<PAGE> 1
SEMIANNUAL REPORT / APRIL 30 2000
AIM CONSTELLATION FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[COVER IMAGE]
-------------------------------------
STARRY NIGHT OVER THE RHONE BY VINCENT VAN GOGH
STARS, PARTICULARLY CONSTELLATIONS, HAVE LONG BEEN USED AS
SIGNS BY WHICH FARMERS PLANTED AND HARVESTED THEIR CROPS AND
SAILORS NAVIGATED THE SEAS. ALTHOUGH DIFFERENT CONSTELLATIONS
ARE VISIBLE AT DIFFERENT TIMES OF THE YEAR, THEIR CONSTANCY IN
THE SKY MAKES THEM RELIABLE FOR MEASURING THE PASSAGE OF TIME
AND DISTANCE. AIM CONSTELLATION FUND SEEKS OUT THE STARS OF
THE STOCK UNIVERSE.
-------------------------------------
AIM Constellation Fund is for shareholders who seek growth of capital by
investing principally in common stocks of companies that the portfolio managers
believe are likely to benefit from new or innovative products, services or
processes, as well as those that have experienced above-average long-term
earnings growth and excellent growth prospects.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Constellation 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 average annual total returns as of the close of the reporting
period are shown in a table in the manager's overview on the pages that
follow. In addition, industry regulations require us to provide average
annual total returns (including sales charges) as of 3/31/00, the most
recent calendar quarter-end, which were: Class A shares, one year, 58.06%;
five years, 24.96%; 10 years, 21.75%. Class B shares, one year, 60.78%;
inception (11/3/97), 27.46%. Class C shares, one year, 64.81%; inception
(8/4/97), 24.93%.
o Investing in small- and mid-sized companies may involve greater risk and
potential reward than investing in more established companies.
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 Lipper Multi-Cap Growth Fund Index represents an average of
the performance of the 30 largest multi-cap growth funds tracked by Lipper,
Inc., an independent mutual fund performance monitor.
o The 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 Russell 2000 Index represents the performance of stocks of
small-capitalization companies.
o The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500)
represents the performance of the stock market.
o The unmanaged Standard & Poor's MidCap 400 Index (the S&P 400) comprises the
common stocks of approximately 400 mid-capitalization companies.
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.
AIM CONSTELLATION 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 CONSTELLATION FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
FUND WEATHERS MARKET SELL-OFF, RECORDS EXCELLENT RETURNS
AFTER SOARING TO NEW HEIGHTS, STOCK INDEXES PLUNGED AS THE REPORTING PERIOD
CLOSED. HOW DID AIM CONSTELLATION FUND PERFORM?
Despite a steep drop in several key market indexes in April, the fund posted
impressive returns for the six-month period ended April 30, 2000. Excluding
sales charges, total returns for Class A, Class B and Class C shares were
33.73%, 33.20% and 33.18%, respectively. The fund outperformed both the S&P 500
and the Lipper Multi-Cap Growth Fund Index, which recorded gains of 7.18% and
30.26%, respectively, over the same period.
While technology stocks were volatile, the fund's heavy weighting in this
sector enhanced performance. Over the reporting period, the fund's total net
assets grew from $15.3 billion to $20.7 billion.
WHAT WERE THE KEY TRENDS IN THE STOCK MARKET?
For most of the reporting period, technology stocks were the undisputed market
leaders. Tech stocks helped push the Dow, the Nasdaq and other market indexes to
new heights. While the Dow peaked in January, the tech-dominated Nasdaq
continued to set records well into March. Toward the end of the month, however,
investors became concerned that tech stocks might be overvalued, sparking a
sharp sell-off in this sector. In April, a federal court ruling against software
giant Microsoft (not a fund holding) helped perpetuate the sell-off. The stocks
of Internet companies with no earnings were particularly hard hit.
Investors were also concerned that the Federal Reserve Board (the Fed) might
continue to raise interest rates to slow torrid economic growth and contain
inflation. During the reporting period, the Fed, which launched a monetary
tightening policy in June 1999, raised the key federal funds rate--the rate
banks charge each other for overnight loans--from 5.25% to 6.0%. Interest-rate
concerns prompted a sell-off that affected nearly every stock-market sector in
April, causing markets to be extremely volatile.
Despite April's well-publicized market downturn, most major indexes posted
gains for the reporting period, with mid-cap stocks leading the charge. The S&P
MidCap 400 Index was up 21.26%, compared to 0.79% for the Dow and 18.72% for the
Russell 2000, which measures the performance of small-cap stocks. Despite
weakness in March and April, tech stocks still outperformed other issues for the
six-month reporting period by a significant margin.
HOW DID YOU MANAGE THE FUND?
During the reporting period, the fund implemented a new investment strategy that
permits it to invest in all sizes of companies instead of being limited to mid-
and small-cap stocks, allowing the fund to take advantage of rallies within
various market segments. We took advantage of April's market sell-off to buy the
stocks of quality companies at reduced prices.
Over the last six months, we increased the fund's technology holdings from
46% to 51% while reducing consumer-cyclical stocks from 20% to 13% of the
portfolio. The portfolio's heavy weighting in the technology sector was a result
of our stock-selection process, which is based on earnings growth prospects, not
macroeconomic predictions. We continued to find many companies with excellent
earnings prospects in the technology sector. Moreover, we generally do not buy
the stocks of companies that have no earnings.
Industries within the technology sector that were prominently represented in
the portfolio included computer software and services, communications equipment
and semiconductors. These industries are benefiting from the steady sales of
personal computers, the proliferation of new communications devices and the
expansion of the Internet.
CAN YOU NAME A FEW OF THE TECH STOCKS IN THE PORTFOLIO?
At the end of the reporting period, VERITAS Software was the portfolio's top
equity holding. VERITAS is the world's largest maker of storage-management
software, which protects networks against data loss from crashes and errors,
expedites data recovery and manages corporate storage. JDS Uniphase, the
portfolio's second-largest equity holding, is the world's leading supplier of
parts
GROWTH OF TOTAL NET ASSETS
================================================================================
$15.3 $20.7
BILLION BILLION
10/31/99 4/30/00
================================================================================
TOTAL RETURNS
For six months ended 4/30/00, excluding sale charges
================================================================================
FUND CLASS A SHARES 33.73%
FUND CLASS B SHARES 33.20%
FUND CLASS C SHARES 33.18%
S&P 5000 7.18%
LIPPER MULTI-CAP GROWTH FUND INDEX 30.26%
================================================================================
See important fund and index disclosures inside front cover.
AIM CONSTELLATION FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
for fiber-optic equipment. Corning, our third-largest holding, is the inventor
and one of the world's top manufacturers of fiber-optic cable. All three
reported strong earnings for the most recent quarter.
Other tech stocks in the portfolio included Analog Devices, a leading maker
of both analog and digital integrated circuits, which translate such phenomena
as pressure, temperature and sound into digital signals; ADC Telecommunications,
which makes systems that speed up the rate at which voice, data and video
signals are transmitted; and PMC-Sierra, which develops semiconductor components
that improve Internet transmission.
We believe the outlook is favorable for tech companies, which stand to
benefit from global economic expansion, mergers and acquisitions and the growth
of wireless communications and the Internet.
WHAT OTHER STOCKS PERFORMED WELL FOR THE FUND?
In the financial sector, the fund benefited from owning the stock of investment
banking firm Charles Schwab, a leading discount broker. In the energy sector, a
stock that performed well for the fund was Cooper Cameron, an equipment maker
for the oil and gas industry.
WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
The near-term outlook for stocks could depend to a large extent on the Fed's
ability to bring the economy to a "soft landing." On May 16, after the reporting
period ended, the central bank raised the federal funds rate to 6.5%. It appears
that the Fed's tightening cycle may be winding down, although the central bank
is expected to approve additional rate increases in the immediate months ahead.
If the Fed succeeds in slowing economic growth to a more sustainable rate and in
keeping inflation under control, it could prolong the current record economic
expansion. Such an environment could help sustain corporate earnings growth and
prove favorable for stocks.
However, uncertainty over the Fed's actions and other factors could
perpetuate the volatility that has characterized markets in recent months. In
such an environment, investors would be well advised to take a long-term
perspective on their investment.
RESULTS OF A $10,000 INVESTMENT
4/30/76-4/30/00, including sales charges
================================================================================
$697,035 $461,855 $338,754
AIM Lipper S&P 500
Constellation Multi-Cap Index
Fund Growth
Class A Fund Index
Shares
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 4/30/00, including sales charges
================================================================================
CLASS A SHARES
Inception (4/30/76) 19.34%
10 Years 20.96
5 Years 22.32
1 Year 40.63*
*48.81%, excluding sales charges
CLASS B SHARES
Inception (11/3/97) 22.17%
1 Year 42.56*
*47.56%, excluding CDSC
CLASS C SHARES
Inception (8/4/97) 20.33
1 Year 46.55*
*47.55%, excluding CDSC
Past performance does not 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.
================================================================================
PORTFOLIO COMPOSITION
As of 4/30/00, based on total net assets
<TABLE>
<CAPTION>
===================================================================================================================================
TOP 10 INDUSTRIES TOP 10 HOLDINGS
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<S> <C> <C> <C>
1. Computers (Software & Services) 13.91% 1. VERITAS Software Corp. 2.99%
2. Communications Equipment 12.80% 2. JDS Uniphase Corp. 2.71%
3. Electronics (Semiconductors) 11.29% 3. Corning, Inc. 2.09%
4. Oil & Gas (Drilling & Equipment) 6.45% 4. Analog Devices, Inc. 1.99%
5. Broadcasting (Television, Radio & Cable) 4.55% 5. ADC Telecommunications, Inc. 1.84%
6. Electrical Equipment 3.46% 6. PMC-Sierra, Inc. (Canada) 1.75%
7. Computers (Networking) 2.78% 7. Scientific-Atlanta, Inc. 1.46%
8. Investment Banking/Brokerage 2.67% 8. Nokia Oyj-ADR (Finland) 1.41%
9. Services (Advertising & Marketing) 2.34% 9. Inktomi Corp. 1.34%
10. Equipment (Semiconductor) 2.27% 10. Comverse Technology, Inc 1.30%
Please keep in mind that the fund's holdings are 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 CONSTELLATION FUND
3
<PAGE> 6
SEMIANNUAL REPORT / FOR CONSIDERATION
CHASING PERFORMANCE MAY HURT MORE THAN IT HELPS
In the wake of some of last year's eye-popping mutual fund returns of more than
100%, it may be hard to look at your own returns and not feel disappointed.
According to Lipper, Inc.(1), the average large-cap core mutual fund finished
1999 up 22.35%--a return that would be considered terrific in most other
years--while the average science and technology fund had an astounding return of
134.77% for the year. Industry trends point to the fact that some investors have
looked at such performance and said, "My investments haven't had that kind of
return. I need to change my portfolio." What's an investor to do?
LOOK AT THE BIG PICTURE
It's very tempting to look only at returns when you invest in a mutual fund. But
there are other factors to consider:
o How well does the fund match my financial goals?
Different kinds of mutual funds are appropriate for different people at
different stages. Are you a young adult early in your work life, or are you
approaching retirement? Are you investing to buy a house, car or other large
item soon, or are you investing for your later years?
If your investment plan has a rather long time horizon, you may be able to
invest more aggressively because you could have time to recoup should you
experience losses. If your needs are more immediate, you should assess how
aggressive you can afford to be--you may need to be more conservative than you
thought to meet your goal.
o How well does the fund match my tolerance for risk?
Many of the mutual funds that had such high-flying returns for 1999 are pretty
aggressive, investing in smaller, less-established companies, some of which
have not even realized a profit. So while these mutual funds have the potential
to make your money grow, they may also entail more risk than you may be prepared
to take.
Of course, investing in any mutual fund brings with it a certain amount of
risk, but this risk can vary widely depending on the types of holdings in which
a fund invests. It's important that you take a hard look at your risk tolerance
before investing in any fund, particularly if you are ratcheting up to a more
aggressive fund.
o How well does the fund fit into my portfolio?
When a market sector or mutual fund is doing well, you may be tempted to
overload your portfolio with the "winner of the moment." It seems to make
sense--you're making money with that investment so you should allocate more
money to it, right?
Be careful. A narrowly invested portfolio could be especially vulnerable to
market volatility. Spreading your investment over several types of funds or
investing in one diversified fund can help you spread out your risk--the more
diversified your portfolio, the less overlap it should have. Less overlap can
mean less risk.
PAST PERFORMANCE IS NO GUARANTEE
Last year's phenomenal returns were the result of a number of unique
factors--the strong U.S. economy, the proliferation of new technology companies
and record amounts of cash being poured into the stock market, to name a few.
Even so, it may seem that everyone came out a winner in 1999.
In reality, just a few large companies accounted for many of the markets'
records in 1999. More than half the stocks in the S&P 500(2) declined during the
year. The technology sector was clearly dominant--the tech component of the S&P
500 finished 1999 with a return of 75.11%, while the capital goods component of
the index, which came in second for the year, had a return of 28.76%.(3) So if
you didn't invest in technology in 1999, you probably didn't enjoy the same
performance as people who did.
As we've seen thus far in 2000, financial markets can be quite fickle,
revolving around investors' perceptions as much as hard facts. Because of the
ever-changing nature of the market environment, many high-performing mutual
funds don't repeat their gains from year to year. This doesn't necessarily mean
a fund had a
------------------------------------
SEC SPEAKS OUT
In the wake of 1999's extraordinary
fund performances, the Securities
and Exchange Commission (SEC),
which regulates the mutual fund
industry, says that investors should
temper their expectations and not
make investment decisions based
only on past performance. The SEC
also suggests that investors consider
the following factors when looking
at a mutual fund:
Age
Risk
Size
Volatility
Management
Expenses
Tax Efficiency
------------------------------------
Source: The Wall Street Journal, 1/25/00
AIM CONSTELLATION FUND
4
<PAGE> 7
SEMIANNUAL REPORT / FOR CONSIDERATION
"bad" year or that fund managers chose holdings poorly. It may just mean that
the environment for a particular fund was not as ideal as it had been in the
past. This can be true for any mutual fund.
KEEP EXPECTATIONS REALISTIC
Along with recognizing how quickly the market environment can change, it's
important to keep your expectations realistic. Of course you would like your
investments to do well every year, but chances are they won't. It's the nature
of the beast. So what you should be shooting for is good performance over the
long term. While your investment may not have a stellar year every year, over
time its average returns may prove to be just what you hoped for.
Sometimes it's hard to be patient when it seems like everyone else's
investments are doing better than yours. You may be tempted to chase winning
performance by trying to time the market, switching in and out of funds as
markets or sectors go in and out of favor. But this strategy can greatly
increase your risk and it rarely works--you may end up with significantly lower
returns than if you'd just stayed put. (There can also be adverse tax
consequences.)
ASSET ALLOCATION: THE OLD STANDBY
The truth is, no one knows for sure what is going to perform well in the market,
which is why mutual fund investors should diversify using asset
allocation--spreading investments over several fund types (e.g., core, growth,
international and income). Unfortunately, some investors seem less interested in
asset allocation these days because they want to chase performance instead. And
when the market is roaring ahead, who can blame them?
But as Isaac Newton proved, what goes up must come down. A diversified
portfolio can offer some protection in a market downturn because when your
assets are spread over several different types of funds, chances are at least
one of them is keeping its head above water. And while a diversified fund
portfolio probably won't perform as well as the flashiest stock fund, it
probably won't do as badly as the worst of them either.
Your financial advisor can help you determine what kinds of mutual funds best
fit your investment goals and risk tolerance. Talk to your financial advisor for
more information.
(1) Lipper, Inc. is an independent mutual fund performance monitor.
(2) The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500)
is generally considered representative of the stock market.
(3) Source: Bloomberg.
DOLLAR-COST AVERAGING CAN LOWER THE
COST OF INVESTING
One useful way to buy shares of a mutual fund is through dollar-cost averaging.
In such a plan, you invest a certain amount at regular intervals--say $200 per
month--which allows you to buy more shares when mutual fund prices go down and
fewer shares when prices go up. This gives you the benefit of your average cost
per share actually being less than the average price per share.
================================================================================
MONTH AMOUNT INVESTED SHARE PRICE SHARES PURCHASED
JANUARY $200 $24 8.333
FEBRUARY 200 20 10.000
MARCH 200 14 14.286
APRIL 200 18 11.111
MAY 200 22 9.091
JUNE 200 24 8.333
6-MONTH TOTAL $1200 $122 61.154
Average price per share: $122 divided by 6 = $20.33
Average cost per share: $1200 divided by 61.154 = $19.62
================================================================================
Please keep in mind that this example is hypothetical and is not indicative of
the performance of any investment, IRA or AIM fund. Dollar-cost averaging does
not assure a profit and does not protect against loss in declining markets.
Since dollar-cost averaging involves continuous investing regardless of
fluctuating securities prices, investors should consider their ability to
continue purchases over an extended period of time.
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.
AIM CONSTELLATION FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
April 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY
INTERESTS-96.77%
AUTO PARTS & EQUIPMENT-0.55%
Danaher Corp. 2,000,000 $ 114,250,000
---------------------------------------------------------------
BANKS (MAJOR REGIONAL)-0.58%
Northern Trust Corp. 1,850,000 118,631,250
---------------------------------------------------------------
BIOTECHNOLOGY-1.41%
Amgen Inc.(a) 1,500,000 84,000,000
---------------------------------------------------------------
Biogen, Inc.(a) 2,379,300 139,932,581
---------------------------------------------------------------
Chiron Corp.(a) 1,500,000 67,875,000
---------------------------------------------------------------
291,807,581
---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO
& CABLE)-4.55%
AMFM Inc.(a) 2,400,000 159,300,000
---------------------------------------------------------------
AT&T Corp.-Liberty Media Group-
Class A(a) 3,000,000 149,812,500
---------------------------------------------------------------
Cox Communications, Inc.-Class
A(a) 1,600,000 68,500,000
---------------------------------------------------------------
Hispanic Broadcasting Corp.(a) 1,525,000 154,120,312
---------------------------------------------------------------
Univision Communications,
Inc.-Class A(a) 1,519,800 166,038,150
---------------------------------------------------------------
USA Networks, Inc.(a) 4,500,000 103,500,000
---------------------------------------------------------------
Westwood One, Inc.(a) 3,918,000 138,599,250
---------------------------------------------------------------
939,870,212
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-12.80%
ADC Telecommunications, Inc.(a) 6,250,000 379,687,500
---------------------------------------------------------------
CIENA Corp.(a) 563,800 69,699,775
---------------------------------------------------------------
Comverse Technology, Inc.(a) 3,000,000 267,562,500
---------------------------------------------------------------
Corning Inc. 2,190,800 432,683,000
---------------------------------------------------------------
JDS Uniphase Corp.(a) 5,400,000 559,912,500
---------------------------------------------------------------
Juniper Networks, Inc.(a) 500,000 106,343,750
---------------------------------------------------------------
Nokia Oyj-ADR (Finland) 5,112,800 290,790,500
---------------------------------------------------------------
Nortel Networks Corp. (Canada) 1,750,000 198,187,500
---------------------------------------------------------------
QUALCOMM Inc.(a) 350,300 37,985,656
---------------------------------------------------------------
Scientific-Atlanta, Inc. 4,636,400 301,655,775
---------------------------------------------------------------
2,644,508,456
---------------------------------------------------------------
COMPUTERS (HARDWARE)-1.88%
Apple Computer, Inc.(a) 732,100 90,826,156
---------------------------------------------------------------
Compaq Computer Corp. 3,500,000 102,375,000
---------------------------------------------------------------
Dell Computer Corp.(a) 1,250,000 62,656,250
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 1,432,400 131,691,275
---------------------------------------------------------------
387,548,681
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (NETWORKING)-2.78%
Cisco Systems, Inc.(a) 2,000,000 $ 138,656,250
---------------------------------------------------------------
Exodus Communications, Inc.(a) 1,750,000 154,765,625
---------------------------------------------------------------
Extreme Networks, Inc.(a) 750,000 43,218,750
---------------------------------------------------------------
VeriSign, Inc.(a) 1,700,000 236,937,500
---------------------------------------------------------------
573,578,125
---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.35%
Adaptec, Inc.(a) 1,196,100 32,294,700
---------------------------------------------------------------
EMC Corp.(a) 1,248,000 173,394,000
---------------------------------------------------------------
Network Appliance, Inc.(a) 1,000,000 73,937,500
---------------------------------------------------------------
279,626,200
---------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-13.58%
Aspect Development, Inc.(a) 1,450,000 100,231,250
---------------------------------------------------------------
BEA Systems, Inc.(a) 2,200,000 106,150,000
---------------------------------------------------------------
Business Objects S.A.-ADR
(France)(a) 1,500,000 146,812,500
---------------------------------------------------------------
Check Point Software
Technologies Ltd. (Israel)(a) 1,500,000 259,500,000
---------------------------------------------------------------
Citrix Systems, Inc.(a) 1,107,300 67,614,506
---------------------------------------------------------------
DoubleClick Inc.(a) 500,000 37,937,500
---------------------------------------------------------------
Electronics for Imaging,
Inc.(a) 2,500,000 130,625,000
---------------------------------------------------------------
Gemstar International Group
Ltd.(a) 1,750,000 80,937,500
---------------------------------------------------------------
Inktomi Corp.(a) 1,800,000 277,087,500
---------------------------------------------------------------
Intuit Inc.(a) 3,250,000 116,796,875
---------------------------------------------------------------
J.D. Edwards & Co.(a) 4,500,000 82,125,000
---------------------------------------------------------------
Lycos, Inc.(a) 2,300,000 106,950,000
---------------------------------------------------------------
Mercury Interactive Corp.(a) 382,800 34,452,000
---------------------------------------------------------------
Oracle Corp.(a) 1,250,000 99,921,875
---------------------------------------------------------------
PeopleSoft, Inc.(a) 2,500,000 34,843,750
---------------------------------------------------------------
Portal Software, Inc.(a) 1,037,700 47,604,487
---------------------------------------------------------------
Rational Software Corp.(a) 698,300 59,442,787
---------------------------------------------------------------
Siebel Systems, Inc.(a) 1,500,000 184,312,500
---------------------------------------------------------------
Verio, Inc.(a) 2,250,000 84,515,625
---------------------------------------------------------------
VERITAS Software Corp.(a) 5,750,000 616,777,344
---------------------------------------------------------------
Yahoo! Inc.(a) 1,000,000 130,250,000
---------------------------------------------------------------
2,804,887,999
---------------------------------------------------------------
CONSUMER FINANCE-0.78%
Providian Financial Corp. 1,825,000 160,714,062
---------------------------------------------------------------
ELECTRICAL EQUIPMENT-3.46%
American Power Conversion
Corp.(a) 5,250,000 185,390,625
---------------------------------------------------------------
Conexant Systems, Inc.(a) 2,000,000 119,750,000
---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-(CONTINUED)
Sanmina Corp.(a) 2,000,000 $ 120,125,000
---------------------------------------------------------------
Symbol Technologies, Inc. 2,756,100 153,652,575
---------------------------------------------------------------
Vishay Intertechnology, Inc.(a) 1,622,000 136,045,250
---------------------------------------------------------------
714,963,450
---------------------------------------------------------------
ELECTRONICS (COMPONENT
DISTRIBUTORS)-0.54%
Agilent Technologies, Inc.(a) 1,250,000 110,781,250
---------------------------------------------------------------
ELECTRONICS (DEFENSE)-0.87%
General Motors Corp.-Class H(a) 1,873,000 180,393,312
---------------------------------------------------------------
ELECTRONICS
(INSTRUMENTATION)-0.98%
PE Corp-PE Biosystems Group 3,375,000 202,500,000
---------------------------------------------------------------
ELECTRONICS
(SEMICONDUCTORS)-11.30%
Advanced Micro Devices, Inc.(a) 875,300 76,807,575
---------------------------------------------------------------
Altera Corp.(a) 1,000,000 102,250,000
---------------------------------------------------------------
Analog Devices, Inc.(a) 5,359,800 411,699,638
---------------------------------------------------------------
ASM Lithography Holding N.V.
(Netherlands)(a) 2,250,000 90,000,000
---------------------------------------------------------------
Celestica Inc. (Canada)(a) 4,012,700 218,942,944
---------------------------------------------------------------
Cypress Semiconductor Corp.(a) 1,313,900 68,240,681
---------------------------------------------------------------
Intel Corp. 1,000,000 126,812,500
---------------------------------------------------------------
Linear Technology Corp. 2,500,000 142,812,500
---------------------------------------------------------------
LSI Logic Corp.(a) 2,500,000 156,250,000
---------------------------------------------------------------
Maxim Integrated Products,
Inc.(a) 2,000,000 129,625,000
---------------------------------------------------------------
Microchip Technology, Inc.(a) 2,000,112 124,131,951
---------------------------------------------------------------
PMC-Sierra, Inc. (Canada)(a) 1,879,200 360,571,500
---------------------------------------------------------------
SDL, Inc.(a) 608,200 118,599,000
---------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 750,000 51,046,875
---------------------------------------------------------------
Xilinx, Inc.(a) 2,122,400 155,465,800
---------------------------------------------------------------
2,333,255,964
---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-2.27%
Applied Materials, Inc.(a) 1,000,000 101,812,500
---------------------------------------------------------------
KLA-Tencor Corp.(a) 1,750,000 131,031,250
---------------------------------------------------------------
Novellus Systems, Inc.(a) 1,500,000 100,031,250
---------------------------------------------------------------
Teradyne, Inc.(a) 1,227,400 135,014,000
---------------------------------------------------------------
467,889,000
---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-0.42%
American Express Co. 575,000 86,285,938
---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.48%
Forest Laboratories, Inc.(a) 1,123,200 94,419,000
---------------------------------------------------------------
Jones Pharma, Inc.(b) 5,536,912 159,532,277
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (DRUGS-GENERIC &
OTHER)-(CONTINUED)
Medicis Pharmaceutical
Corp.-Class A(a) 1,200,000 $ 52,500,000
---------------------------------------------------------------
306,451,277
---------------------------------------------------------------
HEALTH CARE (HOSPITAL
MANAGEMENT)-1.12%
Columbia/HCA Healthcare Corp. 2,332,400 66,327,625
---------------------------------------------------------------
Health Management Associates,
Inc.- Class A(a) 7,190,900 114,604,969
---------------------------------------------------------------
Tenet Healthcare Corp.(a) 2,000,000 51,000,000
---------------------------------------------------------------
231,932,594
---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.53%
Biomet, Inc. 1,974,700 70,472,106
---------------------------------------------------------------
Medtronic, Inc.(c) 4,741,600 246,266,850
---------------------------------------------------------------
316,738,956
---------------------------------------------------------------
HEALTH CARE (SPECIALIZED
SERVICES)-0.34%
Lincare Holdings, Inc.(a) 2,301,800 70,204,900
---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.55%
AFLAC, Inc. 2,326,500 113,562,281
---------------------------------------------------------------
INVESTMENT
BANKING/BROKERAGE-2.67%
Goldman Sachs Group, Inc.
(The)(c) 2,250,000 209,812,500
---------------------------------------------------------------
Morgan Stanley Dean Witter &
Co. 1,700,000 130,475,000
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 4,750,000 211,375,000
---------------------------------------------------------------
551,662,500
---------------------------------------------------------------
INVESTMENT MANAGEMENT-0.34%
Federated Investors, Inc.-
Class B 2,500,000 70,625,000
---------------------------------------------------------------
LEISURE TIME (PRODUCTS)-1.10%
Harley-Davidson, Inc.(c) 5,700,000 226,931,250
---------------------------------------------------------------
MANUFACTURING
(DIVERSIFIED)-0.54%
Honeywell International 2,000,000 112,000,000
---------------------------------------------------------------
MANUFACTURING
(SPECIALIZED)-0.75%
Millipore Corp. 2,149,800 154,113,788
---------------------------------------------------------------
NATURAL GAS-0.59%
Enron Corp.(c) 1,750,000 121,953,125
---------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-6.40%
BJ Services Co.(a) 2,600,000 182,650,000
---------------------------------------------------------------
Cooper Cameron Corp.(a)(b) 2,761,200 207,090,000
---------------------------------------------------------------
ENSCO International Inc. 2,500,000 82,968,750
---------------------------------------------------------------
Grant Prideco, Inc.(a) 1,872,400 36,043,700
---------------------------------------------------------------
Nabors Industries, Inc.(a) 4,432,000 174,787,000
---------------------------------------------------------------
R&B Falcon Corp.(a) 5,900,000 122,425,000
---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL & GAS (DRILLING & EQUIPMENT)-(CONTINUED)
Rowan Cos., Inc.(a) 3,262,700 $ 91,151,681
---------------------------------------------------------------
Smith International, Inc.(a) 2,150,000 163,400,000
---------------------------------------------------------------
Transocean Sedco Forex Inc. 3,950,000 185,650,000
---------------------------------------------------------------
Weatherford International,
Inc.(a) 1,872,400 76,066,250
---------------------------------------------------------------
1,322,232,381
---------------------------------------------------------------
RAILROADS-1.06%
Kansas City Southern
Industries, Inc. 3,050,000 219,218,750
---------------------------------------------------------------
RESTAURANTS-0.78%
Brinker International, Inc.(a) 3,000,000 95,625,000
---------------------------------------------------------------
Outback Steakhouse, Inc.(a) 2,000,000 65,500,000
---------------------------------------------------------------
161,125,000
---------------------------------------------------------------
RETAIL (BUILDING
SUPPLIES)-1.31%
Home Depot, Inc. (The) 1,750,000 98,109,375
---------------------------------------------------------------
Lowe's Cos., Inc. 3,500,000 173,250,000
---------------------------------------------------------------
271,359,375
---------------------------------------------------------------
RETAIL (COMPUTERS &
ELECTRONICS)-1.10%
Best Buy Co., Inc.(a) 882,200 71,237,650
---------------------------------------------------------------
CDW Computer Centers, Inc.(a) 1,500,000 156,000,000
---------------------------------------------------------------
227,237,650
---------------------------------------------------------------
RETAIL (DEPARTMENT
STORES)-0.93%
Kohl's Corp.(a) 4,000,000 192,000,000
---------------------------------------------------------------
RETAIL (DISCOUNTERS)-1.13%
Dollar Tree Stores, Inc.(a) 1,810,600 104,788,475
---------------------------------------------------------------
Family Dollar Stores, Inc. 2,850,000 54,328,125
---------------------------------------------------------------
Ross Stores, Inc. 3,567,200 74,019,400
---------------------------------------------------------------
233,136,000
---------------------------------------------------------------
RETAIL (SPECIALTY)-1.82%
Bed Bath & Beyond, Inc.(a) 5,000,000 183,437,500
---------------------------------------------------------------
Staples, Inc.(a) 4,000,000 76,250,000
---------------------------------------------------------------
Tiffany & Co. 750,000 54,515,625
---------------------------------------------------------------
Zale Corp.(a) 1,500,000 61,875,000
---------------------------------------------------------------
376,078,125
---------------------------------------------------------------
RETAIL
(SPECIALTY-APPAREL)-1.79%
Gap, Inc. (The) 2,500,000 91,875,000
---------------------------------------------------------------
Intimate Brands, Inc. 1,500,000 57,750,000
---------------------------------------------------------------
Limited, Inc. (The) 2,000,000 90,375,000
---------------------------------------------------------------
Men's Wearhouse, Inc.
(The)(a)(b) 2,487,800 53,332,213
---------------------------------------------------------------
Talbots, Inc. (The) 1,500,000 75,843,750
---------------------------------------------------------------
369,175,963
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SERVICES (ADVERTISING/
MARKETING)-2.34%
Lamar Advertising Co.(a)(b) 3,750,000 $ 165,234,375
---------------------------------------------------------------
Omnicom Group, Inc. 2,500,000 227,656,250
---------------------------------------------------------------
Young & Rubicam Inc. 1,632,500 90,909,844
---------------------------------------------------------------
483,800,469
---------------------------------------------------------------
SERVICES (COMPUTER
SYSTEMS)-0.60%
Brocade Communications Systems,
Inc.(a) 1,000,000 124,000,000
---------------------------------------------------------------
SERVICES (DATA
PROCESSING)-1.60%
CSG Systems International,
Inc.(a) 956,500 44,118,563
---------------------------------------------------------------
Fiserv, Inc.(a) 4,060,300 186,520,031
---------------------------------------------------------------
Paychex, Inc. 1,875,000 98,671,875
---------------------------------------------------------------
329,310,469
---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-2.25%
Crown Castle International
Corp.(a) 2,144,200 82,283,675
---------------------------------------------------------------
Level 3 Communications, Inc.(a) 1,000,000 89,000,000
---------------------------------------------------------------
Metromedia Fiber Network,
Inc.-Class A(a) 4,000,000 123,500,000
---------------------------------------------------------------
VoiceStream Wireless(a) 569,200 56,350,800
---------------------------------------------------------------
Western Wireless Corp.-Class
A(a) 2,301,000 114,330,938
---------------------------------------------------------------
465,465,413
---------------------------------------------------------------
TELEPHONE-2.04%
Broadwing Inc.(a) 3,000,000 84,937,500
---------------------------------------------------------------
CenturyTel, Inc. 1,583,525 38,796,363
---------------------------------------------------------------
NTL Inc.(a) 1,500,000 114,750,000
---------------------------------------------------------------
Qwest Communications
International, Inc.(a) 3,495,800 151,630,325
---------------------------------------------------------------
RCN Corp.(a) 1,103,900 31,599,137
---------------------------------------------------------------
421,713,325
---------------------------------------------------------------
TEXTILES (APPAREL)-0.51%
Jones Apparel Group, Inc.(a) 3,564,000 105,806,250
---------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$11,318,442,251) 19,989,326,321
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
CONVERTIBLE BONDS & NOTES-0.57%
COMPUTERS (NETWORKING)-0.13%
Exodus Communications, Inc.,
Conv. Notes, 4.75%, 07/15/08
(Acquired 12/02/99; Cost
$19,815,000)(d) $ 19,815,000 27,468,544
---------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE &
SERVICES)-0.33%
Critical Path Inc., Conv.
Notes, 5.75%, 04/01/05
(Acquired 03/27/00-04/25/00;
Cost $65,116,131)(d) $ 81,000,000 $ 67,989,375
---------------------------------------------------------------
TELEPHONE-0.11%
NTL Inc., Conv. Sub. Notes,
5.75%, 12/15/09 (Acquired
12/17/99; Cost
$25,458,250)(d) 25,000,000 22,281,250
---------------------------------------------------------------
Total Convertible Bonds &
Notes (Cost $110,401,924) 117,739,169
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MONEY MARKET FUNDS-3.14%
STIC Liquid Assets Portfolio(e) 324,330,906 $ 324,330,906
---------------------------------------------------------------
STIC Prime Portfolio(e) 324,330,906 324,330,906
---------------------------------------------------------------
Total Money Market Funds
(Cost $648,661,812) 648,661,812
---------------------------------------------------------------
TOTAL INVESTMENTS-100.48% (Cost
$12,077,505,987) 20,755,727,302
---------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.48%) (100,001,286)
---------------------------------------------------------------
NET ASSETS-100.00% $20,655,726,016
===============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Sub. - Subordinated
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Affiliated issuers are those in which the Fund's holdings of an issuer
represent 5% or more of the outstanding voting securities of the issuer. The
Fund has not owned enough of the outstanding voting securities of the issuer
to have control (as defined in the Investment Company Act of 1940) of that
issuer. The aggregate market value of these securities as of 04/30/00 was
$585,188,865 which represented 2.83% of the Fund's net assets.
(c) A portion of this security is subject to call options written. See Note 7.
(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 $117,739,169
which represented 0.57% of the Fund's net assets.
(e) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$12,077,505,987) $20,755,727,302
-------------------------------------------------------------
Receivables for:
Investments sold 162,431,108
-------------------------------------------------------------
Capital stock sold 32,662,880
-------------------------------------------------------------
Dividends and Interest 5,197,947
-------------------------------------------------------------
Investment for deferred compensation plan 219,535
-------------------------------------------------------------
Other assets 988,721
-------------------------------------------------------------
Total assets 20,957,227,493
-------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 162,263,976
-------------------------------------------------------------
Capital stock reacquired 114,415,316
-------------------------------------------------------------
Deferred compensation plan 219,535
-------------------------------------------------------------
Options written (premiums received
$4,594,572) 1,493,609
-------------------------------------------------------------
Accrued advisory fees 10,042,123
-------------------------------------------------------------
Accrued administrative services fees 59,187
-------------------------------------------------------------
Accrued distribution fees 7,741,754
-------------------------------------------------------------
Accrued directors' fees 6,493
-------------------------------------------------------------
Accrued transfer agent fees 4,358,928
-------------------------------------------------------------
Accrued operating expenses 900,556
-------------------------------------------------------------
Total liabilities 301,501,477
-------------------------------------------------------------
Net assets applicable to shares outstanding $20,655,726,016
=============================================================
NET ASSETS:
Class A $18,921,516,143
=============================================================
Class B $ 1,031,286,280
=============================================================
Class C $ 324,903,258
=============================================================
Institutional Class $ 378,020,335
=============================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 1,000,000,000
-------------------------------------------------------------
Outstanding 444,216,321
=============================================================
Class B:
Authorized 1,000,000,000
-------------------------------------------------------------
Outstanding 24,816,471
=============================================================
Class C:
Authorized 750,000,000
-------------------------------------------------------------
Outstanding 7,820,615
=============================================================
Institutional Class:
Authorized 200,000,000
-------------------------------------------------------------
Outstanding 8,492,512
=============================================================
Class A:
Net asset value and redemption price per
share $ 42.60
-------------------------------------------------------------
Offering price per share:
(Net asset value of $42.60 divided by
94.50%) $ 45.07
=============================================================
Class B:
Net asset value and offering price per
share $ 41.56
=============================================================
Class C:
Net asset value and offering price per
share $ 41.54
=============================================================
Institutional Class:
Net asset value, offering and redemption
price per share $ 44.51
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 2000
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
$300,802) $ 37,638,099
-------------------------------------------------------------
Interest 1,652,827
-------------------------------------------------------------
Total investment income 39,290,926
-------------------------------------------------------------
EXPENSES:
Advisory fees 60,894,984
-------------------------------------------------------------
Administrative services fee 346,584
-------------------------------------------------------------
Custodian fees 328,528
-------------------------------------------------------------
Distribution fees -- Class A 26,982,802
-------------------------------------------------------------
Distribution fees -- Class B 4,237,526
-------------------------------------------------------------
Distribution fees -- Class C 1,252,867
-------------------------------------------------------------
Transfer agent fees -- Class A 12,817,350
-------------------------------------------------------------
Transfer agent fees -- Class B 1,131,334
-------------------------------------------------------------
Transfer agent fees -- Class C 334,490
-------------------------------------------------------------
Transfer agent fees -- Institutional Class 25,272
-------------------------------------------------------------
Directors' fees 41,472
-------------------------------------------------------------
Other 1,247,729
-------------------------------------------------------------
Total expenses 109,640,938
-------------------------------------------------------------
Less: Fees waived (2,181,249)
-------------------------------------------------------------
Expenses paid indirectly (161,830)
-------------------------------------------------------------
Net expenses 107,297,859
-------------------------------------------------------------
Net investment income (loss) (68,006,933)
-------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT SECURITIES,
FOREIGN CURRENCIES AND OPTION CONTRACTS:
Net realized gain from:
Investment securities 2,471,849,544
-------------------------------------------------------------
Option contracts written 32,124,058
-------------------------------------------------------------
2,503,973,602
-------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 2,669,821,895
-------------------------------------------------------------
Foreign currencies (1,049)
-------------------------------------------------------------
Option contracts written 4,349,562
-------------------------------------------------------------
2,674,170,408
-------------------------------------------------------------
Net gain on investment securities, foreign
currencies and option contracts 5,178,144,010
-------------------------------------------------------------
Net increase in net assets resulting from
operations $5,110,137,077
=============================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
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) $ (68,006,933) $ (76,875,258)
------------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 2,503,973,602 1,644,017,203
------------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and option contracts 2,674,170,408 2,669,133,759
------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 5,110,137,077 4,236,275,704
------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (1,341,527,015) (337,206,115)
------------------------------------------------------------------------------------------------
Class B (59,302,977) (8,290,207)
------------------------------------------------------------------------------------------------
Class C (16,589,705) (2,229,567)
------------------------------------------------------------------------------------------------
Institutional Class (23,400,833) (5,075,580)
------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,202,424,646 (1,783,881,252)
------------------------------------------------------------------------------------------------
Class B 299,847,081 205,093,817
------------------------------------------------------------------------------------------------
Class C 124,772,971 55,508,352
------------------------------------------------------------------------------------------------
Institutional Class 70,882,977 (4,793,973)
------------------------------------------------------------------------------------------------
Net increase in net assets 5,367,244,222 2,355,401,179
------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 15,288,481,794 12,933,080,615
------------------------------------------------------------------------------------------------
End of period $20,655,726,016 $15,288,481,794
================================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $ 9,361,884,526 $ 7,663,956,851
------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (68,558,670) (551,737)
------------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 2,681,079,353 1,617,926,281
------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 8,681,320,807 6,007,150,399
------------------------------------------------------------------------------------------------
$20,655,726,016 $15,288,481,794
================================================================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
April 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Constellation 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.
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. 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
12
<PAGE> 15
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.
F. Futures Contracts--The Fund may purchase or sell futures contracts as a
hedge against changes in market conditions. Initial margin deposits
required upon entering into futures contracts are satisfied by the
segregation of specific securities as collateral for the account of the
broker (the Fund's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the
contracts are recognized as unrealized gains or losses by "marking to
market" on a daily basis to reflect the market value of the contracts at
the end of each day's trading. Variation margin payments are made or
received depending upon whether unrealized gains or losses are incurred.
When the contracts are closed, the Fund recognizes a realized gain or loss
equal to the difference between the proceeds from, or cost of, the closing
transaction and the Fund's basis in the contract. Risks include the
possibility of an illiquid market and that a change in value of the
contracts may not correlate with changes in the value of the securities
being hedged.
G. 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 $2,181,249. 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 $346,584 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 $5,609,953 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 shares paid AIM Distributors
$26,982,803, $4,237,526 and $1,252,867, respectively, as compensation under the
Plans.
AIM Distributors received commissions of $2,511,724 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 $168,593 in contingent deferred
sales charges imposed on redemptions of Fund shares.
13
<PAGE> 16
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
$11,277 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 $116,741 and $45,089, respectively, under expense offset arrangements.
The effect of the above arrangements resulted in a reduction of the Fund's total
expenses of $161,830 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
$9,162,139,810 and $8,802,590,457, 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 $9,046,988,555
----------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (372,597,573)
----------------------------------------------------------
Net unrealized appreciation of investment
securities $8,674,390,982
==========================================================
</TABLE>
Cost of investments for tax purposes is $12,081,336,320.
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 22,091 $ 3,848,894
---------------------------------------------------------------------------------------
Written 87,799 58,345,982
---------------------------------------------------------------------------------------
Closed (69,921) (52,092,932)
---------------------------------------------------------------------------------------
Expired (24,381) (5,507,372)
---------------------------------------------------------------------------------------
End of period 15,588 $ 4,594,572
=======================================================================================
</TABLE>
Open call option contracts written at April 30, 2000 were as follows:
<TABLE>
<CAPTION>
APRIL 30,
CONTRACT STRIKE NUMBER OF PREMIUMS 2000 UNREALIZED
ISSUE MONTH PRICE CONTRACTS RECEIVED MARKET VALUE APPRECIATION
----- -------- ------ --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Enron Corp. May-00 $ 80 3,500 $ 941,713 $ 175,000 $ 766,713
-------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) May-00 130 1,441 276,057 36,025 240,032
-------------------------------------------------------------------------------------------------------------------------
Harley-Davidson, Inc. May-00 50 870 95,262 29,906 65,356
-------------------------------------------------------------------------------------------------------------------------
Medtronic, Inc. May-00 55 9,777 3,281,540 1,252,678 2,028,862
-------------------------------------------------------------------------------------------------------------------------
15,588 $4,594,572 $1,493,609 $3,100,963
=========================================================================================================================
</TABLE>
14
<PAGE> 17
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 47,664,468 $ 2,002,506,950 98,564,141 $ 2,981,238,092
-----------------------------------------------------------------------------------------------------------------------------
Class B 7,573,060 311,546,329 10,942,571 332,728,027
-----------------------------------------------------------------------------------------------------------------------------
Class C 3,208,675 132,258,758 5,133,893 156,450,704
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class 1,895,934 80,440,191 1,596,295 51,100,608
-----------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 34,136,481 1,274,295,386 11,320,463 318,895,308
-----------------------------------------------------------------------------------------------------------------------------
Class B 1,560,323 56,999,170 286,888 7,992,642
-----------------------------------------------------------------------------------------------------------------------------
Class C 430,717 15,725,462 75,962 2,115,494
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class 593,713 23,119,167 170,003 4,957,282
-----------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (50,122,218) (2,074,377,690) (167,354,090) (5,084,014,652)
-----------------------------------------------------------------------------------------------------------------------------
Class B (1,661,443) (68,698,418) (4,443,036) (135,626,852)
-----------------------------------------------------------------------------------------------------------------------------
Class C (569,978) (23,211,249) (3,390,263) (103,057,846)
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class (784,221) (32,676,381) (1,915,980) (60,851,863)
-----------------------------------------------------------------------------------------------------------------------------
43,925,511 $ 1,697,927,675 (49,013,153) $(1,528,073,056)
=============================================================================================================================
</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.
This 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 1999 1998 1997 1996 1995
---------------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 34.65 $ 26.37 $ 29.23 $ 25.48 $ 23.69 $ 18.31
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.13) (0.17) (0.14) (0.11) (0.06) (0.05)
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities
(both realized and unrealized) 11.36 9.18 (0.62) 4.75 2.60 5.95
---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 11.23 9.01 (0.76) 4.64 2.54 5.90
---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized
gains (3.28) (0.73) (2.10) (0.89) (0.75) (0.52)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 42.60 $ 34.65 $ 26.37 $ 29.23 $ 25.48 $ 23.69
=================================================================================================================================
Total return(a) 33.73% 34.81% (2.30)% 18.86% 11.26% 33.43%
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $18,921,516 $14,292,905 $12,391,844 $14,319,441 $11,255,506 $7,000,350
=================================================================================================================================
Ratio of expenses to average net
assets:
With fee waivers 1.07%(b) 1.10% 1.10% 1.11% 1.14% 1.16%
=================================================================================================================================
Without fee waivers 1.09%(b) 1.12% 1.12% 1.13% 1.16% 1.18%
=================================================================================================================================
Ratio of net investment income (loss)
to average net assets (0.66)%(b) (0.50)% (0.47)% (0.40)% (0.27)% (0.32)%
=================================================================================================================================
Portfolio turnover rate 48% 62% 76% 67% 58% 45%
=================================================================================================================================
</TABLE>
(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) Ratios are annualized and based on average net assets of $18,087,373,247.
15
<PAGE> 18
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.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------
NOVEMBER 3,
1997
(DATE SALES
COMMENCED)
SIX MONTHS ENDED YEAR ENDED TO
APRIL 30, OCTOBER 31, OCTOBER 31,
2000(a) 1999 1998(a)
---------------- ----------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period $ 34.00 $ 26.11 $ 30.04
------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.30) (0.42) (0.37)
------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 11.14 9.04 (1.46)
------------------------------------------------------------------------------------------------------------
Total from investment operations 10.84 8.62 (1.83)
------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized gains (3.28) (0.73) (2.10)
------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 41.56 $ 34.00 $ 26.11
============================================================================================================
Total return(b) 33.20% 33.64% (5.86)%
============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,031,286 $589,718 $ 275,676
============================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.89%(c) 1.98% 1.98%(d)
============================================================================================================
Without fee waivers 1.91%(c) 2.00% 2.00%(d)
============================================================================================================
Ratio of net investment income (loss) to average net assets (1.49)%(c) (1.38)% (1.36)%(d)
============================================================================================================
Portfolio turnover rate 48% 62% 76%
============================================================================================================
</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 $852,161,811.
(d) Annualized.
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------------
AUGUST 4,
1997
(DATE SALES
COMMENCED)
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, TO
APRIL 30, -------------------------- OCTOBER 31,
2000(a) 1999 1998(a) 1997
---------------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 33.99 $ 26.10 $ 29.18 $ 30.32
-----------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.30) (0.42) (0.37) (0.04)
-----------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 11.13 9.04 (0.61) (1.10)
-----------------------------------------------------------------------------------------------------------------------------
Total from investment operations 10.83 8.62 (0.98) (1.14)
-----------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized gains (3.28) (0.73) (2.10) --
-----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 41.54 $ 33.99 $ 26.10 $ 29.18
=============================================================================================================================
Total return(b) 33.18% 33.65% (3.12)% (3.76)%
=============================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $324,903 $161,490 $76,522 $ 21,508
=============================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.89%(c) 1.98% 1.97% 1.84%(d)
=============================================================================================================================
Without fee waivers 1.91%(c) 2.00% 1.99% 1.86%(d)
=============================================================================================================================
Ratio of net investment income (loss) to average net assets (1.49)%(c) (1.38)% (1.35)% (1.12)%(d)
=============================================================================================================================
Portfolio turnover rate 48% 62% 76% 67%
=============================================================================================================================
</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 $251,950,134.
(d) Annualized.
16
<PAGE> 19
<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>
<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 since
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund 1976 and managed approximately $176 billion
AIM Capital Development Fund in assets for more than 7.4 million
AIM Constellation Fund(1) INTERNATIONAL GROWTH FUNDS shareholders, including individual
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund investors, corporate clients and financial
AIM Emerging Growth Fund AIM Asian Growth Fund institutions, as of March 31, 2000.
AIM Large Cap Growth Fund AIM Developing Markets Fund The AIM Family of Funds--Registered
AIM Large Cap Opportunities Fund AIM Euroland Growth Fund(5) Trademark--is distributed nationwide, and
AIM Mid Cap Equity Fund AIM European Development Fund AIM today is the eighth-largest mutual fund
AIM Mid Cap Growth Fund AIM International Equity Fund complex in the United States in assets under
AIM Mid Cap Opportunities Fund(2) AIM Japan Growth Fund management, according to Strategic Insight,
AIM Select Growth Fund AIM Latin American Growth Fund an independent mutual fund monitor.
AIM Small Cap Growth Fund(3)
AIM Small Cap Opportunities Fund (4) GLOBAL GROWTH FUNDS
AIM Value Fund AIM Weingarten Fund AIM Global Aggressive Growth Fund
AIM Global Growth Fund
GROWTH & INCOME FUNDS AIM Global Trends Fund(6)
AIM Advisor Flex Fund
AIM Advisor Real Estate Fund GLOBAL GROWTH & INCOME FUNDS
AIM Balanced Fund AIM Global Utilities Fund
AIM Basic Value Fund
AIM Charter Fund GLOBAL INCOME FUNDS
AIM Global Income Fund
INCOME FUNDS AIM Strategic Income Fund
AIM Floating Rate Fund
AIM High Yield Fund THEME FUNDS
AIM High Yield Fund II AIM Global Consumer Products and Services Fund
AIM Income Fund AIM Global Financial Services Fund
AIM Intermediate Government Fund AIM Global Health Care Fund
AIM Limited Maturity Treasury Fund AIM Global Infrastructure Fund
AIM Global Resources Fund
TAX-FREE INCOME FUNDS AIM Global Telecommunications and Technology Fund
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]
[DALBAR LOGO APPEARS HERE] --Registered Trademark--
AIM Distributors, Inc.
INVEST WITH DISCIPLINE
--Registered Trademark--
CST-SAR-1
