<PAGE> 1
SEMIANNUAL REPORT / APRIL 30 2000
AIM CAPITAL DEVELOPMENT FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[ COVER IMAGE ]
-------------------------------------
UNION SQUARE GREENMARKET BY PATTI MOLLICA
SMALL-BUSINESS ENTERPRISES ARE FREQUENTLY FOUND NESTLED
AMONG TALL SKYSCRAPERS HOUSING LARGE MULTINATIONAL CORPORATIONS.
SOME OF THESE SMALLER BUSINESSES EVENTUALLY CARVE OUT
THEIR OWN PARTICULAR NICHES IN THE MARKET AND EXPERIENCE
STRONG EARNINGS GROWTH. THAT'S THE KIND OF COMPANY WE
ENDEAVOR TO OWN IN AIM CAPITAL DEVELOPMENT FUND--SMALL
FIRMS WITH STRONG LONG-TERM GROWTH PROSPECTS.
-------------------------------------
AIM Capital Development Fund is for shareholders who seek long-term growth
through investments in the stocks of small and medium-sized companies.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Capital Development 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 managers' 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, 61.75%;
inception (6/17/96), 23.42%. Class B shares, one year, 64.86%; inception
(10/1/96), 21.96%. Class C shares, one year, 68.84%; inception (8/4/97),
22.01%.
o Investing in smaller 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 Mid-Cap Core Fund Index represents an average of the
performance of the 30 largest mid-cap core 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 the stocks of
small-capitalization companies.
o The unmanaged Russell Midcap Index represents the performance of the stocks
of 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 CAPITAL DEVELOPMENT 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
Charles T. had the idea of creating a mutual fund company that put
Bauer, people first. Our slogan, "people are the product," means
Chairman of that people--our employees and our investors-- are our
the Board of company.
THE FUND Almost a quarter-century later, we've grown to more
APPEARS HERE] than seven million investors, $176 billion in assets under
management and 53 retail funds. Over that time, the industry
[PHOTO OF as a whole has grown from $51 billion in assets to more than
Robert H. Graham $7 trillion today. I never dreamed we would see such
APPEARS HERE] phenomenal growth. You are the main reason for our success,
and I want you to know how much I appreciate your loyalty
and 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 CAPITAL DEVELOPMENT FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
SMALL-, MID-CAP STOCKS LEAD MARKET;
FUND POSTS EXCELLENT RETURNS
MID- AND SMALL-CAP STOCKS RECORDED SOLID GAINS FOR THE REPORTING PERIOD, DESPITE
A LATE DOWNTURN IN THE MARKET. HOW DID AIM CAPITAL DEVELOPMENT FUND PERFORM?
Although several key market indexes fell sharply in April, the fund posted
excellent 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 40.95%,
40.40% and 40.43%, respectively. The fund outperformed the Russell 2000 Index,
the Lipper Mid-Cap Core Fund Index and the Russell Midcap Index, which recorded
gains of 18.72%, 29.70% and 17.38%, respectively, over the same period.
During the six-month reporting period, total net assets in the fund grew
from $1.1 billion to $1.4 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 this 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- and small-cap stocks leading the
charge. But while the Russell 2000 and the Russell Midcap Index posted
double-digit gains, the Dow was up only slightly. Growth stocks outperformed
value stocks by a wide margin.
WAS THE FUND ABLE TO TAKE ADVANTAGE OF THESE MARKET TRENDS?
Yes, because mid-, small- and micro-cap stocks--the market leaders for the
reporting period--made up 91% of the fund's stock portfolio. Investors
gravitated to mid- and small-cap stocks because of their attractive valuations
compared to large-cap stocks and the attractive earnings prospects of small and
mid-sized companies. And while technology stocks were volatile, the fund's heavy
weighting in this sector enhanced performance. Despite
FUND PERFORMANCE
TOTAL RETURNS OF
CLASS A, B & C SHARES VS. INDEXES
10/31/99-4/30/00, excluding sales charges
[BAR CHART]
============================================================================
FUND CLASS A SHARES 40.95%
FUND CLASS B SHARES 40.40%
FUND CLASS C SHARES 40.43%
LIPPER MID-CAP CORE FUND INDEX 29.70%
RUSSELL MIDCAP INDEX 17.38%
============================================================================
============================================================================
RESULTS OF A $10,000 INVESTMENT
CLASS A SHARES VS. INDEXES
6/17/96-4/30/00, including sales charges
(Index performance is from 6/30/96-4/30/00)
[BAR CHART]
FUND CLASS A SHARES $20,302
LIPPER MID-CAP CORE FUND INDEX $19,138
RUSSELL MIDCAP INDEX $19,226
============================================================================
============================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 4/30/00, including sales charges
CLASS A SHARES
Inception (6/17/96) 20.09%
1 Year 44.16*
*52.56% excluding sales charges
CLASS B SHARES
Inception (10/1/96) 18.36%
1 Year 46.38*
*51.38% excluding CDSC
CLASS C SHARES
Inception (8/4/97) 17.40%
1 Year 50.41*
*51.41% excluding CDSC
============================================================================
PAST PERFORMANCE CANNOT GUARANTEE COMPARABLE FUTURE RESULTS. MARKET VOLATILITY
CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN INVESTMENT TODAY
MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE SHOWN.
See important fund and index disclosures inside front cover.
AIM CAPITAL DEVELOPMENT FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 4/30/00, based on total net assets
<TABLE>
<CAPTION>
========================================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Powerwave Technologies, Inc. 1.81% 1. Computers (Software & Services) 9.11%
2. Microchip Technology, Inc. 1.40 2. Electronics (Semiconductor) 6.14
3. Novellus Systems, Inc. 1.35 3. Electronics (Instrumentation) 5.53
4. Varian Semiconductor Equipment Associates, Inc. 1.29 4. Electrical Equipment 4.91
5. Rational Software Corp. 1.26 5. Telecommunications (Cellular/Wireless) 4.16
6. Scientific-Atlanta, Inc. 1.21 6. Oil & Gas (Drilling & Equipment) 4.13
7. Varian Inc. 1.18 7. Communications Equipment 3.49
8. TeleTech Holdings, Inc. 1.16 8. Oil & Gas (Exploration & Production) 3.46
9. Methode Electronic, Inc.-Class A 1.12 9. Broadcasting (Television, Radio & Cable) 3.11
10. Flextronics International Ltd. (Singapore) 1.11 10. Retail (Specialty) 3.05
The fund's portfolio composition is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
========================================================================================================================
</TABLE>
weakness in March and April, tech stocks still significantly outperformed other
issues for the six-month reporting period. We also took advantage of April's
market sell-off to buy the stocks of quality companies at reduced prices.
HOW WAS THE FUND POSITIONED?
At the end of the reporting period, the fund had 157 equity holdings, down from
206 six months ago. Fewer holdings make it easier to monitor the business
fundamentals of companies in the portfolio. Over the reporting period, the
strong performance of technology stocks caused their weighting in the portfolio
to increase from 26% to 39%. Over the same period, the fund's exposure to
consumer-cyclical stocks decreased from 18% to less than 11% of the portfolio.
The fund's heavy weighting in the technology sector was a result of our
stock-selection criteria, which are based on earnings growth prospects and not
macro-economic predictions. We also seek stocks that are reasonably priced. 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.
CAN YOU NAME A FEW OF THE TECH STOCKS IN THE PORTFOLIO?
Tech stocks that we liked included Powerwave Technologies, the fund's largest
holding. Powerwave Technologies makes radio-frequency power amplifiers that
boost signal strength and reduce transmission interference in the base stations
of cellular and personal communications-service networks. Microchip Technology,
the fund's second-largest holding, makes low-cost embedded control products for
the automotive, consumer, communications, industrial and office automation
markets. Novellus Systems, our third-largest holding, makes semiconductor
production equipment, including systems that layer insulating material on
semiconductor wafers.
Other tech stocks in the portfolio included Varian Semiconductor Equipment,
the world's leading maker of systems that beam ions at semiconductor wafers to
alter their conductivity in certain areas; Rational Software, a
software-engineering tools firm; and Scientific-Atlanta, a leading maker of
set-top boxes for receiving cable-television programming.
WHAT OTHER STOCKS PERFORMED WELL FOR THE FUND?
TeleTech Holdings provides customer and product support for telecommunications,
technology, health-care, transportation and financial-service companies, while
Cooper Cameron makes and services equipment 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 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, particularly mid- and small-cap issues
because of their attractive valuations.
MERGERS, ACQUISITIONS AND "GRADUATES" SCOREBOARD
Corporations represented among the fund's holdings continued to be the targets
of mergers and acquisitions, underscoring the attractiveness of these firms.
During the reporting period, 11 companies in the portfolio were involved in
acquisitions or mergers. Since the fund's inception on June 17, 1996, through
the end of the latest reporting period, 145 companies in the portfolio have been
acquired by or merged with other firms.
We also sold companies' stocks when their market valuation reached a point
where they could no longer be considered small- or mid-cap stocks. During the
six-month reporting period, there were nine "graduates" from the fund.
See important fund and index disclosures inside front cover.
AIM CAPITAL DEVELOPMENT 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.
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:
(wheel graphic)
============================================================================
AGE
RISK
SIZE
VOLATILITY
MANAGEMENT
EXPENSES
TAX EFFICIENCY
Source: The Wall Street Journal, 1/25/00
============================================================================
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 "bad" year or that fund managers chose
AIM CAPITAL DEVELOPMENT FUND
4
<PAGE> 7
SEMIANNUAL REPORT / FOR CONSIDERATION
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.
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.
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
============================================================================
AIM CAPITAL DEVELOPMENT FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
April 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY
INTERESTS-90.83%
AEROSPACE/DEFENSE-0.10%
HEICO Corp.-Class A 100,000 $ 1,400,000
---------------------------------------------------------------
AIRLINES-0.57%
Ryanair Holdings PLC-ADR
(Ireland)(a) 200,000 8,150,000
---------------------------------------------------------------
BANKS (REGIONAL)-1.09%
Bank United Corp.-Class A 119,000 3,949,312
---------------------------------------------------------------
North Fork Bancorporation, Inc. 446,400 7,226,100
---------------------------------------------------------------
UCBH Holdings, Inc. 200,000 4,450,000
---------------------------------------------------------------
15,625,412
---------------------------------------------------------------
BEVERAGES (ALCOHOLIC)-0.43%
Canandaigua Brands, Inc.-Class
A(a) 121,800 6,135,675
---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-3.11%
Citadel Communications Corp.(a) 129,400 5,054,687
---------------------------------------------------------------
Cox Radio, Inc.-Class A(a) 100,000 7,250,000
---------------------------------------------------------------
Emmis Broadcasting Corp.-Class
A(a) 298,700 12,694,750
---------------------------------------------------------------
Entercom Communications Corp.(a) 134,800 5,729,000
---------------------------------------------------------------
Hispanic Broadcasting Corp.(a) 60,000 6,063,750
---------------------------------------------------------------
Insight Communications Company,
Inc.(a) 316,300 6,444,612
---------------------------------------------------------------
Interep National Radio Sales,
Inc.(a)(b) 250,000 1,437,500
---------------------------------------------------------------
44,674,299
---------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.82%
NOVA Chemicals Corp.(a) 373,000 11,796,125
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-3.49%
ADTRAN, Inc.(a) 89,600 6,053,600
---------------------------------------------------------------
Davox Corp.(a) 349,700 8,917,350
---------------------------------------------------------------
Gilat Satellite Networks Ltd.
(Israel)(a) 107,400 9,222,975
---------------------------------------------------------------
NorthEast Optic Network, Inc.(a) 91,100 5,101,600
---------------------------------------------------------------
Osicom Technologies, Inc.(a) 65,600 3,411,200
---------------------------------------------------------------
Scientific-Atlanta, Inc. 266,000 17,306,625
---------------------------------------------------------------
50,013,350
---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.63%
QLogic Corp.(a) 106,000 10,633,125
---------------------------------------------------------------
SanDisk Corp.(a) 140,000 12,827,500
---------------------------------------------------------------
23,460,625
---------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-9.11%
Dendrite International, Inc.(a) 167,700 3,836,137
---------------------------------------------------------------
Documentum, Inc.(a) 125,000 7,375,000
---------------------------------------------------------------
Hyperion Solutions Corp.(a) 195,000 5,913,984
---------------------------------------------------------------
InfoCure Corp.(a) 236,200 2,155,325
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
IntraNet Solutions, Inc.(a) 305,900 $ 6,806,275
---------------------------------------------------------------
Intuit Inc.(a) 200,000 7,187,500
---------------------------------------------------------------
Mercury Interactive Corp.(a) 149,000 13,410,000
---------------------------------------------------------------
Moldflow Corp.(a) 174,600 3,230,100
---------------------------------------------------------------
MSI Holdings, Inc.(a)(c) 824,712 11,174,848
---------------------------------------------------------------
MTI Technology Corp.(a) 100,000 1,550,000
---------------------------------------------------------------
Navidec, Inc.(a) 225,000 1,898,437
---------------------------------------------------------------
Nucentrix Broadband Networks,
Inc.(a) 150,000 3,740,625
---------------------------------------------------------------
Peregrine Systems, Inc.(a) 181,000 4,355,312
---------------------------------------------------------------
Radiant Systems, Inc.(a) 115,150 2,144,669
---------------------------------------------------------------
Rational Software Corp.(a) 212,500 18,089,062
---------------------------------------------------------------
Secure Computing Corp.(a) 500,000 6,218,750
---------------------------------------------------------------
Symantec Corp.(a) 241,500 15,078,656
---------------------------------------------------------------
Telescan, Inc.(a) 200,000 1,975,000
---------------------------------------------------------------
Titan Corp. (The)(a) 243,100 10,438,106
---------------------------------------------------------------
Trizetto Group, Inc. (The)(a) 195,100 4,145,875
---------------------------------------------------------------
130,723,661
---------------------------------------------------------------
CONSUMER FINANCE-1.62%
American Capital Strategies, Ltd. 449,400 10,897,950
---------------------------------------------------------------
AmeriCredit Corp.(a) 659,500 12,324,406
---------------------------------------------------------------
23,222,356
---------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-1.33%
Performance Food Group Co.(a) 125,000 3,296,875
---------------------------------------------------------------
SUPERVALU, Inc. 766,100 15,848,694
---------------------------------------------------------------
19,145,569
---------------------------------------------------------------
ELECTRICAL EQUIPMENT-4.91%
American Power Conversion Corp.(a) 285,000 10,064,062
---------------------------------------------------------------
Cohu, Inc. 254,700 9,694,519
---------------------------------------------------------------
CommScope, Inc.(a) 175,000 8,312,500
---------------------------------------------------------------
Cree Research, Inc.(a) 96,400 14,026,200
---------------------------------------------------------------
Pinnacle Systems, Inc.(a) 410,000 9,840,000
---------------------------------------------------------------
Sensormatic Electronics Corp.(a) 500,000 8,343,750
---------------------------------------------------------------
Veeco Instruments Inc.(a) 163,800 10,176,075
---------------------------------------------------------------
70,457,106
---------------------------------------------------------------
ELECTRONICS (COMPONENT
DISTRIBUTORS)-1.72%
C-COR.net Corp.(a) 280,000 10,955,000
---------------------------------------------------------------
Power-One, Inc.(a) 201,300 13,738,725
---------------------------------------------------------------
24,693,725
---------------------------------------------------------------
ELECTRONICS (DEFENSE)-0.88%
Aeroflex, Inc.(a) 338,100 12,594,225
---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRONICS
(INSTRUMENTATION)-5.53%
Alpha Industries, Inc.(a) 280,600 $ 14,591,200
---------------------------------------------------------------
Methode Electronics, Inc.-Class A 384,500 16,022,836
---------------------------------------------------------------
Tektronix, Inc. 230,000 13,311,250
---------------------------------------------------------------
Varian Inc.(a) 464,000 16,878,000
---------------------------------------------------------------
Varian Semiconductor Equipment
Associates, Inc.(a) 275,000 18,493,750
---------------------------------------------------------------
79,297,036
---------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-6.14%
American Xtal Technology, Inc.(a) 75,000 1,829,297
---------------------------------------------------------------
Amkor Technology, Inc.(a) 252,900 15,474,319
---------------------------------------------------------------
Celestica Inc. (Canada)(a) 212,700 11,605,444
---------------------------------------------------------------
Fairchild Semiconductor Corp.(a) 206,800 9,823,000
---------------------------------------------------------------
Micrel, Inc.(a) 76,000 6,574,000
---------------------------------------------------------------
Microchip Technology, Inc.(a) 322,650 20,024,466
---------------------------------------------------------------
QuickLogic Corp.(a) 308,100 9,050,437
---------------------------------------------------------------
Xicor, Inc.(a) 347,000 6,202,625
---------------------------------------------------------------
Zoran Corp.(a) 150,000 7,490,625
---------------------------------------------------------------
88,074,213
---------------------------------------------------------------
ENTERTAINMENT-0.28%
ValueVision International,
Inc.-Class A(a) 200,000 3,987,500
---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-1.35%
Novellus Systems, Inc.(a) 289,900 19,332,706
---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-0.42%
SEI Investments Co. 50,000 5,968,750
---------------------------------------------------------------
FOODS-0.48%
American Italian Pasta Co.-Class
A(a) 277,700 6,873,075
---------------------------------------------------------------
GOLD & PRECIOUS METALS
MINING-0.29%
Stillwater Mining Co.(a) 150,000 4,200,000
---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.29%
Alpharma, Inc.-Class A 180,000 6,952,500
---------------------------------------------------------------
Jones Pharma, Inc. 402,000 11,582,625
---------------------------------------------------------------
18,535,125
---------------------------------------------------------------
HEALTH CARE (HOSPITAL
MANAGEMENT)-0.72%
LifePoint Hospitals, Inc.(a) 600,000 10,275,000
---------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-1.47%
Oxford Health Plans, Inc.(a) 500,000 9,500,000
---------------------------------------------------------------
Trigon Healthcare, Inc.(a) 323,100 11,611,406
---------------------------------------------------------------
21,111,406
---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.69%
Edwards Lifesciences Corp.(a) 700,000 10,500,000
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-(CONTINUED)
PolyMedica Corp.(a) 256,100 $ 13,749,369
---------------------------------------------------------------
24,249,369
---------------------------------------------------------------
HEALTH CARE (SPECIALIZED
SERVICES)-1.10%
Hooper Holmes, Inc. 231,400 4,020,575
---------------------------------------------------------------
MAXIMUS, Inc.(a) 230,300 5,426,444
---------------------------------------------------------------
Orthodontic Centers of America,
Inc.(a) 300,000 6,356,250
---------------------------------------------------------------
15,803,269
---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-1.12%
Annuity and Life Reassurance, Ltd.
(Bermuda) 254,300 5,499,237
---------------------------------------------------------------
Clarica Life Insurance Co.
(Canada) 337,900 6,641,601
---------------------------------------------------------------
Nationwide Financial Services,
Inc.-Class A 140,000 3,902,500
---------------------------------------------------------------
16,043,338
---------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-0.38%
Radian Group Inc. 106,660 5,432,994
---------------------------------------------------------------
INSURANCE BROKERS-0.75%
Aon Corp. 400,000 10,825,000
---------------------------------------------------------------
INVESTMENT MANAGEMENT-0.63%
Affiliated Managers Group, Inc.(a) 225,000 9,028,125
---------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.80%
Applied Power, Inc.-Class A 402,000 11,507,250
---------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-0.73%
Spartech Corp. 150,000 5,212,500
---------------------------------------------------------------
Uniroyal Technology Corp.(a) 249,400 5,237,400
---------------------------------------------------------------
10,449,900
---------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-1.87%
Alpine Group, Inc. (The)(a) 386,900 3,143,562
---------------------------------------------------------------
Flextronics International Ltd.
(Singapore)(a) 225,972 15,874,533
---------------------------------------------------------------
Mettler-Toledo International,
Inc.(a) 227,000 7,831,500
---------------------------------------------------------------
26,849,595
---------------------------------------------------------------
NATURAL GAS-0.44%
Kinder Morgan, Inc. 210,000 6,365,625
---------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-1.09%
Reynolds & Reynolds Co.-Class A 400,000 9,500,000
---------------------------------------------------------------
School Specialty, Inc.(a) 328,000 6,109,000
---------------------------------------------------------------
15,609,000
---------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-4.13%
Baker Hughes Inc. 235,000 7,475,937
---------------------------------------------------------------
BJ Services Co.(a) 198,000 13,909,500
---------------------------------------------------------------
Cooper Cameron Corp.(a) 173,800 13,035,000
---------------------------------------------------------------
Key Energy Services, Inc.(a) 1,400,000 13,650,000
---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL & GAS (DRILLING & EQUIPMENT)-(CONTINUED)
Pride International, Inc.(a) 495,900 $ 11,219,737
---------------------------------------------------------------
59,290,174
---------------------------------------------------------------
OIL & GAS (EXPLORATION &
PRODUCTION)-3.46%
Burlington Resources, Inc. 244,800 9,623,700
---------------------------------------------------------------
Chieftain International, Inc.(a) 250,000 4,750,000
---------------------------------------------------------------
Devon Energy Corp. 30,000 1,445,625
---------------------------------------------------------------
EOG Resources, Inc. 355,000 8,830,625
---------------------------------------------------------------
Kerr-McGee Corp.-$1.83 Pfd. DECS 180,000 8,066,250
---------------------------------------------------------------
Nuevo Energy Co.(a) 300,000 5,250,000
---------------------------------------------------------------
Spinnaker Exploration Co.(a) 500,000 11,625,000
---------------------------------------------------------------
49,591,200
---------------------------------------------------------------
PUBLISHING-0.27%
Ziff-Davis, Inc.(a) 400,000 3,925,000
---------------------------------------------------------------
REAL ESTATE INVESTMENT
TRUSTS-0.48%
Apartment Investment & Management
Co. 171,790 6,828,652
---------------------------------------------------------------
RESTAURANTS-0.63%
CEC Entertainment, Inc.(a) 302,500 9,075,000
---------------------------------------------------------------
RETAIL (COMPUTERS &
ELECTRONICS)-0.37%
InterTAN, Inc.(a) 383,500 5,297,094
---------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.94%
BJ's Wholesale Club, Inc.(a) 286,500 10,152,844
---------------------------------------------------------------
Wild Oats Markets, Inc.(a) 250,000 3,312,500
---------------------------------------------------------------
13,465,344
---------------------------------------------------------------
RETAIL (SPECIALTY)-3.05%
Linens 'n Things, Inc.(a) 110,300 3,405,513
---------------------------------------------------------------
Michaels Stores, Inc.(a) 247,000 9,741,063
---------------------------------------------------------------
Rent-A-Center, Inc.(a) 212,000 4,319,500
---------------------------------------------------------------
Rent-Way, Inc.(a) 287,190 7,448,991
---------------------------------------------------------------
Venator Group, Inc.(a) 620,000 7,362,500
---------------------------------------------------------------
Zale Corp.(a) 279,400 11,525,250
---------------------------------------------------------------
43,802,817
---------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-0.52%
Too Inc.(a) 250,000 7,484,375
---------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.73%
Dime Bancorp, Inc. 410,000 7,687,500
---------------------------------------------------------------
Local Financial Corp.(a) 350,000 2,821,875
---------------------------------------------------------------
10,509,375
---------------------------------------------------------------
SERVICES
(ADVERTISING/MARKETING)-2.93%
Forrester Research, Inc.(a) 106,800 4,839,375
---------------------------------------------------------------
Lamar Advertising Co.(a) 145,000 6,389,063
---------------------------------------------------------------
TeleTech Holdings, Inc.(a) 510,000 16,638,750
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SERVICES (ADVERTISING/MARKETING)-(CONTINUED)
Young & Rubicam Inc. 253,500 $ 14,116,781
---------------------------------------------------------------
41,983,969
---------------------------------------------------------------
SERVICES (COMMERCIAL &
CONSUMER)-2.39%
Copart, Inc.(a) 400,000 6,900,000
---------------------------------------------------------------
F.Y.I., Inc.(a) 50,000 1,340,625
---------------------------------------------------------------
Iron Mountain Inc.(a) 250,000 8,750,000
---------------------------------------------------------------
Quanta Services, Inc.(a) 295,500 13,722,281
---------------------------------------------------------------
Regis Corp. 312,700 3,654,681
---------------------------------------------------------------
34,367,587
---------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-1.90%
Insight Enterprises, Inc.(a) 145,700 6,092,081
---------------------------------------------------------------
Safeguard Scientifics, Inc.(a) 59,500 2,484,125
---------------------------------------------------------------
SunGard Data Systems, Inc.(a) 305,000 10,541,563
---------------------------------------------------------------
Sykes Enterprises, Inc.(a) 410,000 8,200,000
---------------------------------------------------------------
27,317,769
---------------------------------------------------------------
SERVICES (DATA PROCESSING)-1.74%
BISYS Group, Inc. (The)(a) 157,000 9,822,313
---------------------------------------------------------------
Concord EFS, Inc.(a) 265,000 5,929,375
---------------------------------------------------------------
CSG Systems International, Inc.(a) 199,600 9,206,550
---------------------------------------------------------------
24,958,238
---------------------------------------------------------------
SERVICES (EMPLOYMENT)-1.28%
Heidrick & Struggles
International, Inc.(a) 288,000 10,368,000
---------------------------------------------------------------
Korn/Ferry International(a) 300,000 7,950,000
---------------------------------------------------------------
18,318,000
---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-4.16%
Arch Communications, Inc.(a) 1,665,000 12,383,438
---------------------------------------------------------------
Nextel Partners, Inc.-Class A(a) 199,700 4,380,919
---------------------------------------------------------------
Powerwave Technologies, Inc.(a) 125,000 26,007,813
---------------------------------------------------------------
Rural Cellular Corp.-Class A(a) 120,000 8,872,500
---------------------------------------------------------------
Western Wireless Corp.-Class A(a) 160,900 7,994,719
---------------------------------------------------------------
59,639,389
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-1.31%
CapRock Communications Corp.(a) 249,700 8,364,950
---------------------------------------------------------------
ITC DeltaCom, Inc.(a) 265,000 8,711,875
---------------------------------------------------------------
NetAmerica.com Corp.(a)(c) 164,600 1,759,164
---------------------------------------------------------------
NetAmerica.com Corp.-Wts.,
expiring 03/21/03(d)(c) 82,300 0
---------------------------------------------------------------
18,835,989
---------------------------------------------------------------
TELEPHONE-0.97%
Broadwing Inc.(a) 492,200 13,935,413
---------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TEXTILES (SPECIALTY)-0.04%
Polymer Group, Inc. 48,600 $ 564,975
---------------------------------------------------------------
WASTE MANAGEMENT-0.15%
Catalytica, Inc.(a) 200,000 2,225,000
---------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$833,319,513) 1,303,325,764
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MONEY MARKET FUNDS-8.11%
STIC Liquid Assets Portfolio(e) 58,183,521 $ 58,183,521
---------------------------------------------------------------
STIC Prime Portfolio(e) 58,183,521 58,183,521
---------------------------------------------------------------
Total Money Market Funds (Cost
$116,367,042) 116,367,042
---------------------------------------------------------------
TOTAL INVESTMENTS-98.94% (Cost
$949,686,555) 1,419,692,806
---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-1.06% 15,174,752
---------------------------------------------------------------
NET ASSETS-100.00% $1,434,867,558
===============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
DECS - Dividend Enhanced Convertible Stock
Pfd. - Preferred
Wts. - Warrants
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 market value as of 04/30/00 represented 0.10% of the Fund's net
assets.
(c) Security fair valued in accordance with the procedures established by the
Board of Directors.
(d) Non-income producing security acquired as part of a unit with or in exchange
for other securities.
(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
$949,686,555) $1,419,692,806
-------------------------------------------------------------
Receivables for:
-------------------------------------------------------------
Investments sold 21,126,656
-------------------------------------------------------------
Capital stock sold 1,944,945
-------------------------------------------------------------
Dividends 794,176
-------------------------------------------------------------
Investment for deferred compensation plan 26,011
-------------------------------------------------------------
Other assets 42,718
-------------------------------------------------------------
Total assets 1,443,627,312
-------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 4,794,802
-------------------------------------------------------------
Capital stock reacquired 1,629,675
-------------------------------------------------------------
Deferred compensation plan 26,011
-------------------------------------------------------------
Accrued advisory fees 767,608
-------------------------------------------------------------
Accrued administrative services fees 12,109
-------------------------------------------------------------
Accrued distribution fees 997,822
-------------------------------------------------------------
Accrued directors' fees 4,605
-------------------------------------------------------------
Accrued transfer agent fees 396,130
-------------------------------------------------------------
Accrued operating expenses 130,992
-------------------------------------------------------------
Total liabilities 8,759,754
-------------------------------------------------------------
Net assets applicable to shares outstanding $1,434,867,558
=============================================================
NET ASSETS:
Class A $ 752,516,815
=============================================================
Class B $ 606,271,124
=============================================================
Class C $ 76,079,619
=============================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 750,000,000
-------------------------------------------------------------
Outstanding 35,039,945
=============================================================
Class B:
Authorized 750,000,000
-------------------------------------------------------------
Outstanding 28,977,421
=============================================================
Class C:
Authorized 750,000,000
-------------------------------------------------------------
Outstanding 3,638,455
=============================================================
Class A:
Net asset value and redemption price per
share $ 21.48
-------------------------------------------------------------
Offering price per share:
(Net asset value of $21.48 divided by
94.50%) $ 22.73
=============================================================
Class B:
Net asset value and offering price per share $ 20.92
=============================================================
Class C:
Net asset value and offering price per
share $ 20.91
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 2000
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
$10,419) $ 3,819,311
------------------------------------------------------------
Interest 1,540
=============================================================
Total investment income 3,820,851
=============================================================
EXPENSES:
Advisory fees 4,453,291
------------------------------------------------------------
Administrative services fee 72,663
------------------------------------------------------------
Custodian fees 74,821
------------------------------------------------------------
Distribution fees-Class A 1,254,488
------------------------------------------------------------
Distribution fees-Class B 2,841,881
------------------------------------------------------------
Distribution fees-Class C 341,977
------------------------------------------------------------
Transfer agent fees-Class A 754,869
------------------------------------------------------------
Transfer agent fees-Class B 897,266
------------------------------------------------------------
Transfer agent fees-Class C 107,973
------------------------------------------------------------
Directors' fees 3,462
------------------------------------------------------------
Other 270,778
-------------------------------------------------------------
Total expenses 11,073,469
-------------------------------------------------------------
Less: Expenses paid indirectly (13,507)
-------------------------------------------------------------
Net expenses 11,059,962
-------------------------------------------------------------
Net investment income (loss) (7,239,111)
------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT
SECURITIES, FOREIGN CURRENCIES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 183,920,564
------------------------------------------------------------
Foreign currencies (470)
------------------------------------------------------------
Option contracts written 460,773
------------------------------------------------------------
184,380,867
------------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 249,023,040
------------------------------------------------------------
Option contracts written (367,311)
------------------------------------------------------------
248,655,729
------------------------------------------------------------
Net gain on investment securities, foreign
currencies and option contracts 433,036,596
------------------------------------------------------------
Net increase in net assets resulting from
operations $425,797,485
=============================================================
</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) $ (7,239,111) $ (12,672,297)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 184,380,867 68,321,156
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and option contracts 248,655,729 143,019,774
----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 425,797,485 198,668,633
----------------------------------------------------------------------------------------------
Share transactions-net:
Class A (55,044,960) (251,714,847)
----------------------------------------------------------------------------------------------
Class B (22,142,182) (119,088,321)
----------------------------------------------------------------------------------------------
Class C 1,403,017 (2,560,814)
----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 350,013,360 (174,695,349)
----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,084,854,198 1,259,549,547
----------------------------------------------------------------------------------------------
End of period $1,434,867,558 $1,084,854,198
==============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $ 798,328,693 $ 874,112,818
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (7,068,598) 170,513
----------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies and option contracts 173,601,212 (10,779,655)
----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 470,006,251 221,350,522
----------------------------------------------------------------------------------------------
$1,434,867,558 $1,084,854,198
==============================================================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
April 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Capital Development 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 three different classes of shares: Class A
shares, Class B shares and Class C shares. 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 long-term 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.
The Fund has a capital loss carryforward of $8,826,774 which may be carried
forward to offset future taxable gains, if any, which expires, if not
previously utilized, in the year 2006.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for that portion of the results of operations
resulting from changes in foreign exchange rates on investments and the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
12
<PAGE> 15
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
G. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. The exercise price of a call option may be below, equal to,
or above the current market value of the underlying security at the time the
option is written. When the Fund writes a covered call option, an amount
equal to the premium received by the Fund is recorded as an asset and an
equivalent liability. The amount of the liability is subsequently
"marked-to-market" to reflect the current market value of the option written.
The current market value of a written option is the mean between the last bid
and asked prices on that day. If a written call option expires on the
stipulated expiration date, or if the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or a loss if the closing purchase
transaction exceeds the premium received when the option was written) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. If a written option is
exercised, the Fund realizes a gain or a loss from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written.
H. 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 advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.75% of
the first $350 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $350 million.
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 $72,663 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 $954,557 for such services.
The Company has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Company has adopted 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
0.35% 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
$1,254,488, $2,841,881 and $341,977, respectively, as compensation under the
Plans.
AIM Distributors received commissions of $156,412 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 $18,575 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and directors of the Company are officers and directors of
AIM, AFS and AIM Distributors.
During the six months ended April 30, 2000, the Fund paid legal fees of
$1,847 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.
13
<PAGE> 16
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 $8,264 and $5,243, respectively, under expense offset arrangements. The
effect of the above arrangements resulted in a reduction of the Fund's total
expenses of $13,507 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
$585,573,725 and $761,364,623, 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 $514,415,191
---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (45,056,239)
---------------------------------------------------------
Net unrealized appreciation of investment
securities $469,358,952
=========================================================
Cost of investments for tax purposes is $950,333,854.
</TABLE>
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 4,982 $ 1,725,877
----------------------------------------------------------
Written 1,088 302,106
----------------------------------------------------------
Closed (4,982) (1,725,877)
----------------------------------------------------------
Expired (1,088) (302,106)
----------------------------------------------------------
End of period -- --
==========================================================
</TABLE>
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 2,587,844 $ 54,315,842 25,404,762 $ 358,048,933
-------------------------------------------------------------------------------------------------------------------------
Class B 2,234,120 44,551,857 7,763,785 107,015,784
-------------------------------------------------------------------------------------------------------------------------
Class C 575,793 11,539,189 2,461,885 34,429,174
-------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (5,586,213) (109,360,802) (43,024,621) (609,763,780)
-------------------------------------------------------------------------------------------------------------------------
Class B (3,564,154) (66,694,039) (16,362,323) (226,104,105)
-------------------------------------------------------------------------------------------------------------------------
Class C (552,877) (10,136,172) (2,650,984) (36,989,988)
-------------------------------------------------------------------------------------------------------------------------
(4,305,487) $ (75,784,125) (26,407,496) $(373,363,982)
=========================================================================================================================
</TABLE>
14
<PAGE> 17
NOTE 9-FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment, ratios and supplemental data. This
information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------
JUNE 17, 1996
(DATE OPERATIONS
YEAR ENDED OCTOBER 31, COMMENCED)
SIX MONTHS ENDED ------------------------------- TO OCTOBER 31,
APRIL 30, 2000 1999(a) 1998(a) 1997(a) 1996(a)
---------------- -------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.24 $ 12.89 $ 14.57 $ 11.09 $ 10.00
------------------------------------------------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (0.07) (0.10) (0.06) (0.10) (0.01)
------------------------------------------------- -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized
and unrealized) 6.31 2.45 (1.62) 3.58 1.10
------------------------------------------------- -------- -------- -------- -------- --------
Total from investment operations 6.24 2.35 (1.68) 3.48 1.09
------------------------------------------------- -------- -------- -------- -------- --------
Net asset value, end of period $ 21.48 $ 15.24 $ 12.89 $ 14.57 $ 11.09
================================================= ======== ======== ======== ======== ========
Total return(b) 40.95% 18.23% (11.53)% 31.38% 10.90%
================================================= ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $752,517 $579,514 $717,263 $577,685 $251,253
================================================= ======== ======== ======== ======== ========
Ratio of expenses to average net assets:
With fee waivers 1.28%(c) 1.38% 1.28% 1.33% 1.35%(d)
------------------------------------------------- -------- -------- -------- -------- --------
Without fee waivers 1.28%(c) 1.38% 1.28% 1.38% 1.60%(d)
================================================= ======== ======== ======== ======== ========
Ratio of net investment income (loss) to average
net assets (0.71)%(c) (0.70)% (0.40)% (0.83)% (0.29)%(d)
================================================= ======== ======== ======== ======== ========
Portfolio turnover rate 46% 117% 78% 41% 13%
================================================= ======== ======== ======== ======== ========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average net assets of $720,789,266.
(d) Annualized.
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------
OCTOBER 1, 1996
(DATE SALES
YEAR ENDED OCTOBER 31, COMMENCED)
SIX MONTHS ENDED -------------------------------- TO OCTOBER 31,
APRIL 30, 2000 1999(a) 1998(a) 1997(a) 1996(a)
---------------- -------- -------- -------- ---------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.90 $ 12.70 $ 14.46 $ 11.08 $ 11.26
----------------------------------------------- -------- -------- -------- -------- -------
Income from investment operations:
Net investment income (loss) (0.14) (0.20) (0.16) (0.20) (0.01)
----------------------------------------------- -------- -------- -------- -------- -------
Net gains (losses) on securities (both
realized and unrealized) 6.16 2.40 (1.60) 3.58 (0.17)
=============================================== ======== ======== ======== ======== =======
Total from investment operations 6.02 2.20 (1.76) 3.38 (0.18)
=============================================== ======== ======== ======== ======== =======
Net asset value, end of period $ 20.92 $ 14.90 $ 12.70 $ 14.46 $ 11.08
=============================================== ======== ======== ======== ======== =======
Total return(b) 40.40% 17.23% (12.17)% 30.51% (1.60)%
=============================================== ======== ======== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $606,271 $451,508 $493,993 $297,623 $22,435
=============================================== ======== ======== ======== ======== =======
Ratio of expenses to average net assets:
With fee waivers 2.04%(c) 2.12% 2.02% 2.09% 1.89%(d)
----------------------------------------------- -------- -------- -------- -------- -------
Without fee waivers 2.04%(c) 2.12% 2.02% 2.14% 2.28%(d)
=============================================== ======== ======== ======== ======== =======
Ratio of net investment income (loss) to
average net assets (1.47)%(c) (1.44)% (1.14)% (0.16)% (0.83)%(d)
=============================================== ======== ======== ======== ======== =======
Portfolio turnover rate 46% 117% 78% 41% 13%
=============================================== ======== ======== ======== ======== =======
</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 $571,499,111.
(d) Annualized.
15
<PAGE> 18
NOTE 9-FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS C
-----------------------------------------------------------
AUGUST 4, 1997
YEAR ENDED (DATE SALES
OCTOBER 31, 1997 COMMENCED)
SIX MONTHS ENDED ------------------ TO OCTOBER 24,
APRIL 30, 2000 1999(a) 1998(a) 1997(a)
---------------- ------- -------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.89 $12.69 $ 14.45 $ 13.48
------------------------------------------------------ ------- ------ ------- -------
Income from investment operations:
Net investment income (loss) (0.14) (0.20) (0.16) (0.06)
------------------------------------------------------ ------- ------ ------- -------
Net gains (losses) on securities (both realized and
unrealized) 6.16 2.40 (1.60) 1.03
------------------------------------------------------ ------- ------ ------- -------
Total from investment operations 6.02 2.20 (1.76) 0.97
------------------------------------------------------ ------- ------ ------- -------
Net asset value, end of period $ 20.91 $14.89 $ 12.69 $ 14.45
====================================================== ======= ====== ======= =======
Total return(b) 40.43% 17.34% (12.18)% 7.20%
====================================================== ======= ====== ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $76,080 $53,832 $48,293 $12,195
====================================================== ======= ====== ======= =======
Ratio of expenses to average net assets:
With fee waivers 2.04%(c) 2.12% 2.02% 2.14%(d)
------------------------------------------------------ ------- ------ ------- -------
Without fee waivers 2.04%(c) 2.12% 2.02% 2.19%(d)
====================================================== ======= ====== ======= =======
Ratio of net investment income (loss) to average net
assets (1.47)%(c) (1.44)% (1.14)% (1.64)%(d)
====================================================== ======= ====== ======= =======
Portfolio turnover rate 46% 117% 78% 41%
====================================================== ======= ====== ======= =======
</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 $68,771,141.
(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 TRANSFER AGENT
Director Edgar M. Larsen
Cortland Trust Inc. Senior Vice President A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn Jr. Dana R. Sutton Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President and Treasurer
Formerly Vice Chairman and President, CUSTODIAN
Mercantile-Safe Deposit & Trust Co.; and Melville B. Cox
President, Mercantile Bankshares Vice President State Street Bank and Trust Company
225 Franklin Street
Jack Fields Mary J. Benson Boston, MA 02110
Chief Executive Officer Assistant Vice Preside
Texana Global, Inc.; Assistant Treasurer COUNSEL TO THE FUND
Formerly Member
of the U.S. House of Representatives Sheri Morris Ballard Spahr
Assistant Vice President Andrews & Ingersoll, LLP
Carl Frischling Assistant Treasurer 1735 Market Street
Partner Philadelphia, PA 19103
Kramer, Levin, Naftalis & Frankel LLP Renee A. Friedli
Assistant Secretary COUNSEL TO THE DIRECTORS
Robert H. Graham
President and Chief Executive Officer P. Michelle Grace Kramer, Levin, Naftalis & Frankel LLP
A I M Management Group Inc. Assistant Secretary 919 Third Avenue
New York, NY 10022
Prema Mathai-Davis Nancy L. Martin
Chief Executive Officer, YWCA of the U.S.A. Assistant Secretary DISTRIBUTOR
Lewis F. Pennock Ofelia M. Mayo A I M Distributors, Inc.
Attorney Assistant Secretary 11 Greenway Plaza
Suite 100
Louis S. Sklar Lisa A. Moss Houston, TX 77046
Executive Vice President Assistant Secretary
Hines Interests
Limited Partnership Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
</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 1976
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund and managed approximately $176 billion in assets
AIM Capital Development Fund for more than 7.4 million shareholders, including
AIM Constellation Fund(1) INTERNATIONAL GROWTH FUNDS individual investors, corporate clients and
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund financial institutions, as of March 31, 2000.
AIM Emerging Growth Fund AIM Asian Growth Fund The AIM Family of Funds--Registered Trademark--
AIM Large Cap Growth Fund AIM Developing Markets Fund is distributed nationwide, and AIM today is the
AIM Large Cap Opportunities Fund AIM Euroland Growth Fund(5) eighth-largest mutual fund complex in the United
AIM Mid Cap Equity Fund AIM European Development Fund States in assets under management, according to
AIM Mid Cap Growth Fund AIM International Equity Fund Strategic Insight, an independent mutual fund
AIM Mid Cap Opportunities Fund(2) AIM Japan Growth Fund monitor.
AIM Select Growth Fund AIM Latin American Growth Fund
AIM Small Cap Growth Fund(3)
AIM Small Cap Opportunities Fund(4) GLOBAL GROWTH FUNDS
AIM Value Fund AIM Global Aggressive Growth Fund
AIM Weingarten Fund AIM Global Growth Fund
AIM Global Trends Fund(6)
GROWTH & INCOME FUNDS
AIM Advisor Flex Fund GLOBAL GROWTH & INCOME FUNDS
AIM Advisor Real Estate Fund AIM Global Utilities Fund
AIM Balanced Fund
AIM Basic Value Fund GLOBAL INCOME FUNDS
AIM Charter Fund AIM Global Income Fund
AIM Strategic Income Fund
INCOME FUNDS
AIM Floating Rate Fund THEME FUNDS
AIM High Yield Fund AIM Global Consumer Products and Services Fund
AIM High Yield Fund II AIM Global Financial Services Fund
AIM Income Fund AIM Global Health Care Fund
AIM Intermediate Government Fund AIM Global Infrastructure Fund
AIM Limited Maturity Treasury Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund
TAX-FREE INCOME FUNDS
AIM High Income Municipal Fund
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
</TABLE>
(1) Effective December 1, 1999, AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations. (2) AIM Mid
Cap Opportunities Fund closed to new investors on March 21, 2000. (3) AIM Small
Cap Growth Fund closed to new investors on November 8, 1999. (4) AIM Small Cap
Opportunities Fund closed to new investors on November 4, 1999. (5) On September
1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund. Previously
the fund invested in all size companies in most areas of Europe. The fund now
seeks to invest at least 65% of its assets in large-cap companies within
countries using the euro as their currency (EMU-member countries). (6) Effective
August 27, 1999, AIM Global Trends Fund was restructured to operate as a
traditional mutual fund. Before that date, the fund operated as a fund of funds.
For more complete information about any AIM fund(s), including sales charges and
expenses, ask your financial advisor or securities dealer for a free
prospectus(es). Please read the prospectus(es) carefully before you invest or
send money. If used as sales material after July 20, 2000, this report must be
accompanied by a current Quarterly Review of Performance for AIM Funds.
[DALBAR LOGO APPEARS HERE] [AIM LOGO APPEARS HERE]
--Registered Trademark--
INVEST WITH DISCIPLINE
--Registered Trademark--
AIM Distributors, Inc. CDV-SAR-1
