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AIM EQUITY FUNDS, INC.
INSTITUTIONAL CLASSES
AIM CHARTER FUND
AIM WEINGARTEN FUND
AIM CONSTELLATION FUND
Supplement dated April 1, 1996
to the Prospectus dated January 2, 1996
The second sentence in the first paragraph under the caption "SUMMARY
- - The Funds and Their Investment Objectives" on page 2 and the second sentence
in the first paragraph under the caption "GENERAL INFORMATION - Organization of
the Company" on page 16 are revised to reflect that AIM Equity Funds, Inc. (the
"Company") currently consists of six separate portfolios.
The last three sentences in the paragraph under the caption
"INVESTMENT PROGRAMS - AIM Charter Fund" on page 8 are replaced in their
entirety by the following:
"CHARTER seeks to achieve its objective by generally investing at
least 65% of its net assets in stocks of companies believed by
management to have the potential for above average growth in revenues
and earnings. CHARTER generally will also invest at least 80% of its
net assets in securities which pay income to CHARTER."
The following paragraph is added after the caption "Certain Investment
Strategies and Policies - Repurchase Agreements" on page 9:
"U.S. GOVERNMENT SECURITIES. CHARTER FUND may invest in U.S.
Government securities, including but not limited to, U.S. Treasury
obligations, such as Treasury Bills (maturities of one year or less)
or Treasury Notes (maturities of less than three years). The market
value of U.S. Government securities will fluctuate with changes in
interest rate levels. Thus, if interest rates increase from the time
the security was purchased, the market value of the security will
decrease. Conversely, if interest rates decrease, the market value of
the security will increase."
The fifth sentence in the paragraph under the caption "Certain
Investment Strategies and Policies - Stock Index Futures Contracts" on page 9
is deleted and replaced in its entirety by the following:
"Each of the Funds may purchase and sell futures contracts 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 Strategies and Policies - Stock Index Futures
Contracts" on page 9:
"There are risks associated with investments in stock index
futures 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
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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 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 fourth sentence in the first paragraph under the caption "PURCHASE
OF SHARES" on page 11 is deleted and replaced in its entirety by the following:
"Accordingly, in order to be accepted for execution, purchase orders
must be submitted in proper form and received prior to the close of
the New York Stock Exchange, which is generally 4:00 p.m. Eastern Time
(and which is hereinafter referred to as "NYSE Close") on a business
day of the Funds, and such orders will be confirmed at the net asset
value determined as of the close of that day ("trade date")."
The second sentence in the second paragraph under the caption
"REDEMPTION OF SHARES" in page 12 is deleted and replaced in its entirety by
the following:
"If a redemption request is received prior to NYSE Close on a business
day of such Fund, the redemption will be effected at the net asset
value determined as of the close of that day (the "redemption date")."
The first paragraph on page 16 of the Prospectus is revised to read in
its entirety as follows:
"Robert M. Kippes, Kenneth A. Zschappel, Charles D. Scavone,
and David P. Barnard are primarily responsible for the day-to-day
management of CONSTELLATION. Mr. Kippes is Vice President of AIM
Capital. He currently serves as manager for CONSTELLATION and has
been responsible for the Fund since 1993. Mr. Kippes' background is
discussed above with respect to the management of Weingarten. 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 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. Mr. Barnard's background is
discussed above with respect to the management of Weingarten; he has
also been responsible for the management of CONSTELLATION since 1990."
