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[COVER IMAGE]
AIM
LARGE CAP GROWTH FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT APRIL 30 1999
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[COVER IMAGE]
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THE BLUE VASE
BY PAUL CEZANNE (1839-1906, FRENCH)
CEZANNE'S MAGNIFICENT STILL LIFES HAVE WITHSTOOD THE TEST OF TIME
TO BECOME CLASSIC EXAMPLES OF POSTIMPRESSIONISM. LIKE THESE
MASTERPIECES, THE COMPANIES IN AIM LARGE CAP GROWTH FUND ARE
ALSO RECOGNIZED AS LEADERS IN THEIR FIELDS.
-------------------------------------
AIM Large Cap Growth Fund is for shareholders who seek long-term growth of
capital through investments primarily in large-capitalization company
securities. These securities may include common stocks, convertible bonds,
convertible preferred stocks and warrants of companies with market
capitalizations that are within the top 50% of stocks in the Russell 1000 Index
at the time of purchase.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Large Cap Growth Fund performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B and Class
C share performance reflects the applicable contingent deferred sales
charge (CDSC) for the period involved. The CDSC on Class B shares declines
from 5% beginning at the time of purchase to 0% at the beginning of the
seventh year. The CDSC on Class C shares is 1% for the first year after
purchase. The performance of the Fund's Class B and Class C shares will
differ from that of Class A shares due to differences in sales charge
structure and expenses.
o Because the Fund has been offered less than one year, all performance
figures reflect cumulative total returns that have not yet been annualized.
o The Fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o International investing presents certain risks not associated with
investing solely in the United States. These include risks relating to
fluctuations in the value of the U.S. dollar relative to the values of
other currencies, the custody arrangement made for the Fund's foreign
holdings, differences in accounting, political risks and the lesser degree
of public information required to be provided by non-U.S. companies.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Dow Jones Industrial Average (the Dow) is a price-weighted average of
30 actively traded primarily industrial stocks.
o The unmanaged Lipper Growth Funds Index represents an average of the
performance of the 30 largest growth funds charted by Lipper, Inc., an
independent mutual-fund performance monitor. Results shown reflect
reinvestment of dividends.
o The Russell 1000 Index is an unmanaged index generally considered
representative of large-capitalization stocks.
o 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.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS
NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THERE IS A
RISK THAT YOU COULD LOSE SOME OR ALL OF YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
AIM LARGE CAP GROWTH FUND
<PAGE> 3
SEMIANNUAL REPORT / APRIL 30 1999
Dear Fellow Shareholder:
With only several months remaining in 1999, the question on
[PHOTO OF many of your minds may be, "How will the year 2000 computer
Charles T. issue affect AIM and my investments?" We would like you to
Bauer, feel comfortable.
Chairman of During March and April, AIM participated in an
the Board of industrywide test that gave us a chance to see how our
THE FUND technology systems might be affected by the changeover to
APPEARS HERE] the year 2000 (Y2K). Everything went as well as we had
hoped; in general, the industry sailed through the testing
process with flying colors. The financial industry has been
seen as a leader in planning for year 2000 concerns. Thus,
it was no surprise to most participants that the test was
an overwhelming success.
The general purpose of the process was to test
electronic interfaces among financial industry members in
the United States and to follow transactions through a
typical trading cycle--from order entry to the settlement process. Investment
banks, broker-dealers, custodian banks and mutual fund companies all worked
together to make this possible. Approximately 400 firms were involved in the
testing; AIM was one of 70 asset managers.
TEST RESULTS EXCELLENT
During the testing process, thousands of transactions were submitted and
approximately 260,000 steps were tested. Of those, only a handful experienced
minor glitches--just 0.02% of the total number of transactions. All problems
were worked through quickly before the hypothetical trades were settled. Of
course, AIM will keep testing and planning throughout 1999 as a precaution.
AIM'S INTERNAL EFFORTS CONTINUE
As you know from our previous communications to you, AIM has been addressing
the year 2000 issue for several years. During 1998, we made substantial
progress on our preparations. We are now in the final phases of the project,
continually testing internal applications and our interfaces with outside
parties. On the investment side, our portfolio management staff is evaluating
the Y2K preparedness of the companies in which we invest.
We feel that our preparations for 2000 are very comprehensive, and the
industrywide testing showed that our colleagues in the financial industry are
also working hard to be ready for the new year. We do not think shareholders
need to take any extraordinary measures with their investments to prepare for
2000. However, if you have any lingering concerns, it may reassure you to know
that AIM is finalizing contingency plans that will be ready if there are
unexpected problems. Our plans will give AIM employees guidelines to follow for
a wide variety of situations.
For a more comprehensive discussion of our Y2K efforts and for periodic
updates, please visit our Web site, www.aimfunds.com.
We are pleased to send you this report covering your fund's performance
over the last six months. If you have any questions or comments, please contact
our Client Services department at 800-959-4246, or e-mail your inquiry to us at
[email protected]. You can access information about your account through our
AIM Investor Line at 800-246-5463 or at our Web site.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--. We appreciate your business.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
AIM Advisors, Inc.
PLEASE NOTE THAT THE INFORMATION ABOUT THE YEAR 2000 IN THIS LETTER
IS DEEMED AIM'S YEAR 2000 READINESS DISCLOSURE.
-------------------------------------
THE FINANCIAL INDUSTRY
HAS BEEN SEEN AS A
LEADER IN PLANNING
FOR YEAR 2000 CONCERNS.
-------------------------------------
AIM LARGE CAP GROWTH FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
AIM LARGE CAP GROWTH FUND BENEFITS FROM
NARROW MARKET
HOW HAS AIM LARGE CAP GROWTH FUND PERFORMED SINCE ITS INCEPTION?
Since inception on March 1, 1999, to the end of the reporting period, AIM Large
Cap Growth Fund's Class A shares returned 5.14%, excluding sales charges.
Cumulative total returns for the Fund's Class B and C shares were -5.17%, from
inception on April 5, 1999 through April 30, 1999. These performance figures
were calculated at net asset value, that is, without the effect of sales
charges. Net assets under management totaled $5.61 million at the reporting
period's end.
WHAT WERE THE MAJOR TRENDS IN THE FINANCIAL MARKETS DURING THE REPORTING
PERIOD?
Increasing narrowness in the U.S. financial markets through early 1999
continued the dominance by large-cap stocks. For the first quarter of 1999,
only five stocks accounted for more than 50% of the S&P 500's gains. In
contrast, it took 15 stocks to do the same in the first quarter of 1997. The
Dow closed above 10,000 on March 29, 1999, and surpassed several other
milestones in April.
The beginning of 1999 was not so hospitable for the technology sector.
After the sector's sterling performance in 1998, many investors began to worry
about a bubble developing, especially in high-flying Internet stocks, the
so-called ".com" universe. A sell-off in the technology arena ensued, but the
markets rebounded after first-quarter 1999 earnings reports came in quite
strong.
HOW IS AIM LARGE CAP GROWTH FUND DIFFERENT FROM OTHER AIM FUNDS?
The new Fund invests solely in the large-cap growth sector, particularly in
companies with market capitalizations in the top 50% of the Russell 1000 Index.
AIM Large Cap Growth Fund occupies a special niche in AIM's product line,
focusing exclusively on the fastest growing large-cap stocks. The Fund is more
concentrated than typical AIM funds, with fewer names and larger positions. As
of April 30, the Fund had 66 holdings. The top 10 holdings represented
approximately 32% of the Fund's total net assets. In normal market conditions,
we aim to keep about a third of the Fund's assets concentrated in the 10
biggest holdings. Due to its large percentage of core holdings and long-term
horizon, we anticipate that the Fund could benefit from tax efficiency,
although the Fund will not be managed for this purpose.
WHAT CONTRIBUTED TO FUND PERFORMANCE DURING THE REPORTING PERIOD?
We believe that several factors drove Fund performance. One is scarcity of
earnings in the financial markets. In an environment of moderate or slightly
decelerating economic growth, investors put a premium on growth companies, and
growth stocks tend to outperform other types of stocks. The Fund's large-cap
bias also benefited from the narrow-market environment during the reporting
period. Four of the five stocks that accounted for most of the S&P 500's 1999
first-quarter earnings--Microsoft, MCI WorldCom, AOL and American International
Group--were in the Fund's top 10 holdings. A concentrated portfolio consisting
mainly of core stocks in traditional growth sectors, such as technology and
health care, also helped Fund performance. We define a core holding as a
company that has a very stable and profitable business model projected to grow
by at least 12% over the next five years. A core holding is expected to
outperform over the long term.
HOW WAS THE FUND POSITIONED ON APRIL 30, 1999?
Our biggest sectors are the pure-growth areas of technology, health care and
consumer staples. Combined, these sectors made up two-thirds of the Fund's
portfolio. Many of the companies in the Fund's portfolio are brand-name market
leaders. As such, their products and services are marketed around the world,
allowing the Fund to capture potential growth from markets abroad. In addition,
the Fund may invest up to 25% of its assets in foreign securities. As of April
30, the Fund had approximately 4% of its total net assets in international
stocks.
WHAT TYPE OF TECHNOLOGY COMPANIES DOES THE FUND OWN?
At the reporting period's close, technology holdings accounted for
approximately 32% of the Fund's total net assets. The majority of the Fund's
technology holdings are high-quality, dominant brand-name firms. Companies such
as AOL and Cisco Systems continued to do well due to their large size, which
has become a strategic weapon for companies in this sector. Larger technology
companies have more money to spend on research and development, which in turn
drives further technological advancement. In this sector, being small- or
mid-cap may not necessarily be an advantage. Having money to spend on research
and development and the ability to provide global reach to customers have
become the main thrusts behind a technology business's success.
-------------------------------------
AIM LARGE CAP GROWTH FUND OCCU-
PIES A SPECIAL NICHE IN AIM'S PRODUCT
LINE, FOCUSING EXCLUSIVELY ON THE
FASTEST GROWING LARGE-CAP STOCKS.
-------------------------------------
See important Fund and index disclosures inside front cover.
AIM LARGE CAP GROWTH FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 4/30/99, based on total net assets
Total number of holdings: 66
<TABLE>
<CAPTION>
===========================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Microsoft Corp. 4.59% 1. Health Care (Diversified) 8.85%
2. MCI WorldCom, Inc. 4.19 2. Computers (Software & Services) 8.51
3. Nokia Oyj A.B.- Class A-ADR 3.79 3. Communications Equipment 7.10
4. Cisco Systems, Inc. 3.12 4. Health Care (Drugs-Major Pharmaceuticals) 5.97
5. America Online, Inc. 3.10 5. Broadcasting (Television, Radio & Cable) 4.87
6. Freddie Mac 3.00 6. Telecommunications (Long Distance) 4.19
7. American International Group, Inc. 2.64 7. Financial (Diversified) 3.95
8. Pfizer Inc. 2.58 8. Health Care (Medical Products & Supplies) 3.23
9. Warner-Lambert Co. 2.39 9. Computer (Networking) 3.12
10. General Electric Co. 2.34 10. Retail (Food Chains) 2.87
Please keep in mind that the Fund's portfolio is subject to change, and there is no assurance
that the Fund will continue to hold any particular security.
===========================================================================================================
</TABLE>
When it comes to Internet investments, we focus on companies that build and
support the structure of the Internet. Successful larger firms, such as Cisco
Systems and Microsoft, are among the Fund's top holdings. For more information
on the Fund's investments in Internet stocks, please see the sidebar.
WHAT HEALTH-CARE COMPANIES DO YOU FAVOR?
The Fund's health-care holdings, which accounted for 20.5% of total net assets
on April 30, consisted mainly of major pharmaceutical and medical-equipment
companies. Our investment in this sector has been driven by long-term
demographic trends. As the population ages, the need for more health care will
increase. Worldwide drug sales are rising at a rate of 8% to 10% a year and
medical-device sales at 7% annually.
In the pharmaceutical arena, we are seeing a continuation of the "size
matters" theme. The costs to bring a new drug to market total in the
neighborhood of $1 billion. So big pharmaceutical companies, such as Pfizer and
Warner-Lambert, have a clear advantage over their smaller counterparts. In
addition, these larger companies already have a foothold in the consumer
products markets. We believe very strongly in this sector as a long-term growth
vehicle.
WHAT IS YOUR OUTLOOK FOR THE FUTURE?
Four months into 1999, fears of a recession in the United States have faded. In
fact, most economists are betting on continued steady growth, with low
inflation and high employment. International markets have stabilized as
countries slowly get a grip on their economies, leading analysts to believe
that the worst is over.
Domestically, interest rates, another key factor supporting a bullish
outlook, are likely to remain quite steady, thanks to the Federal Reserve
Board's watchful guard. The powerful economic forces such as disinflation,
globalization and profits growth that made large-cap stocks big winners are
still firmly in place. To the extent that these factors remain through 1999,
the investing environment for the Fund continues to be favorable.
WHAT ARE INTERNET STOCKS?
The growth of technology stocks, in particular those of Internet companies, has
been in the forefront of financial news. Within the category of "Internet
stocks," there are many more companies than just the AOLs of the world. AIM
seeks those stocks in the technology sector that meet the growth potential
necessary for AIM Funds that follow our disciplined earnings-momentum style of
investing.
Following is a breakdown of the various kinds of companies that make up the
"Internet stock" category:
o Companies that build the Internet infrastructure and are working to provide
improvements in bandwidth include Cisco Systems and Lucent Technologies.
o Network distribution sources for Internet access are companies such as AT&T
and MCI/WorldCom.
o Cable distribution sources provide access through modems. An example of
these is Comcast.
o Companies that provide portals to the Internet are among the most familiar
to the general population and include AOL and Yahoo!
o Companies that have a growing percentage of Internet commerce include
Amazon.com and Cisco Systems.
Companies in this category experience rapid increases in sales via Internet
orders.
VALUATION
Along with the enthusiasm generated by their explosive growth, Internet stocks
have also raised concerns about their valuation. The valuation of a stock is
typically measured by its price-to-earnings (P/E) ratio. A high P/E ratio may
indicate that a particular stock is overvalued. Currently, the high P/Es of
many Internet stocks are based on projections about future earnings or revenue
streams.
AIM portfolio managers evaluate these stocks based on current factors, such
as free cash flow or funds from operations. Concern about overvaluation is one
reason AIM is cautious about purchasing Internet stocks for certain portfolios.
In balancing risk and reward, AIM tends to hold positions in those stocks that
support the Internet's infrastructure and commerce, not necessarily the highly
visible stocks of some Internet companies. AIM portfolio manager Jonathan
Schoolar likens this rationale to investing in the guys who make the bullets,
not the guys who fight the war.
See important Fund and index disclosures inside front cover.
AIM LARGE CAP GROWTH FUND
3
<PAGE> 6
SEMIANNUAL REPORT / FOR CONSIDERATION
TIME FOR A FINANCIAL TUNE-UP?
GET HELP FROM YOUR FINANCIAL CONSULTANT
Keeping track of your investment may require more than just glancing at its
total value. If you haven't checked the asset allocation of your portfolio in
a while, you should. It may look different now.
OUT OF BALANCE
Say you invested $50,000 in equity funds and $50,000 in fixed-income funds on
December 31, 1993, and simply reinvested your income and capital-gains
distributions for five years, making no new investments or withdrawals. (For
this example, we're using the S&P 500 Index and the Lehman Aggregate Bond Index
as indicators of stock and bond performance.*) During those five years, stocks
produced an average annual total return of 24.05%, while bonds grew only 7.27%
per year on average. As a result, you'd have $146,890 in stock funds and
$71,028 in bond funds for a 67/33 allocation on December 31, 1998. If you
wanted to bring your allocation back into balance, you'd need to shift $37,931
from stock to fixed-income funds.
TAX CONSEQUENCES
One way to rebalance is to shift your assets among different funds: selling
equity shares and moving the proceeds into your fixed-income funds. But keep in
mind that this step may trigger tax consequences, since the movement of shares
from one fund to another represents the sale of a security.
Alternatively, you can let your asset allocation change gradually by
altering the proportions of your new investments. Simply raise the amount you
invest in fixed-income funds and lower the amount going into equity funds.
TAX-SHELTERED PLANS
Rebalancing within a tax-sheltered plan, such as a 401(k) or an IRA, makes even
more sense, since there are no tax consequences for selling and buying new
shares.
PERIODIC CHECK-UPS
The key allocation to watch is your overall stock and fixed-income mix. It's
that mix that will have the biggest influence on your risk and return. However,
rebalancing doesn't mean fiddling constantly with your account or attempting to
time the market by moving money around to chase the hottest sectors. It simply
means revisiting your portfolio periodically to make sure it's still right for
you. Your financial consultant should be able to help you determine if your
current portfolio composition is meeting your short- and long-term financial
goals. That's why we recommend regular visits with your consultant as a way to
keep an eye on your nest egg.
YOU AND YOUR FINANCIAL CONSULTANT
Once a year, you and your financial consultant should meet to look ahead,
review investments and take another look at your goals, according to the Forum
for Investor Advice, a nonprofit association that educates investors about the
role and value of professional financial consultants.
TIME AND MARKETS SHIFT BALANCE
Market performance can affect the allocation of a portfolio. This example
illustrates an initial investment of $50,000 in equity funds and $50,000 in
bond funds. Five years later, the assets have shifted to $146,890 in stock
funds and $71,028 in bond funds, due to the strong performance of the stock
market.
===============================================================================
12/31/93 50% STOCK FUNDS 50% BOND FUNDS
12/31/98 33% BOND FUNDS 67% STOCK FUNDS
===============================================================================
*The Lehman Aggregate Bond Index is an unmanaged index generally considered
representative of corporate debt securities. 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. An investment cannot be
made in any index listed.
AIM LARGE CAP GROWTH FUND
4
<PAGE> 7
SEMIANNUAL REPORT / FOR CONSIDERATION
Financial consultants can help you with every kind of financial goal,
whether that's saving up for a house, eliminating debt or saving for a
comfortable retirement. A consultant who knows you well and understands your
needs can make all the difference in your financial future. He or she can
o evaluate your total financial situation and help you formulate a
comprehensive financial plan;
o explain different types of investments, as well as their potential risks
and benefits;
o suggest an investment portfolio that can handle changing market conditions;
and
o help you make clear-headed decisions during market volatility.
GETTING THE MOST FROM YOUR PLANNING SESSION
Your consultant needs a complete picture of your financial status to prepare a
workable plan. Come prepared to talk about your financial situation, your goals
and your feelings about risk. And don't be afraid to ask lots of questions.
Good financial consultants take investor education seriously, so take advantage
of their store of knowledge and materials.
The Forum for Investor Advice suggests that you discuss the following with
your financial consultant:
o changes in the financial markets
o changes in your goals and current situation
o retirement plans
o estate planning
o outlook for the markets
Take along our checklist (right) to get you started on the path to good
planning. And don't forget to stay in touch. Maintaining regular contact with
your financial consultant can keep you moving toward your goals, especially
when your life circumstances or financial needs change.
CONSULTATION CHECKLIST
WHAT TO BRING:
o A list of all your assets, including real estate, life insurance, stocks
and bonds, and mutual funds
o A list of all your expenses, including likely future expenses
o A timetable of your financial goals, including an estimate of when you want
to retire
WHAT TO ASK:
o How can I estimate what my goals will cost?
o How much money do I need to invest, and how often?
o How many different kinds of investments do I need?
o How do I determine my risk tolerance?
o What are the possible risks of the investments you've suggested?
o What effect will these investments have on my taxes? What forms will I need
to file?
o How often do I need to revise my plan?
o How will I know how my investments are doing?
o How can I make changes to my plan?
o What kinds of communication will I get from you?
o Where can I get more information on what we've talked about?
o What do I need to do after this meeting?
[PHOTO]
AIM LARGE CAP GROWTH FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
April 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-83.77%
BEVERAGES (NON-ALCOHOLIC)-1.49%
Coca-Cola Co. (The) 1,230 $ 83,640
- -------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-4.76%
AT&T Corp.-Liberty Media Group(a) 610 38,964
- -------------------------------------------------------------
Cablevision Systems Corp.-Class A(a) 1,200 92,850
- -------------------------------------------------------------
Clear Channel Communications, Inc.(a) 680 47,260
- -------------------------------------------------------------
Comcast Corp.-Class A 985 64,703
- -------------------------------------------------------------
Infinity Broadcasting Corp.-Class A(a) 840 23,258
- -------------------------------------------------------------
267,035
- -------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-6.94%
Lucent Technologies, Inc. 1,460 87,783
- -------------------------------------------------------------
Nokia Oyj A.B.-Class A-ADR (Finland) 2,800 207,725
- -------------------------------------------------------------
Motorola, Inc. 500 40,063
- -------------------------------------------------------------
QUALCOMM, Inc.(a) 270 54,002
- -------------------------------------------------------------
389,573
- -------------------------------------------------------------
COMPUTERS (HARDWARE)-2.30%
Dell Computer Corp.(a) 660 27,184
- -------------------------------------------------------------
International Business Machines Corp. 140 29,286
- -------------------------------------------------------------
Sun Microsystems, Inc.(a) 1,210 72,373
- -------------------------------------------------------------
128,843
- -------------------------------------------------------------
COMPUTERS (NETWORKING)-3.05%
Cisco Systems, Inc.(a) 1,500 171,094
- -------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.94%
EMC Corp.(a) 1,000 108,938
- -------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-8.33%
America Online, Inc.(a) 1,190 169,873
- -------------------------------------------------------------
Microsoft Corp.(a) 3,100 252,069
- -------------------------------------------------------------
Oracle Corp.(a) 375 10,149
- -------------------------------------------------------------
Yahoo! Inc.(a) 200 34,938
- -------------------------------------------------------------
467,029
- -------------------------------------------------------------
CONSUMER FINANCE-1.45%
Capital One Financial Corp. 150 26,053
- -------------------------------------------------------------
Providian Financial Corp. 430 55,497
- -------------------------------------------------------------
81,550
- -------------------------------------------------------------
ELECTRICAL EQUIPMENT-2.28%
General Electric Co. 1,215 128,183
- -------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-2.60%
Intel Corp. 300 18,356
- -------------------------------------------------------------
Linear Technology Corp. 600 34,125
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)
Texas Instruments, Inc. 490 $ 50,041
- -------------------------------------------------------------
Xilinx, Inc.(a) 950 43,344
- -------------------------------------------------------------
145,866
- -------------------------------------------------------------
ENTERTAINMENT-0.51%
Walt Disney Co. (The) 900 28,575
- -------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-1.24%
Applied Materials, Inc.(a) 650 34,856
- -------------------------------------------------------------
Teradyne, Inc.(a) 735 34,683
- -------------------------------------------------------------
69,539
- -------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-3.86%
American Express Co. 400 52,275
- -------------------------------------------------------------
Freddie Mac 2,620 164,405
- -------------------------------------------------------------
216,680
- -------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-8.65%
Abbott Laboratories 1,310 63,453
- -------------------------------------------------------------
American Home Products Corp. 1,050 64,050
- -------------------------------------------------------------
Bristol-Myers Squibb Co. 1,775 112,823
- -------------------------------------------------------------
Johnson & Johnson 1,170 114,075
- -------------------------------------------------------------
Warner-Lambert Co. 1,930 131,119
- -------------------------------------------------------------
485,520
- -------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-5.84%
Lilly (Eli) & Co. 1,000 73,626
- -------------------------------------------------------------
Merck & Co., Inc. 635 44,609
- -------------------------------------------------------------
Pfizer Inc. 1,230 141,527
- -------------------------------------------------------------
Schering-Plough Corp. 1,400 67,638
- -------------------------------------------------------------
327,400
- -------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-3.16%
Guidant Corp. 2,100 112,744
- -------------------------------------------------------------
Medtronic, Inc. 900 64,744
- -------------------------------------------------------------
177,488
- -------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-2.22%
Clorox Co. 200 23,075
- -------------------------------------------------------------
Procter & Gamble Co. (The) 1,080 101,318
- -------------------------------------------------------------
124,393
- -------------------------------------------------------------
INSURANCE (MULTI-LINE)-2.59%
American International Group, Inc. 1,235 145,035
- -------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-0.94%
Schwab (Charles) Corp. 480 52,680
- -------------------------------------------------------------
</TABLE>
6
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<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
LODGING (HOTELS)-0.37%
Carnival Corp. 500 $ 20,625
- -------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-2.01%
Tyco International Ltd. 1,010 82,062
- -------------------------------------------------------------
United Technologies Corp. 210 30,424
- -------------------------------------------------------------
112,486
- -------------------------------------------------------------
NATURAL GAS-0.60%
Enron Corp. 450 33,862
- -------------------------------------------------------------
PERSONAL CARE-0.74%
Gillette Co. 800 41,750
- -------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-2.26%
Home Depot, Inc. (The) 1,475 88,408
- -------------------------------------------------------------
Lowe's Companies, Inc. 730 38,508
- -------------------------------------------------------------
126,916
- -------------------------------------------------------------
RETAIL (COMPUTERS & ELECTRONICS)-0.25%
Best Buy Co., Inc. 290 13,847
- -------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-0.27%
Kohl's Corp.(a) 225 14,947
- -------------------------------------------------------------
RETAIL (FOOD CHAINS)-2.81%
Kroger Co.(a) 1,900 103,194
- -------------------------------------------------------------
Safeway, Inc.(a) 1,005 54,208
- -------------------------------------------------------------
157,402
- -------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-2.66%
Dayton Hudson Corp. 1,100 74,043
- -------------------------------------------------------------
Wal-Mart Stores, Inc. 1,640 75,440
- -------------------------------------------------------------
149,483
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (SPECIALTY)-1.14%
Amazon.com, Inc.(a) 280 $ 48,177
- -------------------------------------------------------------
Staples, Inc.(a) 510 15,300
- -------------------------------------------------------------
63,477
- -------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-1.14%
Abercrombie & Fitch Co.-Class A(a) 250 23,780
- -------------------------------------------------------------
Gap, Inc. (The) 600 39,936
- -------------------------------------------------------------
63,716
- -------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-1.00%
Omnicom Group, Inc. 775 56,185
- -------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.28%
Paychex, Inc. 310 15,828
- -------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-4.10%
MCI WorldCom, Inc.(a) 2,800 230,125
- -------------------------------------------------------------
Total Common Stocks (Cost
$4,643,294) 4,699,710
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. TREASURY BILLS-0.28%(B)
4.237%, 06/24/99 (Cost $15,899) $16,000(c) 15,899
- ---------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITY-11.42%
Federal Home Loan Mortgage Association,
4.90%, 05/03/99 (Cost $640,825) 641,000 640,825
- ---------------------------------------------------------------
TOTAL INVESTMENTS-95.48% 5,356,434
- ---------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-4.52% 253,413
- ---------------------------------------------------------------
NET ASSETS-100.00% $5,609,847
===============================================================
</TABLE>
Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) U.S. Treasury bills are traded on a 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.
(c) A portion of the principal balance was pledged as collateral to cover margin
requirements for open futures contract. See Note 6.
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$5,300,018) $ 5,356.434
- ---------------------------------------------------------
Cash 1,125
- ---------------------------------------------------------
Receivables for:
Capital stock sold 317,658
- ---------------------------------------------------------
Dividends and interest 967
- ---------------------------------------------------------
Other assets 69,776
- ---------------------------------------------------------
Total assets 5,745,960
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 118,757
- ---------------------------------------------------------
Variation margin 2,200
- ---------------------------------------------------------
Accrued administrative services fees 4,000
- ---------------------------------------------------------
Accrued directors' fees 165
- ---------------------------------------------------------
Accrued distribution fees 2,231
- ---------------------------------------------------------
Accrued transfer agent fees 1,882
- ---------------------------------------------------------
Accrued operating expenses 6,878
- ---------------------------------------------------------
Total liabilities 136,113
- ---------------------------------------------------------
Net assets applicable to shares
outstanding $ 5,609,847
- ---------------------------------------------------------
NET ASSETS:
Class A $ 4,365,599
=========================================================
Class B $ 1,155,580
=========================================================
Class C $ 88,668
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 750,000,000
- ---------------------------------------------------------
Outstanding 418,099
=========================================================
Class B:
Authorized 750,000,000
- ---------------------------------------------------------
Outstanding 110,630
=========================================================
Class C:
Authorized 750,000,000
- ---------------------------------------------------------
Outstanding 8,488
=========================================================
Class A:
Net asset value and redemption price
per share $ 10.44
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $10.44
divided by 94.50%) $ 11.05
=========================================================
Class B:
Net asset value and offering price per
share $ 10.45
=========================================================
Class C:
Net asset value and offering price per
share $ 10.45
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the period March 1, 1999 (date operations commenced) through April 30, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $110 foreign withholding
tax) $ 2,369
- --------------------------------------------------------
Interest 5,219
- --------------------------------------------------------
Total investment income 7,588
- --------------------------------------------------------
EXPENSES:
Advisory fees 4,467
- --------------------------------------------------------
Administrative services fees 4,000
- --------------------------------------------------------
Custodian fees 1,681
- --------------------------------------------------------
Directors' fees 329
- --------------------------------------------------------
Distribution fees -- Class A 1,972
- --------------------------------------------------------
Distribution fees -- Class B 311
- --------------------------------------------------------
Distribution fees -- Class C 11
- --------------------------------------------------------
Transfer agent fees -- Class A 1,933
- --------------------------------------------------------
Transfer agent fees -- Class B 114
- --------------------------------------------------------
Transfer agent fees -- Class C 14
- --------------------------------------------------------
Registration and filing fees 9,023
- --------------------------------------------------------
Professional fees 5,262
- --------------------------------------------------------
Other 34
- --------------------------------------------------------
Total expenses 29,151
- --------------------------------------------------------
Less: Fee waivers and reimbursement (19,667)
- --------------------------------------------------------
Less: Expenses paid indirectly (55)
- --------------------------------------------------------
Net expenses 9,429
- --------------------------------------------------------
Net investment income (loss) (1,841)
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FUTURES:
Net realized gain (loss) from:
Investment securities (15,046)
- --------------------------------------------------------
Futures contracts 853
- --------------------------------------------------------
(14,193)
- --------------------------------------------------------
Net unrealized appreciation of:
Investment securities 56,416
- --------------------------------------------------------
Futures contracts 350
- --------------------------------------------------------
56,766
- --------------------------------------------------------
Net gain from investment securities
and futures 42,573
- --------------------------------------------------------
Net increase in net assets resulting from
operations $ 40,732
========================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENT OF CHANGES IN NET ASSETS
For the period March 1, 1999 (date operations commenced) through April 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30,
1999
----------
<S> <C>
OPERATIONS:
Net investment income (loss) $ (1,841)
- ------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
futures (14,193)
- ------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
futures contracts 56,766
- ------------------------------------------------------------------------
Net increase in net assets resulting from operations 40,732
- ------------------------------------------------------------------------
Share transactions-net:
Class A 4,299,158
- ------------------------------------------------------------------------
Class B 1,179,939
- ------------------------------------------------------------------------
Class C 90,018
- ------------------------------------------------------------------------
Net increase in net assets 5,609,847
- ------------------------------------------------------------------------
NET ASSETS:
Beginning of period --
- ------------------------------------------------------------------------
End of period $5,609,847
========================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $5,569,115
- ------------------------------------------------------------------------
Undistributed net investment income (loss) (1,841)
- ------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and futures (14,193)
- ------------------------------------------------------------------------
Unrealized appreciation of investment securities and
futures contracts 56,766
- ------------------------------------------------------------------------
$5,609,847
========================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
April 30, 1999
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Large Cap 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 nine separate
portfolios. The Fund currently offers three different classes of shares: Class A
shares, Class B shares and Class C shares. Class A shares commenced operations
on March 1, 1999. Class B shares and Class C shares commenced sales on April 5,
1999. Class A shares are sold with a front-end sales charge. Class B shares and
Class C shares are sold with a contingent deferred sales charge. 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's investment objective
is long-term growth of capital. 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 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 closing bid price 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. 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 closing bid price. 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 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 market value as determined in good
faith by or under the supervision of the Board of Directors.
B. Foreign Currency Translation--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. The
Fund does not separately account for that portion of the results of
operations resulting from changes in foreign exchange rates on investments
and the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gain or loss from investments.
C. Foreign Currency Contracts--A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may enter into a foreign currency contract for
the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts.
D. 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 and are paid annually.
E. 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.
F. Stock Index Futures Contracts--The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities or cash, and/or by securing a
standby letter of credit from a major commercial bank, as collateral, for
the
10
<PAGE> 13
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.
G. Expenses--Distribution and transfer agency expenses directly attributable to
a class of shares are charged to that class' operations. All other expenses
which are attributable to more than one class are allocated among the
classes.
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 0.75% of
the first $1 billion of the Fund's average daily net assets, plus 0.70% over $1
billion to and including $2 billion of the Fund's average net assets and 0.625%
of the Fund's average net assets over $2 billion.
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 period March 1, 1999 (date
operations commenced) through April 30, 1999, AIM was reimbursed $4,000 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 period March 1, 1999 (date
operations commenced) through April 30, 1999, AFS was paid $1,876 for such
services.
The Company has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Company has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan"), and the
Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The
Fund, pursuant to the Class A and C Plan, pays AIM Distributors compensation at
an annual rate of 0.35% of the average daily net assets of the Class A shares
and 1.00% of the average daily net assets of Class C shares. The Fund, pursuant
to the Class B Plan, pays AIM Distributors compensation at an annual rate of
1.00% of the average daily net assets of the Class B shares. Of these amounts,
the Fund may pay a service fee of 0.25% of the average daily net assets of the
Class A, Class B or Class C shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own the appropriate class of shares of the Fund. Any
amounts not paid as a service fee under the Plans would constitute an asset-
based sales charge. The Plans also impose a cap on the total sales charges,
including asset-based sales charges that may be paid by the respective classes.
During the period March 1, 1999 (date operations commenced) through April 30,
1999, the Class A, Class B and Class C shares paid AIM Distributors $1,972,
$311, and $11 respectively, as compensation under the Plans.
AIM Distributors received commissions of $2,239 from sales of Class A shares
of the Fund during the period March 1, 1999 (date operations commenced) through
April 30, 1999. Such commissions are not an expense of the Fund. They are
deducted from, and are not included in, the proceeds from sales of Class A
shares. During the period March 1, 1999 (date operations commenced) through
April 30, 1999, AIM Distributors received commissions of $8 in contingent
deferred sales charges imposed on redemption of Fund shares. Certain officers
and directors of the Company are officers and directors of AIM, AFS and AIM
Distributors.
NOTE 3-INDIRECT EXPENSES
During the period March 1, 1999 (date operations commenced) through April 30,
1999, the Fund received reductions in transfer agency fees from AFS (an
affiliate of AIM) and reductions in custodian fees of $8 and $47, respectively,
under expense offset arrangements. The effect of the above arrangements resulted
in a reduction of the Fund's total expenses of $55 during the period March 1,
1999 (date operations commenced) through April 30, 1999.
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-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold during the period March 1, 1999 (date operations commenced)
through April 30, 1999 was $4,754,046 and $110,752, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities on a tax basis is as follows:
<TABLE>
<CAPTION>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 186,734
- -----------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (130,318)
- -----------------------------------------------------
Net unrealized appreciation of investment
securities $ 56,416
=====================================================
</TABLE>
Investments have the same cost for tax and financial statement purposes.
NOTE 6-FUTURES CONTRACTS
On April 30, 1999, $16,000 principal amount of U.S. Treasury obligations were
pledged as collateral to cover margin requirements for open futures contracts.
Open futures contracts were as follows:
<TABLE>
<CAPTION>
============================================================
NO. OF MONTH/ UNREALIZED
CONTRACT CONTRACTS COMMITMENT APPRECIATION
- ------------------------------------------------------------
<S> <C> <C> <C>
E-MINI S&P 500 Index 4 Jun 99 $350
============================================================
</TABLE>
11
<PAGE> 14
NOTE 7-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) $1,000,000,000 or (ii) 10% of total assets. 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. During the six months ended April 30, 1999, 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 8-CAPITAL STOCK
Changes in capital stock outstanding during the period March 1, 1999 (date
operations commenced) through April 30, 1999 was as follows:
<TABLE>
<CAPTION>
APRIL 30, 1999
---------------------
SHARES AMOUNT
------- -----------
<S> <C> <C>
Sold:
Class A 425,297 $ 4,378,989
- --------------------------------------------------------------
Class B* 110,630 1,179,939
- --------------------------------------------------------------
Class C* 8,558 90,768
- --------------------------------------------------------------
Reacquired:
Class A (7,198) (79,831)
- --------------------------------------------------------------
Class C* (70) (750)
- --------------------------------------------------------------
537,217 $ 5,569,115
==============================================================
</TABLE>
* Class B and Class C shares commenced sales on April 5, 1999.
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A capital stock
outstanding during the period March 1, 1999 (date operations commenced) through
April 30, 1999, and for a share of Class B and Class C outstanding during the
period April 5, 1999 (date sales commenced) through April 30, 1999.
<TABLE>
<CAPTION>
CLASS A
---------
APRIL 30,
1999
---------
<S> <C>
Net asset value, beginning of period $10.00
- ------------------------------------------------------------ ------
Income from investment operations:
Net investment income --
- ------------------------------------------------------------ ------
Net gains on securities (both realized and unrealized) 0.44
- ------------------------------------------------------------ ------
Total from investment operations 0.44
- ------------------------------------------------------------ ------
Net asset value, end of period $10.44
============================================================ ======
Total return(a) 4.40%
============================================================ ======
Ratios/supplement data:
Net assets, end of period (000s omitted) $4,366
============================================================ ======
Ratio of expenses to average net assets(b) 1.54%(c)
============================================================ ======
Ratio of net investment income to average net assets(d) (0.27)%(c)
============================================================ ======
Portfolio turnover rate 4%
============================================================ ======
</TABLE>
(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) After fee waivers and/or expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
4.56% (annualized).
(c) Ratios are annualized and based on average net assets of $1,136,292.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements was (3.29)% (annualized).
<TABLE>
<CAPTION>
CLASS B CLASS C
--------- ---------
APRIL 30, APRIL 30,
1999 1999
--------- ---------
<S> <C> <C>
Net asset value, beginning of period $11.02 $11.02
- ------------------------------------------------------------ ------ ------
Income from investment operations:
Net investment income -- --
- ------------------------------------------------------------ ------ ------
Net gains (losses) on securities (both realized and
unrealized) (0.57) (0.57)
- ------------------------------------------------------------ ------ ------
Total from investment operations (0.57) (0.57)
- ------------------------------------------------------------ ------ ------
Net asset value, end of period $10.45 $10.45
============================================================ ====== ======
Total return(a) (5.17)% (5.17)%
============================================================ ====== ======
Ratios/supplement data:
Net assets, end of period (000s omitted) $1,156 $ 89
============================================================ ====== ======
Ratio of expenses to average net assets(b) 2.25%(c) 2.25%(c)
============================================================ ====== ======
Ratio of net investment income (loss) to average net
assets(d) (0.94)%(c) (0.94)%(c)
============================================================ ====== ======
Portfolio turnover rate 4% 4%
============================================================ ====== ======
</TABLE>
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) After fee waivers and/or expense reimbursement. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
10.50% (annualized) for Class B and 10.87% (annualized) for Class C.
(c) Ratios are annualized and based on average net assets of $62,702 and $2,154
for Class B and Class C, respectively.
(d) After fee waivers and/or expense reimbursements. Ratios of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements were (9.19)% (annualized) for Class B and (9.56)%
(annualized) for Class C.
12
<PAGE> 15
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
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; Carol F. Relihan A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Secretary 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 Edgar M. Larsen
Cortland Trust Inc. Senior Vice President A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn Jr. Dana R. Sutton Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President and Treasurer
Formerly Vice Chairman and President, CUSTODIAN
Mercantile-Safe Deposit & Trust Co.; and Melville B. Cox
President, Mercantile Bankshares Vice President State Street Bank and Trust Company
225 Franklin Street
Jack Fields Mary J. Benson Boston, MA 02110
Chief Executive Officer Assistant Vice President and
Texana Global, Inc.; Assistant Treasurer COUNSEL TO THE FUND
Formerly Member
of the U.S. House of Representatives Sheri Morris Ballard Spahr
Assistant Vice President and Andrews & Ingersoll, LLP
Carl Frischling Assistant Treasurer 1735 Market Street
Partner Philadelphia, PA 19103
Kramer, Levin, Naftalis & Frankel LLP Renee A. Friedli
Assistant Secretary COUNSEL TO THE DIRECTORS
Robert H. Graham
President and Chief Executive Officer P. Michelle Grace Kramer, Levin, Naftalis & Frankel LLP
A I M Management Group Inc. Assistant Secretary 919 Third Avenue
New York, NY 10022
Prema Mathai-Davis Jeffrey H. Kupor
Chief Executive Officer, YWCA of the U.S.A.; Assistant Secretary DISTRIBUTOR
Commissioner, New York City Dept. for the
Aging; and member of the Board of Directors, Nancy L. Martin A I M Distributors, Inc.
Metropolitan Transportation Authority of Assistant Secretary 11 Greenway Plaza
New York State Suite 100
Ofelia M. Mayo Houston, TX 77046
Lewis F. Pennock Assistant Secretary
Attorney
Lisa A. Moss
Louis S. Sklar Assistant Secretary
Executive Vice President
Hines Interests Kathleen J. Pflueger
Limited Partnership Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
</TABLE>
<PAGE> 16
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has
AIM Aggressive Growth Fund(1) AIM Money Market Fund provided leadership in the mutual-fund
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund industry since 1976 and managed
AIM Capital Development Fund approximately $112 billion in assets
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS for more than 6.3 million shareholders,
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund including individual investors,
AIM Large Cap Growth Fund AIM Asian Growth Fund corporate clients and financial
AIM Mid Cap Equity Fund(2), (A) AIM Developing Markets Fund(2) institutions as of March 31, 1999.
AIM Select Growth Fund(3) AIM Europe Growth Fund(2) The AIM Family of Funds--Registered
AIM Small Cap Growth Fund(2), (B) AIM European Development Fund Trademark-- is distributed nationwide,
AIM Small Cap Opportunities Fund AIM International Equity Fund and AIM today is the 10th-largest
AIM Value Fund AIM Japan Growth Fund(2) mutual-fund complex in the United
AIM Weingarten Fund AIM Latin American Growth Fund(2) States in assets under management,
AIM New Pacific Growth Fund(2) according to Strategic Insight, an
GROWTH & INCOME FUNDS independent mutual-fund monitor.
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund
AIM Advisor Real Estate Fund AIM Global Growth Fund
AIM Balanced Fund
AIM Basic Value Fund(2), (C) GLOBAL GROWTH & INCOME FUNDS
AIM Charter Fund AIM Global Growth & Income Fund(2)
AIM Global Utilities Fund
INCOME FUNDS
AIM Floating Rate Fund(2) GLOBAL INCOME FUNDS
AIM High Yield Fund AIM Emerging Markets Debt Fund(2), (D)
AIM High Yield Fund II AIM Global Government Income Fund(2)
AIM Income Fund AIM Global Income Fund
AIM Intermediate Government Fund AIM Strategic Income Fund(2)
AIM Limited Maturity Treasury Fund
THEME FUNDS
TAX-FREE INCOME FUNDS AIM Global Consumer Products and Services Fund(2)
AIM High Income Municipal Fund AIM Global Financial Services Fund(2)
AIM Municipal Bond Fund AIM Global Health Care Fund(2)
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Infrastructure Fund(2)
AIM Tax-Free Intermediate Fund AIM Global Resources Fund(2)
AIM Global Telecommunications and Technology Fund(2), (E)
AIM Global Trends Fund(2), (F)
</TABLE>
(1) AIM Aggressive Growth Fund reopened to new investors November 16, 1998. (2)
Effective May 29, 1998, A I M Advisors, Inc. became advisor to the former GT
Global Funds. (3) On May 1, 1998, AIM Growth Fund was renamed AIM Select Growth
Fund. (A) On September 8, 1998, AIM Mid Cap Growth Fund was renamed AIM Mid Cap
Equity Fund. (B) On September 8, 1998, AIM Small Cap Equity Fund was renamed
AIM Small Cap Growth Fund. (C) On September 8, 1998, AIM America Value Fund was
renamed AIM Basic Value Fund. (D) On September 8, 1998, AIM Global High Income
Fund was renamed AIM Emerging Markets Debt Fund. (E) On June 1, 1999, AIM
Global Telecommunications Fund was renamed AIM Global Telecommunications and
Technology Fund. For more complete information about any AIM Fund(s), including
sales charges and expenses, ask your financial consultant or securities dealer
for a free prospectus(es). Please read the prospectus(es) carefully before you
invest or send money. (F) On September 8, 1998, AIM New Dimension Fund was
renamed AIM Global Trends Fund.
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