<PAGE> 1
[PHOTO APPEARS HERE]
AIM WEINGARTEN FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT APRIL 30, 1996
<PAGE> 2
AIM WEINGARTEN FUND
For shareholders who seek long-term growth of capital through investments
primarily in common stocks of leading U.S. companies considered by management
to have strong earnings momentum.
ABOUT FUND PERFORMANCE DATA THROUGHOUT THIS REPORT:
o AIM Weingarten Fund performance figures are historical and reflect
reinvestments of all distributions and changes in net asset value.
Unless otherwise indicated, Fund results were computed at net asset
value without reflecting sales charges.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B share
performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines
from 5% to 0% at the beginning of the seventh year. The performance
of the Fund's Class B shares will differ from that of Class A shares
due to differences in sales charge structure and Fund expenses.
o 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.
o Past performance cannot guarantee comparable future results.
o The Fund's portfolio composition is subject to change, and there is no
assurance the Fund will continue to hold any one particular security.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o Lipper Analytical Services, Inc., is an independent mutual fund
performance monitor. The unmanaged Lipper Growth Fund Index represents
an average of the performance of the 30 largest growth mutual funds.
o Standard & Poor's Corporation (S&P) is a credit-rating agency. The
unmanaged Standard & Poor's Composite Index of 500 Stocks (S&P 500) is
widely regarded by investors as representative of the stock market in
general.
o The Dow Jones Industrial Average (DJIA) is an unmanaged composite of
the performance of 30 large-company stocks.
o The NASDAQ (National Association of Securities Dealers Automated
Quotation system) Composite Index is a group of more than 4,500
unmanaged over-the-counter securities widely regarded by investors to
be representative of the small- and medium-size company stock
universe.
o Bank certificates of deposit (CDs), which are insured by the FDIC for
up to $100,000, are short-term investments that pay fixed principal
and interest but are subject to fluctuating rollover rates and early
withdrawal penalties. CD income is calculated using the six-month
annualized average monthly CD rate reported by the Federal Reserve
Board. Shares of AIM Weingarten Fund are not insured, and their value
will vary with market conditions.
o The Consumer Price Index (CPI) is a measure of change in consumer
prices as determined by the U.S. Bureau of Labor Statistics.
o An investment cannot be made in any index 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> 3
A Message from
the Chairman
- ---------------------------
At $3 trillion in assets,
the industry
has grown
1,500 times over the
past 50 years.
If we are to sustain
that growth,
we must have the
public's confidence.
- ---------------------------
Dear Shareholder:
"Past performance cannot guarantee comparable
[PHOTO OF future results."
Charles T. Bauer,
Chairman of As a mutual fund investor, you've seen this disclaimer on
the Board of every piece of mail you've ever received about your fund.
the Fund. You've seen it so often that you probably don't even
APPEARS HERE] think about it or question what it means. But you should.
That sentence about past performance is true now more
than ever. These days it bluntly means "Don't expect the
25% to 35% returns you received last year." Don't automatically expect the
15% to 20% returns of the past decade, either. History shows that the average
annual return is about 9% to 10%. If you're investing in mutual funds with
expectations of double-digit returns every year, you will be disappointed.
Maybe not today, but sometime in the future.
What is a realistic expectation for 1996? In this uncertain market, it is
easier to discuss what is unrealistic. Last year's performance was an
anomaly--the equivalent of euphoria. To expect a repeat is unrealistic.
I realize I am sounding a warning bell during the mutual fund industry's best
year ever. Investors like you poured $99 billion into stock mutual funds during
the first four months of 1996--the highest inflows on record. At $3 trillion in
assets, the industry has grown 1,500 times over the past 50 years. If we are to
sustain that growth, we must have the public's confidence. Our industry has a
long-standing reputation for honesty and integrity. To maintain that reputation
as our assets swell into the trillions, we must make sure that we don't promise
anything we can't produce.
The industry's concern about investors' expectations goes beyond stamping
all our advertising with a standard disclaimer about performance. Mutual fund
leaders recently met for a conference in New York, and foremost on our minds
was educating investors about market volatility.
A whole generation of investors has seen nothing but a bull market, which
started in 1982. Except for the 1987 market crash, they've enjoyed a heady
rise. They may expect the same throughout this decade. I've been in the mutual
fund industry for more than 25 years, and I have seen a 5% to 10% market
correction about every five years. The last major correction was in 1990. If
history is any kind of teacher, we are overdue.
The challenge for investors is not to panic when the market takes a
downturn. We have another saying in the industry: "Focus on time, not timing."
Over time, the stock market has proven to be the only investment that
consistently beats inflation. But investing in it takes a long-term view.
Market timing--trying to play the market and "rescue" your money in a
downturn--has proven to be an inefficient strategy for most investors.
The challenge for the mutual fund industry is to keep your trust during a
bear market. The industry has survived and thrived because of its built-in
integrity: By law, we must operate in the best interests of our shareholders.
The mutual fund industry is among the most regulated in the country. The
Investment Company Act of 1940, which governs our industry, protects
shareholders against self-dealing, conflicts of interest, misappropriation of
funds, and other fraudulent activities.
The industry also policies itself. At AIM we have an exhaustive code of
ethics that governs each of our 1,150 employees.
(continued)
<PAGE> 4
A Message from
the Chairman
On a very basic level, it boils down to this: We are dealing with your money,
and if we lose your trust, we lose our business.
We are vulnerable to even the hint of impropriety. That's why the mutual fund
industry is set up to avoid even the perception of self-dealing. Fund managers
succeed to the extent that they attract and keep investors. If they lose your
faith, managers ultimately will fail.
Mutual funds are highly liquid investments. Any time you choose, you can pull
out of a fund and receive a redemption price reflective of the market that day.
If you become dissatisfied with a fund manager, it's easy to leave and go
elsewhere. With more than 7,000 funds available, it's a buyers' market.
The next time you read, "Past performance cannot guarantee comparable future
results," think about your own expectations as an investor. We cannot promise
you another year like 1995. But we can promise to manage your money with honesty
and integrity.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
On the following pages is a complete discussion of your Fund's performance and
investment strategy. If you have any questions or comments about this report,
please call our Client Services department 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.
2
<PAGE> 5
Management's
Discussion & Analysis
- ------------------------
AIM Weingarten
Fund's total return
was 9.01% for
Class A shares and
8.65% for Class B shares
during the
six-month period
ended April 30, 1996.
- ------------------------
[PHOTO AIM WEINGARTEN FUND
APPEARS HERE] DIVERSIFIES, HEADS BACK TO BASICS
Uncertainty plagued the performance of the stock markets through most of the
six-month period ended April 30, 1996. The period was one of the most volatile
on record, as sweeping point swings whipsawed the markets.
What caused the roller coaster ride? Investors believed that 1995's prime
stock market conditions--robust corporate earnings, moderate economic growth,
and mild inflation--would not continue. To some extent, they were right. Net
income of many U.S. companies fell in the fourth quarter of 1995. Among the
hardest hit were technology stocks, which had been market favorites. Growth in
the economy slowed in the fourth quarter to a feeble annual rate of 0.5%,
according to The Wall Street Journal.
In late 1995, investors flocked from technology stocks to blue-chip stocks
and waited for the Federal Reserve Bank Board to spur the economy by cutting
interest rates. The Fed did lower rates in December and January, but market
watchers anticipated that further cuts were possible.
In March, everything changed. The Labor Department released the first of two
stunningly strong monthly employment reports, and the Dow Jones Industrial
Average fell 171 points in one day. Fed Chairman Alan Greenspan cautioned about
growing wage pressures. Suddenly the economy appeared to be overheating, and
analysts voiced concern that the Fed might have to raise interest rates to slow
it down. That never happened.
In less than two weeks, the markets warmed to the idea of a growing economy,
and major indexes advanced to near-record levels. Greenspan testified before
Congress: "The economy has weathered recent sluggishness and is back on track
for steady growth with low inflation."
By April 1996, reports offered a mixed picture of the economy. Job growth
slowed, but consumer income and spending levels rose and factory orders surged.
Corporate earnings in first quarter 1996 were better than expected. I/B/E/S
International, a Wall Street firm that tabulates corporate earnings estimates,
reported that earnings of 54% of the companies it surveyed exceeded analysts'
expectations.
Though the markets remained skittish, stocks resumed their advance toward
record levels.
YOUR INVESTMENT PORTFOLIO
AIM Weingarten Fund's total return was 9.01% for Class A shares and 8.65% for
Class B shares during the six-month period ended April 30, 1996. The Fund
attracted approximately 14,500 new investors over the period, and net assets
grew from $4.7 billion to $5.1 billion.
AIM Weingarten Fund responded to volatile markets by diversifying its mix of
securities. The Fund has taken a "barbell" approach to asset allocation: About
half of the portfolio is invested in "core" stocks of major companies and the
other half in "momentum" stocks such as those in the technology and consumer
cyclical sectors.
Managers consider the Fund to be sector neutral with no heavy weighting in
any one particular industry. The Fund decreased holdings in technology stocks
from about 35% to about 15%. Technology is a broad category including stocks of
software developers, hardware manufacturers, networking equipment providers,
electronics firms and telecommunications.
The Fund increased weightings in drug company and retail stocks over the
past six months. Emphasis on international stocks rose to 14.42% from 10.98%.
These included large holdings in European drug manufacturing companies.
MEDICAL (DRUGS): Drugmakers across the world are benefiting from cost
cutting, price increases, and the introduction of new drugs. This sector made
up the largest single industry concentration of the Fund, at 8.45%.
MEDICAL (PATIENT SERVICES): Stocks of large
3
<PAGE> 6
Management's
Discussion & Analysis
<TABLE>
<CAPTION>
================================================================================
PORTFOLIO HOLDINGS (AS OF APRIL 30, 1996)
================================================================================
<S> <C>
TOP 10 SECURITIES TOP 10 INDUSTRIES
1. Philip Morris Companies, Inc. 1. Medical (Drugs)
2. Ciba-Geigy Ltd. 2. Retail (Stores)
3. Loews Corp. 3. Medical (Patient Services)
4. Sandoz Ltd. 4. Finance (Consumer Credit)
5. Tenet Healthcare Corp. 5. Telecommunications
6. Bass PLC 6. Computer Software/Services
7. Atmel Corp. 7. Medical Instruments/Products
8. Baxter International Inc. 8. Insurance (Multi-Line Property)
9. Vencor, Inc. 9. Chemicals
10. Varian Associates, Inc. 10. Banking
================================================================================
</TABLE>
hospital chains and managed care companies were buoyed over the past six months
by continuing cost-cutting efforts. The industry is going through major
restructuring through consolidations, networking and increased reliance on
managed care. The Fund invested 5.55% of its assets in this sector, and major
holdings included Tenet Healthcare Corp. and Vencor, Inc.
CONSUMER CYCLICALS: After a dismal Christmas, earnings picked up for
retailers in the first quarter of 1996. Several factors were at work:
o Weak demand last year prompted retailers to cut inventory and
operating costs,
o Technology allowed improved tracking and distribution of inventory,
o Sales have increased in California, the nation's leading indicator of
sales.
Retail stores made up 5.74% of the Fund's holdings. These included discount
chain Price/Costco Inc., and "category killers" Office Depot, Inc., Pep
Boys--Mannie, Moe, and Jack, and Home Depot, Inc.
As of April 30, 1996, the Fund had 252 holdings. Of course, the Fund's
composition is subject to change and there is no guarantee it will continue to
hold any one particular security.
OUTLOOK
All signs point to continued stock market volatility. Until investors gain a
clearer picture of the momentum of the U.S. economy, financial markets
probably will continue to vacillate.
The outlook for corporate earnings is mixed for the second quarter of 1996.
Growth in specific industries--including technology, health care and retail--is
expected to continue. One possible dampener: a rise in interest rates, which
would increase the cost of borrowing and erode profits.
What should AIM Weingarten Fund investors expect from the rest of 1996? With
the markets in a constant state of flux, it is easier to discuss what not to
expect. There is no guarantee the Fund's Class A shares will return 28.20% as
they did in fiscal year 1995. Historically, the stock market has generated an
average total return of about 10%, according to Ibbotson Associates.
AIM Weingarten Fund portfolio managers deal with market volatility through
diversification and a disciplined investment strategy that focuses on earnings
growth as the foremost criterion for stock selection. It is a time-tested
strategy that has led the Fund's Class A shares to an outstanding average
annual return over the past 27 years, as shown by the chart on the next page.
- ----------------------------------
Net Asset Composition
As of 4/30/96
Common Stock 94%
Convertible Bonds 2%
Cash/Cash Equivalent 3%
Other assets 1%
- ----------------------------------
4
<PAGE> 7
Long-Term
Performance
================================================================================
GROWTH OF A $10,000 INVESTMENT
================================================================================
Inception-April 30, 1996
Past performance cannot guarantee comparable future results.
<TABLE>
<CAPTION>
AIM WEINGARTEN FUND CONSUMER
CLASS A SHARES PRICE INDEX
(with sales charge) S&P 500 SIX-MONTH CDs (CPI)
------------------- ------- ------------- -----------
<S> <C> <C> <C> <C>
6/17/69 $9,444 $10,000 $10,000 $10,000
4/71 7,573 8,610 10,871 10,519
4/70 11,339 11,381 11,638 10,956
4/72 14,447 12,149 12,262 11,339
4/73 11,603 12,416 12,922 11,913
4/74 9,842 10,845 14,033 13,115
4/75 10,382 11,013 15,464 14,454
4/76 11,407 13,342 16,471 15,328
4/77 12,080 13,451 17,330 16,393
4/78 16,156 13,912 18,390 17,459
4/79 19,867 15,405 20,267 19,290
4/80 27,403 16,994 22,679 22,131
4/81 43,205 22,301 25,475 24,344
4/82 36,883 20,670 29,422 25,929
4/83 65,713 30,788 33,005 26,940
4/84 57,791 31,299 36,189 28,169
4/85 70,366 36,816 40,042 29,208
4/86 103,121 50,140 43,174 29,672
4/87 127,515 63,444 45,893 30,792
4/88 122,037 59,359 48,915 31,995
4/89 147,107 72,880 52,900 33,634
4/90 170,565 80,488 57,275 35,219
4/91 219,345 94,628 61,769 36,940
4/92 248,067 107,924 64,825 38,115
4/93 249,169 117,870 66,943 39,344
4/94 268,499 124,147 68,867 40,273
4/95 302,255 145,770 72,589 41,503
4/96 395,188 189,698 76,368 42,705
================================================================================
</TABLE>
Source: Towers Data Systems HYPO(R)
Your Fund's total return includes sales charges, expenses, and management
fees. For Fund performance calculations and descriptions of indexes cited on
this page, please refer to the inside front cover.
- ----------------------------------
AVERAGE ANNUAL
TOTAL RETURNS
As of March 31, 1996
(the most recent calendar quarter)
SINCE INCEPTION
(6/17/69) 14.61%
20 YEARS 18.62
15 YEARS 15.13
10 YEARS 13.62
5 YEARS 10.54
1 YEAR 23.66
- ----------------------------------
5
<PAGE> 8
Financials
SCHEDULE OF INVESTMENTS
April 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-79.49%
ADVERTISING/BROADCASTING-0.06%
83,900 Belo (A.H.) Corp. $ 3,125,275
- ---------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE-0.88%
225,100 Boeing Co. 18,486,338
- ---------------------------------------------------------------------------------------------
414,600 General Dynamics Corp. 26,171,625
- ---------------------------------------------------------------------------------------------
44,657,963
- ---------------------------------------------------------------------------------------------
AIRLINES-0.29%
500,000 Southwest Airlines Co. 14,875,000
- ---------------------------------------------------------------------------------------------
APPLIANCES-0.28%
500,000 Newell Co. 14,250,000
- ---------------------------------------------------------------------------------------------
AUTOMOBILE (MANUFACTURERS)-0.77%
225,000 Chrysler Corp. 14,118,750
- ---------------------------------------------------------------------------------------------
700,000 Ford Motor Co. 25,112,500
- ---------------------------------------------------------------------------------------------
39,231,250
- ---------------------------------------------------------------------------------------------
BANKING-2.03%
520,000 Chase Manhattan Corp. 35,815,000
- ---------------------------------------------------------------------------------------------
300,000 Fleet Financial Group, Inc. 12,900,000
- ---------------------------------------------------------------------------------------------
55,600 NationsBank Corp. 4,434,100
- ---------------------------------------------------------------------------------------------
350,000 Norwest Bank Corp. 12,643,750
- ---------------------------------------------------------------------------------------------
425,000 PNC Bank Corp. 12,856,250
- ---------------------------------------------------------------------------------------------
100,000 Wells Fargo & Co. 24,262,500
- ---------------------------------------------------------------------------------------------
102,911,600
- ---------------------------------------------------------------------------------------------
BEVERAGES-0.80%
200,000 Anheuser-Busch Companies, Inc. 13,425,000
- ---------------------------------------------------------------------------------------------
425,000 PepsiCo. Inc. 26,987,500
- ---------------------------------------------------------------------------------------------
40,412,500
- ---------------------------------------------------------------------------------------------
BIOTECHNOLOGY-0.81%
250,000 AMGEN Inc.(a) 14,375,000
- ---------------------------------------------------------------------------------------------
475,000 Guidant Corp. 26,659,375
- ---------------------------------------------------------------------------------------------
41,034,375
- ---------------------------------------------------------------------------------------------
BUILDING MATERIALS-0.54%
350,000 Georgia-Pacific Corp. 27,212,500
- ---------------------------------------------------------------------------------------------
BUSINESS SERVICES-1.83%
500,000 CUC International Inc.(a) 16,437,500
- ---------------------------------------------------------------------------------------------
129,250 Diebold, Inc. 4,976,125
- ---------------------------------------------------------------------------------------------
180,000 Dun & Bradstreet Corp. (The) 10,957,500
- ---------------------------------------------------------------------------------------------
625,000 Equifax Inc. 15,312,500
- ---------------------------------------------------------------------------------------------
300,000 Healthcare COMPARE Corp.(a) 14,137,500
- ---------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
Business Services-continued
619,800 Olsten Corp. $ 18,826,425
- ---------------------------------------------------------------------------------------------
381,200 ServiceMaster L.P. 12,103,100
- ---------------------------------------------------------------------------------------------
92,750,650
- ---------------------------------------------------------------------------------------------
CHEMICALS-0.47%
171,700 Great Lakes Chemical Corp. 11,718,525
- ---------------------------------------------------------------------------------------------
200,000 Hercules Inc. 12,100,000
- ---------------------------------------------------------------------------------------------
23,818,525
- ---------------------------------------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.04%
82,800 Cabot Corp. 2,214,900
- ---------------------------------------------------------------------------------------------
COMPUTER MINI/PCS-2.33%
300,000 COMPAQ Computer Corp.(a) 13,987,500
- ---------------------------------------------------------------------------------------------
325,000 Dell Computer Corp. 14,909,375
- ---------------------------------------------------------------------------------------------
240,200 Digital Equipment Corp.(a) 14,351,950
- ---------------------------------------------------------------------------------------------
500,000 Gateway 2000 Inc.(a) 17,437,500
- ---------------------------------------------------------------------------------------------
250,000 Hewlett-Packard Co. 26,468,750
- ---------------------------------------------------------------------------------------------
40,800 Stratus Computer, Inc.(a) 1,147,500
- ---------------------------------------------------------------------------------------------
550,000 Sun Microsystems Inc.(a) 29,837,500
- ---------------------------------------------------------------------------------------------
118,140,075
- ---------------------------------------------------------------------------------------------
COMPUTER NETWORKING-1.57%
525,000 Cabletron Systems, Inc.(a) 39,571,875
- ---------------------------------------------------------------------------------------------
525,000 Cisco Systems, Inc.(a) 27,234,375
- ---------------------------------------------------------------------------------------------
275,000 3Com Corp.(a) 12,684,375
- ---------------------------------------------------------------------------------------------
79,490,625
- ---------------------------------------------------------------------------------------------
COMPUTER PERIPHERALS-1.60%
225,000 Adaptec Inc.(a) 12,937,500
- ---------------------------------------------------------------------------------------------
621,700 Cognex Corp.(a) 16,630,475
- ---------------------------------------------------------------------------------------------
225,000 Seagate Technology Inc.(a) 13,050,000
- ---------------------------------------------------------------------------------------------
800,000 Storage Technology Corp.(a) 24,600,000
- ---------------------------------------------------------------------------------------------
90,000 U.S. Robotics Corp.(a) 14,085,000
- ---------------------------------------------------------------------------------------------
81,302,975
- ---------------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES-4.47%
200,000 BMC Software, Inc.(a) 12,175,000
- ---------------------------------------------------------------------------------------------
570,000 Cadence Design Systems, Inc.(a) 29,782,500
- ---------------------------------------------------------------------------------------------
471,200 Ceridian Corp.(a) 22,499,800
- ---------------------------------------------------------------------------------------------
350,000 Computer Associates International, Inc. 25,681,250
- ---------------------------------------------------------------------------------------------
926,600 Computervision Corp.(a) 11,235,025
- ---------------------------------------------------------------------------------------------
250,000 First Data Corp. 19,000,000
- ---------------------------------------------------------------------------------------------
608,100 Fiserv, Inc.(a) 18,547,050
- ---------------------------------------------------------------------------------------------
265,000 Microsoft Corp.(a) 30,044,375
- ---------------------------------------------------------------------------------------------
25,400 National Data Corp. 895,350
- ---------------------------------------------------------------------------------------------
450,000 Oracle Systems Corp.(a) 15,187,500
- ---------------------------------------------------------------------------------------------
697,500 Synopsys, Inc.(a) 28,771,875
- ---------------------------------------------------------------------------------------------
225,000 Wallace Computer Services, Inc. 13,303,125
- ---------------------------------------------------------------------------------------------
227,122,850
- ---------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 10
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
CONGLOMERATES-2.03%
500,000 Dial Corp. (The) $ 14,062,500
- ---------------------------------------------------------------------------------------------
700,000 Loews Corp. 53,375,000
- ---------------------------------------------------------------------------------------------
150,000 Textron Inc. 12,862,500
- ---------------------------------------------------------------------------------------------
325,000 Tyco International Ltd. 12,553,125
- ---------------------------------------------------------------------------------------------
478,100 U.S. Industries Inc. 10,040,100
- ---------------------------------------------------------------------------------------------
102,893,225
- ---------------------------------------------------------------------------------------------
CONTAINERS-0.76%
882,300 First Brands Corp. 23,380,950
- ---------------------------------------------------------------------------------------------
425,000 Sealed Air Corp.(a) 15,034,375
- ---------------------------------------------------------------------------------------------
38,415,325
- ---------------------------------------------------------------------------------------------
COSMETICS & TOILETRIES-1.30%
175,000 Colgate-Palmolive Co. 13,409,375
- ---------------------------------------------------------------------------------------------
1,400,000 General Nutrition Co.(a) 27,300,000
- ---------------------------------------------------------------------------------------------
237,100 Gillette Co. (The) 12,803,400
- ---------------------------------------------------------------------------------------------
150,000 Procter & Gamble Co. 12,675,000
- ---------------------------------------------------------------------------------------------
66,187,775
- ---------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS/MISCELLANEOUS-0.97%
1,150,000 Amphenol Corp.(a) 30,331,250
- ---------------------------------------------------------------------------------------------
231,100 Anixter International Inc.(a) 4,044,250
- ---------------------------------------------------------------------------------------------
450,000 Thermo Instrument Systems, Inc.(a) 14,850,000
- ---------------------------------------------------------------------------------------------
49,225,500
- ---------------------------------------------------------------------------------------------
ELECTRONIC/DEFENSE-0.22%
300,000 Sundstrand Corp. 11,025,000
- ---------------------------------------------------------------------------------------------
ELECTRONIC/PC DISTRIBUTORS-0.79%
250,000 Arrow Electronics, Inc.(a) 12,531,250
- ---------------------------------------------------------------------------------------------
525,000 Avnet, Inc. 27,693,750
- ---------------------------------------------------------------------------------------------
40,225,000
- ---------------------------------------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-2.33%
1,200,000 Bear Stearns Companies Inc. 30,150,000
- ---------------------------------------------------------------------------------------------
225,000 Finova Group, Inc. 12,487,500
- ---------------------------------------------------------------------------------------------
275,000 Franklin Resources, Inc. 15,743,750
- ---------------------------------------------------------------------------------------------
300,000 Morgan Stanley Group Inc. 15,075,000
- ---------------------------------------------------------------------------------------------
850,000 PaineWebber Group Inc. 17,743,750
- ---------------------------------------------------------------------------------------------
249,600 Price (T. Rowe) Associates 13,915,200
- ---------------------------------------------------------------------------------------------
325,000 Salomon Inc. 13,203,125
- ---------------------------------------------------------------------------------------------
118,318,325
- ---------------------------------------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-4.57%
250,000 Beneficial Corp. 13,812,500
- ---------------------------------------------------------------------------------------------
550,000 Countrywide Credit Industries, Inc. 11,893,750
- ---------------------------------------------------------------------------------------------
300,000 Federal Home Loan Mortgage Corp. 25,012,500
- ---------------------------------------------------------------------------------------------
400,000 Federal National Mortgage Association 12,250,000
- ---------------------------------------------------------------------------------------------
431,100 First USA, Inc. 24,249,375
- ---------------------------------------------------------------------------------------------
209,100 Firstar Corp. 9,723,150
- ---------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
Finance (Consumer Credit)-continued
750,000 Green Tree Acceptance, Inc. $ 25,312,500
- ---------------------------------------------------------------------------------------------
375,000 Household International, Inc. 25,921,875
- ---------------------------------------------------------------------------------------------
875,000 MBNA Corp. 24,828,125
- ---------------------------------------------------------------------------------------------
350,000 Student Loan Marketing Association 25,637,500
- ---------------------------------------------------------------------------------------------
250,000 SunAmerica, Inc. 13,625,000
- ---------------------------------------------------------------------------------------------
610,500 United Companies Financial Corp. 19,536,000
- ---------------------------------------------------------------------------------------------
231,802,275
- ---------------------------------------------------------------------------------------------
FINANCE (SAVINGS & LOAN)-0.25%
450,000 Washington Mutual Inc. 12,487,500
- ---------------------------------------------------------------------------------------------
FOOD PROCESSING-0.84%
600,000 ConAgra, Inc. 23,175,000
- ---------------------------------------------------------------------------------------------
160,100 Dole Food Co., Inc. 6,404,000
- ---------------------------------------------------------------------------------------------
394,233 Lancaster Colony Corp. 13,305,364
- ---------------------------------------------------------------------------------------------
42,884,364
- ---------------------------------------------------------------------------------------------
FUNERAL SERVICES-0.31%
300,000 Service Corp. International 15,937,500
- ---------------------------------------------------------------------------------------------
FURNITURE-0.14%
231,200 Miller (Herman) Inc. 7,080,500
- ---------------------------------------------------------------------------------------------
GAMING-0.31%
450,000 Harrah's Entertainment, Inc.(a) 15,525,000
- ---------------------------------------------------------------------------------------------
HOME BUILDING-0.11%
207,000 Centex Corp. 5,589,000
- ---------------------------------------------------------------------------------------------
HOTELS/MOTELS-0.26%
1,000,000 Host Marriott Corp.(a) 13,375,000
- ---------------------------------------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-0.54%
750,000 Conseco, Inc. 27,375,000
- ---------------------------------------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY)-3.42%
246,000 ACE, Ltd. 10,824,000
- ---------------------------------------------------------------------------------------------
350,000 Aetna Life & Casualty Co. 24,937,500
- ---------------------------------------------------------------------------------------------
300,000 CIGNA Corp. 34,012,500
- ---------------------------------------------------------------------------------------------
800,000 Horace Mann Educators Corp. 26,300,000
- ---------------------------------------------------------------------------------------------
475,000 MGIC Investment Corp. 25,768,750
- ---------------------------------------------------------------------------------------------
73,000 Mid Ocean Limited 2,609,750
- ---------------------------------------------------------------------------------------------
300,000 PMI Group, Inc. (The) 12,750,000
- ---------------------------------------------------------------------------------------------
800,000 TIG Holdings, Inc. 24,300,000
- ---------------------------------------------------------------------------------------------
200,000 Travelers Group, Inc. 12,300,000
- ---------------------------------------------------------------------------------------------
173,802,500
- ---------------------------------------------------------------------------------------------
LEISURE & RECREATION-1.27%
520,300 Brunswick Corp. 11,446,600
- ---------------------------------------------------------------------------------------------
850,000 Carnival Cruise Lines, Inc. 24,650,000
- ---------------------------------------------------------------------------------------------
350,000 Coleman Co., Inc. (The)(a) 16,056,250
- ---------------------------------------------------------------------------------------------
159,600 Eastman Kodak Co. 12,209,400
- ---------------------------------------------------------------------------------------------
64,362,250
- ---------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 12
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
MACHINERY (HEAVY)-0.86%
300,000 Dover Corp. $ 15,450,000
- ---------------------------------------------------------------------------------------------
300,000 Foster Wheeler Corp. 13,875,000
- ---------------------------------------------------------------------------------------------
350,000 Harnischfeger Industries, Inc. 14,175,000
- ---------------------------------------------------------------------------------------------
43,500,000
- ---------------------------------------------------------------------------------------------
MACHINERY (MISCELLANEOUS)-0.07%
126,200 American Standard Companies(a) 3,565,150
- ---------------------------------------------------------------------------------------------
MEDICAL (DRUGS)-5.37%
750,000 Abbott Laboratories 30,468,750
- ---------------------------------------------------------------------------------------------
375,000 American Home Products Corp. 39,562,500
- ---------------------------------------------------------------------------------------------
380,000 AmeriSource Health Corp.(a) 13,680,000
- ---------------------------------------------------------------------------------------------
425,000 Cardinal Health, Inc. 26,668,750
- ---------------------------------------------------------------------------------------------
66,300 Express Scripts, Inc.(a) 3,281,850
- ---------------------------------------------------------------------------------------------
600,000 ICN Pharmaceuticals, Inc. 13,500,000
- ---------------------------------------------------------------------------------------------
450,000 Ivax Corp. 13,106,250
- ---------------------------------------------------------------------------------------------
200,000 Merck & Co., Inc. 12,100,000
- ---------------------------------------------------------------------------------------------
200,000 Pfizer Inc. 13,775,000
- ---------------------------------------------------------------------------------------------
650,000 Pharmacia & Upjohn, Inc. 24,862,500
- ---------------------------------------------------------------------------------------------
400,000 Rhone-Poulenc Rorer Inc. 24,800,000
- ---------------------------------------------------------------------------------------------
473,200 Schering-Plough Corp. 27,149,850
- ---------------------------------------------------------------------------------------------
625,000 Watson Pharmaceuticals, Inc.(a) 29,687,500
- ---------------------------------------------------------------------------------------------
272,642,950
- ---------------------------------------------------------------------------------------------
MEDICAL (INSTRUMENTS/PRODUCTS)-3.50%
917,500 Baxter International Inc. 40,599,375
- ---------------------------------------------------------------------------------------------
300,000 Becton, Dickinson & Co. 24,187,500
- ---------------------------------------------------------------------------------------------
1,000,000 Biomet, Inc.(a) 14,750,000
- ---------------------------------------------------------------------------------------------
650,077 Boston Scientific Corp.(a) 28,034,571
- ---------------------------------------------------------------------------------------------
425,000 Medtronic, Inc. 22,578,125
- ---------------------------------------------------------------------------------------------
379,400 Nellcor Puritan-Bennett, Inc.(a) 18,590,600
- ---------------------------------------------------------------------------------------------
300,050 St. Jude Medical, Inc. 10,951,825
- ---------------------------------------------------------------------------------------------
478,500 U.S. Surgical Corp. 17,704,500
- ---------------------------------------------------------------------------------------------
177,396,496
- ---------------------------------------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-5.29%
1,000,000 Caremark International, Inc. 27,625,000
- ---------------------------------------------------------------------------------------------
250,000 Columbia/HCA Healthcare Corp. 13,281,250
- ---------------------------------------------------------------------------------------------
475,000 Community Health Systems, Inc.(a) 20,603,125
- ---------------------------------------------------------------------------------------------
400,000 Health Management Associates, Inc.(a) 12,800,000
- ---------------------------------------------------------------------------------------------
700,000 HEALTHSOUTH Corp.(a) 25,987,500
- ---------------------------------------------------------------------------------------------
500,000 Living Centers of America, Inc.(a) 18,500,000
- ---------------------------------------------------------------------------------------------
500,000 MedPartners/Mullikin, Inc.(a) 14,437,500
- ---------------------------------------------------------------------------------------------
793,000 Sybron International Corp.(a) 20,023,250
- ---------------------------------------------------------------------------------------------
2,500,000 Tenet Healthcare Corp.(a) 51,250,000
- ---------------------------------------------------------------------------------------------
400,000 United Healthcare Corp. 23,400,000
- ---------------------------------------------------------------------------------------------
1,200,000 Vencor, Inc.(a) 40,500,000
- ---------------------------------------------------------------------------------------------
268,407,625
- ---------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 13
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
NATURAL GAS PIPELINE-0.50%
500,000 Williams Cos., Inc. (The) $ 25,562,500
- ---------------------------------------------------------------------------------------------
OFFICE AUTOMATION-0.29%
100,000 Xerox Corp. 14,650,000
- ---------------------------------------------------------------------------------------------
OFFICE PRODUCTS-0.86%
250,000 Alco Standard Corp. 14,468,750
- ---------------------------------------------------------------------------------------------
225,000 Avery Dennison Corp. 12,825,000
- ---------------------------------------------------------------------------------------------
350,000 Reynolds & Reynolds Co.-Class A 16,187,500
- ---------------------------------------------------------------------------------------------
43,481,250
- ---------------------------------------------------------------------------------------------
OIL & GAS (SERVICES)-1.66%
374,900 Louisiana Land & Exploration Co. 20,291,462
- ---------------------------------------------------------------------------------------------
100,000 Mobil Corp. 11,500,000
- ---------------------------------------------------------------------------------------------
1,131,100 NorAm Energy Corp. 12,442,100
- ---------------------------------------------------------------------------------------------
500,000 Reading & Bates Corp.(a) 12,250,000
- ---------------------------------------------------------------------------------------------
505,800 Sonat Offshore Drilling Inc. 27,755,775
- ---------------------------------------------------------------------------------------------
84,239,337
- ---------------------------------------------------------------------------------------------
OIL EQUIPMENT & SUPPLIES-1.47%
450,000 Baker Hughes Inc. 14,287,500
- ---------------------------------------------------------------------------------------------
350,000 Coastal Corp. 13,868,750
- ---------------------------------------------------------------------------------------------
95,300 Cooper Cameron Corp.(a) 4,300,413
- ---------------------------------------------------------------------------------------------
450,000 Dresser Industries, Inc. 14,343,750
- ---------------------------------------------------------------------------------------------
320,000 Halliburton Co. 18,360,000
- ---------------------------------------------------------------------------------------------
106,600 Schlumberger Ltd. 9,407,450
- ---------------------------------------------------------------------------------------------
74,567,863
- ---------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS-1.55%
650,000 International Paper Co. 25,918,750
- ---------------------------------------------------------------------------------------------
350,000 Kimberly-Clark Corp. 25,418,750
- ---------------------------------------------------------------------------------------------
500,000 Union Camp Corp. 27,187,500
- ---------------------------------------------------------------------------------------------
78,525,000
- ---------------------------------------------------------------------------------------------
PUBLISHING-0.54%
336,400 New York Times Co. 10,933,000
- ---------------------------------------------------------------------------------------------
122,400 Times Mirror Co. (The) 5,217,300
- ---------------------------------------------------------------------------------------------
160,500 Tribune Co. 11,194,875
- ---------------------------------------------------------------------------------------------
27,345,175
- ---------------------------------------------------------------------------------------------
RESTAURANTS-1.38%
550,000 Applebee's International, Inc. 14,575,000
- ---------------------------------------------------------------------------------------------
2,000,000 Darden Restaurants, Inc. 27,500,000
- ---------------------------------------------------------------------------------------------
250,000 McDonald's Corp. 11,968,750
- ---------------------------------------------------------------------------------------------
400,000 Outback Steakhouse Inc.(a) 16,050,000
- ---------------------------------------------------------------------------------------------
70,093,750
- ---------------------------------------------------------------------------------------------
RETAIL (FOOD & DRUG)-1.60%
650,000 Albertson's, Inc. 25,025,000
- ---------------------------------------------------------------------------------------------
178,400 Hannaford Bros. Co. 4,995,200
- ---------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 14
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
Retail (Food & Drug)-continued
425,000 Rite Aid Corp. $ 12,590,625
- ---------------------------------------------------------------------------------------------
1,141,000 Safeway Inc.(a) 38,508,750
- ---------------------------------------------------------------------------------------------
81,119,575
- ---------------------------------------------------------------------------------------------
RETAIL (STORES)-5.51%
400,000 Circuit City Stores, Inc. 12,700,000
- ---------------------------------------------------------------------------------------------
742,600 Consolidated Stores Corp.(a) 26,733,600
- ---------------------------------------------------------------------------------------------
300,000 Dayton-Hudson Corp. 28,650,000
- ---------------------------------------------------------------------------------------------
500,000 Gap Inc. (The) 15,062,500
- ---------------------------------------------------------------------------------------------
550,000 Home Depot, Inc. 26,056,250
- ---------------------------------------------------------------------------------------------
121,700 Mercantile Stores Co., Inc. 7,591,038
- ---------------------------------------------------------------------------------------------
650,000 Micro Warehouse, Inc.(a) 27,950,000
- ---------------------------------------------------------------------------------------------
1,050,800 Office Depot, Inc.(a) 23,511,650
- ---------------------------------------------------------------------------------------------
750,000 Pep Boys-Manny, Moe & Jack 25,031,250
- ---------------------------------------------------------------------------------------------
1,500,000 Price/Costco Inc.(a) 28,500,000
- ---------------------------------------------------------------------------------------------
320,000 Sears, Roebuck & Co. 15,960,000
- ---------------------------------------------------------------------------------------------
590,625 Staples, Inc.(a) 11,221,875
- ---------------------------------------------------------------------------------------------
230,000 Viking Office Products Inc.(a) 13,656,250
- ---------------------------------------------------------------------------------------------
700,000 Waban Inc.(a) 17,150,000
- ---------------------------------------------------------------------------------------------
279,774,413
- ---------------------------------------------------------------------------------------------
SCIENTIFIC INSTRUMENTS-1.03%
294,900 Millipore Corp. 12,348,938
- ---------------------------------------------------------------------------------------------
700,000 Varian Associates, Inc. 39,987,500
- ---------------------------------------------------------------------------------------------
52,336,438
- ---------------------------------------------------------------------------------------------
SEMICONDUCTORS-2.07%
500,000 Analog Devices, Inc.(a) 12,875,000
- ---------------------------------------------------------------------------------------------
1,015,700 Atmel Corp.(a) 40,628,000
- ---------------------------------------------------------------------------------------------
400,000 Intel Corp. 27,100,000
- ---------------------------------------------------------------------------------------------
850,000 KLA Instruments Corp.(a) 24,543,750
- ---------------------------------------------------------------------------------------------
105,146,750
- ---------------------------------------------------------------------------------------------
SHOES & RELATED APPAREL-0.33%
190,300 NIKE, Inc.-Class B 16,651,250
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-2.87%
941,000 ADC Telecommunications, Inc.(a) 39,522,000
- ---------------------------------------------------------------------------------------------
177,600 Andrew Corp.(a) 8,524,800
- ---------------------------------------------------------------------------------------------
400,000 A T & T Corp. 24,500,000
- ---------------------------------------------------------------------------------------------
550,000 Glenayre Technologies, Inc.(a) 25,575,000
- ---------------------------------------------------------------------------------------------
500,000 MCI Communications Corp. 14,718,750
- ---------------------------------------------------------------------------------------------
500,000 Tellabs, Inc.(a) 27,625,000
- ---------------------------------------------------------------------------------------------
213,333 360 Communications Co.(a) 5,013,333
- ---------------------------------------------------------------------------------------------
145,478,883
- ---------------------------------------------------------------------------------------------
TELEPHONE-0.73%
750,000 Cincinnati Bell, Inc. 36,937,500
- ---------------------------------------------------------------------------------------------
TEXTILES-0.29%
400,000 Liz Claiborne, Inc. 14,550,000
- ---------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 15
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
TOBACCO-2.27%
1,100,000 Philip Morris Companies, Inc. $ 99,137,500
- ---------------------------------------------------------------------------------------------
500,000 UST, Inc. 16,000,000
- ---------------------------------------------------------------------------------------------
115,137,500
- ---------------------------------------------------------------------------------------------
TRANSPORTATION (MISCELLANEOUS)-0.26%
650,000 Stolt-Nielsen S.A. 13,355,469
- ---------------------------------------------------------------------------------------------
Total Domestic Common Stocks 4,033,526,976
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS-1.66%
MACHINERY (MISCELLANEOUS)-0.73%
$ 30,500,000 Thermo Electron Corp., Conv. Sub. Deb., 4.25%, 01/01/03 37,286,250
- ---------------------------------------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-0.26%
13,400,000 Healthsource Inc., Conv. Sub. Notes, 5.00%, 03/01/03(b)
(acquired 03/18/96-03/22/96; cost $13,855,989) 13,132,000
- ---------------------------------------------------------------------------------------------
OFFICE AUTOMATION-0.67%
19,500,000 Danka Business Systems PLC, Conv. Yankee Sub. Notes, 6.75%,
04/01/02 34,051,875
- ---------------------------------------------------------------------------------------------
Total Convertible Corporate Bonds 84,470,125
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY INTERESTS-14.42%
BRAZIL-0.32%
300,000 Telecomunicacoes Brasileiras S/A Telebras-ADR
(Telecommunications) 16,237,500
- ---------------------------------------------------------------------------------------------
CANADA-1.05%
275,000 Newbridge Networks Corp.(a) (Computer Networking) 17,703,125
- ---------------------------------------------------------------------------------------------
694,900 Northern Telecom Ltd. (Telecommunications) 35,787,350
- ---------------------------------------------------------------------------------------------
53,490,475
- ---------------------------------------------------------------------------------------------
DENMARK-0.28%
290,000 Danisco A/S (Food Processing) 14,151,135
- ---------------------------------------------------------------------------------------------
FRANCE-0.94%
102,000 Roussel-Uclaf (Medical-Drugs) 24,041,800
- ---------------------------------------------------------------------------------------------
500,000 SGS-Thomson Microelectronics N.V.-N.Y. Shares(a)
(Semiconductors) 23,500,000
- ---------------------------------------------------------------------------------------------
47,541,800
- ---------------------------------------------------------------------------------------------
GERMANY-0.40%
160,900 Adidas A.G.(a) (Shoes & Related Apparel) 12,244,333
- ---------------------------------------------------------------------------------------------
158,000 Veba A.G. (Electric Services) 7,854,073
- ---------------------------------------------------------------------------------------------
20,098,406
- ---------------------------------------------------------------------------------------------
HONG KONG-0.71%
820,000 HSBC Holdings PLC (Banking) 12,243,552
- ---------------------------------------------------------------------------------------------
2,505,000 Sun Hung Kai Properties Ltd. (Real Estate) 23,882,587
- ---------------------------------------------------------------------------------------------
36,126,139
- ---------------------------------------------------------------------------------------------
IRELAND-0.53%
405,500 Elan Corporation PLC-ADR(a) (Medical-Drugs) 26,813,688
- ---------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 16
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
ISRAEL-1.17%
1,200,000 ECI Telecommunications (Computer Networking) $ 31,350,000
- ---------------------------------------------------------------------------------------------
625,000 Teva Pharmaceutical Industries Ltd.-ADR (Medical-Drugs) 28,046,875
- ---------------------------------------------------------------------------------------------
59,396,875
- ---------------------------------------------------------------------------------------------
ITALY-0.73%
167,000 Fila Holding S.p.A.-ADR (Retail Stores) 11,397,750
- ---------------------------------------------------------------------------------------------
6,000,000 Telecom Italia Mobile S.p.A.(a) (Telecommunications) 13,160,051
- ---------------------------------------------------------------------------------------------
6,000,000 Telecom Italia S.p.A.(Telecommunications) 12,199,744
- ---------------------------------------------------------------------------------------------
36,757,545
- ---------------------------------------------------------------------------------------------
JAPAN-0.27%
608,000 Honda Motor Co. (Automobile-Manufacturers) 13,891,497
- ---------------------------------------------------------------------------------------------
MALAYSIA-0.63%
2,149,000 Malayan Banking Berhad (Banking) 20,944,411
- ---------------------------------------------------------------------------------------------
1,600,000 United Engineers (Building Materials) 10,973,409
- ---------------------------------------------------------------------------------------------
31,917,820
- ---------------------------------------------------------------------------------------------
NETHERLANDS-0.37%
197,300 Madge Networks N.V.(a) (Computer Networking) 5,820,350
- ---------------------------------------------------------------------------------------------
120,000 Wolters Kluwer N.V. (Publishing) 13,117,011
- ---------------------------------------------------------------------------------------------
18,937,361
- ---------------------------------------------------------------------------------------------
NORWAY-0.23%
250,000 Norsk Hydro A.S.-ADR (Chemicals) 11,500,000
- ---------------------------------------------------------------------------------------------
SINGAPORE-0.26%
1,513,000 City Developments Ltd. (Real Estate) 13,237,942
- ---------------------------------------------------------------------------------------------
SWEDEN-1.41%
899,000 ASTRA AB-A Shares (Medical-Drugs) 39,968,222
- ---------------------------------------------------------------------------------------------
490,000 Skandia Forsakrings AB (Insurance-Multi-Line Property) 11,199,421
- ---------------------------------------------------------------------------------------------
1,000,000 Telefonaktiebolaget L.M. Ericsson-ADR (Telecommunications) 20,375,000
- ---------------------------------------------------------------------------------------------
71,542,643
- ---------------------------------------------------------------------------------------------
SWITZERLAND-2.62%
58,700 Ciba-Geigy Ltd. (Chemicals) 68,127,175
- ---------------------------------------------------------------------------------------------
1,700 Roche Holdings A.G. (Medical-Drugs) 13,370,248
- ---------------------------------------------------------------------------------------------
47,200 Sandoz A.G. (Chemicals) 51,548,969
- ---------------------------------------------------------------------------------------------
133,046,392
- ---------------------------------------------------------------------------------------------
UNITED KINGDOM-2.50%
3,876,450 Bass PLC (Beverages-Alcoholic) 45,720,286
- ---------------------------------------------------------------------------------------------
5,408,200 British Gas PLC (Oil & Gas-Exploration & Production) 19,213,235
- ---------------------------------------------------------------------------------------------
190,300 Danka Business Systems PLC-ADR (Office Automation) 9,134,400
- ---------------------------------------------------------------------------------------------
1,975,000 Glaxo Wellcome PLC (Medical-Drugs) 23,962,818
- ---------------------------------------------------------------------------------------------
1,000,000 Granada Group PLC (Leisure & Recreation) 12,396,508
- ---------------------------------------------------------------------------------------------
350,000 Stolt-Nielsen S.A.-ADR (Transportation-Miscellaneous) 7,262,500
- ---------------------------------------------------------------------------------------------
337,250 Thorn EMI PLC (Leisure & Recreation) 9,353,953
- ---------------------------------------------------------------------------------------------
127,043,700
- ---------------------------------------------------------------------------------------------
Total Foreign Stocks & Other Equity Interests 731,730,918
- ---------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 17
Financials
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-2.56%(C)
$129,901,038 Daiwa Securities America Inc., 5.34%, 05/01/95(d) $ 129,901,038
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-98.13% 4,979,629,057
- ---------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.87% 94,781,165
- ---------------------------------------------------------------------------------------------
TOTAL NET ASSETS-100.00% $5,074,410,222
=============================================================================================
</TABLE>
Abbreviations:
ADR - American Depository Receipt
Conv. - Convertible
Deb. - Debentures
Sub. - Subordinated
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of this security has been determined in
accordance with procedures established by the Board of Directors. The market
value of this security at April 30, 1996 was $13,132,000 which represented
0.26% of net assets.
(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% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(d) Joint repurchase agreement entered into on 04/30/96 with maturing value of
$767,124,680. Collateralized by $737,151,000 U.S. Treasury obligations,
0.00% to 11.25% due 05/15/96 to 02/15/21.
See Notes to Financial Statements.
15
<PAGE> 18
Financials
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $4,090,864,009) $4,979,629,057
- -----------------------------------------------------------------------------------------
Foreign currencies, at market value (cost $3,501,586) 3,475,235
- -----------------------------------------------------------------------------------------
Receivables for:
Investments sold 111,744,188
- -----------------------------------------------------------------------------------------
Capital stock sold 10,649,465
- -----------------------------------------------------------------------------------------
Dividends and interest 4,947,034
- -----------------------------------------------------------------------------------------
Investment for deferred compensation plan 47,860
- -----------------------------------------------------------------------------------------
Other assets 114,584
- -----------------------------------------------------------------------------------------
Total assets 5,110,607,423
- -----------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 21,829,175
- -----------------------------------------------------------------------------------------
Capital stock reacquired 8,581,928
- -----------------------------------------------------------------------------------------
Deferred compensation 47,860
- -----------------------------------------------------------------------------------------
Accrued advisory fees 2,479,971
- -----------------------------------------------------------------------------------------
Accrued administrative service fees 12,617
- -----------------------------------------------------------------------------------------
Accrued distribution fees 1,901,956
- -----------------------------------------------------------------------------------------
Accrued transfer agent fees 579,675
- -----------------------------------------------------------------------------------------
Accrued operating expenses 764,019
- -----------------------------------------------------------------------------------------
Total liabilities 36,197,201
- -----------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $5,074,410,222
=========================================================================================
NET ASSETS:
Class A $4,859,206,284
- -----------------------------------------------------------------------------------------
Class B $ 157,314,881
- -----------------------------------------------------------------------------------------
Institutional Class $ 57,889,057
- -----------------------------------------------------------------------------------------
CAPITAL STOCK, $.001 PAR VALUE PER SHARE:
Class A:
Authorized 750,000,000
- -----------------------------------------------------------------------------------------
Outstanding 253,481,547
=========================================================================================
Class B:
Authorized 750,000,000
- -----------------------------------------------------------------------------------------
Outstanding 8,259,513
=========================================================================================
Institutional Class:
Authorized 200,000,000
- -----------------------------------------------------------------------------------------
Outstanding 2,986,393
=========================================================================================
CLASS A:
Net asset value and redemption price per share $ 19.17
- -----------------------------------------------------------------------------------------
Offering price per share:
(Net asset value of $19.17 divided by 94.50%) $ 20.29
=========================================================================================
CLASS B:
Net asset value and offering price per share $ 19.05
=========================================================================================
INSTITUTIONAL CLASS:
Net asset value, offering and redemption price per share $ 19.38
=========================================================================================
</TABLE>
See Notes to Financial Statements.
16
<PAGE> 19
Financials
STATEMENT OF OPERATIONS
For the six months ended April 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $749,284 foreign withholding tax) $ 28,373,892
- -----------------------------------------------------------------------------------------
Interest 8,254,048
- -----------------------------------------------------------------------------------------
Total investment income 36,627,940
- -----------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 15,084,498
- -----------------------------------------------------------------------------------------
Administrative service fees 55,446
- -----------------------------------------------------------------------------------------
Custodian fees 70,325
- -----------------------------------------------------------------------------------------
Directors' fees 7,856
- -----------------------------------------------------------------------------------------
Distribution fees-Class A 6,941,306
- -----------------------------------------------------------------------------------------
Distribution fees-Class B 451,959
- -----------------------------------------------------------------------------------------
Transfer agent fees-Class A 4,181,974
- -----------------------------------------------------------------------------------------
Transfer agent fees-Class B 123,506
- -----------------------------------------------------------------------------------------
Transfer agent fees-Institutional Class 1,925
- -----------------------------------------------------------------------------------------
Other 577,028
- -----------------------------------------------------------------------------------------
Total expenses 27,495,823
- -----------------------------------------------------------------------------------------
Less fees waived by advisor (663,890)
- -----------------------------------------------------------------------------------------
Net expenses 26,831,933
- -----------------------------------------------------------------------------------------
Net investment income 9,796,007
- -----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES, FOREIGN
CURRENCIES AND FUTURES CONTRACTS:
Net realized gain (loss) on sales of:
Investment securities 479,497,460
- -----------------------------------------------------------------------------------------
Foreign currencies (125,026)
- -----------------------------------------------------------------------------------------
Futures contracts (7,874,291)
- -----------------------------------------------------------------------------------------
471,498,143
- -----------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of:
Investment securities (63,496,144)
- -----------------------------------------------------------------------------------------
Foreign currencies 143,872
- -----------------------------------------------------------------------------------------
(63,352,272)
- -----------------------------------------------------------------------------------------
Net gain on investment securities, foreign currencies and futures
contracts 408,145,871
- -----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $417,941,878
=========================================================================================
</TABLE>
See Notes to Financial Statements.
17
<PAGE> 20
Financials
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 1996 and the year ended October 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1996 1995
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ 9,796,007 $ (1,259,456)
- ----------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities,
foreign currencies, futures and options contracts 471,498,143 620,641,509
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investment securities and foreign currencies (63,352,272) 411,202,260
- ----------------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations 417,941,878 1,030,584,313
- ----------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income:
Class A -- (14,842,521)
- ----------------------------------------------------------------------------------------------
Class B -- --
- ----------------------------------------------------------------------------------------------
Institutional Class -- (290,923)
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A (606,615,135) (387,332,253)
- ----------------------------------------------------------------------------------------------
Class B (7,813,688) --
- ----------------------------------------------------------------------------------------------
Institutional Class (7,333,818) (4,072,920)
- ----------------------------------------------------------------------------------------------
Net equalization credits (charges):
Class A 3,473,548 204,025
- ----------------------------------------------------------------------------------------------
Class B 550,475 297,921
- ----------------------------------------------------------------------------------------------
Institutional Class 69,990 71,195
- ----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 493,722,778 (17,628,236)
- ----------------------------------------------------------------------------------------------
Class B 113,038,327 41,458,876
- ----------------------------------------------------------------------------------------------
Institutional Class 6,077,118 6,504,480
- ----------------------------------------------------------------------------------------------
Net increase in net assets 413,111,473 654,953,957
- ----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 4,661,298,749 4,006,344,792
- ----------------------------------------------------------------------------------------------
End of period $5,074,410,222 $4,661,298,749
==============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $3,683,390,922 $3,070,552,699
- ----------------------------------------------------------------------------------------------
Undistributed net investment income 38,918,893 25,028,873
- ----------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investment
securities, foreign currencies, futures and options
contracts 463,568,542 613,833,040
- ----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities,
foreign currencies, and futures contracts 888,531,865 951,884,137
- ----------------------------------------------------------------------------------------------
$5,074,410,222 $4,661,298,749
==============================================================================================
</TABLE>
See Notes to Financial Statements.
18
<PAGE> 21
Financials
NOTES TO FINANCIAL STATEMENTS
April 30, 1996
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Weingarten Fund (the "Fund") is a series 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 operating diversified
portfolios: AIM Weingarten Fund, AIM Charter Fund, AIM Constellation Fund and
AIM Aggressive Growth Fund. The Fund currently offers three different classes of
shares: the Class A shares, Class B shares and the Institutional Class. Matters
affecting each portfolio or class will be voted on exclusively by such
shareholders. The assets, liabilities and operations of each portfolio are
accounted for separately. The Fund's investment objective is to seek growth of
capital principally through investment in common stocks of seasoned and better
capitalized companies. 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. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. Security Valuations -- Except as provided in the next sentence, 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. Exchange listed convertible bonds are valued
at the mean between the closing bid and asked prices obtained from a
broker-dealer. 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 or are questionable 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. 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.
C. Foreign Currency Contracts -- A foreign 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 currency 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.
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 or cash, and/or by securing a
standby letter of credit from a major commercial bank, as collateral, for the
account of the broker (the Fund's agent in acquiring the futures
19
<PAGE> 22
Financials
position). During the period the futures contract is open, changes in the
value of the contract are recognized as unrealized gains or losses by
"marking to market" on a daily basis to reflect the market value of the
contract 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 contract is closed, the Fund records 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 the
contract may not correlate with changes in the securities being hedged.
E. Covered Call Options -- The Fund may write call options, but only on a
covered basis; that is, the Fund will own the underlying security. Options
written by the Fund normally will have expiration dates between three and
nine months from the date written. The exercise price of a call option may
be below, equal to, or above the current market value of the underlying
security at the time the option is written. When the Fund writes a covered
call option, an amount equal to the premium received by the Fund is recorded
as an asset and an equivalent liability. The amount of the liability is
subsequently "marked-to-market" to reflect the current market value of the
option written. The current market value of a written option is the last
sale price, or in the absence of a sale, the mean between the last bid and
asked prices on that day. If a written call option expires on the stipulated
expiration date, or if the Fund enters into a closing purchase transaction,
the Fund realizes a gain (or a loss if the closing purchase transaction
exceeds the premium received when the option was written) without regard to
any unrealized gain or loss on the underlying security, and the liability
related to such option is extinguished. If a written option is exercised,
the Fund realizes a gain or a loss from the sale of the underlying security
and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy,
and the writer (the Fund) the obligation to sell, the underlying security
at the stated exercise price during the option period. The purchaser of a
call option has the right to acquire the security which is the subject of
the call option at any time during the option period. During the option
period, in return for the premium paid by the purchaser of the option, the
Fund has given up the opportunity for capital appreciation above the
exercise price should the market price of the underlying security increase,
but has retained the risk of loss should the price of the underlying
security decline. During the option period, the Fund may be required at any
time to deliver the underlying security against payment of the exercise
price. This obligation is terminated upon the expiration of the option
period or at such earlier time at which the Fund effects a closing purchase
transaction by purchasing (at a price which may be higher than that
received when the call option was written) a call option identical to the
one originally written. The Fund will not write a covered call option if,
immediately thereafter, the aggregate value of the securities underlying
all such options, determined as of the dates such options were written,
would exceed 25% of the net assets of the Fund.
F. 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 specific identification of 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.
G. 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.
H. Expenses -- Operating expenses directly attributable to a class of shares
are charged to that class' operations. Expenses which are applicable to all
classes, eg. advisory fees, are allocated among them.
I. Equalization -- The Fund follows the accounting practice known as
equalization by which a portion of the proceeds from sales and the costs of
repurchases of Fund shares, equivalent on a per share basis to the amount
of undistributed net investment income, is credited or charged to
undistributed net income when the transaction is recorded so that
undistributed net investment income per share is unaffected by sales or
redemptions of Fund shares.
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"). The terms of the master investment advisory agreement
provide that the Fund shall pay an advisory fee to AIM at an
20
<PAGE> 23
Financials
annual rate of 1.0% of the first $30 million of the Fund's average daily net
assets, plus 0.75% of the Fund's average daily net assets in excess of $30
million to and including $350 million, plus 0.625% of the Fund's average daily
net assets in excess of $350 million. AIM is currently voluntarily waiving a
portion of its advisory fees payable by the Fund to AIM to the extent necessary
to reduce the fees paid by the Fund at net asset levels higher than those
currently incorporated in the present advisory fee schedule. AIM will receive a
fee calculated at the annual rate of 1.0% of the first $30 million of the Fund's
average daily net assets, plus 0.75% of the Fund's average daily net assets in
excess of $30 million to and including $350 million, plus 0.625% of the Fund's
average daily net assets in excess of $350 million to and including $2 billion,
plus 0.60% of the Fund's average daily net assets in excess of $2 billion to and
including $3 billion, plus 0.575% of the Fund's average daily net assets in
excess of $3 billion to and including $4 billion, plus 0.55% of the Fund's
average daily net assets in excess of $4 billion. The waiver of fees is entirely
voluntary but approval is required by the Board of Directors of the Company for
any decision by AIM to discontinue the waiver. During the six months ended April
30, 1996, AIM waived fees of $663,890. Under the terms of a master sub-advisory
agreement between AIM and A I M Capital Management, Inc. ("AIM Capital"), AIM
pays AIM Capital 50% of the amount paid by the Fund to AIM. These agreements
require AIM to reduce its fees or, if necessary, make payments to the Fund to
the extent required to satisfy any expense limitations imposed by the securities
laws or regulations thereunder or of any state in which the Fund's shares are
qualified for sale.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the six months ended April 30, 1996, AIM
was reimbursed $55,446 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 Class A shares and Class B shares. During the
six months ended April 30, 1996, AFS was reimbursed $2,210,305 for such
services.
During the six months ended April 30, 1996, the Fund, pursuant to a transfer
agency and service agreement, paid A I M Institutional Fund Services, Inc.
("AIFS") $1,925 for shareholder and transfer agency services with respect to the
Institutional Class.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A and Class B shares and a master distribution agreement with Fund
Management Company ("FMC") to serve as the distributor for the Institutional
Class. The Company has adopted Plans pursuant to Rule 12b-1 under the 1940 Act
with respect to the Fund's Class A shares (the "Class A Plan") and with respect
to the Fund's Class B shares (the "Class B Plan") (collectively, the "Plans").
The Fund, pursuant to the Class A Plan, pays AIM Distributors compensation at
the annual rate of 0.30% of the average daily net assets attributable to the
Class A shares. The Class A Plan is designed to compensate AIM Distributors for
certain promotional and other sales related costs, and to implement a program
which provides periodic payments to selected dealers and financial institutions
who furnish continuing personal shareholder services to their customers who
purchase and own Class A shares of the Fund. The Fund, pursuant to the Class B
Plan, pays AIM Distributors compensation at an annual rate of 1.00% of the
average daily net assets attributable to the Class B shares. Of this amount, the
Fund may pay a service fee of 0.25% of the average daily net assets of the Class
B shares to selected dealers and financial institutions who furnish continuing
personal shareholder services to their customers who purchase and own Class B
shares of the Fund. Any amounts not paid as a service fee under such Plans would
constitute an asset-based sales charge. The Plans also impose a cap on the total
sales charges, including asset-based sales charges, that may be paid by the
respective classes. AIM Distributors may, from time to time, assign, transfer or
pledge to one or more designees, its rights to all or a designated portion of
(a) compensation received by AIM Distributors from the Fund pursuant to the
Class B Plan (but not AIM Distributors duties and obligations pursuant to the
Class B Plan) and (b) any contingent deferred sales charges received by AIM
Distributors related to the Class B shares. During the six months ended April
30, 1996, the Class A shares and the Class B shares paid AIM Distributors
$6,941,306 and $451,959, respectively, as compensation under the Plans.
AIM Distributors received commissions of $1,320,988 from sales of shares of
the Class A shares of the Fund during the six months ended April 30, 1996. Such
commissions are not an expense of the Fund. They are deducted from, and are not
included in, the proceeds from sales of Class A shares. During the six months
ended April 30, 1996, AIM Distributors received commissions of $1,470 in
contingent deferred sales charges imposed on
21
<PAGE> 24
Financials
redemptions of Class B shares. Certain officers and directors of the Company are
officers and directors of AIM, AIM Capital, AIM Distributors, AFS, AIFS and FMC.
During the six months ended April 30, 1996, the Fund paid legal fees of $8,537
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-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold during the six months ended April 30, 1996 was $4,340,367,975
and $4,345,873,752, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of April 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $919,552,773
- -----------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (30,848,302)
- -----------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 888,704,471
=========================================================================================
</TABLE>
Cost of investments for tax purposes is $4,090,924,586.
NOTE 4-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company invests directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund has a $68,400,000 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. 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 6-CAPITAL STOCK
Changes in the capital stock outstanding during the six months ended April 30,
1996 and year ended October 31, 1995 were as follows:
<TABLE>
<CAPTION>
APRIL 30, 1996 OCTOBER 31, 1995
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 20,405,015 $377,609,502 32,034,901 $559,325,258
- -----------------------------------------------------------------------------------------------
Class B* 6,234,266 114,620,558 2,180,033 43,415,613
- -----------------------------------------------------------------------------------------------
Institutional Class 257,868 4,879,423 559,557 10,092,219
- -----------------------------------------------------------------------------------------------
Issued as a reinvestment of
dividends:
Class A 32,395,132 557,844,149 24,460,017 361,036,594
- -----------------------------------------------------------------------------------------------
Class B* 425,933 7,326,049 -- --
- -----------------------------------------------------------------------------------------------
Institutional Class 338,803 5,871,449 199,304 2,950,819
- -----------------------------------------------------------------------------------------------
Reacquired:
Class A (23,882,725) (441,730,873) (54,445,065) (937,990,088)
- -----------------------------------------------------------------------------------------------
Class B* (483,195) (8,908,280) (97,524) (1,956,737)
- -----------------------------------------------------------------------------------------------
Institutional Class (262,910) (4,673,754) (363,327) (6,538,558)
- -----------------------------------------------------------------------------------------------
35,428,187 $612,838,223 4,527,896 $30,335,120
===============================================================================================
</TABLE>
* Class B shares commenced sales on June 26, 1995.
22
<PAGE> 25
Financials
NOTE 7-FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a Class A share
outstanding during the six months ended April 30, 1996, and each of the years in
the seven-year period ended October 31, 1995, the ten months ended October 31,
1988 and the year ended December 31, 1987(a) and for a Class B share outstanding
during the six months ended April 30, 1996 and the period June 26, 1995 (date
sales commenced) through October 31, 1995.
CLASS A:
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
--------- ----------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 20.33 $ 17.82 $ 17.62 $ 16.68 $ 15.76 $ 11.15 $ 12.32
- ------------------------------------------ --------- --------- --------- --------- --------- --------- -------
Income from investment operations:
Net investment income 0.03 -- 0.07 0.10 0.10 0.11 0.09
- ------------------------------------------ --------- --------- --------- --------- --------- --------- -------
Net gains (losses) on securities (both
realized and unrealized) 1.52 4.36 0.57 0.93 0.98 4.80 (0.56)
- ------------------------------------------ --------- --------- --------- --------- --------- --------- -------
Total from investment operations 1.55 4.36 0.64 1.03 1.08 4.91 (0.47)
- ------------------------------------------ --------- --------- --------- --------- --------- --------- -------
Less distributions:
Dividends from net investment income -- (0.07) (0.11) (0.09) (0.07) (0.09) (0.06)
- ------------------------------------------ --------- --------- --------- --------- --------- --------- -------
Distributions from net realized capital
gains (2.71) (1.78) (0.33) -- (0.09) (0.21) (0.64)
- ------------------------------------------ --------- --------- --------- --------- --------- --------- -------
Total distributions (2.71) (1.85) (0.44) (0.09) (0.16) (0.30) (0.70)
- ------------------------------------------ --------- --------- --------- --------- --------- --------- -------
Net asset value, end of period $ 19.17 $ 20.33 $ 17.82 $ 17.62 $ 16.68 $ 15.76 $ 11.15
========================================== ========= ========= ========= ========= ========= ========= =======
Total return(c) 9.01% 28.20% 3.76% 6.17% 6.85% 44.88% (4.03)%
========================================== ========= ========= ========= ========= ========= ========= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $4,859,206 $4,564,730 $3,965,858 $4,999,983 $5,198,835 $2,534,331 $632,522
========================================== ========= ========= ========= ========= ========= ========= =======
Ratio of expenses to average net assets 1.1%(d)(e) 1.2% 1.2% 1.1% 1.1% 1.2% 1.3%
========================================== ========= ========= ========= ========= ========= ========= =======
Ratio of net investment income to average
net assets 0.4%(d)(e) 0.0% 0.4% 0.6% 0.6% 0.7% 0.8%
========================================== ========= ========= ========= ========= ========= ========= =======
Portfolio turnover rate 95% 139% 136% 109% 37% 46% 79%
========================================== ========= ========= ========= ========= ========= ========= =======
Borrowings for the period:
Amount of debt outstanding at end of
period (000s omitted) -- -- -- -- -- -- --
========================================== ========= ========= ========= ========= ========= ========= =======
Average amount of debt outstanding during
the period (000s omitted)(f) -- $ 593 -- -- -- -- $ 485
========================================== ========= ========= ========= ========= ========= ========= =======
Average number of shares outstanding
during the period (000s omitted)(f) 246,856 229,272 249,351 314,490 246,273 102,353 44,770
========================================== ========= ========= ========= ========= ========= ========= =======
Average amount of debt per share during
the period -- $ 0.0026 -- -- -- -- $ 0.011
========================================== ========= ========= ========= ========= ========= ========= =======
<CAPTION>
OCTOBER 31, DECEMBER 31,
------------------ ------------
1989 1988(b) 1987
------- ------- --------
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.23 $ 8.36 $ 8.82
- ------------------------------------------ ------- ------- --------
Income from investment operations:
Net investment income 0.10 0.07 0.07
- ------------------------------------------ ------- ------- --------
Net gains (losses) on securities (both
realized and unrealized) 3.10 0.80 0.83
- ------------------------------------------ ------- ------- --------
Total from investment operations 3.20 0.87 0.90
- ------------------------------------------ ------- ------- --------
Less distributions:
Dividends from net investment income (0.11) -- (0.09)
- ------------------------------------------ ------- ------- --------
Distributions from net realized capital
gains -- -- (1.27)
- ------------------------------------------ ------- ------- -------
Total distributions (0.11) -- (1.36)
- ------------------------------------------ ------- ------- --------
Net asset value, end of period $ 12.32 $ 9.23 $ 8.36
========================================== ======= ======= =======
Total return(c) 35.13% 10.41% 9.75 %
========================================== ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $393,320 $297,284 $286,453
========================================== ======= ======= =======
Ratio of expenses to average net assets 1.2% 1.1%(e) 1.0 %
========================================== ======= ======= =======
Ratio of net investment income to average
net assets 1.0% 0.9%(e) 0.7%
========================================== ======= ======= =======
Portfolio turnover rate 87% 93% 108%
========================================== ======= ======= =======
Borrowings for the period:
Amount of debt outstanding at end of
period (000s omitted) $ 3,781 -- $ 355
========================================== ======= ======= =======
Average amount of debt outstanding during
the period (000s omitted)(f) $ 1,083 $ 229 $ 509
========================================== ======= ======= =======
Average number of shares outstanding
during the period (000s omitted)(f) 31,275 33,031 25,825
========================================== ======= ======= =======
Average amount of debt per share during
the period $ 0.035 $ 0.007 $ 0.020
========================================== ======= ======= =======
</TABLE>
(a) Per share information has been restated to reflect a 2 for 1 stock split,
effected in the form of a dividend, on September 29, 1987.
(b) The Fund changed investment advisors on September 30, 1988.
(c) Does not deduct sales charges and, for periods less than one year, total
returns are not annualized.
(d) After waiver of advisory fees. Ratios are based on average net assets of
$4,640,250,147.
(e) Annualized.
(f) Averages computed on a daily basis.
23
<PAGE> 26
Financials
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
----------- -----------
1996 1995
----------- -----------
<S> <C> <C>
CLASS B:
Net asset value, beginning of period $20.28 $18.56
- ------------------------------------------------------------- ----------- -----------
Income from investment operations:
Net investment income (loss) (0.03) (0.03)
- ------------------------------------------------------------- ----------- -----------
Net gains (losses) on securities (both realized and
unrealized) 1.51 1.75
- ------------------------------------------------------------- ----------- -----------
Total from investment operations 1.48 1.72
- ------------------------------------------------------------- ----------- -----------
Less distributions:
Distributions from net realized capital gains (2.71) --
- ------------------------------------------------------------- ----------- -----------
Net asset value, end of period $19.05 $20.28
- ------------------------------------------------------------- ----------- -----------
Total return(a) 8.65% 9.27%
- ------------------------------------------------------------- ----------- -----------
Ratios/supplemental data:
Net assets, end of period (000's omitted) $157,315 $42,238
- ------------------------------------------------------------- ----------- -----------
Ratio of expenses to average net assets 1.87%(b) 1.91%(d)
- ------------------------------------------------------------- ----------- -----------
Ratio of net investment income (loss) to average net assets (0.30)%(b) (0.76)%(d)
- ------------------------------------------------------------- ----------- -----------
Portfolio turnover rate 95% 139%
- ------------------------------------------------------------- ----------- -----------
Borrowings for the period:
Amount of debt outstanding at end of
period (000s omitted) -- --
- ------------------------------------------------------------- ----------- -----------
Average amount of debt outstanding during the
period (000s omitted)(c) -- $ 3
- ------------------------------------------------------------- ----------- -----------
Average number of shares outstanding during the
period (000s omitted)(c) 4,943 1,036
- ------------------------------------------------------------- ----------- -----------
Average amount of debt per share during the period -- $0.0029
- ------------------------------------------------------------- ----------- -----------
</TABLE>
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Annualized. After waiver of advisory fees. Annualized ratios of expenses and
net investment income (loss) to average net assets prior to waiver of
advisory fees were 1.89% and (0.32)%, respectively. Ratios are based on
average net assets of $90,640,057.
(c) Averages computed on a daily basis.
(d) Annualized.
24
<PAGE> 27
Directors & Officers
<TABLE>
<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
SCOTT G. LUCAS
CARL FRISCHLING Senior Vice President A I M Fund Services, Inc.
Partner P.O. Box 4739
Kramer, Levin, Naftalis, Nessen, CAROL F. RELIHAN Houston, TX 77210-4739
Kamin & Frankel Senior Vice President and Secretary
CUSTODIAN
ROBERT H. GRAHAM JONATHAN C. SCHOOLAR
President and Chief Operating Officer Senior Vice President State Street Bank and Trust Company
A I M Management Group Inc. 225 Franklin Street
MELVILLE B. COX Boston, MA 02110
JOHN F. KROEGER Vice President
Formerly, Consultant COUNSEL TO THE FUND
Wendell & Stockel Associates, Inc. DANA R. SUTTON
Vice President and Assistant Treasurer Ballard Spahr
LEWIS F. PENNOCK Andrews & Ingersoll
Attorney P. MICHELLE GRACE 1735 Market Street
Assistant Secretary Philadelphia, PA 19103
IAN W. ROBINSON
Consultant; Formerly Executive DAVID L. KITE COUNSEL TO THE DIRECTORS
Avenue Assistant Secretary
Vice President and Kramer, Levin, Naftalis,
Chief Financial Officer NANCY L. MARTIN Nessen, Kamin & Frankel
Bell Atlantic Management Assistant Secretary 919 Third
Services, Inc. New York, NY 10022
OFELIA M. MAYO
LOUIS S. SKLAR Assistant Secretary DISTRIBUTOR
Executive Vice President
Hines Interests KATHLEEN J. PFLUEGER A I M Distributors, Inc.
Limited Partnership Assistant Secretary 11 Greenway Plaza
Suite 1919
SAMUEL D. SIRKO Houston, TX 77046
Assistant Secretary
STEPHEN I. WINER
Assistant Secretary
MARY J. BENSON
Assistant Treasurer
</TABLE>
<PAGE> 28
<TABLE>
<S> <C>
[PHOTO OF 11 GREENWAY PLAZA THE AIM FAMILY OF FUNDS(R)
APPEARS HERE]
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Capital Development Fund
AIM Constellation Fund
AIM Global Aggressive Growth Fund
GROWTH
AIM Blue Chip Fund
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 Management Group has provided leadership
in the mutual fund industry since 1976 and
currently manages approximately $54 billion *AIM Aggressive Growth Fund was closed to new
in assets for more than 2.3 million investors on July 18, 1995. **On September 25,
shareholders, including individual investors, 1995, AIM Government Securities Fund became AIM
corporate clients, and financial institutions. Intermediate Government Fund. For more complete
The AIM Family of Funds(R) is distributed information about any AIM Fund(s), including
nationwide, and AIM today ranks among the sales charges and expenses, ask your financial
nation's top 15 mutual fund companies in consultant or securities dealer for a free prospectus(es).
assets under management, according to Please read the prospectus(es) carefully before you
Lipper Analytical Services, Inc. invest or send money.
---------------
BULK RATE
U.S. POSTAGE
PAID
HOUSTON, TX
A I M Distributors, Inc. Permit No. 1919
11 Greenway Plaza, Suite 1919 ---------------
Houston, TX 77046
</TABLE>
