<PAGE> 1
AIM AGGRESSIVE
GROWTH FUND
[AIM LOGO APPEARS HERE] ANNUAL REPORT OCTOBER 31, 1997
<PAGE> 2
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Fund's average annual total returns, including sales charges, for
periods ended 9/30/97, the most recent calendar quarter-end, were as
follows: one year, 11.67% (18.18% excluding sales charges); five years,
30.11%; 10 years, 18.92%; inception (5/1/84), 17.35%.
o AIM Aggressive Growth Fund's performance figures are historical
and reflect reinvestment of all distributions and changes in net asset
value. Unless otherwise indicated, the Fund's performance is computed
without a sales charge. When sales charges are included, Fund performance
reflects the maximum 5.50% sales charge.
o During the year ended October 31, 1997, the Fund paid
distributions of $2.298 per share.
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 The Fund's portfolio composition is subject to change and there is no
assurance the Fund will continue to hold any particular security.
o Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o Standard & Poor's Corporation (S&P) is a credit-rating agency. The
Standard & Poor's Composite Index of 500 Stocks (S&P 500) is a group of
unmanaged securities widely regarded by investors to be representative of
the stock market in general. Results shown assume the reinvestment of
dividends.
o The unmanaged Lipper Small Cap Fund Index represents an average of the
performance of the 30 largest small-capitalization growth funds.
o The unmanaged Russell 2000 Index is generally representative of
the performance of the stocks of small-capitalization companies.
o The Dow Jones Industrial Average is a price-weighted average of 30
actively traded primarily industrial stocks.
o The Europe, Australia, and Far East Index (EAFE) is a group of unmanaged
foreign securities tracked by Morgan Stanley Capital International.
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-sized company stock universe.
o The Consumer Price Index 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 the indexes listed. Unless
otherwise indicated, index results include reinvested dividends and do not
reflect sales charges.
MUTUAL FUNDS, ANNUITIES, AND OTHER INVESTMENTS ARE NOT INSURED BY THE
FDIC OR ANY OTHER GOVERNMENT AGENCY; ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF, OR GUARANTEED BY, ANY BANK OR ANY AFFILIATE;
AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS
OF PRINCIPAL AMOUNT INVESTED.
------------------------------------------
AIM AGGRESSIVE GROWTH FUND
For shareholders who seek
long-term growth of capital by
investing in a portfolio consisting
primarily of small-company stocks which
management believes will have earnings
growth in excess of the general economy.
------------------------------------------
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE> 3
The Chairman's Letter
Dear Fellow Shareholder:
The fiscal year ended October 31 experienced no let-up in
the volatility in equity markets, and it closed on an
unsettling note. In late October, in the wake of a currency
[PHOTO OF crisis in Southeast Asia, the stock market experienced its
Charles T. first 10% correction since 1991. On Monday, October 27, the
Bauer, New York Stock Exchange closed to deal with market
Chairman of volatility for the first time in its history when the Dow
the Board of Jones Industrial Average fell 554 points, the index's
THE FUND, largest point decline ever. It is important to note that
APPEARS HERE] in percentage terms, this was a drop of 7.18%, far smaller
than the 22.61% decline that occurred October 19, 1987.
Unfortunately, this time the market snapped back, and the
Dow regained 337 points the next day. As of this writing,
markets continue to recover.
Many investment managers, including AIM, had cautioned
that a correction was inevitable, that the relentless rise in benchmarks like
the Dow could not continue. In less than 12 months, the Dow had climbed from
6010 on October 14, 1996, to reach its all-time high of 8259 on August 6, 1997.
When markets become overvalued, no one knows what will precipitate a decline.
No one foresaw that a currency devaluation by Thailand beginning during the
summer would lead to worldwide stock market turmoil.
Despite recent activities, the fiscal year ended October 31 brought domestic
equity investors excellent returns: The Dow was up almost 26%; the broader S&P
500, more than 32%; the NASDAQ small-cap index, 30.46%. International
investments, while positive, weren't as robust; the EAFE Index rose 4.63%. On
the following pages, your Fund managers discuss how your Fund performed in this
market context and their outlook for the future.
REALISTIC EXPECTATIONS
The 1100-point decline in the Dow between early August and late October was the
latest in a series of market breaks. Between mid-March and mid-April of this
year, for example, the Dow dropped almost 10%.
Many investors, including professional fund managers, have become accustomed
to buying on these market breaks because the market has bounced back quickly.
From its 1997 low of 6391 on April 11, the Dow took less than four months to
rise almost 2000 points to its all-time high.
However, this time could be different. Many investors have developed two
unrealistic expectations: first, a belief that stocks can rise more than 20% a
year indefinitely; and second, confidence that the market always rebounds
swiftly from a decline.
Neither notion is historically correct. History tells us that over the long
term, average annual total return for stocks is about 10%, not 20%. And those
of us who have been in this business for many years remember the bear market of
the 1970s, when the market experienced a series of declines and recovery was
very slow.
Nevertheless, there is reason for optimism, including sound fiscal policy
steadily shrinking the federal deficit, stable interest rates, and a strong
economy unharmed by inflation. Despite recent events in Asia, it is difficult
to be pessimistic about the U.S. economy and, indeed, about most of the
developed economies in the world.
We are pleased to send you this report on your Fund. Please contact our
Client Services department at 800-959-4246 if you have any questions or
comments. Don't forget that automated information about your AIM account is
available 24 hours a day on the AIM Investor Line, 800-246-5463. Or visit our
Web site, at www.aimfunds.com.
Sincerely,
/s/CHARLES T. BAUER
Charles T. Bauer
Chairman
------------------------------------------
Despite recent activities, the fiscal year
ended October 31 brought domestic equity
investors excellent returns.
------------------------------------------
<PAGE> 4
The Managers' Overview
FUND REBOUNDS AS SMALL-CAP STOCKS TAKE OVER MARKET LEADERSHIP
A roundtable discussion with the Fund management team for AIM Aggressive
Growth Fund for the fiscal year ended October 31, 1997.
- --------------------------------------------------------------------------------
Q. IT WAS A MOMENTOUS YEAR IN THE STOCK MARKET. HOW DID AIM AGGRESSIVE GROWTH
FUND PERFORM?
A. Your Fund rebounded strongly during the second half of the reporting
period and posted a respectable 17.35% total return for the fiscal year
ended October 31, 1997.
You will recall from our last report on April 30, 1997, that the Fund's
six-month cumulative total return was -14.54%. The turnabout in the Fund's
performance in the second half of the year was truly stunning. For the
six-month period ended October 31, 1997, the Fund posted a cumulative total
return of 37.32%. That was good enough to best the 27.29% total return for
the Russell 2000 Index and the 29.19% total return for the Lipper Small
Cap Funds Index for the same six-month period.
================================================================================
FUND REBOUNDS STRONGLY
- --------------------------------------------------------------------------------
Fund vs. indexes; six months ended 10/31/97
AIM Aggressive Growth Fund 37.32%
Lipper Small Cap Funds Index 29.19%
Russell 2000 Index 27.29%
================================================================================
Q. WHAT WAS BEHIND THE FUND'S REMARKABLE TURNAROUND?
A. During the first half of the fiscal year, large-company stocks were the
undisputed market kings. For the six-month period ended April 30, 1997,
the Standard and Poor's Composite Index of 500 Stocks (S&P 500) posted a
total return of 14.75% compared to 1.61% for the Russell 2000 Index. The
first quarter of 1997 was particularly difficult for small-cap stocks as
reflected in the -5.17% total return for the Russell 2000 Index.
Moreover, the stocks of the largest companies, the so-called "super
caps," primarily were responsible for the gains of the S&P 500 in the first
half of the year. However, in the second half of the year, there was a
shift in the market leadership from large- to small-cap company stocks, the
type found in your Fund's portfolio. The change in leadership was
reflected in the 27.29% total return of the Russell 2000 Index compared to
15.13% for the S&P 500 for the six-month period ended October 31, 1997.
Q. WHY DID SMALL-CAP STOCKS TAKE OVER THE MARKET LEADERSHIP?
A. Earlier in the year, market analysts were concerned that healthy economic
growth might accelerate inflation and lead to higher interest rates that
could adversely affect corporate profits. In such an environment, investors
were drawn to the stocks of large companies with more predictable earnings.
Despite continued strong economic growth in the second half of the
fiscal year, however, inflation remained tame and borrowing costs declined.
Investors also became concerned about the relatively high prices of
large-cap stocks, particularly since the strength of the U.S. dollar
relative to other major currencies threatened to erode the profits of
giant, multinational companies. As a result, investors gravitated to the
more reasonably priced stocks of smaller companies with greater earnings
potential.
Q. THE CURRENCY DEVALUTIONS IN SOUTHEAST ASIA CAUSED STOCK MARKETS WORLDWIDE
TO PLUMMET ON OCTOBER 27, 1997. WHAT WAS THE IMPACT ON SMALL-CAP STOCKS?
A. Small-cap stocks weren't spared the massive selloffs that hit equity
markets on October 27 as the Russell 2000 Index lost 6.14% of its value in
a single day. However, the index rose nearly 2.0% the following day as
most major stock markets rebounded.
We believe the currency problems in Southeast Asia ultimately could
prove beneficial to domestic small-cap stocks. Money flowing out of
emerging markets in Southeast Asia most likely will be redirected into
other types of aggressive-growth investments, such as domestic small-cap
stocks.
Q. HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD?
A. Among the Fund's top sector holdings were: technology, 30%; health-care,
14%, and energy, 11%. Since our last report six months ago, we have
increased our holdings in energy stocks and reduced our holdings in
health-care stocks while maintaining about the same exposure in the
technology sector.
Q. TECHNOLOGY STOCKS CONTINUED TO BE A VOLATILE. WHY DO YOU FIND THIS
SECTOR ATTRACTIVE?
A. While technology stocks were, indeed, volatile, we remain optimistic
about the long-term prospects for this sector. The
See important fund and index disclosures inside front cover.
2
<PAGE> 5
PORTFOLIO COMPOSITION
As of 10/31/97, based on total net assets
<TABLE>
========================================================================================================================
Top 10 Equity Holdings Top 10 Industries
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <S> <C>
1. Sipex Corp. 0.85% 1. Oil & Gas (Drilling & Equipment) 9.16%
2. Patterson Energy, Inc. 0.80 2. Computer (Software & Services) 8.47
3. National-Oilwell, Inc. 0.79 3. Electronics (Semiconductors) 5.45
4. EVI Inc. 0.75 4. Communications Equipment 3.93
5. Health Management Associates, Inc. 0.70 5. Electrical Equipment 3.87
6. FIRSTPLUS Financial Group 0.64 6. Retail (Specialty) 3.33
7. Sybron International Corp 0.62 7. Health Care (Medical Products & Supplies) 3.20
8. Brightpoint, Inc. 0.60 8. Health Care (Specialized Services) 3.08
9. Cellstar Corp 0.59 9. Restaurants 2.84
10. Concords EFS, Inc. 0.56 10. Services (Data Processing) 2.66
Please keep in mind that the Fund's portfolio is subject to change and there is
no assurance the Fund will continue to hold any particular security.
========================================================================================================================
</TABLE>
largest portion of corporate and global capital expenditures is being
channeled into technology. The technology sector also stands to benefit
from the reprogramming of older computers to recognize the year 2000 and
the conversion of Europe to a single currency.
Finally, we only invest in the stocks of technology companies that
show earning growth potential.
One of the stocks we found attractive was Sipex Corp. The company, a
leading manufacturer of high-performance, high value-added analog
integrated circuits, reported a 39% increase in earnings for the third
quarter of 1997 in comparison to the same quarter for the previous year.
The Fund also benefited from owning the stocks of such technology
companies as Veritas Software Corp., Aspect Development, Inc., and Saville
Systems Ireland.
Q. WHAT MAKES HEALTH-CARE STOCKS ATTRACTIVE?
A. As the population ages, we expect the health-care industry to remain
vibrant. At the end of the fiscal year, the Fund's health-care holdings
primarily were in producers of medical products and supplies, companies
offering specialized services, and pharmaceutical manufacturers.
One of the health-care stocks in the portfolio was Sybron International
Corp., a leading supplier of laboratory and dental products. The company,
which recently reported a record year for sales and net income, is in the
process of consolidating its position within its industry, having been
involved in a series of acquistions.
Other health-care stocks we found attractive included Health Management
Association, Inc., HEALTHSOUTH Corp., and Medicis Pharmaceutical Corp.
Q. WHAT IS BEHIND THE POSITIVE EARNINGS TRENDS IN THE ENERGY INDUSTRY?
A. Energy companies enjoyed stellar earnings in the third quarter of 1997
because of increases in both prices and demand for their products and
services. The industry also has benefited from a wave of consolidations. We
believe the energy industry will continue to be vibrant for several more
years because demand for its products and services has already reached a
point where it exceeds available supply.
National-Oilwell, Inc., one of the Fund's top holdings, manufactures
major mechanical components for oil and gas drilling rigs. The company
estimates that about 65% of the world's offshore rigs and most of the
larger land rigs, use its drilling machinery. Patterson Energy, Inc.,
another one of the Fund's top holdings, is a leading provider of domestic
land drilling services for major independent oil and natural gas
companies. Both companies reported significant third-quarter earnings
increases.
Q. WHAT IS YOUR MARKET OUTLOOK?
A. As 1997 draws to a close, the environment seems favorable for the stock
market. The economy is growing at a healthy pace, corporate profits are
strong, and inflation is low. The Federal Reserve Board (the Fed), after
tightening monetary policy in March 1997, has left interest rates
unchanged. If these conditions persist, it should prove beneficial for
stocks.
We are optimistic about small-cap stocks because of their lower
valuations in comparison to large-cap stocks. Also, we believe smaller
companies have greater earnings potential than their larger counterparts.
The profits of small companies also are less adversely affected by a strong
U.S. dollar because they do considerably less business overseas than large,
multi-national companies. Additionally, the small-cap market already has
experienced a correction and is in the process of rebounding. Finally,
small-cap stocks should benefit from the reduction in the capital gains
tax.
Nevertheless, we expect volatility to continue to be a factor in the
market. Fed Chairman Alan Greenspan and others have warned that a tight
labor market might eventually accelerate inflation. The periodic release of
key economic data, which could provide some indication on the direction of
inflation--and the Fed's likely response--could cause the market to
fluctuate dramatically. Also, as the events of October 27 illustrated,
offshore developments such as the Hong Kong stock-market tumble could have
an impact on the market.
Finally, investors would be well-advised to be realistic in their
expectations. Stock returns, which have exceeded 20% in recent years,
could be gravitating back to their more historic levels of approximately
10%.
See important fund and index disclosures inside front cover.
3
<PAGE> 6
Long-Term Performance
THE AIM AGGRESSIVE GROWTH FUND GROWTH STORY
Growth of a $10,000 Investment: May 1, 1984-October 31, 1997
AIM AGGRESSIVE GROWTH FUND VS. BENCHMARK INDEXES
The chart compares your Fund to benchmark indexes. It is intended to give you a
general idea of how your Fund performed compared to the stock market. It is
important to understand differences between your Fund and an index. An index
measures the performance of a hypothetical portfolio, in this case the Russell
2000 Index and the Lipper Small Cap Funds Index. Unlike your Fund, an index is
not managed; therefore there are no sales charges, expenses, or fees. You cannot
invest in an index. But if you could buy all the securities that make up an
index, you would incur expenses that would affect the return on your investment.
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
For periods ended 10/31/97. Including sales charges.
CLASS A SHARES
Since Inception (5/1/84) 16.65%
10 Years 22.36
5 Years 26.44
1 Year 10.91*
*17.35% excluding sales charges.
================================================================================
<TABLE>
<CAPTION>
==============================================================================================
5/1/84 1985 1986 1987 1988 1989 1990
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Dividends Reinvested $ 66 153 73 0 0 53 39
Capital Gains Reinvested $ 0 0 259 391 1,383 1,625 1,330
Total Distributions Reinvested $ 66 153 332 391 1,383 1,678 1,369
Total Account Value $9,587 10,682 12,470 10,040 12,100 14,278 11,409
==============================================================================================
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
================================================================================
AIM Aggressive Russell 2000 Lipper Small Cap Consumer
Growth Fund Index Funds Index Price Index
- --------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
5/1/84 $9,452 $10,000 $10,000 $10,000
10/84 9,587 10,100 10,167 10,374
10/85 10,682 11,699 11,495 11,070
10/86 12,470 14,297 13,722 12,068
10/87 10,040 12,339 12,413 13,672
10/88 12,100 15,700 15,241 15,383
10/89 14,278 18,150 18,411 16,756
10/90 11,409 13,199 14,305 17,397
10/91 21,330 20,938 22,320 18,057
10/92 23,363 22,926 23,893 18,770
10/93 35,278 30,357 30,935 19,483
10/94 41,968 30,250 31,582 19,697
10/95 59,365 35,800 39,028 20,570
10/96 68,134 41,745 45,717 21,479
10/97 79,953 53,989 53,832 28,734
================================================================================
</TABLE>
================================================================================
1991 1992 1993 1994 1995 1996 1997
- --------------------------------------------------------------------------------
100 0 0 0 0 0 0
3,217 6,959 11,737 13,966 19,755 23,786 30,631
3,317 6,959 11,737 13,966 19,755 23,786 30,631
21,330 23,363 35,278 41,968 59,365 68,134 79,953
================================================================================
Data shown are as of the Fund's fiscal year-end. 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. Source: Towers Data Systems HYPO--Registered Trademark--.
<PAGE> 8
SCHEDULE OF INVESTMENTS
October 31, 1997
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-95.19%
AEROSPACE/DEFENSE-0.41%
BE Aerospace, Inc.(a) 355,000 $ 9,984,375
- ---------------------------------------------------------------
Precision Castparts Corp. 100,000 5,881,250
- ---------------------------------------------------------------
15,865,625
- ---------------------------------------------------------------
AIR FREIGHT-0.70%
Air Express International Corp. 150,000 4,593,750
- ---------------------------------------------------------------
Airborne Freight Corp. 200,000 12,675,000
- ---------------------------------------------------------------
Expeditors International of
Washington, Inc. 262,500 9,646,875
- ---------------------------------------------------------------
26,915,625
- ---------------------------------------------------------------
AUTO PARTS & EQUIPMENT-0.45%
Borg-Warner Automotive, Inc. 150,000 8,175,000
- ---------------------------------------------------------------
Danaher Corp. 70,000 3,836,875
- ---------------------------------------------------------------
Keystone Automotive Industries,
Inc.(a) 250,000 5,531,250
- ---------------------------------------------------------------
17,543,125
- ---------------------------------------------------------------
BANKS (REGIONAL)-0.65%
Bank United Corp.-Class A 175,000 7,350,000
- ---------------------------------------------------------------
First Savings Bank of Washington
Bancorp, Inc. 250,000 5,937,500
- ---------------------------------------------------------------
Imperial Bancorp(a) 150,000 6,543,750
- ---------------------------------------------------------------
Provident Bankshares Corp. 100,000 5,400,000
- ---------------------------------------------------------------
25,231,250
- ---------------------------------------------------------------
BANKS (MONEY CENTER)-0.22%
First Republic Bank(a) 300,000 8,475,000
- ---------------------------------------------------------------
BIOTECHNOLOGY-0.36%
Curative Technologies, Inc.(a) 225,000 6,778,125
- ---------------------------------------------------------------
Kos Pharmaceuticals, Inc.(a) 200,000 7,150,000
- ---------------------------------------------------------------
13,928,125
- ---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-1.15%
Chancellor Media Corp.(a) 200,000 10,975,000
- ---------------------------------------------------------------
Heftel Broadcasting Corp.(a) 316,700 21,060,550
- ---------------------------------------------------------------
Jacor Communications, Inc.(a) 300,000 12,562,500
- ---------------------------------------------------------------
44,598,050
- ---------------------------------------------------------------
BUILDING MATERIALS-0.24%
Apogee Enterprises, Inc. 200,000 4,775,000
- ---------------------------------------------------------------
TJ International, Inc. 200,000 4,600,000
- ---------------------------------------------------------------
9,375,000
- ---------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.19%
Cambrex Corp. 150,000 7,190,625
- ---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-3.93%
ADC Telecommunications, Inc.(a) 552,200 $ 18,291,625
- ---------------------------------------------------------------
Audiovox Corp.-Class A(a) 243,400 2,205,812
- ---------------------------------------------------------------
Boston Technology, Inc.(a) 250,000 6,781,250
- ---------------------------------------------------------------
Brightpoint, Inc.(a)(b) 700,106 23,103,498
- ---------------------------------------------------------------
Coherent Communications Systems
Corp.(a) 500,000 15,125,000
- ---------------------------------------------------------------
Comverse Technology, Inc.(a) 150,000 6,187,500
- ---------------------------------------------------------------
Davox Corp.(a) 250,000 8,937,500
- ---------------------------------------------------------------
Digital Microwave Corp.(a) 225,000 8,100,000
- ---------------------------------------------------------------
Discreet Logic, Inc.(a)(Canada) 350,000 6,846,875
- ---------------------------------------------------------------
Glenayre Technologies, Inc.(a) 250,000 3,250,000
- ---------------------------------------------------------------
Innova Corp.(a) 200,000 4,300,000
- ---------------------------------------------------------------
MasTec, Inc.(a) 200,000 6,487,500
- ---------------------------------------------------------------
NACT Telecommunications, Inc.(a) 225,000 3,065,625
- ---------------------------------------------------------------
P-COM, Inc.(a) 300,000 6,037,500
- ---------------------------------------------------------------
Premisys Communications, Inc.(a) 200,000 5,450,000
- ---------------------------------------------------------------
REMEC, Inc.(a) 250,000 6,343,750
- ---------------------------------------------------------------
Teledata Communication
Ltd.(a)(Israel) 170,100 5,273,100
- ---------------------------------------------------------------
TESSCO Technologies, Inc.(a)(b) 350,000 7,525,000
- ---------------------------------------------------------------
Tollgrade Communications,
Inc.(a)(b) 350,000 8,618,750
- ---------------------------------------------------------------
151,930,285
- ---------------------------------------------------------------
COMPUTERS (HARDWARE)-1.25%
Citrix Systems, Inc.(a) 250,000 18,359,375
- ---------------------------------------------------------------
Concord EFS, Inc.(a) 725,000 21,523,437
- ---------------------------------------------------------------
Data General Corp.(a) 325,000 6,256,250
- ---------------------------------------------------------------
National Instruments Corp.(a) 50,000 2,275,000
- ---------------------------------------------------------------
48,414,062
- ---------------------------------------------------------------
COMPUTERS (NETWORKING)-0.43%
International Network Services(a) 100,000 2,200,000
- ---------------------------------------------------------------
MMC Networks, Inc.(a) 80,000 1,750,000
- ---------------------------------------------------------------
Premiere Technologies, Inc.(a) 375,000 12,750,000
- ---------------------------------------------------------------
16,700,000
- ---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.33%
Creative Technology
Limited(a)(Singapore) 200,000 5,087,500
- ---------------------------------------------------------------
Encad, Inc.(a) 125,000 4,062,500
- ---------------------------------------------------------------
MicroTouch Systems, Inc.(a)(b) 525,000 12,665,625
- ---------------------------------------------------------------
Network Appliance, Inc.(a) 150,000 7,537,500
- ---------------------------------------------------------------
QLogic Corp.(a) 100,000 3,250,000
- ---------------------------------------------------------------
SanDisk Corp.(a) 294,300 7,026,412
- ---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (PERIPHERALS)-(CONTINUED)
STB Systems, Inc.(a)(b) 400,000 $ 11,750,000
- ---------------------------------------------------------------
51,379,537
- ---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-8.47%
Accelr8 Technology Corp.(a) 130,000 2,583,750
- ---------------------------------------------------------------
Advanced Fibre Communications,
Inc.(a) 250,000 7,265,625
- ---------------------------------------------------------------
Analysts International Corp. 200,000 9,025,000
- ---------------------------------------------------------------
Applied Voice Technology, Inc.(a) 200,000 5,200,000
- ---------------------------------------------------------------
Aspect Development, Inc.(a) 400,000 18,700,000
- ---------------------------------------------------------------
Avant! Corp.(a) 275,000 7,218,750
- ---------------------------------------------------------------
Axent Technologies, Inc.(a) 375,000 8,765,625
- ---------------------------------------------------------------
CBT Group PLC-ADR(a)(Ireland) 150,000 11,512,500
- ---------------------------------------------------------------
Check Point Software Technologies
Ltd.(a)(Israel) 250,000 10,656,250
- ---------------------------------------------------------------
Computer Task Group, Inc. 200,000 5,650,000
- ---------------------------------------------------------------
CyberMedia, Inc.(a) 200,000 5,950,000
- ---------------------------------------------------------------
DAOU Systems, Inc.(a) 250,000 6,593,750
- ---------------------------------------------------------------
Documentum, Inc.(a) 100,000 2,987,500
- ---------------------------------------------------------------
DSP Group, Inc.(a) 400,000 14,175,000
- ---------------------------------------------------------------
Engineering Animation, Inc.(a)(b) 310,100 13,683,162
- ---------------------------------------------------------------
HBO & Co. 250,000 10,875,000
- ---------------------------------------------------------------
IDX Systems Corp.(a) 300,000 10,125,000
- ---------------------------------------------------------------
Integrated Systems, Inc.(a) 200,000 3,525,000
- ---------------------------------------------------------------
Jack Henry & Associates 225,000 5,793,750
- ---------------------------------------------------------------
JDA Software Group, Inc.(a) 200,000 6,250,000
- ---------------------------------------------------------------
Legato Systems, Inc.(a) 250,000 10,687,500
- ---------------------------------------------------------------
Lycos, Inc.(a) 100,000 2,612,500
- ---------------------------------------------------------------
Midway Games Inc.(a) 300,000 6,281,250
- ---------------------------------------------------------------
Network General Corp.(a) 582,700 11,799,675
- ---------------------------------------------------------------
NOVA Corp.(a) 253,000 6,799,375
- ---------------------------------------------------------------
Peerless Systems Corp.(a) 500,000 6,500,000
- ---------------------------------------------------------------
PeopleSoft, Inc.(a) 100,000 6,287,500
- ---------------------------------------------------------------
Quadramed Corp.(a) 100,000 2,350,000
- ---------------------------------------------------------------
Quickturn Design Systems, Inc.(a) 380,200 4,990,125
- ---------------------------------------------------------------
RadiSys Corp.(a) 150,000 6,975,000
- ---------------------------------------------------------------
RWD Technologies, Inc.(a) 66,600 1,498,500
- ---------------------------------------------------------------
Sapient Corp.(a) 150,000 7,987,500
- ---------------------------------------------------------------
Security Dynamics Technologies,
Inc.(a) 300,000 10,162,500
- ---------------------------------------------------------------
Simulation Sciences, Inc.(a) 250,000 4,562,500
- ---------------------------------------------------------------
Sterling Commerce, Inc.(a) 100,160 3,324,060
- ---------------------------------------------------------------
Sterling Software, Inc.(a) 100,000 3,412,500
- ---------------------------------------------------------------
Technology Solutions Co.(a) 187,500 5,906,250
- ---------------------------------------------------------------
Tecnomatix Technologies Ltd.(a)
(Israel) 200,000 6,175,000
- ---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
3Dfx Interactive, Inc.(a) 125,000 $ 2,125,000
- ---------------------------------------------------------------
Transaction Systems Architects,
Inc.-Class A(a) 200,000 7,825,000
- ---------------------------------------------------------------
Vantive Corp.(a) 150,000 3,787,500
- ---------------------------------------------------------------
Veritas Software Corp.(a) 375,000 15,609,375
- ---------------------------------------------------------------
Viasoft, Inc.(a) 166,500 6,826,500
- ---------------------------------------------------------------
Whittman-Hart, Inc.(a) 100,000 2,900,000
- ---------------------------------------------------------------
Wind River Systems(a) 150,000 5,756,250
- ---------------------------------------------------------------
Xpedite Systems, Inc.(a) 100,000 2,462,500
- ---------------------------------------------------------------
Yahoo! Inc.(a) 116,250 5,096,835
- ---------------------------------------------------------------
327,236,357
- ---------------------------------------------------------------
CONSTRUCTION (CEMENT & AGGREGATES)-0.03%
Transcoastal Marine Services(a) 50,000 1,243,750
- ---------------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES &
GIFTS)-0.55%
Action Performance Companies,
Inc.(a) 400,000 10,250,000
- ---------------------------------------------------------------
Blyth Industries, Inc.(a) 441,300 10,977,337
- ---------------------------------------------------------------
21,227,337
- ---------------------------------------------------------------
CONSUMER FINANCE-1.33%
AmeriCredit Corp.(a) 300,000 8,718,750
- ---------------------------------------------------------------
Delta Financial Corp.(a) 100,900 1,841,425
- ---------------------------------------------------------------
FIRSTPLUS Financial Group, Inc.(a) 450,000 24,750,000
- ---------------------------------------------------------------
IMC Mortgage Co.(a) 600,000 10,425,000
- ---------------------------------------------------------------
Money Store, Inc. (The) 200,000 5,675,000
- ---------------------------------------------------------------
51,410,175
- ---------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-0.10%
Patterson Dental Co.(a) 100,000 4,000,000
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT-3.87%
Avid Technology, Inc.(a) 300,000 8,568,750
- ---------------------------------------------------------------
Black Box Corp.(a) 300,000 12,300,000
- ---------------------------------------------------------------
Chicago Miniature Lamp, Inc.(a) 250,000 8,000,000
- ---------------------------------------------------------------
Cohu, Inc. 95,000 3,556,562
- ---------------------------------------------------------------
Cyberoptics Corp.(a)(b) 300,000 8,250,000
- ---------------------------------------------------------------
Electro Scientific Industries,
Inc.(a) 100,000 4,850,000
- ---------------------------------------------------------------
HADCO Corp.(a) 150,000 8,306,250
- ---------------------------------------------------------------
Kemet Corp.(a) 350,000 7,612,500
- ---------------------------------------------------------------
Littelfuse, Inc.(a) 150,000 4,593,750
- ---------------------------------------------------------------
Pinnacle Systems, Inc.(a) 300,000 8,100,000
- ---------------------------------------------------------------
RF Monolithics, Inc.(a) 200,000 2,700,000
- ---------------------------------------------------------------
Robbins & Myers, Inc. 200,000 7,575,000
- ---------------------------------------------------------------
Sanmina Corp.(a) 225,000 16,818,750
- ---------------------------------------------------------------
Sawtek Inc.(a) 210,000 7,140,000
- ---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-(CONTINUED)
SCI Systems, Inc.(a) 300,000 $ 13,200,000
- ---------------------------------------------------------------
Symbol Technologies, Inc. 300,000 11,925,000
- ---------------------------------------------------------------
Technitrol, Inc. 250,000 7,718,750
- ---------------------------------------------------------------
Uniphase Corp.(a) 125,000 8,390,625
- ---------------------------------------------------------------
149,605,937
- ---------------------------------------------------------------
ELECTRONICS (COMPONENT DISTRIBUTORS)-0.99%
Anicom, Inc.(a) 400,000 6,200,000
- ---------------------------------------------------------------
Benchmarq Microelectronics,
Inc.(a)(b) 425,000 8,818,750
- ---------------------------------------------------------------
Computer Products, Inc.(a) 600,000 16,350,000
- ---------------------------------------------------------------
Kent Electronics Corp.(a) 200,000 6,987,500
- ---------------------------------------------------------------
38,356,250
- ---------------------------------------------------------------
ELECTRONICS
(INSTRUMENTATION)-1.04%
Aavid Thermal Technologies(a) 100,000 2,975,000
- ---------------------------------------------------------------
Alpha Industries, Inc.(a) 184,700 2,932,112
- ---------------------------------------------------------------
CellStar Corp.(a) 675,000 22,907,812
- ---------------------------------------------------------------
Thermo Optek Corp.(a) 350,000 5,928,125
- ---------------------------------------------------------------
ThermoQuest Corp.(a) 300,000 5,362,500
- ---------------------------------------------------------------
40,105,549
- ---------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-5.45%
Alliance Semiconductor Corp.(a) 300,000 2,250,000
- ---------------------------------------------------------------
ANADIGICS, Inc.(a) 300,000 11,100,000
- ---------------------------------------------------------------
ASE Test Ltd.(a)(Taiwan) 94,300 5,162,925
- ---------------------------------------------------------------
ATMI Inc.(a) 150,000 4,031,250
- ---------------------------------------------------------------
Burr-Brown Corp.(a) 350,000 10,587,500
- ---------------------------------------------------------------
Cypress Semiconductor Corp.(a) 550,000 6,187,500
- ---------------------------------------------------------------
Dallas Semiconductor Corp. 300,000 14,662,500
- ---------------------------------------------------------------
Flextronics International Ltd.(a) 500,000 19,000,000
- ---------------------------------------------------------------
General Scanning, Inc.(a) 150,000 3,871,875
- ---------------------------------------------------------------
Integrated Circuit Systems,
Inc.(a) 125,400 4,294,950
- ---------------------------------------------------------------
Integrated Device Technology,
Inc.(a) 450,000 5,203,125
- ---------------------------------------------------------------
International Rectifier Corp.(a) 185,100 2,533,556
- ---------------------------------------------------------------
Lattice Semiconductor Corp.(a) 175,000 8,760,938
- ---------------------------------------------------------------
Level One Communications, Inc.(a) 225,000 10,125,000
- ---------------------------------------------------------------
Micrel, Inc.(a) 200,000 7,175,000
- ---------------------------------------------------------------
PMC-Sierra, Inc.(a) 350,000 9,231,250
- ---------------------------------------------------------------
Semtech Corp.(a) 150,000 6,984,375
- ---------------------------------------------------------------
Sipex Corp.(a)(b) 1,000,000 32,875,000
- ---------------------------------------------------------------
3Dlabs Inc., Ltd.(a) 400,000 8,500,000
- ---------------------------------------------------------------
Tower Semiconductor Ltd. (Israel) 250,000 2,937,500
- ---------------------------------------------------------------
Unitrode Corp.(a) 400,000 10,725,000
- ---------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 350,000 15,181,250
- ---------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)
VLSI Technology, Inc.(a) 300,000 $ 8,887,500
- ---------------------------------------------------------------
210,267,994
- ---------------------------------------------------------------
ENTERTAINMENT-0.30%
Cinar Films Inc.-Class
B(a)(Canada) 60,500 2,351,938
- ---------------------------------------------------------------
N2K Inc.(a) 350,000 9,209,374
- ---------------------------------------------------------------
11,561,312
- ---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-1.59%
BMC Industries, Inc. 350,000 11,265,625
- ---------------------------------------------------------------
Credence Systems Corp.(a) 400,000 11,800,000
- ---------------------------------------------------------------
DuPont Photomasks, Inc.(a) 150,000 6,450,000
- ---------------------------------------------------------------
Electroglas, Inc.(a) 300,000 5,700,000
- ---------------------------------------------------------------
Integrated Process Equipment
Corp.(a) 200,000 4,437,500
- ---------------------------------------------------------------
Photronics, Inc.(a) 250,000 10,718,750
- ---------------------------------------------------------------
Silicon Valley Group, Inc.(a) 250,000 7,187,500
- ---------------------------------------------------------------
Speedfam International, Inc.(a) 100,000 3,712,500
- ---------------------------------------------------------------
61,271,875
- ---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-0.63%
Amresco, Inc.(a) 350,000 10,981,250
- ---------------------------------------------------------------
Ocwen Financial Corp.(a) 150,000 8,240,625
- ---------------------------------------------------------------
United Companies Financial Corp. 200,000 5,062,500
- ---------------------------------------------------------------
24,284,375
- ---------------------------------------------------------------
FOOTWEAR-0.31%
Stride Rite Corp. 250,000 2,937,500
- ---------------------------------------------------------------
Wolverine World Wide, Inc. 400,000 8,800,000
- ---------------------------------------------------------------
11,737,500
- ---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC & OTHER)-2.01%
Alpharma, Inc.-Class A 495,834 10,939,338
- ---------------------------------------------------------------
Biovail Corp.
International(a)(Canada) 400,000 11,550,000
- ---------------------------------------------------------------
Columbia Laboratories, Inc.(a) 500,000 8,000,000
- ---------------------------------------------------------------
Dura Pharmaceuticals, Inc.(a) 207,000 10,013,625
- ---------------------------------------------------------------
Jones Medical Industries, Inc. 250,000 7,531,250
- ---------------------------------------------------------------
Medicis Pharmaceutical Corp.(a) 405,000 19,490,625
- ---------------------------------------------------------------
Parexel International Corp.(a) 100,000 3,612,500
- ---------------------------------------------------------------
VIVUS, Inc.(a) 250,000 6,593,750
- ---------------------------------------------------------------
77,731,088
- ---------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-1.60%
Health Management Associates,
Inc.-Class A(a) 1,106,493 26,970,766
- ---------------------------------------------------------------
Quorum Health Group, Inc.(a) 450,000 10,912,500
- ---------------------------------------------------------------
Tenet Healthcare Corp.(a) 200,000 6,112,500
- ---------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (HOSPITAL MANAGEMENT)-(CONTINUED)
Universal Health Services,
Inc.-Class B(a) 400,000 $ 17,625,000
- ---------------------------------------------------------------
61,620,766
- ---------------------------------------------------------------
HEALTH CARE (LONG TERM CARE)-1.62%
Assisted Living Concepts, Inc.(a) 335,000 6,867,500
- ---------------------------------------------------------------
Atria Communities, Inc.(a) 250,000 4,156,250
- ---------------------------------------------------------------
CareMatrix Corp.(a) 400,000 10,900,000
- ---------------------------------------------------------------
Health Care and Retirement
Corp.(a) 325,000 12,289,062
- ---------------------------------------------------------------
HEALTHSOUTH Corp.(a) 750,000 19,171,875
- ---------------------------------------------------------------
Sunrise Assisted Living, Inc.(a) 244,800 9,088,200
- ---------------------------------------------------------------
62,472,887
- ---------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-0.97%
American Oncology Resources,
Inc.(a) 500,000 7,312,500
- ---------------------------------------------------------------
Concentra Managed Care, Inc.(a) 578,600 18,876,825
- ---------------------------------------------------------------
Express Scripts, Inc.-Class A(a) 125,000 7,046,875
- ---------------------------------------------------------------
PhyCor, Inc.(a) 187,500 4,324,218
- ---------------------------------------------------------------
37,560,418
- ---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-3.20%
ADAC Laboratories 250,000 4,875,000
- ---------------------------------------------------------------
Arterial Vascular Engineering,
Inc.(a) 300,000 15,937,500
- ---------------------------------------------------------------
Coopers Companies, Inc.(a) 100,000 3,581,250
- ---------------------------------------------------------------
Dentsply International, Inc. 300,000 8,512,500
- ---------------------------------------------------------------
Healthdyne Technologies(a) 300,000 6,000,000
- ---------------------------------------------------------------
Henry Schein, Inc.(a) 200,000 6,575,000
- ---------------------------------------------------------------
MiniMed, Inc.(a) 150,000 5,850,000
- ---------------------------------------------------------------
Physician Sales & Service, Inc.(a) 500,000 12,250,000
- ---------------------------------------------------------------
ResMed, Inc.(a) 275,000 7,700,000
- ---------------------------------------------------------------
Respironics, Inc.(a) 350,000 9,843,750
- ---------------------------------------------------------------
Safeskin Corp.(a) 250,000 11,343,750
- ---------------------------------------------------------------
Sullivan Dental Products, Inc. 300,000 7,012,500
- ---------------------------------------------------------------
Sybron International Corp.(a) 600,000 24,075,000
- ---------------------------------------------------------------
123,556,250
- ---------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-3.08%
Access Health, Inc.(a) 200,000 6,950,000
- ---------------------------------------------------------------
American HomePatient, Inc.(a) 337,350 8,686,763
- ---------------------------------------------------------------
BioReliance Corp.(a) 150,000 3,337,500
- ---------------------------------------------------------------
Boron, LePore & Associates,
Inc.(a) 200,000 4,875,000
- ---------------------------------------------------------------
First Commonwealth, Inc.(a) 162,500 2,356,250
- ---------------------------------------------------------------
FPA Medical Management, Inc.(a) 500,000 12,062,500
- ---------------------------------------------------------------
Lincare Holdings, Inc.(a) 150,000 8,043,750
- ---------------------------------------------------------------
NCS HealthCare, Inc.-Class A(a) 125,000 2,921,875
- ---------------------------------------------------------------
Omnicare, Inc. 500,000 13,906,250
- ---------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-(CONTINUED)
Orthodontic Centers of America,
Inc.(a) 625,000 $ 10,820,312
- ---------------------------------------------------------------
Pediatrix Medical Group, Inc.(a) 200,000 8,450,000
- ---------------------------------------------------------------
Renal Care Group, Inc.(a) 174,050 5,830,675
- ---------------------------------------------------------------
Renal Treatment Centers, Inc.(a) 150,000 4,978,125
- ---------------------------------------------------------------
Superior Consultant Holdings
Corp.(a) 285,000 8,835,000
- ---------------------------------------------------------------
Total Renal Care Holdings, Inc.(a) 250,000 7,703,125
- ---------------------------------------------------------------
Transition Systems, Inc.(a) 450,000 9,112,500
- ---------------------------------------------------------------
118,869,625
- ---------------------------------------------------------------
HOME BUILDING-0.20%
American Homestar Corp.(a) 350,000 7,875,000
- ---------------------------------------------------------------
HOUSEHOLD FURNITURE & APPLIANCES-0.23%
Ethan Allen Interiors, Inc. 250,000 8,859,375
- ---------------------------------------------------------------
HOUSEWARES-1.05%
Central Garden and Pet Co.(a) 350,000 9,187,500
- ---------------------------------------------------------------
Day Runner, Inc.(a) 173,400 6,990,187
- ---------------------------------------------------------------
Helen of Troy Ltd.(a) 1,200,000 19,950,000
- ---------------------------------------------------------------
Windmere-Durable Holdings Inc. 200,000 4,525,000
- ---------------------------------------------------------------
40,652,687
- ---------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-0.31%
John Alden Financial Corp. 175,000 4,801,562
- ---------------------------------------------------------------
Penn Treaty American Corp.(a) 225,000 7,228,125
- ---------------------------------------------------------------
12,029,687
- ---------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-1.67%
CapMAC Holdings, Inc. 125,000 3,750,000
- ---------------------------------------------------------------
CMAC Investment Corp. 300,000 16,406,250
- ---------------------------------------------------------------
Executive Risk Inc. 185,000 12,186,875
- ---------------------------------------------------------------
Frontier Insurance Group, Inc. 200,000 6,737,500
- ---------------------------------------------------------------
HCC Insurance Holdings, Inc. 650,000 15,193,750
- ---------------------------------------------------------------
Vesta Insurance Group, Inc. 178,500 10,375,313
- ---------------------------------------------------------------
64,649,688
- ---------------------------------------------------------------
INVESTMENTS-0.26%
Sirrom Capital Corp. 200,000 10,075,000
- ---------------------------------------------------------------
IRON & STEEL-0.45%
Northwest Pipe Co.(a) 170,000 4,122,500
- ---------------------------------------------------------------
NS Group, Inc.(a)(b) 500,000 13,375,000
- ---------------------------------------------------------------
17,497,500
- ---------------------------------------------------------------
LAND DEVELOPMENT-0.28%
Fairfield Communities, Inc.(a) 250,000 10,984,375
- ---------------------------------------------------------------
LEISURE & RECREATION-0.29%
North Face, Inc.(The)(a) 350,000 8,268,750
- ---------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
LEISURE & RECREATION-(CONTINUED)
Penske Motorsports, Inc.(a) 100,000 $ 2,962,500
- ---------------------------------------------------------------
11,231,250
- ---------------------------------------------------------------
LODGING (HOTELS)-0.39%
Prime Hospitality Corp.(a) 450,000 9,168,750
- ---------------------------------------------------------------
Suburban Lodges of America,
Inc.(a) 80,000 1,980,000
- ---------------------------------------------------------------
Wyndham Hotel Corp.(a) 83,300 3,743,294
- ---------------------------------------------------------------
14,892,044
- ---------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.67%
Applied Power, Inc.-Class A 125,000 7,734,375
- ---------------------------------------------------------------
DT Industries, Inc. 300,000 9,000,000
- ---------------------------------------------------------------
Gardner Denver Machinery Inc.(a) 250,000 8,968,750
- ---------------------------------------------------------------
25,703,125
- ---------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-1.34%
AMETEK, Inc. 200,000 4,712,500
- ---------------------------------------------------------------
Coflexip S.A.-ADR (France) 140,100 7,705,500
- ---------------------------------------------------------------
Halter Marine Group, Inc.(a) 350,000 18,309,375
- ---------------------------------------------------------------
Rock of Ages Corp.(a) 150,000 2,850,000
- ---------------------------------------------------------------
US Filter Corp.(a) 450,000 18,056,250
- ---------------------------------------------------------------
51,633,625
- ---------------------------------------------------------------
MEDICAL INSTRUMENTS/PRODUCTS-0.05%
ESC Medical Systems
Ltd.(a)(Israel) 47,850 1,878,113
- ---------------------------------------------------------------
NATURAL GAS-0.06%
Edge Petroleum Corp.(a) 160,000 2,340,000
- ---------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-1.09%
Boise Cascade Office Products
Corp.(a) 400,000 7,600,000
- ---------------------------------------------------------------
Daisytek International Corp.(a)(b) 250,000 9,531,250
- ---------------------------------------------------------------
Danka Business Systems PLC-ADR
(United Kingdom) 250,000 9,250,000
- ---------------------------------------------------------------
Herman Miller, Inc. 250,000 12,218,750
- ---------------------------------------------------------------
Mail-Well, Inc.(a) 100,000 3,462,500
- ---------------------------------------------------------------
42,062,500
- ---------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-9.16%
Camco International, Inc. 225,000 16,256,250
- ---------------------------------------------------------------
CE Franklin Ltd.(a) 365,900 4,939,650
- ---------------------------------------------------------------
Cliffs Drilling Co.(a) 225,000 16,354,688
- ---------------------------------------------------------------
Core Laboratories N.V.(a)
(Netherlands) 200,000 8,000,000
- ---------------------------------------------------------------
EVI, Inc.(a) 450,000 28,884,375
- ---------------------------------------------------------------
Friede Goldman International
Inc.(a) 150,000 5,971,875
- ---------------------------------------------------------------
Global Industries Ltd.(a) 800,000 16,100,000
- ---------------------------------------------------------------
Gulf Island Fabrication, Inc.(a) 161,200 5,239,000
- ---------------------------------------------------------------
Key Energy Group, Inc.(a) 125,000 3,921,875
- ---------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-(CONTINUED)
Lone Star Technologies, Inc.(a) 250,000 $ 9,546,875
- ---------------------------------------------------------------
Marine Drilling Companies, Inc.(a) 350,000 10,368,750
- ---------------------------------------------------------------
Maverick Tube Corp.(a)(b) 455,000 16,038,750
- ---------------------------------------------------------------
Mitcham Industries, Inc.(a) 200,000 5,225,000
- ---------------------------------------------------------------
National-Oilwell, Inc.(a) 400,749 30,682,346
- ---------------------------------------------------------------
Newpark Resources, Inc.(a) 300,000 12,450,000
- ---------------------------------------------------------------
Oceaneering International, Inc.(a) 150,000 3,721,875
- ---------------------------------------------------------------
Patterson Energy, Inc.(a) 550,000 30,800,000
- ---------------------------------------------------------------
Pool Energy Services Co.(a) 200,000 6,787,500
- ---------------------------------------------------------------
Precision Drilling
Corp.(a)(Canada) 500,000 15,375,000
- ---------------------------------------------------------------
Pride International, Inc.(a) 400,000 13,200,000
- ---------------------------------------------------------------
Trico Marine Services, Inc.(a) 300,000 11,025,000
- ---------------------------------------------------------------
Tubos de Acero de Mexico
S.A.(a)(Mexico) 200,000 4,037,500
- ---------------------------------------------------------------
Tuboscope Vetco International
Corp.(a) 420,000 13,335,000
- ---------------------------------------------------------------
UNIFAB International, Inc.(a) 55,000 1,760,000
- ---------------------------------------------------------------
UTI Energy Corp.(a) 450,000 20,081,250
- ---------------------------------------------------------------
Varco International, Inc.(a) 250,000 15,234,375
- ---------------------------------------------------------------
Veritas DGC, Inc.(a) 500,000 20,468,750
- ---------------------------------------------------------------
Willbros Group, Inc.(a) 425,000 8,287,500
- ---------------------------------------------------------------
354,093,184
- ---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-1.36%
Basin Exploration, Inc.(a) 141,000 2,784,750
- ---------------------------------------------------------------
Cabot Oil and Gas Corp.-Class A 255,800 6,139,200
- ---------------------------------------------------------------
Comstock Resources, Inc.(a) 150,000 2,512,500
- ---------------------------------------------------------------
Devon Energy Corp. 250,000 11,187,500
- ---------------------------------------------------------------
KCS Energy, Inc. 200,000 5,262,500
- ---------------------------------------------------------------
St. Mary Land & Exploration Co. 200,000 8,150,000
- ---------------------------------------------------------------
Stolt Comex Seaway, S.A.(a)(United
Kingdom) 100,000 6,000,000
- ---------------------------------------------------------------
Tom Brown, Inc.(a) 150,000 3,712,500
- ---------------------------------------------------------------
Vintage Petroleum, Inc. 300,000 6,862,500
- ---------------------------------------------------------------
52,611,450
- ---------------------------------------------------------------
PERSONAL CARE-0.67%
Rexall Sundown, Inc.(a) 800,000 17,500,000
- ---------------------------------------------------------------
Twinlab Corp.(a) 450,000 8,550,000
- ---------------------------------------------------------------
26,050,000
- ---------------------------------------------------------------
PUBLISHING-0.18%
Meredith Corp. 200,000 6,812,500
- ---------------------------------------------------------------
RAILROADS-0.17%
MotivePower Industries, Inc.(a) 250,000 6,656,250
- ---------------------------------------------------------------
RESTAURANTS-2.84%
Apple South, Inc. 799,962 14,899,293
- ---------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RESTAURANTS-(CONTINUED)
Applebee's International, Inc. 250,000 $ 5,546,875
- ---------------------------------------------------------------
Cheesecake Factory (The)(a) 250,000 7,875,000
- ---------------------------------------------------------------
CKE Restaurants, Inc. 300,000 11,981,250
- ---------------------------------------------------------------
Dave & Buster's, Inc.(a) 450,000 11,812,500
- ---------------------------------------------------------------
Foodmaker, Inc.(a) 500,000 8,218,750
- ---------------------------------------------------------------
Landry's Seafood Restaurants,
Inc.(a) 375,000 10,500,000
- ---------------------------------------------------------------
Logan's Roadhouse, Inc.(a)(b) 452,000 8,079,500
- ---------------------------------------------------------------
Papa John's International, Inc.(a) 200,000 5,912,500
- ---------------------------------------------------------------
Rainforest Cafe, Inc.(a) 275,000 9,384,375
- ---------------------------------------------------------------
Showbiz Pizza Time, Inc.(a) 340,000 7,225,000
- ---------------------------------------------------------------
Sonic Corp.(a) 321,300 8,273,475
- ---------------------------------------------------------------
Starbucks Corp.(a) 6,000 198,000
- ---------------------------------------------------------------
109,906,518
- ---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-0.26%
Eagle Hardware & Garden, Inc.(a) 600,000 10,200,000
- ---------------------------------------------------------------
RETAIL (COMPUTERS &
ELECTRONICS)-1.78%
Best Buy Co., Inc.(a) 250,000 6,984,375
- ---------------------------------------------------------------
CHS Electronics, Inc.(a) 675,000 16,495,313
- ---------------------------------------------------------------
CompUSA, Inc.(a) 600,000 19,650,000
- ---------------------------------------------------------------
MicroAge, Inc.(a) 350,000 7,700,000
- ---------------------------------------------------------------
Tech Data Corp.(a) 400,000 17,800,000
- ---------------------------------------------------------------
68,629,688
- ---------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-0.15%
Fred Meyer, Inc.(a) 200,000 5,712,500
- ---------------------------------------------------------------
RETAIL (DISCOUNTERS)-1.48%
Ames Department Stores, Inc.(a) 500,000 7,781,250
- ---------------------------------------------------------------
Dollar Tree Stores, Inc.(a) 285,900 11,578,950
- ---------------------------------------------------------------
Family Dollar Stores, Inc. 250,000 5,875,000
- ---------------------------------------------------------------
Men's Wearhouse, Inc. (The)(a) 500,000 19,375,000
- ---------------------------------------------------------------
99 Cents Only Stores(a) 144,100 5,412,757
- ---------------------------------------------------------------
Stein Mart, Inc.(a) 250,000 7,312,500
- ---------------------------------------------------------------
57,335,457
- ---------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.71%
Quality Food Centers, Inc.(a) 350,000 16,668,750
- ---------------------------------------------------------------
Whole Foods Market, Inc.(a) 275,000 10,793,750
- ---------------------------------------------------------------
27,462,500
- ---------------------------------------------------------------
RETAIL (HOME SHOPPING)-0.53%
CDW Computer Centers, Inc.(a) 200,000 12,400,000
- ---------------------------------------------------------------
Micro Warehouse, Inc.(a) 550,000 8,250,000
- ---------------------------------------------------------------
20,650,000
- ---------------------------------------------------------------
RETAIL (SPECIALTY)-3.13%
Finish Line, Inc. (The)-Class A(a) 600,000 $ 10,125,000
- ---------------------------------------------------------------
Garden Ridge Corp.(a) 741,000 9,910,875
- ---------------------------------------------------------------
Genesco Inc.(a) 700,000 8,881,250
- ---------------------------------------------------------------
Hollywood Entertainment Corp.(a) 400,000 4,900,000
- ---------------------------------------------------------------
Inacom Corp.(a) 375,000 11,554,688
- ---------------------------------------------------------------
Linens 'N Things, Inc.(a) 200,000 7,187,500
- ---------------------------------------------------------------
Michaels Stores, Inc.(a) 400,000 12,025,000
- ---------------------------------------------------------------
O'Reilly Automotive, Inc.(a) 250,000 6,093,750
- ---------------------------------------------------------------
Party City Corp.(a) 175,000 4,812,500
- ---------------------------------------------------------------
Petco Animal Supplies, Inc.(a) 450,000 13,837,500
- ---------------------------------------------------------------
Pier 1 Imports, Inc. 450,000 8,212,500
- ---------------------------------------------------------------
Trans World Entertainment Corp.(a) 250,000 7,000,000
- ---------------------------------------------------------------
Williams-Sonoma, Inc.(a) 225,000 9,028,125
- ---------------------------------------------------------------
Zale Corp.(a) 300,000 7,575,000
- ---------------------------------------------------------------
121,143,688
- ---------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-0.71%
American Eagle Outfitters, Inc.(a) 46,700 1,354,300
- ---------------------------------------------------------------
Buckle, Inc. (The)(a) 340,000 9,180,000
- ---------------------------------------------------------------
Pacific Sunwear of California(a) 412,500 11,395,313
- ---------------------------------------------------------------
Paul Harris Stores, Inc.(a) 300,000 5,512,500
- ---------------------------------------------------------------
27,442,113
- ---------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.36%
TCF Financial Corp. 100,000 5,687,500
- ---------------------------------------------------------------
Webster Financial Corp. 135,000 8,319,375
- ---------------------------------------------------------------
14,006,875
- ---------------------------------------------------------------
SERVICES
(ADVERTISING/MARKETING)-1.06%
Abacus Direct Corp.(a) 275,000 10,106,250
- ---------------------------------------------------------------
Catalina Marketing Corp.(a) 200,000 9,137,500
- ---------------------------------------------------------------
CKS Group, Inc.(a) 250,000 9,062,500
- ---------------------------------------------------------------
Market Facts, Inc. 200,000 4,050,000
- ---------------------------------------------------------------
Metris Companies Inc. 200,000 8,450,000
- ---------------------------------------------------------------
40,806,250
- ---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.55%
ABR Information Services, Inc.(a) 250,000 5,875,000
- ---------------------------------------------------------------
Caribiner International, Inc.(a) 200,000 8,912,500
- ---------------------------------------------------------------
Cerner Corp.(a) 500,000 12,125,000
- ---------------------------------------------------------------
Children's Comprehensive Services,
Inc.(a)(b) 436,100 7,870,243
- ---------------------------------------------------------------
Computer Learning Centers, Inc.(a) 100,000 4,525,000
- ---------------------------------------------------------------
Equity Corp. International(a) 450,000 9,168,750
- ---------------------------------------------------------------
G & K Services, Inc.-Class A 150,000 5,400,000
- ---------------------------------------------------------------
IntelliQuest Information Group,
Inc.(a)(b) 525,000 8,925,000
- ---------------------------------------------------------------
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SERVICES (COMMERCIAL & CONSUMER)-(CONTINUED)
MSC Industrial Direct Co.,
Inc.-Class A(a) 125,000 $ 5,203,125
- ---------------------------------------------------------------
Rental Service Corp.(a) 100,000 2,675,000
- ---------------------------------------------------------------
Stewart Enterprises, Inc.- Class A 400,000 16,600,000
- ---------------------------------------------------------------
Strayer Education, Inc. 153,900 7,348,725
- ---------------------------------------------------------------
Wilmar Industries, Inc.(a) 150,000 3,937,500
- ---------------------------------------------------------------
98,565,843
- ---------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-1.46%
Cambridge Technology Partners,
Inc.(a) 300,000 10,950,000
- ---------------------------------------------------------------
Compucom Systems, Inc.(a) 600,000 5,662,500
- ---------------------------------------------------------------
Insight Enterprises, Inc.(a)(b) 525,000 20,540,625
- ---------------------------------------------------------------
SunGard Data Systems Inc.(a) 600,000 14,175,000
- ---------------------------------------------------------------
Sykes Enterprises, Inc.(a) 200,000 4,975,000
- ---------------------------------------------------------------
56,303,125
- ---------------------------------------------------------------
SERVICES (DATA PROCESSING)-2.66%
Affiliated Computer Services,
Inc.(a) 700,000 17,587,500
- ---------------------------------------------------------------
Computer Data Systems, Inc. 119,300 4,936,038
- ---------------------------------------------------------------
Computer Horizons Corp.(a) 150,000 4,556,250
- ---------------------------------------------------------------
CSG Systems International, Inc.(a) 339,400 13,300,238
- ---------------------------------------------------------------
Envoy Corp.(a) 300,000 8,400,000
- ---------------------------------------------------------------
Fair, Issac and Co., Inc. 100,000 4,343,750
- ---------------------------------------------------------------
4Front Software International,
Inc.(a) 46,400 461,100
- ---------------------------------------------------------------
Hyperion Software Corp.(a) 300,000 11,437,500
- ---------------------------------------------------------------
MedQuist, Inc.(a) 300,000 7,312,500
- ---------------------------------------------------------------
PMT Services, Inc.(a) 600,000 9,675,000
- ---------------------------------------------------------------
Saville Systems Ireland
PLC-ADR(a)(Ireland) 350,000 20,912,500
- ---------------------------------------------------------------
102,922,376
- ---------------------------------------------------------------
SERVICES (EMPLOYMENT)-1.11%
Alternative Resources Corp.(a) 250,000 6,187,500
- ---------------------------------------------------------------
Norrell Corp. 225,000 6,553,125
- ---------------------------------------------------------------
RemedyTemp, Inc.- Class A(a) 165,000 3,795,000
- ---------------------------------------------------------------
Robert Half International, Inc.(a) 375,000 15,351,563
- ---------------------------------------------------------------
Romac International, Inc.(a) 400,000 8,000,000
- ---------------------------------------------------------------
Vincam Group, Inc. (The)(a) 100,000 3,137,500
- ---------------------------------------------------------------
43,024,688
- ---------------------------------------------------------------
SERVICES (FACILITIES & ENVIRONMENTAL)-0.09%
Cornell Corrections, Inc.(a) 200,000 3,600,000
- ---------------------------------------------------------------
SPECIALTY PRINTING-0.40%
Consolidated Graphics, Inc.(a) 200,000 10,375,000
- ---------------------------------------------------------------
World Color Press, Inc.(a) 200,000 5,062,500
- ---------------------------------------------------------------
15,437,500
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.52%
Electromagnetic Sciences, Inc.(a) 250,000 $ 4,734,375
- ---------------------------------------------------------------
Powerwave Technologies, Inc.(a) 200,000 6,175,000
- ---------------------------------------------------------------
World Access, Inc.(a) 350,000 9,275,000
- ---------------------------------------------------------------
20,184,375
- ---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-1.02%
ACC Corp. 200,000 7,925,000
- ---------------------------------------------------------------
Billing Information Concepts(a) 450,000 17,662,500
- ---------------------------------------------------------------
Tel-Save Holdings, Inc.(a) 39,700 853,550
- ---------------------------------------------------------------
USLD Communications Corp.(a) 650,000 12,878,125
- ---------------------------------------------------------------
39,319,175
- ---------------------------------------------------------------
TEXTILES (APPAREL)-0.96%
Ashworth, Inc.(a) 450,000 4,471,875
- ---------------------------------------------------------------
Nautica Enterprises, Inc.(a) 350,000 9,318,750
- ---------------------------------------------------------------
Quicksilver, Inc.(a) 200,000 6,150,000
- ---------------------------------------------------------------
St. John Knits, Inc. 300,000 12,056,250
- ---------------------------------------------------------------
Tommy Hilfiger Corp.(a) 125,000 4,945,313
- ---------------------------------------------------------------
36,942,188
- ---------------------------------------------------------------
TEXTILES (HOME FURNISHINGS)-0.41%
Mohawk Industries, Inc.(a) 250,000 7,687,500
- ---------------------------------------------------------------
WestPoint Stevens, Inc.(a) 200,000 8,200,000
- ---------------------------------------------------------------
15,887,500
- ---------------------------------------------------------------
TOBACCO-0.14%
Schweitzer-Mauduit International,
Inc. 125,000 5,265,625
- ---------------------------------------------------------------
TRUCKING-0.84%
Heartland Express, Inc.(a) 150,000 4,125,000
- ---------------------------------------------------------------
Hub Group, Inc.(a) 200,000 6,100,000
- ---------------------------------------------------------------
M.S. Carriers, Inc.(a) 150,000 3,801,563
- ---------------------------------------------------------------
Swift Transportation Co., Inc.(a) 300,000 9,600,000
- ---------------------------------------------------------------
US Xpress Enterprises, Inc.(a) 200,000 4,400,000
- ---------------------------------------------------------------
Werner Enerprises, Inc. 175,000 4,243,750
- ---------------------------------------------------------------
32,270,313
- ---------------------------------------------------------------
TRUCKS & PARTS-0.08%
Wabash National Corp. 100,000 2,987,500
- ---------------------------------------------------------------
WASTE MANAGEMENT-1.61%
Allied Waste Industries, Inc.(a) 500,000 10,187,500
- ---------------------------------------------------------------
American Disposal Services,
Inc.(a) 400,000 14,100,000
- ---------------------------------------------------------------
ITEQ, Inc.(a)(b) 650,000 8,125,000
- ---------------------------------------------------------------
KTI, Inc.(a) 300,000 4,350,000
- ---------------------------------------------------------------
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
WASTE MANAGEMENT-(CONTINUED)
Philip Services Corp.(a)(Canada) 400,000 $ 7,000,000
- ---------------------------------------------------------------
USA Waste Services, Inc.(a) 497,500 18,407,500
- ---------------------------------------------------------------
62,170,000
- ---------------------------------------------------------------
Total Common Stocks 3,678,428,904
- ---------------------------------------------------------------
PREFERRED STOCK -0.23%
HOTELS-0.23%
Royal Caribbean Cruises Ltd.-$3.63
Conv. Pfd. 115,000 8,740,000
- ---------------------------------------------------------------
CONVERTIBLE CORPORATE NOTES-0.25%
ADVERTISING/BROADCASTING-0.05%
Jacor Communications Inc., Conv.
Sr. LYON, 5.50%, 06/12/11(c) $3,200,000 $ 1,959,776
- ---------------------------------------------------------------
RETAIL (SPECIALTY)-0.20%
Pier 1 Imports, Inc., Conv. Sub.
Notes, 5.75%, 10/01/03 $4,800,000 $ 7,789,968
- ---------------------------------------------------------------
Total Convertible Corporate
Notes 9,749,744
- ---------------------------------------------------------------
U.S. TREASURY SECURITIES-2.15%
U.S. TREASURY BILLS-2.15%
5.093%, 01/02/98(d)(e) 83,780,000 83,111,435
- ---------------------------------------------------------------
REPURCHASE AGREEMENT-1.93%(f)
HSBC Securities, Inc., 5.65%,
11/03/97(g) 74,585,705 74,585,705
- ---------------------------------------------------------------
TOTAL INVESTMENTS-99.75% 3,854,615,788
- ---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.25% 9,641,521
- ---------------------------------------------------------------
NET ASSETS-100.00% $3,864,257,309
===============================================================
</TABLE>
Investment Abbreviations:
ADR -- American Depository Receipt
Conv. -- Convertible
LYON -- Liquid Yield Option Notes
Pfd. -- Preferred
Sr. -- Senior
Sub. -- Subordinated
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Affiliated issuers are those in which the Fund's holdings of an issuer
represent 5% or more of the outstanding voting securities of the issuer. The
Fund has never owned enough of the outstanding voting securities of any
issuer to have control (as defined in the Investment Co. Act of 1940) of
that issuer. The aggregate market value of affiliated issuers as of 10/31/97
was $175,116,278 which represented 4.53% of the Fund's net assets.
(c) Zero coupon bond. Interest rate shown represents the rate of original issue
discount.
(d) U.S. Treasury bills are traded on discount basis. In such cases the interest
rate shown represents the rate of discount paid or received at the time of
purchase by the Fund.
(e) A portion of the principal balance was pledged as collateral to cover margin
requirements for open futures contracts. See note 7.
(f) 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.
(g) Joint repurchase agreement entered into 10/31/97 with a maturing value of
$350,164,792. Collateralized by $355,329,000, U.S. Government obligations,
7.00% to 9.875% due 11/15/15-10/01/27 with an aggregate market value at
10/31/97 of $359,463,470.
See Notes to Financial Statements.
13
<PAGE> 16
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$2,754,595,749) $3,854,615,788
- --------------------------------------------------------
Receivables for:
Investments sold 14,238,069
- --------------------------------------------------------
Capital stock sold 29,386,400
- --------------------------------------------------------
Dividends and interest 344,855
- --------------------------------------------------------
Variation margin 1,776,500
- --------------------------------------------------------
Investment for deferred compensation
plan 34,679
- --------------------------------------------------------
Other assets 101,226
- --------------------------------------------------------
Total assets 3,900,497,517
- --------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 25,526,261
- --------------------------------------------------------
Capital stock reacquired 7,082,703
- --------------------------------------------------------
Deferred compensation 34,679
- --------------------------------------------------------
Accrued advisory fees 2,187,579
- --------------------------------------------------------
Accrued administrative services fees 10,746
- --------------------------------------------------------
Accrued distribution fees 864,455
- --------------------------------------------------------
Accrued directors' fees 7,521
- --------------------------------------------------------
Accrued transfer agent fees 345,281
- --------------------------------------------------------
Accrued operating expenses 180,983
- --------------------------------------------------------
Total liabilities 36,240,208
- --------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES
OUTSTANDING $3,864,257,309
========================================================
Capital stock, $.001 par value per
share:
Authorized 750,000,000
- --------------------------------------------------------
Outstanding 77,337,382
========================================================
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE $ 49.97
========================================================
OFFERING PRICE PER SHARE:
(Net asset value of $49.97 divided by
94.50%) $ 52.88
========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 8,960,543
- --------------------------------------------------------
Dividends (net of $63,501 foreign
withholding tax) 3,185,128
- --------------------------------------------------------
Total investment income 12,145,671
- --------------------------------------------------------
EXPENSES:
Advisory fees 19,244,957
- --------------------------------------------------------
Administrative services fees 97,609
- --------------------------------------------------------
Custodian fees 258,042
- --------------------------------------------------------
Directors' fees 24,698
- --------------------------------------------------------
Distribution fees 7,594,650
- --------------------------------------------------------
Transfer agent fees 4,007,067
- --------------------------------------------------------
Other 846,694
- --------------------------------------------------------
Total expenses 32,073,717
- --------------------------------------------------------
Less: Expenses paid indirectly (187,716)
- --------------------------------------------------------
Net expenses 31,886,001
- --------------------------------------------------------
Net investment income (loss) (19,740,330)
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES AND FUTURES
CONTRACTS:
Net realized gain on sales of:
Investment securities 120,020,005
- --------------------------------------------------------
Futures contracts 23,220,678
- --------------------------------------------------------
143,240,683
- --------------------------------------------------------
Net unrealized appreciation
(depreciation) of:
Investment securities 445,142,391
- --------------------------------------------------------
Futures contracts (9,323,940)
- --------------------------------------------------------
435,818,451
========================================================
Net gain on investment
securities and futures
contracts 579,059,134
- --------------------------------------------------------
Net increase in net assets resulting from
operations $ 559,318,804
========================================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 17
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED OCTOBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (19,740,330) $ (19,703,976)
- ---------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities and
futures contracts 143,240,683 141,538,687
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
futures contracts 435,818,451 211,197,677
- ---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 559,318,804 333,032,388
- ---------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities (138,552,707) (54,512,548)
- ---------------------------------------------------------------------------------------------
Net increase from capital stock transactions 692,927,269 226,490,173
- ---------------------------------------------------------------------------------------------
Net increase in net assets 1,113,693,366 505,010,013
- ---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 2,750,563,943 2,245,553,930
- ---------------------------------------------------------------------------------------------
End of period $3,864,257,309 $2,750,563,943
=============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $2,631,139,285 $1,957,915,109
- ---------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (81,400) (44,163)
- ---------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investment
securities and futures contracts 138,417,475 133,729,499
- ---------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
futures contracts 1,094,781,949 658,963,498
- ---------------------------------------------------------------------------------------------
$3,864,257,309 $2,750,563,943
=============================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Aggressive Growth Fund (the "Fund") is a series portfolio of AIM Equity
Funds, Inc. (the "Company"). The Company is a Maryland corporation registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end series management investment company consisting of six diversified
portfolios: AIM Aggressive Growth Fund, AIM Blue Chip Fund, AIM Capital
Development Fund, AIM Charter Fund, AIM Constellation Fund and AIM Weingarten
Fund. Matters affecting each portfolio or class will be voted on exclusively by
the shareholders of such portfolio or class. The assets, liabilities and
operations of each portfolio are accounted for separately. The Fund has
temporarily discontinued public sales of its shares to new investors. The Fund
is a diversified portfolio which seeks to achieve long-term growth of capital by
investing primarily in common stocks, convertible bonds, convertible preferred
stocks and warrants of companies which in the opinion of the Fund's investment
advisor are expected to achieve earnings growth over time at a rate in excess of
15% per year.
Information presented in these financial statements pertains only to the Fund.
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. The
following is a summary of the significant accounting policies followed by the
Fund in the preparation of its financial statements.
A. Security Valuations--A security listed or traded on an exchange (except
convertible bonds) is valued at its last price on the exchange where the
security is principally traded, or lacking any sales on a particular day,
the security is valued at the mean between the closing bid and asked prices
on that day. Each security traded in the over-the-counter market (but not
including securities reported on the NASDAQ National Market System) is
valued at the mean between the last bid and asked prices based upon quotes
furnished by market makers for such securities. If a mean is not available,
as is the case in some foreign markets, the closing bid will be used absent
a last sales price. 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. Debt
obligations (including convertible bonds) are valued on the basis of prices
provided by an independent pricing service. Prices provided by the pricing
service may be determined without exclusive reliance on quoted prices, and
may reflect appropriate factors such as yield, type of issue, coupon rate
and maturity date. Securities for which market 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
15
<PAGE> 18
close of the New York Stock Exchange. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the
times at which they are determined and the close of the New York Stock
Exchange which will not be reflected in the computation of the Fund's net
asset value. If events materially affecting the value of such securities
occur during such period, then these securities will be valued at their fair
value as determined in good faith by or under the supervision of the Board
of Directors.
B. Securities Transactions, Investment Income and Distributions-- Securities
transactions are recorded on a trade date basis. Realized gains or losses on
sales are computed on the basis of specific identification of the securities
sold. Interest income is recorded as earned from settlement date and is
recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. On October 31, 1997,
$19,703,093 was reclassified from undistributed net investment income (loss)
to paid in capital as a result of net operating tax loss. Net assets were
unaffected by the reclassification discussed above.
C. Federal Income Taxes--The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
D. Stock Index Futures Contracts--The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities as collateral for the account of
the broker (the Fund's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the contracts
are recognized as unrealized gains or losses by "marking to market" on a
daily basis to reflect the market value of the contracts at the end of each
day's trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contracts are
closed, the Fund recognizes a realized gain or loss equal to the difference
between the proceeds from, or cost of, the closing transaction and the
Fund's basis in the contract. Risks include the possibility of an illiquid
market and that a change in the value of contracts may not correlate with
changes in the value of the securities being hedged.
E. Foreign Currency Transactions--Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions.
F. Foreign Currency Contracts--A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a forward 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.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.80% of
the first $150 million of the Fund's average daily net assets, plus 0.625% of
the fund's average daily net assets in excess of $150 million.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended October 31, 1997, AIM was
reimbursed $97,609 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") for certain costs incurred in providing
transfer agency services to the Fund. During the year ended October 31, 1997,
AFS was paid $979,015 for such services.
The Company has entered into a master distribution agreement with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Fund. The Company has adopted a plan pursuant to rule 12b-1 under the 1940 Act
(the "Plan"), whereby the Fund pays to AIM Distributors an annual rate of 0.25%
of the Fund's average daily net assets as compensation for services related to
the sales and distribution of the Fund's shares. The Plan provides that payments
to dealers and financial institutions that provide continuing personal
shareholder services to their customers who purchase and own shares of the Fund,
in amounts of up to 0.25% of the average net assets of the Fund attributable to
the customers of such dealers or financial institutions, may be characterized as
a service fee. Any amounts not paid as a service fee under the Plan would
constitute an assets-based sales charge. The Plan also imposes a cap on the
total amount of sales charges, including asset-based sales charges, that may be
paid by the Company with respect to the Fund's shares. During the year ended
October 31, 1997, the Fund paid AIM Distributors $7,594,650 as compensation
under the Plan.
AIM Distributors received commissions of $5,850,410 from sales of shares of
the Fund's capital stock during the year ended October 31, 1997. Such
commissions are not an expense of the Fund. They are deducted from, and are not
included in, the proceeds from sales of capital stock. During the year ended
October 31, 1997, AIM Distributors received $72,147 in contingent deferred sales
charges imposed on redemptions of the Fund's capital stock. Certain officers and
directors of the Company are officers and directors of AIM, AFS and AIM
Distributors.
During the year ended October 31, 1997, the Fund paid legal fees of $11,454
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Company's directors. A member of that firm is a director of the Company.
NOTE 3-INDIRECT EXPENSES
AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund. For the year ended
October 31, 1997, the Fund's
16
<PAGE> 19
expenses were reduced by $13,018. The Fund also received reductions in transfer
agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of
$39,453 and $135,245, respectively, under expense offset arrangements. The
effect of the above arrangements resulted in reductions of the Fund's total
expenses of $187,716 during the year ended October 31, 1997.
NOTE 4-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 15, 1997, the Fund was
limited to borrowing up to the lesser of i) $325,000,000 or ii) the limit set by
its prospectus for borrowings. During the year ended October 31, 1997, the Fund
did not borrow under the line of credit agreement. The funds which are party to
the line of credit are charged a commitment fee of 0.05% on the unused balance
of the committed line. The commitment fee is allocated among the funds based on
their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold during the year ended October 31, 1997 were $2,666,279,948
and $2,089,513,535, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of October 31, 1997 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 1,177,189,380
- -----------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (79,723,571)
- -----------------------------------------------------------
Net unrealized appreciation of investment
securities $ 1,097,465,809
===========================================================
</TABLE>
Cost of investment for tax purposes is $2,757,149,979.
NOTE 7-FUTURES CONTRACTS
On October 31, 1997, $3,288,000 principal amount of U.S. Treasury obligations
were pledged as collateral to cover margin requirements for futures contracts.
Open futures contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
NO. OF MONTH/ APPRECIATION
CONTRACT CONTRACTS COMMITMENT (DEPRECIATION)
-------- ---------- ---------- --------------
<S> <C> <C> <C>
S&P 500 Index 170 Dec. 97 $(5,238,090)
</TABLE>
17
<PAGE> 20
NOTE 8-CAPITAL STOCK
Changes in capital stock outstanding during the years ended October 31, 1997 and
1996 were as follows:
<TABLE>
<CAPTION>
1997 1996
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Sold 41,558,826 $ 1,826,781,148 30,538,437 $ 1,334,476,880
- --------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends 3,068,800 127,938,198 1,291,013 49,897,557
- --------------------------------------------------------------------------------------------------------------------------
Reacquired (28,514,602) (1,261,792,077) (26,568,998) (1,157,884,264)
- --------------------------------------------------------------------------------------------------------------------------
16,113,024 $ 692,927,269 5,260,452 $ 226,490,173
==========================================================================================================================
</TABLE>
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock
outstanding during each of the years in the four-year period ended October 31,
1997, the ten month period ended October 31, 1993 and the year ended December
31, 1992.
<TABLE>
<CAPTION>
OCTOBER 31,
--------------------------------------------------------------- DECEMBER 31,
1997 1996 1995 1994 1993 1992(a)
---------- ---------- ---------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 44.93 $ 40.13 $ 28.37 $ 23.85 $ 18.52 $ 16.06
- ------------------------------------------------ ---------- ---------- ---------- -------- -------- -------
Income from investment operations:
Net investment income (loss) (0.26) (0.32) (0.04) (0.05) (0.02) (0.03)
- ------------------------------------------------ ---------- ---------- ---------- -------- -------- -------
Net gains (losses) on securities (both
realized and unrealized) 7.60 6.09 11.80 4.57 5.35 3.41
- ------------------------------------------------ ---------- ---------- ---------- -------- -------- -------
Total from investment operations 7.34 5.77 11.76 4.52 5.33 3.38
- ------------------------------------------------ ---------- ---------- ---------- -------- -------- -------
Less distributions:
Dividends from net investment income -- -- -- -- -- --
- ------------------------------------------------ ---------- ---------- ---------- -------- -------- -------
Distributions from net realized gains (2.30) (0.97) -- -- -- (0.92)
- ------------------------------------------------ ---------- ---------- ---------- -------- -------- -------
Total distributions (2.30) (0.97) -- -- -- (0.92)
- ------------------------------------------------ ---------- ---------- ---------- -------- -------- -------
Net asset value, end of period $ 49.97 $ 44.93 $ 40.13 $ 28.37 $ 23.85 $ 18.52
================================================ ========== ========== ========== ======== ======== =======
Total return(b) 17.35% 14.77% 41.45% 18.96% 28.78% 21.34%
================================================ ========== ========== ========== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $3,864,257 $2,750,564 $2,245,554 $687,238 $217,256 $38,238
================================================ ========== ========== ========== ======== ======== =======
Ratio of expenses to average net assets(c) 1.06%(d)(e) 1.11% 1.08% 1.07% 1.00%(g) 1.25%
================================================ ========== ========== ========== ======== ======== =======
Ratio of net investment income (loss) to average
net assets(f) (0.65)%(d) (0.76)% (0.19)% (0.26)% (0.24)%(g) (0.59)%
================================================ ========== ========== ========== ======== ======== =======
Portfolio turnover rate 73% 79% 52% 75% 61% 164%
================================================ ========== ========== ========== ======== ======== =======
Average broker commission rate paid(h) $ 0.0540 $ 0.0545 N/A N/A N/A N/A
================================================ ========== ========== ========== ======== ======== =======
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Does not deduct sales charges and for periods less than one year, total
returns are not annualized.
(c) Prior to fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.15%, 1.09%, 1.17% (annualized), and 1.65%, for 1995-92, respectively.
(d) Ratios are based on average net assets of $3,037,859,800.
(e) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been 1.05%.
(f) After fee waivers and/or expense reimbursements. Ratios of net investment
income (loss) to average net assets prior to fee waivers and/or and expense
reimbursements were (0.26)%, (0.28)%, (0.41)% (annualized), and (0.99)%,
for 1995-92, respectively.
(g) Annualized.
(h) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
NOTE 10-LEGAL PROCEEDINGS
A claim, Saltzberg v. AIM Equity Funds, Inc., et al., was filed in Southern
District Court in Texas in October 1996 against AIM and certain other
subsidiaries of AIM Management. The claim was instituted under section 36(b) of
the Investment Company Act of 1940 and seeks to recover damages allegedly
suffered by the Fund in connection with fees paid for marketing and shareholder
services after the Fund was closed to new investors. AIM Management is
investigating whether there is any basis at all for this claim and intends to
defend it vigorously.
NOTE 11-FUND REOPENING AND CLOSING
The Fund was reopened to new investors on June 4, 1997 and subsequently closed
to new investors effective as of the close of business June 5, 1997.
18
<PAGE> 21
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
AIM Aggressive Growth Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Aggressive Growth Fund (a portfolio of
AIM Equity Funds, Inc.), including the schedule of
investments, as of October 31, 1997, the related
statement of operations for the year then ended, the
statement of changes in net assets for each of the years
in the two-year period then ended, and the financial
highlights for each of the years in the four-year period
then ended, the ten month period ended October 31, 1993
and the year ended December 31, 1992. These financial
statements and financial highlights are the
responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of October 31, 1997, by
correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM
Aggressive Growth Fund as of October 31, 1997, the
results of its operations for the year then ended, the
changes in its net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years in the four-year period then ended,
the ten month period ended October 31, 1993 and the year
ended December 31, 1992, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
December 5, 1997
19
<PAGE> 22
SUPPLEMENTAL PROXY INFORMATION
- --------------------------------------------------------------------------------
The Annual Meeting of Shareholders of the AIM Equity Funds, Inc. (the "Company")
was held on February 7, 1997 at the offices of A I M Management Group Inc., 11
Greenway Plaza, Houston, Texas. The meeting was held for the following purposes:
(1) To elect Directors as follows: Charles T. Bauer, Bruce L. Crockett, Owen
Daly II, Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F.
Pennock, Ian W. Robinson and Louis S. Sklar.
(2) To approve a new Master Investment Advisory Agreement between the AIM
Aggressive Growth Fund (the "Fund") and A I M Advisors, Inc.
(3) To approve the elimination of the fundamental investment policy prohibiting
the Fund from investing in other investment companies.
(4) To ratify the selection of KPMG Peat Marwick LLP as independent accountants
for the Fund for the Company's fiscal year ending October 31, 1997.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
Votes Withheld/
Director/Matter Votes For Against Abstentions
--------------- --------- ------- -----------
<S> <C> <C> <C> <C>
(1) Charles T. Bauer............................................ 618,811,245 N/A 19,923,485
Bruce L. Crockett........................................... 619,427,685 N/A 19,307,045
Owen Daly II................................................ 618,919,919 N/A 19,814,811
Carl Frischling............................................. 619,275,356 N/A 19,459,374
Robert H. Graham............................................ 619,431,576 N/A 19,303,154
John F. Kroeger............................................. 618,878,096 N/A 19,856,634
Lewis F. Pennock............................................ 619,272,998 N/A 19,461,732
Ian W. Robinson............................................. 618,944,840 N/A 19,789,890
Louis S. Sklar.............................................. 619,462,714 N/A 19,272,016
(2) Approval of Master Investment Advisory Agreement............ 31,114,791 731,317 1,218,650
Elimination of policy prohibiting investments in other
(3) investment companies........................................ 23,839,643 1,595,508 1,270,078
(4) KPMG Peat Marwick LLP....................................... 609,690,634 5,519,782 23,524,314
</TABLE>
20
<PAGE> 23
Directors & Officers
<TABLE>
<S> <C>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director
ACE Limited; John J. Arthur A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Treasurer 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Gary T. Crum Houston, TX 77046
Senior Vice President
Owen Daly II TRANSFER AGENT
Director Carol F. Relihan
Cortland Trust Inc. Senior Vice President and Secretary A I M Fund Services, Inc.
P.O. Box 4739
Jack Fields Jonathan C. Schoolar Houston, TX 77210-4739
Formerly Member of the Senior Vice President
U.S. House of Representatives CUSTODIAN
Melville B. Cox
Carl Frischling Vice President State Street Bank & Trust Company
Partner 225 Franklin Street
Kramer, Levin, Naftalis & Frankel Dana R. Sutton Boston, MA 02110
Vice President and Assistant Treasurer
Robert H. Graham COUNSEL TO THE FUND
President and Chief Executive Officer P. Michelle Grace
A I M Management Group Inc. Assistant Secretary Ballard Spahr
Andrews & Ingersoll
John F. Kroeger Nancy L. Martin 1735 Market Street
Formerly Consultant Assistant Secretary Philadelphia, PA 19103
Wendell & Stockel Associates, Inc.
Ofelia M. Mayo COUNSEL TO THE DIRECTORS
Lewis F. Pennock Assistant Secretary
Attorney Kramer, Levin, Naftalis & Frankel
Kathleen J. Pflueger 919 Third Avenue
Ian W. Robinson Assistant Secretary New York, NY 10022
Consultant; Formerly Executive
Vice President and Samuel D. Sirko DISTRIBUTOR
Chief Financial Officer Assistant Secretary
Bell Atlantic Management A I M Distributors, Inc.
Services, Inc. Stephen I. Winer 11 Greenway Plaza
Assistant Secretary Suite 100
Louis S. Sklar Houston, TX 77046
Executive Vice President Mary J. Benson
Hines Interests Assistant Treasurer AUDITORS
Limited Partnership
KPMG Peat Marwick LLP
700 Louisiana
Houston, TX 77002
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
AIM Aggressive Growth Fund distributed long-term capital gains of $2.298 per
share during its tax year ended October 31, 1997.
<PAGE> 24
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS--Registered Trademark--
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Capital Development Fund
AIM Constellation Fund
AIM Global Aggressive Growth Fund
GROWTH OF CAPITAL
AIM Advisor International Value Fund
[PHOTO OF AIM Blue Chip Fund
11 GREENWAY PLAZA AIM Global Growth Fund
APPEARS HERE] AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME OR INCOME WITH CAPITAL GROWTH
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund
AIM Charter Fund
AIM Global Utilities Fund
HIGH CURRENT INCOME OR CURRENT INCOME
AIM High Yield Fund
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
CURRENT INCOME AND HIGH DEGREE OF SAFETY
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Fund
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
A I M Management Group Inc. has provided leadership in the *AIM Aggressive Growth Fund was closed to new investors on
mutual fund industry since 1976 and managed approximately June 5, 1997. For more complete information about any AIM
$82 billion in assets for more than 3.6 million shareholders, Fund(s), including sales charges and expenses, ask your
including individual investors, corporate clients, and financial financial consultant or securities dealer for a free
institutions as of September 30, 1997. The AIM Family of prospectus(es). Please read the prospectus(es) carefully
Funds--Registered Trademark-- is distributed nationwide, and before you invest or send money.
AIM today ranks among the nation's top 15 mutual fund
companies in assets under management, according to Lipper INVEST WITH DISCIPLINE-SM-
Analytical Services, Inc.
[AIM LOGO APPEARS HERE] -----------------
BULK RATE
A I M Distributors, Inc. U.S. POSTAGE
11 Greenway Plaza, Suite 100 PAID
Houston, TX 77046 HOUSTON, TX
Permit No. 1919
-----------------
</TABLE>
