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RETAIL CLASS OF AIM EQUITY FUNDS, INC.
AIM AGGRESSIVE GROWTH FUND
Supplement dated November 6, 1998
to the Prospectus dated February 27, 1998
as supplemented July 1, 1998 and October 1, 1998
This Supplement supersedes and replaces the supplements dated July 1,
1998 and October 1, 1998.
The Board of Directors of AIM Equity Funds, Inc. (the "Company") has
authorized the reopening of AIM Aggressive Growth Fund (the "Fund") to new
investors effective November 16, 1998 on the terms described in the Investor's
Guide.
The section entitled "Closure of the Fund to New Investors" on page 12
of the Prospectus is deleted.
The following paragraphs are inserted as a new item under "CERTAIN INVESTMENT
STRATEGIES AND POLICIES," before "Foreign Securities" on page 8 of the
prospectus:
"REAL ESTATE INVESTMENT TRUSTS ("REITS"). The Fund may invest in equity
and/or debt securities issued by REITs. Such investments will not
exceed 25% of the total assets of the Fund.
REITs are trusts which sell equity or debt securities to investors and
use the proceeds to invest in real estate or interests therein. A REIT
may focus on particular projects, such as apartment complexes, or
geographic regions, such as the Southeastern United States, or both.
To the extent that the Fund has the ability to invest in REITs, the Fund
could conceivably own real estate directly as a result of a default on
the securities it owns. The Fund, therefore, may be subject to certain
risks associated with the direct ownership of real estate including
difficulties in valuing and trading real estate, declines in the value
of real estate, risks related to general and local economic condition,
adverse change in the climate for real estate, increases in property
taxes and operating expense, changes in zoning laws, casualty or
condemnation losses, limitations on rents, changes in neighborhood
values, the appeal of properties to tenants, and increases in interest
rates.
In addition to the risks described above, equity REITs may be affected
by any changes in the value of the underlying property owned by the
trusts, while mortgage REITs may be affected by the quality of any
credit extended. Equity and mortgage REITs are dependent upon management
skill, are not diversified, and are therefore subject to the risk of
financing single or a limited number of projects. Such trusts are also
subject to heavy cash flow dependency, defaults by borrowers,
self-liquidation, and the possibility of failing to maintain exemption
from the 1940 Act. Changes in interest rates may also affect the value
of debt securities held by the Fund. By investing in REITs indirectly
through the Fund, a shareholder will bear not only
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his/her proportionate share of the expenses of the Fund, but also,
indirectly, similar expenses of the REITs."
The following paragraphs should be inserted under the heading of "Risk Factors
Regarding Foreign Securities--Currency Risk" on page 9:
"Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg,
the Netherlands, Portugal, and Spain are members of the European
Economic and Monetary Union (the "EEMU"). The EEMU 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 which is a member of the EEMU may elect to
participate in the EEMU 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 Portfolio."
The following paragraph should be inserted as a new item under "INVESTMENT
PROGRAM," before "Risk Factors Regarding Foreign Securities" on page 9 of the
prospectus:
"FOREIGN EXCHANGE TRANSACTIONS. The Fund has authority to deal in
foreign exchange between currencies of the different countries in which
it 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 on futures contracts with respect to
foreign currency (and options thereon), 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 Fund 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 Fund's 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 Fund
accruing in connection with the purchase or sale of its portfolio
securities, the sale and redemption of shares of the Fund, or the
payment of dividends and distributions by the Fund. 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 Fund 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."