<PAGE> 1
SEMIANNUAL REPORT / APRIL 30 2000
AIM CHARTER FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[ COVER IMAGE ]
-------------------------------------
FULL SAIL BY JAMES G. TYLER (1855-1931)
THIS BOAT WITH BILLOWING SAILS DEPICTS CONFIDENCE AND A SENSE OF
PURPOSE AND DIRECTION AS IT PRESSES ON THROUGH EVER-CHANGING
SEAS TO REACH ITS DESTINATION. IN THE SAME WAY, AIM CHARTER
FUND MAINTAINS A DISCIPLINED INVESTMENT COURSE TO REACH ITS GOAL.
-------------------------------------
AIM Charter Fund is for shareholders who seek growth of capital with a secondary
objective of current income. The fund invests in the securities of companies
that have prospects for both capital growth and dividend income.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Charter Fund's performance figures are historical, and they reflect the
reinvestment of 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 its Class A shares due to different sales-charge structure and class
expenses.
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.
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 National Association of Securities Dealers Automated Quotation
System Composite Index (the Nasdaq) is a market-value-weighted index
comprising all domestic and non-U.S.-based common stocks listed on the
Nasdaq system. It includes more than 5,000 companies, and it is often
considered representative of the small and medium-sized company stock
universe. While it includes many small and mid-sized company stocks,
large-capitalization technology companies tend to dominate the index.
o The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500)
represents the performance of the stock market in general.
o An investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends, and they 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.
AVERAGE ANNUAL TOTAL RETURNS
The fund's average annual total returns as of the close of the reporting period
are shown in a table in the managers' overview on the pages that follow. In
addition, industry regulations require us to provide average annual returns as
of 3/31/00, the most recent calendar quarter-end, which are shown below and
include sales charges.
================================================================================
CLASS A SHARES
Inception (11/26/68) 15.07%
10 years 19.01
5 years 26.33
1 year 26.57
CLASS B SHARES
Inception (6/26/95) 25.33%
1 year 27.98
CLASS C SHARES
Inception (8/4/97) 24.33%
1 year 31.87
================================================================================
AIM CHARTER FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
When we started AIM in 1976, we had only a table, two chairs
[PHOTO OF and a telephone. At the time, Bob Graham, Gary Crum and I had
Charles T. the idea of creating a mutual fund company that put people
Bauer, first. Our slogan, "people are the product," means that
Chairman of people--our employees and our investors--are our company.
the Board of Almost a quarter-century later, we've grown to more than
THE FUND seven million investors, $176 billion in assets under
APPEARS HERE] management and 53 retail funds. Over that time, the industry
as a whole has grown from $51 billion in assets to more than
[PHOTO OF $7 trillion today. I never dreamed we would see such
Robert H. phenomenal growth. You are the main reason for our success,
Graham, and I want you to know how much I appreciate your loyalty and
APPEARS HERE] trust over the past 24 years.
Usually in this letter I review market activity during
the period covered by the report. This time, I'd just like to
say thank you. I am retiring as chairman of the AIM Funds
effective September 30, and as chairman of AIM effective December 31, 2000. Bob
Graham, whose picture appears under mine, will succeed me as AIM's chairman and
chairman of the AIM Funds. Gary Crum will remain president of A I M Capital
Management, Inc., leading our investment division. I am enormously proud to
leave AIM in such capable hands.
I'm also very proud of our team of employees, now more than 2,300 strong.
Because of their collective commitment to excellence and ethical business
practices, AIM has earned the trust of investors and financial advisors alike.
And every employee, from portfolio managers to client services representatives,
is dedicated to serving our shareholders.
Rest assured that nothing at AIM will change because of my retirement. You
can still depend on this company to manage your money responsibly and provide
you with top-notch service. As chairman of AIM and chairman of the AIM Funds,
Bob is committed to preserving the things that have made AIM great in the past
and positioning it to succeed in the future. And Gary is dedicated to
maintaining the quality and long-term performance you've come to expect from
AIM.
In the pages that follow, the managers of your fund comment on recent market
activity, how they have managed your fund over the past six months and their
outlook for the coming months. We trust you will find their comments helpful.
If you have any questions or comments, please contact us through our Web
site, www.aimfunds.com, or call our Client Services department at 800-959-4246
during normal business hours. Information about your account is available at our
Web site and on our automated AIM Investor Line, 800-246-5463.
Thank you again for the support and trust you've shown us. I feel privileged
to have helped you with your financial goals, and I wish you success in all your
endeavors.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Advisors, Inc.
AIM CHARTER FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
AIM CHARTER FUND WEATHERS MARKET VOLATILITY
THE STOCK MARKET ENDED 1999 STRONG BUT EXPERIENCED SOME BUMPS IN THE FIRST
MONTHS OF 2000. HOW DID AIM CHARTER FUND PERFORM?
For the six-month reporting period, AIM Charter Fund turned in an excellent
performance. As of April 30, 2000, Class A, Class B and Class C shares of the
fund had returns of 17.56%, 17.08% and 17.10%, respectively. (These returns are
at net asset value, which does not include sales charges.) The fund handily
outperformed the S&P 500, which had a six-month return of 7.18% as of April 30.
Net assets in the fund jumped from $7.4 billion to $9.1 billion over the
reporting period.
WHAT WAS THE MARKET ENVIRONMENT LIKE OVER THE PAST SIX MONTHS?
After an almost uninterrupted rise through the final months of 1999, stocks
began hitting air pockets early in 2000. The large-company-driven Dow hit its
all-time high in mid-January. But a variety of factors converged to shake market
confidence and led to unusual volatility in March and April:
o U.S. economic growth continued to sizzle, with an annualized growth
rate above 7% for the fourth quarter of 1999 and above 5% in the first
quarter of 2000. These numbers led many to believe that the Federal Reserve
Board (the Fed) might implement a larger rate hike in May because its five
rate hikes since June 1999 did not slow the economy.
o The March court ruling that Microsoft (a fund holding) had exercised
illegal monopoly powers cast a pall over the whole technology sector, which
was already subject to misgivings about the untested heights to which many
tech-stock values had risen.
o The Employment Cost Index, which tracks wages and benefits, rose
1.4% in the first quarter of 2000, its highest rate in more than 10 years.
This hinted at rising inflation and jolted investors. Low inflation,
combined with robust economic growth, has been a major element nurturing the
long bull market of the `90s.
For all the headline-making one-day dips and dives among various benchmarks,
it's worth noting that the most widely reported stock indexes all gained during
the six months covered by this report. A great deal of the market's volatility
was confined to some very high-flying tech stocks that saw their values plummet
in the Nasdaq shakeout late in the reporting period. For the most part, company
earnings reports continued to be positive for the first quarter of 2000 across a
broad array of industries, from banking and health care to energy and certain
technologies.
DID YOU MANAGE THE FUND DIFFERENTLY, GIVEN THE MARKET'S VOLATILITY?
We maintained our bias toward larger, more established companies. Our investment
discipline holds that we do not try to time the market by moving in and out of
stocks that go in and out of favor for various reasons. Instead, we look at
companies in terms of their earnings--we focus on companies in growth industries
or sectors and strive to understand what's behind the numbers, what factors
drive a company's earnings and if those factors are sustainable. This allows us
to make buy and sell decisions based on concrete research rather than market
sentiment.
YOUR FUND'S PERFORMANCE
GROWTH OF NET ASSETS
================================================================================
10/31/99 $7.4 BILLION
4/30/00 $9.1 BILLION
================================================================================
FUND BEATS S&P 500
Total returns for the six months ended 4/30/00, excluding sales charges
================================================================================
AIM CHARTER AIM CHARTER AIM CHARTER
FUND CLASS FUND CLASS FUND CLASS S&P 500
A SHARES B SHARES C SHARES INDEX
--------------------------------------------------------------------------------
17.56% 17.08% 17.10% 7.18%
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 4/30/00, including sales charges
================================================================================
CLASS A SHARES
INCEPTION (11/26/68) 14.78%
10 YEARS 18.28
5 YEARS 23.92
1 YEAR 16.64*
*23.42% excluding sales charges
CLASS B SHARES
INCEPTION (6/26/95) 23.08%
1 YEAR 17.46*
*22.46% excluding CDSC
CLASS C SHARES
INCEPTION (8/4/97) 20.46%
1 YEAR 21.46*
*22.46% excluding CDSC
================================================================================
Past performance cannot guarantee comparable future results.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS
OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
See important fund and index disclosures inside front cover.
AIM CHARTER FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
WHAT WERE THE FUND'S TOP SECTOR WEIGHTINGS?
Technology, financials, health care and consumer cyclicals (such as retail
companies) continue to have the heaviest weightings in the fund's portfolio.
Over the past six months, we increased our tech weighting from 32% to 42%,
particularly in the telecommunications-equipment industry, which continues to
see tremendous growth as a result of the global wireless boom and increased
levels of spending by large corporations transitioning business models to
compete in the Internet economy. We have slightly reduced our weightings in
financials and health care to take advantage of better growth opportunities in
the tech sector.
WHAT TECH-RELATED COMPANIES HAVE YOU FAVORED?
The fund owns high-quality, market-leading technology companies that are
generating strong earnings growth ahead of analyst expectations. For example,
Cisco Systems continues to be a standout holding. Cisco is the world's largest
manufacturer of computer networking equipment--the switches and routers that
direct data across the Internet. In March, Cisco overtook Microsoft as the
world's most valuable company in terms of market capitalization.
We have increased the fund's position in Finland-based Nokia, which holds
more than a quarter of the world's mobile-phone market. Nokia, which posted a
55% increase in net income for the first quarter of 2000, is touting the
prospects of its next generation of mobile phones, which will receive data and
enjoy better Internet access.
WHAT OTHER HOLDINGS HAVE BENEFITED THE FUND?
In financials, we own established banks or brokerage firms that have profited
from the strong financial markets and the full IPO (initial public offering)
schedule. Morgan Stanley Dean Witter, an investment-banking and retail-brokerage
powerhouse, is a top fund holding. The firm reported a 50% increase in its
fiscal first-quarter income over the previous year. Of particular benefit to the
firm's revenue was its underwriting of tech-related companies.
Drug manufacturer Warner-Lambert, our largest holding, continues to see
strong sales of its cholesterol-lowering drug Lipitor. The company reported
positive earnings for the first quarter of 2000, beating analysts' expectations
despite the generally unfavorable performance of the health-care sector.
Warner-Lambert has announced plans to merge with pharmaceutical giant Pfizer, a
move that will create one of the world's largest and fastest-growing drug
companies.
WHAT IS YOUR NEAR-TERM OUTLOOK?
After the close of the reporting period, the Fed raised the federal funds rate
by 0.5% to 6.5%. Recent economic indicators, such as a 30-year low for the U.S.
unemployment rate, led the Fed to be more aggressive in its attempts to fend off
impending inflationary tendencies in the economy. While investors' inflation
fears may cause some short-term market volatility, we believe that the
environment for equities remains largely favorable. Whatever economic trends
surface, we will maintain our philosophy of investing in high-quality growth
companies.
THE DECLINE OF DIVIDENDS
For the first time in recent history, a quarter of the value of the S&P 500
comes from companies that do not pay dividends. (A dividend is a distribution of
earnings to shareholders.) Twenty years ago, only 2% of the index's value came
from such companies. What has changed?
A company previously used dividends to convince investors that it was
successful and worthy of investment. Today, many investors consider stocks less
risky than they used to, so the demand for dividends has decreased. Fewer
companies are raising dividends, and increasing numbers of major companies are
not paying them at all.
What does this mean for AIM Charter Fund? In February, the fund's
investment policy was changed to allow it to respond to market conditions such
as this downward dividend trend. Companies that pay or raise their dividends
will continue to be an important part of the fund's portfolio, but so will
high-quality growth companies.
PORTFOLIO COMPOSITION
As of 4/30/00, based on total net assets
NUMBER OF HOLDINGS 70
<TABLE>
<CAPTION>
=====================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Warner-Lambert Co. 5.00% 1. Computers (Software & Services) 12.90%
2. Tyco International Ltd. 4.55 2. Communications Equipment 10.35
3. Target Corp. 4.39 3. Health Care (Diversified) 7.32
4. Cisco Systems, Inc. 3.81 4. Retail (General Merchandise) 5.68
5. Morgan Stanley 3.37 5. Financial (Diversified) 5.09
Dean Witter & Co.
6. Nokia Oyj-ADR (Finland) 3.00 6. Electronics (Semiconductors) 5.04
7. VERITAS Software Corp. 2.95 7. Manufacturing (Diversified) 4.54
8. Novell, Inc. 2.70 8. Investment Banking/Brokerage 4.49
9. Citigroup Inc. 2.61 9. Computers (Hardware) 4.26
10. General Electric Co. 2.59 10. Computers (Networking) 3.81
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
=====================================================================================
</TABLE>
See important fund and index disclosures inside front cover.
AIM CHARTER FUND
3
<PAGE> 6
SEMIANNUAL REPORT / FOR CONSIDERATION
A PROSPEROUS RETIREMENT: IT'S UP TO YOU,
AND IT CAN BE DONE
Many experts predict that Social Security could go broke sometime between 2020
and 2030 as the number of retirees outpaces the ability of the workforce to pay
for their benefits through taxes. Lawmakers are sharply divided on ways to
remedy this impending problem.
Meanwhile, the Social Security Administration is sending Americans a wake-up
call. The agency now mails annual contributions and benefit statements to all
workers covered by Social Security. You should receive your statement three
months before your birthday.
The most important information in the statement is an estimate of the
monthly retirement benefit you will receive at age 62, at full retirement and at
age 70. Many people may be shocked to learn how small that amount will be.
RETIREMENT IS EXPENSIVE
Social Security and pensions account for only 43% of the retirement income
needed by affluent retirees, according to the Social Security Administration and
the U.S. Bureau of Labor Statistics. The other 57% may need to come from
personal savings. Financial experts estimate that most people will need about
75% of their current annual income to maintain their lifestyle in retirement.
If you're depending on Social Security alone, you may have to scale back
your lifestyle considerably upon retirement.
WOULD YOU RATHER BE A MILLIONAIRE?
Of course you would. What to do? You could try to become a guest on the hit
television quiz show. A more practical way is to save and invest now for a
comfortable retirement later. But remember: when planning for retirement, time
can be your best friend--or your worst enemy. Time can affect your retirement
plans in three ways.
o The longer you wait to begin saving for retirement, the more you'll have to
save to accumulate the nest egg you'll need, as the table nearby shows.
o Even modest inflation means that each dollar you save today will be less
valuable 20 or 30 or 40 years from now. Over a 25-year period, a 2% annual
rate of inflation reduces the value (the "buying power") of $1,000 to just
$610.
o As Americans live longer, they need their retirement savings to last longer.
More and more Americans each year outlive their savings.
Let's estimate you'll need $1 million to live comfortably in retirement. How
much will you need to save each month to reach your goal--if you start early, or
if you wait to begin saving?
THE LESSON? START SAVING EARLY
Procrastination can be expensive. The longer you wait to begin your retirement
saving plan, the more you'll have to save
STARTING EARLY MAKES IT EASIER TO SAVE FOR RETIREMENT
===============================================================================
YEARS TO MONTHLY SAVINGS
CURRENT SAVE UNTIL RETIREMENT NEEDED TO
AGE RETIREMENT SAVINGS GOAL REACH GOAL
------- ---------- ------------ ---------------
25 40 $1,000,000 $85
35 30 $1,000,000 $284
45 20 $1,000,000 $1,001
55 10 $1,000,000 $4,305
===============================================================================
All figures assume a 12% annual return on investments. This hypothetical example
is for illustrative purposes only and is not intended to represent the
performance of any particular fund, IRA or investor. Your actual return isn't
likely to be consistent from year to year and there is no guarantee that a
specific rate of return will be achieved.
WILL YOU HAVE ENOUGH FOR RETIREMENT?
Social Security and pensions account for 43% of the retirement income needed by
affluent retirees. The rest must come from personal savings.
================================================================================
SOCIAL SECURITY
AND PENSIONS PERSONAL SAVINGS
--------------------------------------------------------------------------------
43% 57%
Source: Social Security Administration and U.S. Bureau of Labor Statistics
================================================================================
AIM CHARTER FUND
4
<PAGE> 7
SEMIANNUAL REPORT / FOR CONSIDERATION
each month to build an adequate retirement nest egg. The person who starts
saving at age 25 may be able to accumulate $1 million by saving just $85 a
month. Someone who waits to age 35 before beginning to save for retirement will
have to contribute more than three times as much each month to make up for lost
time!
START WITH A PRACTICAL INVESTMENT PLAN
A comfortable retirement is within your reach. But you will need a practical
investment plan to get there. So consider the four steps described here and talk
them over with your financial advisor. He or she can help you devise a plan and
choose investments suited to your unique circumstances.
1. IF YOU HAVE A 401(k) PLAN, CONTRIBUTE TO IT--AND MAKE THE MOST OF EMPLOYER
MATCHING. If your employer matches 401(k) contributions, contribute at least
enough to maximize the company's contribution. If the company match is 5% of
your salary, contribute at least 5% of your pay yourself. From your
stand-point, the employer contribution is "free" money.
2. CONTRIBUTE TO AN IRA TOO. Even if you cannot deduct an IRA contribution, you
can enjoy an IRA's tax-deferred compounding. And don't forget the added
advantage of the spousal IRA.
3. DIVERSIFY! Asset diversification helps manage risk because different types
of assets behave differently. If you put your retirement assets into mutual
funds, consider buying more than one type of fund.
4. IF YOU HAVE TIME, INVEST AGGRESSIVELY. Historically, small-company stocks
have provided the highest returns. They can be volatile in the short term,
but if you can be patient, consider including aggressive small-company
growth funds in your portfolio.
DOLLAR-COST AVERAGING TYPICALLY LOWERS THE COST OF INVESTING
One simple way to save for retirement is to use an installment plan. With a
strategy called dollar-cost averaging, you can commit a fixed amount of money to
an investment at regular intervals. There are several advantages to this plan:
o Regular investing of equal amounts helps you make the most of market highs
and lows. You automatically buy more shares when prices are low and fewer
shares when prices are high.
o Your average cost per share is less than your average price per share. The
only time this would not occur is if the share price remained constant.
o This strategy is especially appropriate for long-term investments, such as
retirement plans, because the longer you maintain a regular investment
program, the more likely you will be to buy shares at a wide variety of
prices.
o By systematically investing, you will be less tempted to make decisions on
the basis of short-term events and your emotions. Your fortunes as an
investor won't depend on your ability to make the right call about future
trends.
Of course, no investment strategy--even dollar-cost averaging--is guaranteed
to result in profits or protect against losses in declining markets. Since
dollar-cost averaging involves continuous investing regardless of fluctuating
securities prices, you should consider your ability to continue purchases
through periods of low price levels.
WHAT SHOULD YOU DO?
Visit your financial advisor. He or she can help you determine how much money
you'll actually need in retirement and how to earn that money through careful
investments.
DOLLAR-COST AVERAGING LOWERS COST OF INVESTING
===============================================================================
AMOUNT SHARE SHARES
MONTH INVESTED PRICE PURCHASED
JANUARY $200.00 $24.00 8.333
FEBRUARY $200.00 $20.00 10.000
MARCH $200.00 $14.00 14.286
APRIL $200.00 $18.00 11.111
MAY $200.00 $22.00 9.091
JUNE $200.00 $24.00 8.333
SIX-MONTH TOTAL $1,200.00 $122.00 61.154
===============================================================================
Average price per share: $122.00 divided by 6 equals $20.33;
Average cost to you per share: $1,200.00 divided by 61.154 equals $19.62
AIM CHARTER FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
April 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY
INTERESTS-89.87%
BANKS (MONEY CENTER)-2.38%
Chase Manhattan Corp. (The) 3,000,000 $ 216,187,500
---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-2.64%
AT&T Corp.-Liberty Media
Group-Class A(a) 2,000,000 99,875,000
---------------------------------------------------------------
Comcast Corp.-Class A(a) 3,500,000 140,218,750
---------------------------------------------------------------
240,093,750
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-9.36%
Corning Inc.(b) 250,000 49,375,000
---------------------------------------------------------------
JDS Uniphase Corp.(a) 1,200,000 124,425,000
---------------------------------------------------------------
Motorola, Inc. 1,150,000 136,921,875
---------------------------------------------------------------
Nokia Oyj-ADR (Finland) 4,800,000 273,000,000
---------------------------------------------------------------
Nortel Networks Corp. (Canada) 800,000 90,600,000
---------------------------------------------------------------
Telefonaktiebolaget LM Ericsson
A.B.-ADR (Sweden) 2,000,000 176,875,000
---------------------------------------------------------------
851,196,875
---------------------------------------------------------------
COMPUTERS (HARDWARE)-3.90%
Dell Computer Corp.(a) 2,500,000 125,312,500
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 2,500,000 229,843,750
---------------------------------------------------------------
355,156,250
---------------------------------------------------------------
COMPUTERS (NETWORKING)-3.81%
Cisco Systems, Inc.(a) 5,000,000 346,640,625
---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.53%
EMC Corp.(a) 1,000,000 138,937,500
---------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-11.36%
Intuit Inc.(a) 800,000 28,750,000
---------------------------------------------------------------
Microsoft Corp.(a) 2,500,000 174,375,000
---------------------------------------------------------------
Novell, Inc.(a) 12,500,000 245,312,500
---------------------------------------------------------------
Oracle Corp.(a) 2,500,000 199,843,750
---------------------------------------------------------------
VERITAS Software Corp.(a) 2,500,000 268,164,062
---------------------------------------------------------------
Vitria Technology, Inc.(a) 1,043,100 38,529,506
---------------------------------------------------------------
Yahoo! Inc.(a) 600,000 78,150,000
---------------------------------------------------------------
1,033,124,818
---------------------------------------------------------------
ELECTRICAL EQUIPMENT-3.11%
General Electric Co. 1,500,000 235,875,000
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-(CONTINUED)
Solectron Corp.(a) 1,000,000 $ 46,812,500
---------------------------------------------------------------
282,687,500
---------------------------------------------------------------
ELECTRONICS
(SEMICONDUCTORS)-5.04%
Celestica Inc. (Canada)(a) 1,350,000 73,659,375
---------------------------------------------------------------
Intel Corp. 1,500,000 190,218,750
---------------------------------------------------------------
Linear Technology Corp. 700,000 39,987,500
---------------------------------------------------------------
Texas Instruments Inc. 950,000 154,731,250
---------------------------------------------------------------
458,596,875
---------------------------------------------------------------
ENTERTAINMENT-1.90%
Time Warner Inc. 500,000 44,968,750
---------------------------------------------------------------
Walt Disney Co. (The) 2,963,900 128,373,919
---------------------------------------------------------------
173,342,669
---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-1.12%
Applied Materials, Inc.(a) 1,000,000 101,812,500
---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-5.09%
American Express Co. 1,500,000 225,093,750
---------------------------------------------------------------
Citigroup Inc. 4,000,000 237,750,000
---------------------------------------------------------------
462,843,750
---------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-7.32%
Allergan, Inc. 1,000,000 58,875,000
---------------------------------------------------------------
American Home Products Corp. 2,000,000 112,375,000
---------------------------------------------------------------
Bristol-Myers Squibb Co. 750,000 39,328,125
---------------------------------------------------------------
Warner-Lambert Co. 4,000,000 455,250,000
---------------------------------------------------------------
665,828,125
---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-0.64%
Genetech, Inc.(a) 500,000 58,500,000
---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-0.55%
Pharmacia Corp. 1,000,000 49,937,500
---------------------------------------------------------------
HEALTH CARE (HOSPITAL
MANAGEMENT)-0.53%
Health Management Associates,
Inc.-Class A(a) 3,000,000 47,812,500
---------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-0.92%
UnitedHealth Group Inc. 1,250,000 83,359,375
---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.04%
Guidant Corp.(a) 750,000 $ 43,031,250
---------------------------------------------------------------
Medtronic, Inc. 1,000,000 51,937,500
---------------------------------------------------------------
94,968,750
---------------------------------------------------------------
INSURANCE (MULTI-LINE)-2.41%
American International Group,
Inc. 2,000,000 219,375,000
---------------------------------------------------------------
INSURANCE BROKERS-0.65%
Marsh & McLennan Cos. Inc. 600,000 59,137,500
---------------------------------------------------------------
INVESTMENT
BANKING/BROKERAGE-4.49%
Merrill Lynch & Co., Inc. 1,000,000 101,937,500
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 4,000,000 307,000,000
---------------------------------------------------------------
408,937,500
---------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-4.54%
Tyco International Ltd. 9,000,000 413,437,500
---------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-1.65%
Schlumberger Ltd. 1,350,000 103,359,375
---------------------------------------------------------------
Transocean Sedco Forex Inc. 1,000,000 47,000,000
---------------------------------------------------------------
150,359,375
---------------------------------------------------------------
OIL (INTERNATIONAL
INTEGRATED)-1.28%
Exxon Mobil Corp. 1,500,000 116,531,250
---------------------------------------------------------------
RAILROADS-0.97%
Kansas City Southern Industries,
Inc. 1,228,100 88,269,688
---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-1.36%
Home Depot, Inc. (The) 1,500,000 84,093,750
---------------------------------------------------------------
Lowe's Cos., Inc. 800,000 39,600,000
---------------------------------------------------------------
123,693,750
---------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-0.66%
Kohl's Corporation(a)(b) 1,250,000 60,000,000
---------------------------------------------------------------
RETAIL (DRUG STORES)-0.62%
Walgreen Co. 2,000,000 56,250,000
---------------------------------------------------------------
RETAIL (GENERAL
MERCHANDISE)-5.68%
Costco Wholesale Corp.(a) 1,400,000 75,687,500
---------------------------------------------------------------
Target Corp. 6,000,000 399,375,000
---------------------------------------------------------------
Wal-Mart Stores, Inc. 750,000 41,531,250
---------------------------------------------------------------
516,593,750
---------------------------------------------------------------
RETAIL (SPECIALTY)-0.61%
Amazon.com, Inc.(a) 1,000,000 55,187,500
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SERVICES (COMMERCIAL &
CONSUMER)-0.15%
Cendant Corp.-Rts., expiring
02/14/01(c) 1,500,000 $ 13,593,750
---------------------------------------------------------------
SERVICES (DATA PROCESSING)-1.07%
First Data Corp. 2,000,000 97,375,000
---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-1.49%
Nextel Communications, Inc.-Class
A(a) 1,021,400 111,779,463
---------------------------------------------------------------
Vodafone Air Touch PLC-ADR
(United Kingdom) 500,000 23,500,000
---------------------------------------------------------------
135,279,463
---------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$5,418,117,214) 8,175,047,888
---------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS-2.03%
CHEMICALS (DIVERSIFIED)-0.40%
Monsanto Co., $2.60 Conv. Pfd. 800,000 36,200,000
---------------------------------------------------------------
ELECTRIC COMPANIES-1.63%
Houston Industries, Inc.-$3.29
Conv. Pfd. 1,000,000 148,062,500
---------------------------------------------------------------
Total Convertible Preferred
Stocks (Cost $121,971,232) 184,262,500
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
CONVERTIBLE BONDS & NOTES-3.60%
COMMUNICATIONS EQUIPMENT-0.99%
Juniper Networks, Inc., Unsec.
Conv. Bonds, 4.75%, 03/15/07 $60,000,000 54,975,000
---------------------------------------------------------------
Redback Networks, Inc., Conv.
Notes, 5.00%, 04/01/07
(Acquired 04/13/00-04/17/00;
Cost $33,675,750)(d) 50,000,000 35,437,500
---------------------------------------------------------------
90,412,500
---------------------------------------------------------------
COMPUTERS (HARDWARE)-0.36%
Candescent Technology Corp.,
Conv. Deb., 7.00%, 05/01/03
(Acquired 03/07/00; Cost
$9,360,000)(d) 11,700,000 9,477,000
---------------------------------------------------------------
Candescent Technology Corp., Sr.
Conv. Sub. Deb., 7.00%,
05/01/03 (Acquired
04/17/98-11/30/98; Cost
$27,943,750)(d) 28,300,000 22,923,000
---------------------------------------------------------------
32,400,000
---------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-1.55%
VERITAS Software Corp., Conv.
Unsec. Notes, 5.25%, 11/01/04 12,500,000 140,562,500
---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
RETAIL (SPECIALTY)-0.70%
Amazon.com, Inc., Conv. Sub.
Deb., 4.75%, 02/01/09 $75,000,000 $ 63,750,000
---------------------------------------------------------------
Total Convertible Bonds &
Notes (Cost $221,483,382) 327,125,000
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
MONEY MARKET FUNDS-4.60%
STIC Liquid Assets Portfolio(e) 209,333,447 209,333,447
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MONEY MARKET FUNDS-(CONTINUED)
STIC Prime Portfolio(e) 209,333,447 $ 209,333,447
---------------------------------------------------------------
Total Money Market Funds
(Cost $418,666,894) 418,666,894
---------------------------------------------------------------
TOTAL INVESTMENTS-100.10% (Cost
$6,180,238,722) 9,105,102,282
---------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.10%) (8,664,938)
---------------------------------------------------------------
NET ASSETS-100.00% $9,096,437,344
===============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Deb. - Debentures
Pfd. - Preferred
Rts. - Rights
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) A portion of this security is subject to call options written. See Note 7.
(c) Non-income producing security acquired as part of a unit with or in exchange
for other securities.
(d) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Directors. The
aggregate market value of these securities at 04/30/00 was $67,837,500 which
represented 7.46% of the Fund's net assets.
(e) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$6,180,238,722) $9,105,102,282
-------------------------------------------------------------
Receivables for:
Capital stock sold 27,717,554
-------------------------------------------------------------
Dividends and Interest 9,073,073
-------------------------------------------------------------
Investment for deferred compensation plan 101,324
-------------------------------------------------------------
Other assets 149,706
-------------------------------------------------------------
Total assets 9,142,143,939
-------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 18,336,180
-------------------------------------------------------------
Capital stock reacquired 9,710,683
-------------------------------------------------------------
Deferred compensation plan 101,324
-------------------------------------------------------------
Options written (premiums received
$4,212,984) 7,086,250
-------------------------------------------------------------
Accrued advisory fees 4,534,775
-------------------------------------------------------------
Accrued administrative services fees 31,726
-------------------------------------------------------------
Accrued distribution fees 4,718,715
-------------------------------------------------------------
Accrued directors' fees 3,167
-------------------------------------------------------------
Accrued transfer agent fees 805,828
-------------------------------------------------------------
Accrued operating expenses 377,947
-------------------------------------------------------------
Total liabilities 45,706,595
-------------------------------------------------------------
Net assets applicable to shares outstanding $9,096,437,344
=============================================================
NET ASSETS:
Class A $5,836,427,480
=============================================================
Class B $2,885,007,464
=============================================================
Class C $ 293,301,650
=============================================================
Institutional Class $ 81,700,750
=============================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 750,000,000
-------------------------------------------------------------
Outstanding 312,103,212
=============================================================
Class B:
Authorized 750,000,000
-------------------------------------------------------------
Outstanding 156,775,658
=============================================================
Class C:
Authorized 750,000,000
-------------------------------------------------------------
Outstanding 15,896,208
=============================================================
Institutional Class:
Authorized 750,000,000
-------------------------------------------------------------
Outstanding 4,316,388
=============================================================
Class A:
Net asset value, and redemption price per
share $ 18.70
-------------------------------------------------------------
Offering price per share:
(Net asset value of $18.70
divided by 94.50%) $ 19.79
=============================================================
Class B:
Net asset value and offering price per
share $ 18.40
=============================================================
Class C:
Net asset value and offering price per
share $ 18.45
=============================================================
Institutional Class:
Net asset value, offering and redemption
price per share $ 18.93
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 2000
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
$211,486) $ 32,051,145
-------------------------------------------------------------
Interest 4,190,372
-------------------------------------------------------------
Total investment income 36,241,517
-------------------------------------------------------------
EXPENSES:
Advisory fees 26,658,365
-------------------------------------------------------------
Administrative services fee 183,509
-------------------------------------------------------------
Custodian fees 225,137
-------------------------------------------------------------
Distribution fees -- Class A 8,365,548
-------------------------------------------------------------
Distribution fees -- Class B 13,052,206
-------------------------------------------------------------
Distribution fees -- Class C 1,047,229
-------------------------------------------------------------
Transfer agent fees -- Class A 2,746,450
-------------------------------------------------------------
Transfer agent fees -- Class B 2,096,911
-------------------------------------------------------------
Transfer agent fees -- Class C 168,243
-------------------------------------------------------------
Transfer agent fees -- Institutional Class 5,807
-------------------------------------------------------------
Directors' fees 19,399
-------------------------------------------------------------
Other 1,003,798
-------------------------------------------------------------
Total expenses 55,572,602
-------------------------------------------------------------
Less: Fees waived (811,784)
-------------------------------------------------------------
Expenses paid indirectly (62,129)
-------------------------------------------------------------
Net expenses 54,698,689
-------------------------------------------------------------
Net investment income (loss) (18,457,172)
-------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 669,287,772
-------------------------------------------------------------
Foreign currencies 48
-------------------------------------------------------------
Option contracts written (9,113,794)
-------------------------------------------------------------
660,174,026
-------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 643,288,938
-------------------------------------------------------------
Foreign currencies (43,683)
-------------------------------------------------------------
Option contracts written (2,698,576)
-------------------------------------------------------------
640,546,679
-------------------------------------------------------------
Net gain on investment securities, foreign
currencies and option contracts 1,300,720,705
-------------------------------------------------------------
Net increase in net assets resulting from
operations $1,282,263,533
=============================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 2000 and the year ended October 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
2000 1999
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (18,457,172) $ (7,207,717)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 660,174,026 657,364,994
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and option contracts 640,546,679 1,116,552,041
----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,282,263,533 1,766,709,318
----------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A -- (9,134,542)
----------------------------------------------------------------------------------------------
Institutional Class -- (216,682)
----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (388,577,391) (149,620,112)
----------------------------------------------------------------------------------------------
Class B (178,887,591) (57,712,333)
----------------------------------------------------------------------------------------------
Class C (12,095,929) (1,614,093)
----------------------------------------------------------------------------------------------
Institutional Class (5,231,737) (1,761,967)
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 413,365,371 151,495,357
----------------------------------------------------------------------------------------------
Class B 475,317,315 370,892,559
----------------------------------------------------------------------------------------------
Class C 141,343,677 84,930,162
----------------------------------------------------------------------------------------------
Institutional Class 8,254,798 9,431,197
----------------------------------------------------------------------------------------------
Net increase in net assets 1,735,752,046 2,163,398,864
----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 7,360,685,298 5,197,286,434
----------------------------------------------------------------------------------------------
End of period $9,096,437,344 $7,360,685,298
==============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $5,504,734,405 $4,466,453,244
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (18,674,280) (217,108)
----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 688,438,463 613,057,085
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 2,921,938,756 2,281,392,077
----------------------------------------------------------------------------------------------
$9,096,437,344 $7,360,685,298
==============================================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
April 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Charter 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 eleven separate portfolios.
The Fund currently offers four different classes of shares: Class A shares,
Class B shares, Class C shares and the Institutional Class. 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. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is growth of capital with a
secondary objective of current income.
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 sales price as of the close of the
customary trading session 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 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 prices are not provided by
any of the above methods are valued based upon quotes furnished by
independent sources and are valued at the last bid price in the case of
equity securities and in the case of debt obligations, the mean between the
last bid and asked prices. Securities for which market quotations are not
readily available or are questionable are valued at fair value as
determined in good faith by or under the supervision of the Company's
officers in a manner specifically authorized by the Board of Directors of
the Company. Short-term obligations having 60 days or less to maturity are
valued at amortized cost which approximates market value. For purposes of
determining net asset value per share, futures and option contracts
generally will be valued 15 minutes after the close of the customary
trading session of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed
each day at various times prior to the close of the NYSE. 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 NYSE. 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
customary trading session of the NYSE which would 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 and Investment Income--Securities transactions
are accounted for 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 is recorded on the
ex-dividend date.
C. Distributions--Distributions from income and net realized capital gains, if
any, are generally paid annually and recorded on ex-dividend date. The Fund
may elect to use a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
D. 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.
E. Foreign Currency Translations--Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are
translated into U.S. dollar amounts on the respective dates of such
transactions. 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.
F. 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
11
<PAGE> 14
Fund from adverse changes in the relationship between currencies. The Fund
may also 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 or if the value of the foreign currency changes unfavorably.
G. Covered Call Options--The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. The exercise price of a call option may be below, equal
to, or above the current market value of the underlying security at the
time the option is written. When the Fund writes a covered call option, an
amount equal to the premium received by the Fund is recorded as an asset
and an equivalent liability. The amount of the liability is subsequently
"marked-to-market" to reflect the current market value of the option
written. The current market value of a written option is the mean between
the last bid and asked prices on that day. If a written call option expires
on the stipulated expiration date, or if the Fund enters into a closing
purchase transaction, the Fund realizes a gain (or a loss if the closing
purchase transaction exceeds the premium received when the option was
written) without regard to any unrealized gain or loss on the underlying
security, and the liability related to such option is extinguished. If a
written option is exercised, the Fund realizes a gain or a loss from the
sale of the underlying security and the proceeds of the sale are increased
by the premium originally received.
A call option gives the purchaser of such option the right to buy, and
the writer (the Fund) the obligation to sell, the underlying security at
the stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the
call option at any time during the option period. During the option period,
in return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has
retained the risk of loss should the price of the underlying security
decline. During the option period, the Fund may be required at any time to
deliver the underlying security against payment of the exercise price. This
obligation is terminated upon the expiration of the option period or at
such earlier time at which the Fund effects a closing purchase transaction
by purchasing (at a price which may be higher than that received when the
call option was written) a call option identical to the one originally
written.
H. Bond Premiums--It is the policy of the Fund not to amortize market premiums
on bonds for financial reporting purposes.
I. Expenses--Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes'
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 agreement, the
Fund pays an advisory fee to AIM at the annual rate of 1.0% of the first $30
million of the Fund's average daily net assets, plus 0.75% of the Fund's average
daily net assets in excess of $30 million to and including $150 million, plus
0.625% of the Fund's average daily net assets in excess of $150 million. AIM has
agreed to waive advisory fees paid by the Fund to AIM at the annual rate of
0.025% of the Fund's average daily net assets in excess of $2 billion. During
the six months ended April 30, 2000, AIM waived fees of $811,784. Under the
terms of a master sub-advisory agreement between AIM and A I M Capital
Management, Inc. ("AIM Capital"), AIM pays AIM Capital 50% of the amount paid by
the Fund to AIM.
The Fund, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended April 30, 2000, AIM
was paid $183,509 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the six months ended April 30, 2000, AFS
was paid $2,643,163 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 and a master distribution agreement with
Fund Management Company ("FMC") to serve as the distributor for the
Institutional Class shares of the Fund. The Company has adopted plans pursuant
to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A shares,
Class B shares and Class C shares (collectively the "Plans"). The Fund, pursuant
to the Plans, pays AIM Distributors compensation at the annual rate of 0.30% of
the Fund's average daily net assets of Class A shares and 1.00% of the average
daily net assets of Class B and C 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 six months ended April
30, 2000, the Class A, Class B and Class C
12
<PAGE> 15
shares paid AIM Distributors $8,365,548, $13,052,206 and $1,047,229,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $1,715,641 from sales of the Class
A shares of the Fund during the six months ended April 30, 2000. Such
commissions are not an expense of the Fund. They are deducted from, and are not
included in, the proceeds from sales of Class A shares. During the six months
ended April 30, 2000, AIM Distributors received $72,752 in contingent deferred
sales charges imposed on redemptions of Fund shares.
Certain officers and directors of the Company are officers and directors of
AIM, AFS, FMC and AIM Distributors.
During the six months ended April 30, 2000, the Fund paid legal fees of
$5,867 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Company's directors. A member of that firm is a director of the Company.
NOTE 3-INDIRECT EXPENSES
During the six months ended April 30, 2000, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian
fees of $50,878 and $11,251, respectively, under expense offset arrangements.
The effect of the above arrangements resulted in a reduction of the Fund's total
expenses of $62,129 during the six months ended April 30, 2000.
NOTE 4-DIRECTORS' FEES
Directors' fees represent remuneration paid to directors who are not an
"interested person" of AIM. The Company invests directors' fees, if so elected
by a director, in mutual fund shares in accordance with a deferred compensation
plan.
NOTE 5-BANK BORROWINGS
The Fund 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) 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. During the six
months ended April 30, 2000, 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 0.09% 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 by the Fund during the six months ended April 30, 2000 was
$4,197,679,275 and $3,937,733,974, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities, for tax purposes, as of April 30, 2000 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $2,991,113,383
----------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (76,783,628)
----------------------------------------------------------
Net unrealized appreciation of investment
securities $2,914,329,755
==========================================================
</TABLE>
Cost of investments for tax purposes is $6,190,772,527.
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended April 30, 2000
are summarized as follows:
<TABLE>
<CAPTION>
CALL OPTION CONTRACTS
-------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ------------
<S> <C> <C>
Beginning of period 22,500 $ 25,481,560
------------------------------------------------- -------- ------------
Written 16,000 9,432,948
------------------------------------------------- -------- ------------
Closed (13,681) (21,219,307)
------------------------------------------------- -------- ------------
Exercised (3,000) (2,407,419)
------------------------------------------------- -------- ------------
Expired (16,819) (7,074,798)
------------------------------------------------- -------- ------------
End of period 5,000 $ 4,212,984
================================================= ======== ============
</TABLE>
Open call option contracts written at April 30, 2000 were as follows:
<TABLE>
<CAPTION>
NUMBER APRIL 30, UNREALIZED
CONTRACT STRIKE OF PREMIUMS 2000 APPRECIATION
ISSUE MONTH PRICE CONTRACTS RECEIVED MARKET VALUE (DEPRECIATION)
----- -------- ------ --------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Corning, Inc. May-00 $170 850 $1,388,429 $2,624,375 $(1,235,946)
Corning, Inc. May-00 175 850 1,165,311 2,295,000 (1,129,689)
Corning, Inc. May-00 180 800 916,769 1,870,000 (953,231)
Kohls Corp. May-00 52.5 2,500 742,475 296,875 445,600
------- ---------- ---------- -----------
5,000 $4,212,984 $7,086,250 $(2,873,266)
============= ====== ==== ======= ========== ========== ===========
</TABLE>
13
<PAGE> 16
NOTE 8-CAPITAL STOCK
Changes in capital stock outstanding during the six months ended April 30, 2000
and the year ended October 31, 1999 were as follows:
<TABLE>
<CAPTION>
APRIL 30, 2000 OCTOBER 31, 1999
---------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 27,888,891 $ 515,451,062 51,272,783 $ 809,088,837
------------------------------------------------------------------------------------------------------------------------
Class B 26,318,356 480,310,853 36,310,602 576,056,633
------------------------------------------------------------------------------------------------------------------------
Class C 7,967,333 146,015,716 6,968,661 111,866,437
------------------------------------------------------------------------------------------------------------------------
Institutional Class 472,348 8,881,907 828,138 13,421,969
------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 21,348,673 366,548,415 10,532,077 149,384,623
------------------------------------------------------------------------------------------------------------------------
Class B 9,983,386 169,087,741 3,894,826 54,866,091
------------------------------------------------------------------------------------------------------------------------
Class C 672,773 11,427,814 107,859 1,525,822
------------------------------------------------------------------------------------------------------------------------
Institutional Class 294,478 5,109,184 134,608 1,929,704
------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (25,463,229) (468,634,106) (51,731,503) (806,978,103)
------------------------------------------------------------------------------------------------------------------------
Class B (9,556,633) (174,081,279) (16,551,587) (260,030,165)
------------------------------------------------------------------------------------------------------------------------
Class C (883,118) (16,099,853) (1,788,368) (28,462,097)
------------------------------------------------------------------------------------------------------------------------
Institutional Class (305,898) (5,736,293) (372,429) (5,920,476)
------------------------------------------------------------------------------------------------------------------------
58,737,360 $1,038,281,161 39,605,667 $ 616,749,275
========================================================================================================================
</TABLE>
NOTE 9-FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
The information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ------------------------------------------------------------------
2000(a) 1999 1998 1997 1996 1995
---------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.16 $ 13.32 $ 13.41 $ 11.19 $ 10.63 $ 8.90
---------------------------------------- ------------- ---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss) (0.02) 0.02 0.12 0.10 0.19 0.15
---------------------------------------- ------------- ---------- ---------- ---------- ---------- ----------
Net gains on securities (both realized
and unrealized) 2.91 4.39 1.23 2.91 1.43 2.11
---------------------------------------- ------------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 2.89 4.41 1.35 3.01 1.62 2.26
---------------------------------------- ------------- ---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income -- (0.03) (0.10) (0.12) (0.16) (0.20)
---------------------------------------- ------------- ---------- ---------- ---------- ---------- ----------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.67) (0.90) (0.33)
---------------------------------------- ------------- ---------- ---------- ---------- ---------- ----------
Total distributions (1.35) (0.57) (1.44) (0.79) (1.06) (0.53)
---------------------------------------- ------------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 18.70 $ 17.16 $ 13.32 $ 13.41 $ 11.19 $ 10.63
======================================== ============= ========== ========== ========== ========== ==========
Total return(b) 17.56% 34.05% 11.20% 28.57% 16.70% 27.03%
======================================== ============= ========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 5,836,427 $4,948,666 $3,706,938 $3,466,912 $2,647,208 $1,974,417
======================================== ============= ========== ========== ========== ========== ==========
Ratio of expenses to average net assets:
With fee waivers 1.04%(c) 1.05% 1.08% 1.09% 1.12% 1.17%
---------------------------------------- ------------- ---------- ---------- ---------- ---------- ----------
Without fee waivers 1.06%(c) 1.07% 1.10% 1.10% 1.12% 1.17%
======================================== ============= ========== ========== ========== ========== ==========
Ratio of net investment income (loss) to
average net assets (0.18)%(c) 0.11% 0.95% 0.79% 1.81% 1.55%
======================================== ============= ========== ========== ========== ========== ==========
Portfolio turnover rate 97% 107% 154% 170% 164% 161%
======================================== ============= ========== ========== ========== ========== ==========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average net assets of $5,607,674,730.
14
<PAGE> 17
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
The information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B
--------------------------------------------------------------------------------------
JUNE 26, 1995
(DATE SALES
COMMENCED)
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, -------------------------------------------------- OCTOBER 31,
2000(a) 1999 1998 1997 1996 1995
---------------- ---------- ---------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.97 $ 13.24 $ 13.37 $ 11.18 $ 10.62 $ 9.81
----------------------------------------- ------------ ---------- ---------- ---------- -------- ----------
Income from investment operations:
Net investment income (loss) (0.09) (0.10) 0.02 0.01 0.10 0.03
----------------------------------------- ------------ ---------- ---------- ---------- -------- ----------
Net gains on securities (both realized
and unrealized) 2.87 4.37 1.22 2.89 1.45 0.80
----------------------------------------- ------------ ---------- ---------- ---------- -------- ----------
Total from investment operations 2.78 4.27 1.24 2.90 1.55 0.83
----------------------------------------- ------------ ---------- ---------- ---------- -------- ----------
Less distributions:
Dividends from net investment income -- -- (0.03) (0.04) (0.09) (0.02)
----------------------------------------- ------------ ---------- ---------- ---------- -------- ----------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.67) (0.90) --
----------------------------------------- ------------ ---------- ---------- ---------- -------- ----------
Total distributions (1.35) (0.54) (1.37) (0.71) (0.99) (0.02)
----------------------------------------- ------------ ---------- ---------- ---------- -------- ----------
Net asset value, end of period $ 18.40 $ 16.97 $ 13.24 $ 13.37 $ 11.18 $ 10.62
========================================= ============ ========== ========== ========== ======== ==========
Total return(b) 17.08% 33.06% 10.33% 27.54% 15.90% 8.48%
========================================= ============ ========== ========== ========== ======== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 2,885,007 $2,206,752 $1,408,687 $1,056,094 $515,672 $ 67,592
========================================= ============ ========== ========== ========== ======== ==========
Ratio of expenses to average net assets:
With fee waivers 1.80%(c) 1.80% 1.84% 1.85% 1.94% 1.98%(d)
========================================= ============ ========== ========== ========== ======== ==========
Without fee waivers 1.82%(c) 1.82% 1.86% 1.86% 1.94% 1.98%(d)
----------------------------------------- ------------ ---------- ---------- ---------- -------- ----------
Ratio of net investment income (loss) to
average net assets (0.94)%(c) (0.64)% 0.19% 0.03% 0.99% 0.74%(d)
========================================= ============ ========== ========== ========== ======== ==========
Portfolio turnover rate 97% 107% 154% 170% 164% 161%
========================================= ============ ========== ========== ========== ======== ==========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $2,624,784,359.
(d) Annualized.
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------
AUGUST 4, 1997
(DATE SALES
YEAR ENDED OCTOBER COMMENCED)
SIX MONTHS ENDED 31, TO
APRIL 30, ------------------- OCTOBER 31,
2000(a) 1999 1998 1997
---------------- -------- ------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.01 $ 13.27 $ 13.39 $ 13.86
----------------------------------------------------------- -------- -------- ------- -------
Income from investment operations:
Net investment income (loss) (0.09) (0.09) 0.02 --
----------------------------------------------------------- -------- -------- ------- -------
Net gains (losses) on securities (both realized and
unrealized) 2.88 4.37 1.23 (0.45)
----------------------------------------------------------- -------- -------- ------- -------
Total from investment operations 2.79 4.28 1.25 (0.45)
----------------------------------------------------------- -------- -------- ------- -------
Less distributions:
Dividends from net investment income -- -- (0.03) --
----------------------------------------------------------- -------- -------- ------- -------
Distributions from net realized gains (1.35) (0.54) (1.34) (0.02)
----------------------------------------------------------- -------- -------- ------- -------
Total distributions (1.35) (0.54) (1.37) (0.02)
----------------------------------------------------------- -------- -------- ------- -------
Net asset value, end of period $ 18.45 $ 17.01 $ 13.27 $ 13.39
=========================================================== ======== ======== ======= =======
Total return(b) 17.10% 33.06% 10.39% (3.24)%
=========================================================== ======== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $293,302 $138,467 $37,846 $ 5,669
=========================================================== ======== ======== ======= =======
Ratio of expenses to average net assets:
With fee waivers 1.80%(c) 1.80% 1.84% 1.82%(d)
----------------------------------------------------------- -------- -------- ------- -------
Without fee waivers 1.82%(c) 1.82% 1.86% 1.83%(d)
=========================================================== ======== ======== ======= =======
Ratio of net investment income (loss) to average net assets (0.94)%(c) (0.64)% 0.19% 0.06%(d)
=========================================================== ======== ======== ======= =======
Portfolio turnover rate 97% 107% 154% 170%
=========================================================== ======== ======== ======= =======
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $210,596,630.
(d) Annualized.
15
<PAGE> 18
<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 SUB-ADVISOR
Director Edgar M. Larsen
Cortland Trust Inc. Senior Vice President A I M Capital Management, Inc.
11 Greenway Plaza
Edward K. Dunn Jr. Dana R. Sutton Suite 100
Chairman, Mercantile Mortgage Corp.; Vice President and Treasurer Houston, TX 77046
Formerly Vice Chairman and President,
Mercantile-Safe Deposit & Trust Co.; and Melville B. Cox TRANSFER AGENT
President, Mercantile Bankshares Vice President
A I M Fund Services, Inc.
Jack Fields Mary J. Benson P.O. Box 4739
Chief Executive Officer Assistant Vice President and Houston, TX 77210-4739
Texana Global, Inc.; Assistant Treasurer
Formerly Member CUSTODIAN
of the U.S. House of Representatives Sheri Morris
Assistant Vice President and State Street Bank and Trust Company
Carl Frischling Assistant Treasurer 225 Franklin Street
Partner Boston, MA 02110
Kramer, Levin, Naftalis & Frankel LLP Renee A. Friedli
Assistant Secretary COUNSEL TO THE FUND
Robert H. Graham
President and Chief Executive Officer P. Michelle Grace Ballard Spahr
A I M Management Group Inc. Assistant Secretary Andrews & Ingersoll, LLP
1735 Market Street
Prema Mathai-Davis Nancy L. Martin Philadelphia, PA 19103
Chief Executive Officer, YWCA of the U.S.A. Assistant Secretary
COUNSEL TO THE DIRECTORS
Lewis F. Pennock Ofelia M. Mayo
Attorney Assistant Secretary Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
Louis S. Sklar Lisa A. Moss New York, NY 10022
Executive Vice President Assistant Secretary
Hines Interests DISTRIBUTOR
Limited Partnership Kathleen J. Pflueger
Assistant Secretary A I M Distributors, Inc.
11 Greenway Plaza
Samuel D. Sirko Suite 100
Assistant Secretary Houston, TX 77046
</TABLE>
16
<PAGE> 19
AIM FUNDS--Registered Trademark--MAKES
INVESTING EASY
o AIM BANK CONNECTION(SM). You can make investments in your AIM account in
amounts from $50 to $100,000 without writing a check. Once you set up this
convenient feature, AIM will draw the funds from your pre-authorized
checking account at your request.
o AIM INTERNET CONNECT(SM). Sign up for this service and you can purchase,
redeem or exchange shares of AIM funds in your current AIM account simply by
accessing our Web site at www.aimfunds.com. For a retirement account, such
as an IRA or 403(b), only exchanges are allowed over the Internet because of
the tax-reporting and record-keeping requirements these accounts involve.
o AUTOMATIC REINVESTMENT OF DIVIDENDS AND/OR CAPITAL GAINS. You can receive
distributions in cash, or you can reinvest them in your account without
paying a sales charge. Over time, the power of compounding can significantly
increase the value of your account.
o AUTOMATIC INVESTMENT PLAN. You can add to your account by authorizing your
AIM fund to withdraw a specified amount, minimum $50, from your bank account
on a regular schedule.
o EASY ACCESS TO YOUR MONEY. You can redeem shares of your AIM fund any day
the New York Stock Exchange is open. The value of the shares may be more or
less than their original cost depending on market conditions.
o EXCHANGE PRIVILEGE. As your investment goals change, you may exchange part
or all of your shares of one fund for shares of a different AIM fund within
the same share class. You may make up to 10 such exchanges per calendar
year.
o TAX-ADVANTAGED RETIREMENT PLANS. You can enjoy the tax advantages offered by
a variety of investment plans, including Traditional IRAs, Roth IRAs and
education IRAs, among others.
o E-MAIL ACCESS. You can contact us at [email protected] for general
information. For account information, contact us at
[email protected].
o www.aimfunds.com. Our award-winning Web site provides account information,
shareholder education and fund performance information.
-------------------------------------
OUR AUTOMATED
AIM INVESTOR LINE,
800-246-5463,
PROVIDES CURRENT ACCOUNT
INFORMATION AND THE PRICE,
YIELD AND TOTAL RETURN ON
ALL AIM FUNDS 24 HOURS A
DAY. YOU CAN ALSO ORDER A
YEAR-TO-DATE STATEMENT OF
YOUR ACCOUNT.
-------------------------------------
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund AIM Money Market Fund leadership in the mutual fund industry
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund since 1976 and managed approximately
AIM Capital Development Fund $176 billion in assets for more than 7.4 million
AIM Constellation Fund(1) INTERNATIONAL GROWTH FUNDS shareholders, including individual investors,
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund corporate clients and financial institutions,
AIM Emerging Growth Fund AIM Asian Growth Fund as of March 31, 2000.
AIM Large Cap Growth Fund AIM Developing Markets Fund The AIM Family of Funds--Registered Trademark--
AIM Large Cap Opportunities Fund AIM Euroland Growth Fund(5) is distributed nationwide, and AIM today is the
AIM Mid Cap Equity Fund AIM European Development Fund eighth-largest mutual fund complex in the United
AIM Mid Cap Growth Fund AIM International Equity Fund States in assets under management, according to
AIM Mid Cap Opportunities Fund(2) AIM Japan Growth Fund Strategic Insight, an independent mutual fund monitor.
AIM Select Growth Fund AIM Latin American Growth Fund
AIM Small Cap Growth Fund(3)
AIM Small Cap Opportunities Fund(4) GLOBAL GROWTH FUNDS
AIM Value Fund AIM Global Aggressive Growth Fund
AIM Weingarten Fund AIM Global Growth Fund
AIM Global Trends Fund(6)
GROWTH & INCOME FUNDS
AIM Advisor Flex Fund GLOBAL GROWTH & INCOME FUNDS
AIM Advisor Real Estate Fund AIM Global Utilities Fund
AIM Balanced Fund
AIM Basic Value Fund GLOBAL INCOME FUNDS
AIM Charter Fund AIM Global Income Fund
AIM Strategic Income Fund
INCOME FUNDS
AIM Floating Rate Fund THEME FUNDS
AIM High Yield Fund AIM Global Consumer Products and Services Fund
AIM High Yield Fund II AIM Global Financial Services Fund
AIM Income Fund AIM Global Health Care Fund
AIM Intermediate Government Fund AIM Global Infrastructure Fund
AIM Limited Maturity Treasury Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund
TAX-FREE INCOME FUNDS
AIM High Income Municipal Fund
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
</TABLE>
(1) Effective December 1, 1999, AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations. (2) AIM Mid
Cap Opportunities Fund closed to new investors on March 21, 2000. (3) AIM Small
Cap Growth Fund closed to new investors on November 8, 1999. (4) AIM Small Cap
Opportunities Fund closed to new investors on November 4, 1999. (5) On September
1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund. Previously
the fund invested in all size companies in most areas of Europe. The fund now
seeks to invest at least 65% of its assets in large-cap companies within
countries using the euro as their currency (EMU-member countries). (6) Effective
August 27, 1999, AIM Global Trends Fund was restructured to operate as a
traditional mutual fund. Before that date, the fund operated as a fund of funds.
For more complete information about any AIM fund(s), including sales charges and
expenses, ask your financial advisor or securities dealer for a free
prospectus(es). Please read the prospectus(es) carefully before you invest or
send money. If used as sales material after July 20, 2000, this report must be
accompanied by a current Quarterly Review of Performance for AIM Funds.
[AIM LOGO APPEARS HERE]
--Registered Trademark--
[DALBAR LOGO APPEARS HERE] INVEST WITH DISCIPLINE
--Registered Trademark--
A I M Distributors, Inc. CHT-SAR-1
