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RETAIL CLASS OF AIM EQUITY FUNDS, INC.
AIM AGGRESSIVE GROWTH FUND
Supplement dated April 1, 1996
to the Prospectus dated January 2, 1996
The first sentence in the first paragraph on the cover page, the
second sentence in the first paragraph under the caption "SUMMARY- THE FUND" on
page 2 and the second sentence in the first paragraph under the caption
"ORGANIZATION OF THE COMPANY" on page 11 are revised to reflect that AIM Equity
Funds, Inc. (the "Company") currently consists of six separate portfolios.
The fourth sentence in the paragraph under the caption "Certain
Investment Strategies and Policies - Stock Index Futures Contracts and Related
Options" on page 7 is deleted and replaced in its entirety by the following:
"The Fund may purchase and sell futures contracts and related options
in order to hedge the value of its portfolio against changes in market
conditions."
The following paragraph is added as the second paragraph under the
caption "Certain Investment Policies - Stock Index Futures Contracts and
Related Options" on page 7:
"There are risks associated with investments in stock index
futures contracts and options on such contracts. During certain
market conditions, purchases and sales of futures contracts may not
completely offset a decline or rise in the value of a Fund's
portfolio. In the futures markets, it may not always be possible to
execute a buy or sell order at the desired price, or to close out an
open position due to market conditions, limits on open positions
and/or daily price fluctuations. Changes in the market value of a
Fund's portfolio may differ substantially from the changes anticipated
by the Fund when hedged positions were established, and unanticipated
price movements in a futures contract may result in a loss
substantially greater than a Fund's initial investment in such
contract. Successful use of futures contracts and related options is
dependent upon AIM's ability to predict correctly movements in the
direction of the applicable markets. No assurance can be given that
AIM's judgment in this respect will be correct."
The second paragraph under the caption "Portfolio Managers" on page
10 of the Prospectus is revised to read in its entirety as follows:
"Robert M. Kippes, Kenneth A. Zschappel and Charles D. Scavone
are primarily responsible for the day-to-day management of AGGRESSIVE
GROWTH. Mr. Kippes is Vice President of AIM Capital. He currently
serves as co-manager of AGGRESSIVE GROWTH and has been responsible
for the Fund since 1992. Mr. Kippes has been associated with AIM
and/or its affiliates since 1989 and has six years of experience as an
investment professional. Mr. Zschappel is Assistant Vice President of
AIM Capital and has been responsible for the Fund since 1996. Mr.
Zschappel has been associated with AIM and/or its affiliates since
1990 and has five years of experience as an investment professional.
Mr. Scavone has been responsible for the Fund and associated with AIM
and/or its affiliates since 1996. Mr. Scavone has five
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years experience as an investment professional. Prior to joining AIM,
Mr. Scavone was Associate Portfolio Manager for Van Kampen
American Capital Asset Management, Inc. from 1994-1996. From 1991 to
1994, he worked in the investments department at Texas Commerce
Investment Management Company, with his last position being Equity
Research Analyst/Assistant Portfolio Manager."
The first paragraph under the caption "TERMS AND CONDITIONS OF
PURCHASE OF THE AIM FUNDS - Timing of Purchase Orders" on page A-4 is deleted
and replaced in its entirety by the following:
"TIMING OF PURCHASE ORDERS. Orders for the purchase of shares
of an AIM Fund (other than AIM MONEY MARKET FUND, as described below)
received prior to the close of the New York Stock Exchange ("NYSE"),
which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close") on any business day of an AIM Fund will
be confirmed at the price next determined. Orders received after NYSE
close will be confirmed at the price determined on the next business
day of the AIM Fund. It is the responsibility of the dealer to ensure
that all orders are transmitted on a timely basis to the Transfer
Agent. Any loss resulting from the dealer's failure to submit an
order within the prescribed time frame will be borne by that dealer.
Please see "How to Purchase Shares - Purchases by Wire" for
information on obtaining a reference number for wire orders, which
will facilitate the handling of such orders and ensure prompt credit
to an investor's account. A "business day" of an AIM Fund is any day
on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays
and on the days on which New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE."
The section under the caption "TERMS AND CONDITIONS OF PURCHASE OF THE
AIM FUNDS - Special Information Relating to Money Market Funds" on page A-5 is
deleted and replaced in its entirety by the following:
"TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY
MARKET FUND ONLY). Orders for purchases, exchanges and redemptions of
shares of AIM MONEY MARKET FUND received prior to 12:00 noon or NYSE
Close on any business day of the Fund will be confirmed at the price
next determined. Net asset value is normally determined at 12:00 noon
and on each business day of AIM MONEY MARKET FUND.
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SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND AND AIM
TAX-EXEMPT CASH FUND (THE "MONEY MARKET FUNDS"). Because each Money
Market Fund uses the amortized cost method of valuing the securities
it holds and rounds its per share net asset value to the nearest whole
cent, it is anticipated that the net asset value of the shares of such
funds will remain constant at $1.00 per share. However, there is no
assurance that either Money Market Fund can maintain a $1.00 net asset
value per share. In order to earn dividends with respect to AIM MONEY
MARKET FUND on the same day that a purchase is made, purchase payments
in the form of federal funds must be received by the Transfer Agent
before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds
received after such time but prior to NYSE Close, will begin to earn
dividends on the next business day following the date of purchase.
The Money Market Funds generally will not issue share certificates but
will record investor holdings in noncertificate form and regularly
advise the shareholder of his ownership position. Class B shares of
AIM MONEY MARKET FUND are designed for temporary investment as part of
an investment program in the Class B shares and, unlike shares of most
money market funds, are subject to a contingent deferred sales charge
as well as Rule 12b-1 distribution fees and service fees."
The third paragraph under the caption "Purchases At Net Asset Value"
on page A-7 is revised by changing item (h) to read in its entirety as follows:
"(h) certain broker-dealers, investment advisers or bank trust
departments that provide asset allocation, similar specialized
investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services,
and that have entered into an agreement with AIM Distributors with
respect to their use of the AIM Funds in connection with such
services."
The fourth paragraph under the caption "Purchases At Net Asset Value"
on page A-7 is revised by deleting the word "or" before item (3), and inserting
the following after item (3):
",or (4) all of the plan's transactions are executed through a single
omnibus account per fund and the financial institution or service
organization has entered into an agreement with AIM Distributors with
respect to their use of the AIM Funds in connection with such
accounts."
The second sentence in the first paragraph after the listing of the
AIM Funds under the caption "EXCHANGE PRIVILEGE - Terms and Conditions of
Exchanges" on page A-10 is deleted in its entirety.
The seventh paragraph under the caption "EXCHANGE PRIVILEGE - Terms
and Conditions of Exchanges" on page A-11 is deleted and replaced in its
entirety by the following:
"Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to
be exchanged are redeemed at their net asset value as determined at
NYSE Close on
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the day that an exchange request in proper form (described below) is
received. Exchange requests received after NYSE Close will result in
the redemption of shares at their net asset value at NYSE Close on
the next business day. See "Terms and Conditions of Purchase of the
AIM Funds - Timing of Purchase, Exchange and Redemption Orders (AIM
MONEY MARKET FUND only)" for information regarding the timing of
exchange orders for AIM MONEY MARKET FUND. Normally, shares of an AIM
Fund to be acquired by exchange are purchased at their net asset
value or applicable offering price, as the case may be,
determined on the date that such request is received, but under
unusual market conditions such purchases may be delayed for up to
five business days if it is determined that a fund would be
materially disadvantaged by an immediate transfer of the proceeds of
the exchange. If a shareholder is exchanging into a fund paying
daily dividends (See "Dividends, Distributions and Tax Matters -
Dividends and Distributions," below), and the release of the exchange
proceeds is delayed for the foregoing five-day period, such
shareholder will not begin to accrue dividends until the sixth
business day after the exchange. Shares purchased by check may not
be exchanged until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is
received. See "Terms and Conditions of Purchase of the AIM Funds -
Timing of Purchase Orders."
The fifth and sixth sentences in the paragraph under the caption
"EXCHANGE PRIVILEGE - Exchanges by Telephone" on page A-12 are deleted and
replaced in their entirety by the following:
"To exchange shares by telephone, a shareholder, dealer or investment
advisor who has satisfied the foregoing conditions must call AFS at
(800) 959-4246. If a shareholder is unable to reach AFS by telephone,
he may also request exchanges by telegraph or use overnight courier
services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is
received prior to NYSE Close."
The second sentence in the paragraph under the caption "HOW TO REDEEM
SHARES - Expedited Redemptions (AIM Money Market Fund only)" on page A-14 is
deleted and replaced in its entirety by the following:
"If the redemption order is received after 11:30 a.m. and prior to
NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next
business day."
The paragraph under the caption "HOW TO REDEEM SHARES - Timing and
Pricing of Redemption Orders" on page A-14 is deleted and replaced in its
entirety by the following:
"TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the
various AIM Funds (other than AIM MONEY MARKET FUND) are redeemed at
their net asset value next computed after a request for redemption in
proper form (including signature guarantees and other required
documentation for written redemptions) is received by the Transfer
Agent, except that Class B shares of the Multiple Class Funds, and
Class A shares of the Multiple Class Funds and shares of the other AIM
Funds that are subject to the contingent deferred sales charge program
for large purchases
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described above, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See
"Multiple Distribution System" and "Contingent Deferred Sales Charge
Program for Large Purchases." Orders for the redemption of shares
received in proper form prior to NYSE Close on any business day of
an AIM Fund will be confirmed at the price determined as of the close
of that day. Orders received after NYSE Close will be confirmed at
the price determined on the next business day of an AIM Fund.
Redemption of shares of AIM MONEY MARKET FUND received prior to 12:00
noon or NYSE Close on any business day of the Fund will be confirmed
at the price next determined. It is the responsibility of the dealer
to ensure that all orders are transmitted on a timely basis. Any
resulting loss from the dealer's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer. Telephone redemption requests must be made by NYSE Close on
any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept
requests which specify a particular date for redemption or which
specify any special conditions."
