of sales charges and expenses, ask your
Funds(R) is distributed nationwide, and AIM financial consultant or securities dealer
today ranks among the nation's top 20 mutual for a free prospectus(es). Please read the
fund companies in assets under management, according prospectus(es) carefully before you invest
to Lipper Analytical Services, Inc. or send money.
-------------------
[AIM LOGO BULK RATE
APPEARS U.S. POSTAGE
HERE] PAID
HOUSTON, TX
A I M Distributors, Inc. Permit No. 1919
11 Greenway Plaza, Suite 1919 -------------------
Houston, TX 77046
</TABLE>
