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AIM EQUITY FUNDS, INC.
Institutional Classes of
AIM Charter Fund
AIM Weingarten Fund
AIM Constellation Fund
Supplement dated October 1, 1998 to the
Prospectus dated February 27, 1998, as supplement July 1, 1998
The following paragraph should be inserted as a new item under "INVESTMENT
PROGRAMS," before "Risk Factors Regarding Foreign Securities" on page 11 of the
prospectus:
"FOREIGN EXCHANGE TRANSACTIONS. The Funds have authority to deal in
foreign exchange between currencies of the different countries in which
they will invest either for the settlement of transactions or as a
hedge against possible variations in the foreign exchange rates between
those currencies. This may be accomplished through direct purchases or
sales of foreign currency, purchases of futures contracts with respect
to foreign currency (and options there on), and contractual agreements
to purchase or sell a specified currency at a specified future date (up
to one year) at a price set at the time of the contract. Such
contractual commitments may be forward contracts entered into directly
with another party or exchange-traded futures contracts. The Funds may
purchase and sell options on futures contracts or forward contracts
which are denominated in a particular foreign currency to hedge the
risk of fluctuations in the value of another currency. The Funds'
dealings in foreign exchange may involve specific transactions or
portfolio positions. Transaction hedging is the purchase or sale of
foreign currency with respect to specific receivables or payables of
the Funds accruing in connection with the purchase or sale of their
portfolio securities, the sale and redemption of shares of the Funds,
or the payment of dividends and distributions by the Funds. Position
hedging is the purchase or sale of foreign currency with respect to
portfolio security positions (or underlying portfolio security
positions, such as in an ADR) denominated or quoted in a foreign
currency. The Funds will not speculate in foreign exchange, nor commit
a larger percentage of its total assets to foreign exchange hedges than
the percentage of its total assets that it could invest in foreign
securities."
The following paragraphs should be inserted under the heading of "Risk Factors
Regarding Foreign Securities--Currency Risk" on page 11 of the prospectus:
"Austria, Belgium, Finland, France, Germany, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, and Spain are members of the
European Economic and Monetary Union (the "EMU"). The EMU intends to
establish a common European currency for participating countries which
will be known as the "euro." It is anticipated that each participating
country will supplement its existing currency with the euro on January
1, 1999, and will replace its existing currency with the euro on July
1, 2002. Any other European country that is a member of the European
Union and satisfies the criteria for participation in the EMU may elect
to participate in the EMU and may supplement its existing currency with
the euro after January 1, 1999.
The expected introduction of the euro presents unique risks and
uncertainties, including whether the payment and operational systems of
banks and other financial institutions will be ready by January 1,
1999; how outstanding financial contracts will be treated after January
1, 1999; the establishment of exchange rates for existing currencies
and the euro; and the creation of suitable clearing and settlement
systems for the euro. These and other factors could cause market
disruptions before or after the introduction of the euro and could
adversely affect the value of securities held by the Fund."
