<PAGE> 1
ANNUAL REPORT / OCTOBER 31 2000
AIM WEINGARTEN FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[COVER IMAGE]
------------------------------------
THE VIOLIN BOX BY SUZANNE VALADON
IN THE ART OF INVESTING, SUCCESS DOES NOT ALWAYS COME IN AN INSTANT--IT IS
USUALLY ACHIEVED OVER TIME. VALADON'S UNFORGETTABLE OILS MAKE THIS POINT, OFTEN
TAKING 13 YEARS OF DEDICATION AND DILIGENCE TO COMPLETE. HER RICHLY COLORED
"VIOLIN BOX" REMINDS US THAT ALL GOOD THINGS ARE WORTH THE WAIT.
------------------------------------
AIM Weingarten Fund is for shareholders who seek long-term growth of capital
through investments primarily in common stocks of leading U.S. companies
considered by management to have strong earnings momentum.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Weingarten 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 In addition to the returns as of the close of the fiscal year found on page
4, industry regulations require us to provide average annual total returns
(including sales charges) as of 9/30/00, the most recent calendar
quarter-end, which were:
================================================================================
CLASS A SHARES
10 Years 18.98%
5 Years 20.55
1 Year 20.08
CLASS B SHARES
Inception (6/26/95) 22.34%
5 Years 20.77
1 Year 21.08
CLASS C SHARES
Inception (8/4/97) 20.76%
1 Year 25.10
================================================================================
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 unmanaged Russell 1000 Index represents the performance of the stocks of
large-capitalization companies.
o The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500)
represents the performance of the U.S. stock market.
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 WEINGARTEN FUND
<PAGE> 3
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
It's an honor to address you as the AIM Funds' new chairman.
[PHOTO OF I feel privileged to succeed Ted Bauer, who recently retired
Robert H. from the funds' board and will soon retire as A I M
Graham Management Group's chairman after a long, successful career
Chairman of in the investment industry. Ted has always shown the highest
the Board of degree of integrity and commitment to excellence, and I have
THE FUND always admired him. I'm also proud to be part of the team
APPEARS HERE] that launched AIM almost 25 years ago. From the beginning,
AIM has been a very people-oriented, service-minded company,
and I plan to carry on the tradition for our shareholders,
financial advisors and employees.
UNCERTAIN MARKETS
The markets this year have been particularly volatile and
confusing for many investors, especially for those who have
only experienced the bull market of the 1990s. After almost
a decade of double-digit returns, the S&P 500 was down 1.81% year-to-date as of
October 31, 2000. But market returns in the 20% to 30% range, such as we have
seen in recent years, are not typical. If you expect these kinds of returns
every year, you'll be disappointed. Historically, markets decline in one out of
every four years. What we're seeing now is a normal downturn.
This appears to be a worldwide trend. Throughout 2000, overseas markets
generally have been more turbulent than their U.S. counterpart.
REASONS FOR OPTIMISM
While investors may need to temper their expectations, there are plenty of
reasons to be optimistic. Economic fundamentals remain strong, and many believe
that the Federal Reserve Board may have succeeded in bringing the economy to a
"soft landing." Gross domestic product growth slowed to 2.4% in the third
quarter from the rapid pace of about 7% a year ago. With this slowdown, it seems
unlikely that the Fed will raise interest rates in the near future, and stable
interest rates provide a solid environment for both stocks and bonds.
In Europe, the region's economic and investment future continues to look
bright despite the weak euro. Restructuring, merger activity and tax reform bode
well for European economies. In Asia, most analysts think the continuing
strength of the U.S. economy will help boost Asian stock markets.
THE VALUE OF ADVICE
The current environment illustrates the value of professional money management.
Knowing when to buy and sell takes expertise and discipline even in the best of
markets. During downturns, many investors may be tempted to make decisions based
on emotions instead of strategy. The wisest choice is to rely on a professional
money manager to make these decisions for you.
In these uncertain times, it's important to keep market volatility in
perspective. Mutual fund investing should be a long-term endeavor. Remember why
you're investing, whether it's for your retirement or your child's education,
and think about your time frame. If you're unsure about whether your investments
can meet your goals, visit your financial advisor for help.
In the following pages, your fund's portfolio managers discuss market
activity, how they managed your fund during the fiscal year and their near-term
outlook. 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 for your continued participation in The AIM Family of Funds
--Registered Trademark--.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
------------------------------------
THE CURRENT ENVIRONMENT
ILLUSTRATES THE VALUE OF
PROFESSIONAL MONEY
MANAGEMENT. KNOWING WHEN
TO BUY AND SELL TAKES
EXPERTISE AND DISCIPLINE
EVEN IN THE BEST OF
MARKETS.
------------------------------------
AIM WEINGARTEN FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND BEATS INDEXES DESPITE MARKET VOLATILITY
HOW DID AIM WEINGARTEN FUND PERFORM DURING THE FISCAL YEAR?
For the fiscal year ended October 31, 2000, AIM Weingarten Fund performed well
despite the volatility that affected stock markets during most of 2000. The
fund's total return was 10.57%, 9.72% and 9.75% for Class A, Class B and Class C
shares, respectively. For the fiscal year, the S&P 500 returned 6.08% and the
Russell 1000 Index returned 9.06%. Performance figures for the fund were
calculated at net asset value, that is, without the effect of sales charges.
The fund's performance for the entire fiscal year includes significant gains
made in late 1999 and early 2000 when the stock market performed quite strongly;
during the second half of the fiscal year, performance was adversely affected by
the sell-off in technology stocks and other market difficulties.
WHAT WERE THE MAJOR TRENDS IN THE FINANCIAL MARKETS DURING THE FISCAL YEAR?
U.S. stock markets were volatile for most of 2000, with significant sell-offs in
March through May and again in August through October. In the spring, investors
worried that the Federal Reserve Board (the Fed) would continue raising interest
rates to slow torrid economic growth and to forestall inflation. The Fed raised
the federal funds rate (the rate banks charge one another for overnight loans)
from 6.0% to 6.5% in May--the sixth increase since June 1999. But with data
showing that economic growth was slowing and that inflation was in check, the
Fed kept rates unchanged at its June, August and October meetings.
Early in 2000, investors became concerned that many technology stocks that
had propelled the markets higher in 1999 might have become overvalued. In late
summer and fall, rising oil prices and Middle East tensions made investors
skittish, sparking a second major stock-market sell-off. Investors also became
concerned about a string of corporate earnings warnings and disappointing
third-quarter earnings announcements by a number of major corporations. Higher
oil prices and a weak euro (the common currency adopted in 1999 by 11 European
nations) negatively affected corporate profits.
HOW WAS THE FUND'S PORTFOLIO POSITIONED AT THE CLOSE OF THE REPORTING PERIOD?
Compared to its S&P 500 benchmark, the fund remained overweighted in technology
stocks. While tech stocks have been volatile during much of 2000, we continue to
be bullish about their long-term potential. The fund's investment discipline
prevents us from buying high-flying technology stocks (or any other type of
stock) with little or no earnings. We believe that companies building the
Internet's infrastructure may continue to experience significant long-term
growth; we also believe that companies that are leading the technological
revolution represent attractive long-term holdings. The technology revolution is
a long-term trend, not a short-term phenomenon.
Large pharmaceutical companies also were represented in the fund's holdings.
As market volatility spooked investors for much of the fiscal year,
pharmaceutical stocks were widely viewed as a "safe haven" because of their
relatively predictable earnings. Demand for pharmaceuticals, after all, is
largely inelastic; patients who depend on them for their health must buy them
regardless of economic or market conditions.
The fund also was overweighted in utility stocks at the close of the fiscal
year. Utility stocks enjoyed strong earnings growth during the year, benefiting
from electric-company deregulation and increased demand for energy. Indeed,
utilities were the best-performing sector of the S&P 500 during the fiscal year.
The fund's holdings at the close of the fiscal year consisted overwhelmingly
of large-cap U.S. common stocks. The fund's portfolio was pared from 81 to 71
stocks during the fiscal year as we concentrated on the stocks about which we
were most confident.
WHAT WERE SOME OF THE FUND'S MAJOR HOLDINGS?
The fund's major holdings at the close of the fiscal year included the
following:
o General Electric is a diversified company that produces locomotives and
other transportation equipment, household appliances, electric distribution
and control equipment, generators and turbines, nuclear reactors and
medical-
================================================================================
TOTAL RETURNS
For the fiscal year ended 10/31/00,
excluding sales charges
================================================================================
FUND CLASS A SHARES 10.57%
FUND CLASS B SHARES 9.72%
FUND CLASS C SHARES 9.75%
S&P 500 INDEX 6.08%
RUSSELL 1000 INDEX 9.06%
================================================================================
See important fund and index disclosures inside front cover.
AIM WEINGARTEN FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
[ART WORK]
================================================================================
PORTFOLIO COMPOSITION
As of 10/31/00, based on total net assets
<TABLE>
<CAPTION>
========================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Sun Microsystems, Inc. 4.12% 1. Computers (Software & Services) 13.38%
2. General Electric Co. 3.92 2. Communications Equipment 12.72
3. Citigroup Inc. 3.24 3. Electronics (Semiconductors) 9.59
4. American Express Co. 2.97 4. Financial (Diversified) 6.21
5. JDS Uniphase Corp. 2.89 5. Computers (Peripherals) 5.96
6. EMC Corp. 2.66 6. Electrical Equipment 4.93
7. Pfizer Inc. 2.55 7. Computers (Hardware) 4.78
8. Nortel Networks Corp. (Canada) 2.52 8. Investment Banking/Brokerage 3.61
9. VERITAS Software Corp. 2.45 9. Health Care (Drugs - Major Pharmaceuticals) 3.38
10. Xilinx, Inc. 2.36 10. Computers (Networking) 3.19
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
========================================================================================================
</TABLE>
imaging equipment. Half its sales come from its financial arm, GE Capital
Services. Its recent acquisition of Honeywell is expected to boost its
aircraft engine and plastics operations.
o American Express is far more than just a charge-card issuer. The
financial-services giant is one of the world's largest travel agencies; it
also publishes magazines and provides financial-advisory services. American
Express recently opened an online bank and began offering online mortgage
and brokerage services.
o EMC is the leading maker of mainframe computer disk-memory hardware and
software. While storage hardware accounts for about 80% of its sales, EMC
continues to boost its presence in software and related services, with an
emphasis on overseeing corporations' Internet data. EMC's earnings have
increased by an average of 25% a year for the past half-decade.
o Citigroup--formed by the merger of one of the world's largest banks
(Citicorp) and one of the world's largest insurers (Travelers Group)--is the
world's largest financial-services company. The company offers credit card,
banking, insurance and investment services in some 100 countries around the
globe. Its e-Citi unit develops online financial products.
WHAT IS YOUR OUTLOOK FOR THE FUTURE? At the close of the fiscal year, we
remained cautiously optimistic about the direction of the U.S. economy. While
economic growth is slowing, the economy continues to grow at a sustainable pace.
Unemployment dropped to 3.9% in September--matching a 30-year low. Consumer
spending continues to grow, albeit at a somewhat more subdued pace than last
year, and except for the potential threat of higher oil prices, inflation
remains in check. Corporate profits, while declining, remain impressive; indeed,
fourth-quarter profits among S&P 500 companies are expected to grow from
year-ago levels. And the federal government's record $236 billion budget surplus
for fiscal year 2000 will allow it to continue to retire debt and to reduce its
future borrowing costs.
Interest rates seem to have stabilized as the Fed has taken a respite from
its string of interest-rate increases, which have roiled the markets for more
than a year. However, because of a degree of uncertainty surrounding short-term
economic trends and international developments, markets may continue to be
volatile. In such an environment, investors would be well advised to remain
diversified and maintain a long-term investment perspective.
------------------------------------
READ THIS REPORT ONLINE!
Early in 2001, a new service will be
available--electronic delivery of fund
reports and prospectuses. Soon, you can
read the same AIM report you are reading
now--online. Once you sign up for the
service, we will send you a link to the report
via e-mail. If you choose to receive your
reports online, you will not receive a paper
copy by mail. You may cancel the service
at any time by visiting our Web site.
Please visit our Web site at
www.aimfunds.com and go to "Your AIM
Account." Log into your account and then
click on the "View Other Account Options"
dropdown menu and select "eDelivery."
------------------------------------
See important fund and index disclosures inside front cover.
AIM WEINGARTEN FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM WEINGARTEN FUND VS. BENCHMARK INDEXES
10/31/80-10/31/00
in thousands
================================================================================
AIM Weingarten Fund, S&P 500 Russell 1000
Class A Shares Index Index
--------------------------------------------------------------------------------
10/80 $ 9,452.00 $ 10,000.00 $ 10,000.00
10/81 9,532.00 10,011.00 9,955.00
10/82 10,819.00 11,645.00 11,451.00
10/83 15,889.00 14,892.00 14,626.00
10/84 14,796.00 15,925.00 15,326.00
10/85 17,602.00 18,951.00 18,439.00
10/86 25,181.00 25,196.00 24,518.00
10/87 26,485.00 26,835.00 25,240.00
10/88 29,908.00 30,781.00 29,185.00
10/89 39,683.00 38,341.00 36,768.00
10/90 38,778.00 36,024.00 33,278.00
10/91 56,027.00 48,159.00 45,454.00
10/92 59,979.00 52,894.00 50,343.00
10/93 63,680.00 60,785.00 58,290.00
10/94 66,114.00 63,303.00 60,099.00
10/95 85,294.00 80,030.00 76,328.00
10/96 96,341.00 98,391.00 93,825.00
10/97 121,722.00 129,250.00 123,696.00
10/98 138,573.00 159,622.00 148,081.00
10/99 192,163.00 200,631.00 185,963.00
10/00 212,475.00 212,978.00 202,807.00
Source: Lipper, Inc.
Past performance cannot guarantee comparable future results.
================================================================================
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS
OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
ABOUT THIS CHART
The chart compares your fund's Class A shares to its benchmark indexes. It is
intended to give you an idea of how your fund performed compared to these
indexes over the period 10/31/80-10/31/00. It is important to understand the
differences between your fund and an index. An index measures the performance of
a hypothetical portfolio. A market index such as the S&P 500 Index or the
Russell 1000 Index is not managed, incurring no sales charges, expenses or fees.
If you could buy all the securities that make up a market index, you would incur
expenses that would affect your investment's return.
Since the last reporting period, AIM Weingarten Fund has elected to use the
S&P 500 Index as its benchmark instead of the Russell 1000 Index. The new index
more closely resembles the securities in which the fund invests. The fund will
no longer measure its performance against the Russell 1000 Index, the index
published in previous reports to shareholders. Because this is the first
reporting period since we have adopted the new index, SEC guidelines require
that we compare the fund's performance to both the old and the new index.
AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/00, including sales charges
================================================================================
CLASS A SHARES
Inception (6/17/69) 15.46%
20 Years 16.51
10 Years 17.88
5 Years 18.84
1 Year 4.48*
*10.57%, excluding sales charges
CLASS B SHARES
Inception (6/26/95) 19.78%
5 Years 19.06
1 Year 4.81*
*9.72%, excluding CDSC
CLASS C SHARES
Inception (8/4/97) 16.67%
1 Year 8.77*
*9.75%, excluding CDSC
================================================================================
YOUR FUND'S TOTAL RETURN INCLUDES SALES CHARGES, EXPENSES AND MANAGEMENT FEES.
THE PERFORMANCE OF THE FUND'S CLASS B AND CLASS C SHARES WILL DIFFER FROM THAT
OF ITS CLASS A SHARES DUE TO DIFFERING FEES AND EXPENSES. FOR FUND PERFORMANCE
CALCULATIONS AND DESCRIPTIONS OF THE INDEXES CITED ON THIS PAGE, PLEASE SEE THE
INSIDE FRONT COVER.
AIM WEINGARTEN FUND
4
<PAGE> 7
[ART WORK]
------------------------------------
FOR MORE THAN THREE DECADES,
INVESTORS HAVE RELIED ON AIM
WEINGARTEN FUND TO HELP
THEM ACHIEVE THEIR FINANCIAL
GOALS. THROUGH GOOD TIMES
AND BAD, AIM WEINGARTEN
FUND'S DISCIPLINED INVEST-
MENT STRATEGY HAS PROVIDED
CONSISTENT RETURNS TO PATIENT
LONG-TERM INVESTORS--AS THE
FOLLOWING CHART SHOWS....
------------------------------------
5
<PAGE> 8
ANNUAL REPORT / PERFORMANCE HISTORY
THE AIM WEINGARTEN FUND GROWTH STORY...
GROWTH OF A $10,000 INVESTMENT: JUNE 17, 1969--OCTOBER 31, 2000
--------------------------------------------------------------------------------
Only the fabric of time--war, recession, inflation, declines and deficit--can
put an investment through perhaps the most significant, truth-revealing test.
Even through the litany of bad news illustrated in the chart, AIM Weingarten
Fund has consistently appreciated over long-term periods.
--------------------------------------------------------------------------------
Anti-Vietnam War Demonstrations Peak
Cambodia Invaded, War Spreads
90-Day Freeze on Wages and Prices
New York City Near Bankruptcy
Arab Oil Embargo--Prices Quadruple from Approximately $3 to $12 per Barrel
Steepest Market Decline in 40 Years; S&P 500 Down 26%
Economic Recession
Record Trade Deficit at $5 Billion
S&P 500 Declines 7%
OPEC Raises Prices 14%
Annual Inflation Rate Hits 13%
Prime Interest Rate Reaches 20%
Assassination Attempt on President Reagan
Unemployment Reaches 10.8%
Terrorist Bomb Kills 241 U.S. Marines in Beirut
Federal Deficit Tops Record $185 Billion
U.S. Dollar at Lowest Level in Five Years
Tax Reform Act Cuts IRA Deduction
Stock Market Crash--DJIA Down 25% in Five Weeks
Savings and Loan Insolvencies
Junk Bond Market Collapses
Iraq Invades Kuwait
Recession Persists
Unemployment Reaches 10-Year High
Economic Growth Remains Sluggish
Fed Raises Federal Funds Interest Rate Six Times
Mexican Peso Devaluation
Weakened Markets in Europe and Japan Limit U.S. Exports
Asian Market Meltdown
Stock Market Sees Record Volatility
Nasdaq Surges While Bonds Plummet
Techs Crumble
<TABLE>
TOTALS
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income Dividends Reinvested $ 0 38 58 0 0 0 0 54 0
98 208 166 237 247 0 136 461 788
957 126 1,558 897 1,338 1,029 1,346 1,701 1,079
0 1,237 0 388 0 $ 14,147
Capital Gains Reinvested $ 0 57 0 0 1,344 0 0 0 0
0 0 3,482 5,379 5,058 0 14,531 0 4,777
24,440 9,739 0 8,917 3,122 1,333 0 5,080 28,208
48,243 46,064 77,702 41,273 92,752 $421,503
Total Distributions Reinvested $ 0 95 58 0 1,344 0 0 54 0
98 208 3,648 5,617 5,305 0 14,667 461 5,565
25,397 9,865 1,558 9,814 4,460 2,362 1,346 6,781 29,287
48,243 47,301 77,702 41,661 92,752 $435,650
Total Account Value $ 9,416 8,231 11,485 14,252 12,908 8,112 10,273 10,505 12,925
15,586 21,777 40,440 40,783 46,289 65,460 63,077 75,451 107,196
113,321 127,826 172,731 165,769 240,174 256,626 272,462 282,717 362,445
416,121 527,771 592,904 822,195 909,104 $909,104
Source: Towers Data
====================================================================================================================================
</TABLE>
AIM WEINGARTEN FUND
6
<PAGE> 9
ANNUAL REPORT / PERFORMANCE HISTORY
...CONSISTENT APPRECIATION OVER THE LONG TERM
<TABLE>
<CAPTION>
===========================================================================================
Weingarten,
Class A Shares S&P 500 Index
-------------------------------------------------------------------------------------------
in thousands
<S> <C> <C> <C>
10/31/69 $ 9,464.00 $ 10,000.00 $909,104
10/69 9,416.00 10,063.00 AIM WEINGARTEN
10/70 8,231.00 8,949.00 FUND, CLASS A
10/71 11,485.00 10,456.00 SHARES
10/72 14,252.00 12,747.00
10/73 12,908.00 12,750.00
10/74 8,112.00 9,079.00
10/75 10,273.00 11,438.00
10/76 10,505.00 13,744.00
10/77 12,925.00 12,914.00
10/78 15,586.00 13,733.00
10/79 21,777.00 15,857.00
10/80 40,440.00 20,940.00
10/81 40,783.00 21,058.00
10/82 46,289.00 24,488.00
10/83 65,460.00 31,332.00
10/84 63,077.00 33,327.00
10/85 75,451.00 39,769.00 $446,055
10/86 107,196.00 52,966.00
10/87 147,975.00 56,355.00 S&P 500
10/88 127,826.00 64,674.00 INDEX
10/89 172,731.00 81,718.00
10/90 166,215.00 75,606.00
10/91 236,516.00 100,871.00
10/92 256,626.00 110,906.00
10/93 272,462.00 127,441.00
10/94 282,717.00 132,358.00
10/95 362,445.00 167,312.00
10/96 416,121.00 207,601.00
10/97 552,626.00 274,239.00
10/98 592,904.00 334,544.00
10/99 822,195.00 420,396.00
10/00 909,100.00 445,969.00
===========================================================================================
</TABLE>
AIM WEINGARTEN FUND
7
<PAGE> 10
SCHEDULE OF INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-80.49%
BIOTECHNOLOGY-0.40%
Amgen Inc.(a) 772,600 $ 44,762,512
===============================================================
BROADCASTING (TELEVISION, RADIO
& CABLE)-2.68%
AT&T Corp.-Liberty Media
Corp.-Class A 5,000,000 90,000,000
---------------------------------------------------------------
Infinity Broadcasting
Corp.-Class A(a) 6,327,400 210,386,050
===============================================================
300,386,050
===============================================================
COMMUNICATIONS EQUIPMENT-9.09%
ADC Telecommunications, Inc.(a) 3,698,300 79,051,162
---------------------------------------------------------------
Comverse Technology, Inc.(a) 2,300,000 257,025,000
---------------------------------------------------------------
Corning Inc. 3,100,000 237,150,000
---------------------------------------------------------------
JDS Uniphase Corp.(a) 3,975,000 323,465,625
---------------------------------------------------------------
Redback Networks Inc.(a) 475,000 50,557,812
---------------------------------------------------------------
Scientific-Atlanta, Inc. 1,030,300 70,511,156
===============================================================
1,017,760,755
===============================================================
COMPUTERS (HARDWARE)-4.78%
Palm, Inc.(a) 1,375,000 73,648,438
---------------------------------------------------------------
Sun Microsystems, Inc.(a) 4,163,000 461,572,625
===============================================================
535,221,063
===============================================================
COMPUTERS (NETWORKING)-3.19%
Cisco Systems, Inc.(a) 2,200,000 118,525,000
---------------------------------------------------------------
Extreme Networks, Inc.(a) 800,000 66,350,000
---------------------------------------------------------------
Juniper Networks, Inc.(a) 625,000 121,875,000
---------------------------------------------------------------
VeriSign, Inc.(a) 384,100 50,701,200
===============================================================
357,451,200
===============================================================
COMPUTERS (PERIPHERALS)-5.96%
Brocade Communications Systems,
Inc.(a) 700,000 159,162,500
---------------------------------------------------------------
EMC Corp.(a) 3,346,300 298,029,844
---------------------------------------------------------------
Network Appliance, Inc.(a) 774,500 92,165,500
---------------------------------------------------------------
QLogic Corp.(a) 1,215,700 117,618,975
===============================================================
666,976,819
===============================================================
COMPUTERS (SOFTWARE &
SERVICES)-11.11%
Adobe Systems Inc. 1,220,000 92,796,250
---------------------------------------------------------------
America Online, Inc.(a) 1,500,000 75,645,000
---------------------------------------------------------------
Ariba, Inc.(a) 900,000 113,737,500
---------------------------------------------------------------
BEA Systems, Inc.(a) 1,050,000 75,337,500
---------------------------------------------------------------
Intuit Inc.(a) 1,800,000 110,587,500
---------------------------------------------------------------
Mercury Interactive Corp.(a) 800,000 88,800,000
---------------------------------------------------------------
Oracle Corp.(a) 3,400,000 112,200,000
---------------------------------------------------------------
Rational Software Corp.(a) 2,750,000 164,140,625
---------------------------------------------------------------
Siebel Systems, Inc.(a) 1,300,000 136,418,750
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
VERITAS Software Corp.(a) 1,946,600 $ 274,501,016
===============================================================
1,244,164,141
===============================================================
CONSUMER FINANCE-0.48%
Capital One Financial Corp. 850,000 53,656,250
===============================================================
ELECTRICAL EQUIPMENT-4.93%
General Electric Co. 8,000,000 438,500,000
---------------------------------------------------------------
Sanmina Corp.(a) 871,900 99,669,069
---------------------------------------------------------------
Symbol Technologies, Inc. 309,000 14,040,188
===============================================================
552,209,257
===============================================================
ELECTRONICS
(SEMICONDUCTORS)-8.20%
Analog Devices, Inc.(a) 3,650,000 237,250,000
---------------------------------------------------------------
Applied Micro Circuits Corp.(a) 1,200,000 91,725,000
---------------------------------------------------------------
Cypress Semiconductor Corp.(a) 1,650,000 61,771,875
---------------------------------------------------------------
Integrated Device Technology,
Inc.(a) 1,400,000 78,837,500
---------------------------------------------------------------
Linear Technology Corp. 2,000,000 129,125,000
---------------------------------------------------------------
TranSwitch Corp.(a) 948,500 54,775,875
---------------------------------------------------------------
Xilinx, Inc.(a) 3,648,800 264,309,950
===============================================================
917,795,200
===============================================================
ENTERTAINMENT-1.25%
Time Warner Inc. 1,850,000 140,433,500
===============================================================
EQUIPMENT (SEMICONDUCTOR)-1.00%
Broadcom Corp.-Class A(a) 505,000 112,299,375
===============================================================
FINANCIAL (DIVERSIFIED)-6.21%
American Express Co. 5,549,900 332,994,000
---------------------------------------------------------------
Citigroup Inc. 6,891,766 362,679,186
===============================================================
695,673,186
===============================================================
HEALTH CARE (DIVERSIFIED)-1.28%
IVAX Corp.(a) 3,289,000 143,071,500
===============================================================
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.99%
Forest Laboratories, Inc.(a) 620,000 82,150,000
---------------------------------------------------------------
Genentech, Inc.(a) 1,700,000 140,250,000
===============================================================
222,400,000
===============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-3.38%
Allergan, Inc. 1,100,000 92,468,750
---------------------------------------------------------------
Pfizer Inc. 6,620,000 285,901,250
===============================================================
378,370,000
===============================================================
HEALTH CARE (MANAGED CARE)-1.08%
UnitedHealth Group Inc. 1,100,000 120,312,500
===============================================================
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.09%
PE Corp-PE Biosystems Group 1,045,700 $ 122,346,900
===============================================================
INVESTMENT
BANKING/BROKERAGE-3.61%
Merrill Lynch & Co., Inc. 3,482,200 243,754,000
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 2,000,000 160,625,000
===============================================================
404,379,000
===============================================================
LEISURE TIME (PRODUCTS)-0.86%
Harley-Davidson, Inc. 2,000,000 96,375,000
===============================================================
MANUFACTURING
(DIVERSIFIED)-1.03%
United Technologies Corp. 1,650,000 115,190,625
===============================================================
NATURAL GAS-2.18%
Dynegy Inc.-Class A 2,600,000 120,412,500
---------------------------------------------------------------
Enron Corp. 1,500,000 123,093,750
===============================================================
243,506,250
===============================================================
POWER PRODUCERS
(INDEPENDENT)-2.01%
AES Corp. (The)(a) 1,675,000 94,637,500
---------------------------------------------------------------
Calpine Corp.(a) 1,650,000 130,246,875
===============================================================
224,884,375
===============================================================
RETAIL (FOOD CHAINS)-1.15%
Safeway Inc.(a) 2,350,000 128,515,625
===============================================================
RETAIL (SPECIALTY)-0.73%
Bed Bath & Beyond Inc.(a) 3,165,700 81,714,631
===============================================================
SERVICES (ADVERTISING/MARKETING)-0.55%
TMP Worldwide, Inc.(a) 881,900 61,388,508
===============================================================
SERVICES (DATA PROCESSING)-0.02%
DST Systems, Inc.(a) 41,400 2,551,275
===============================================================
TELECOMMUNICATIONS
(CELLULAR/WIRELESS)-0.25%
Powerwave Technologies, Inc.(a) 581,000 27,960,625
===============================================================
Total Domestic Common Stocks
(Cost $6,723,018,207) 9,011,756,122
===============================================================
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-10.66%
BERMUDA-1.75%
Tyco International Ltd.
(Manufacturing-Diversified) 3,458,800 $ 196,070,725
===============================================================
CANADA-3.91%
Nortel Networks Corp.
(Communications Equipment) 6,200,000 282,100,000
---------------------------------------------------------------
PMC-Sierra, Inc.
(Electronics-Semiconductors)(a) 920,000 155,940,000
===============================================================
438,040,000
===============================================================
FRANCE-1.12%
Alcatel S.A.-ADR (Communications
Equipment) 2,000,000 124,750,000
===============================================================
HONG KONG-1.26%
China Mobile Ltd.
(Telecommunications-
Cellular/Wireless)(a) 22,000,100 141,044,364
===============================================================
ISRAEL-2.62%
Check Point Software
Technologies Ltd.
(Computers-Software &
Services)(a) 1,600,000 253,400,000
---------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd.-ADR (Health
Care-Drugs-Generic & Other) 675,000 39,909,375
===============================================================
293,309,375
===============================================================
Total Foreign Stocks & Other
Equity Interests (Cost
$849,041,022) 1,193,214,464
===============================================================
MONEY MARKET FUNDS-8.15%
STIC Liquid Assets Portfolio(b) 456,311,366 456,311,366
---------------------------------------------------------------
STIC Prime Portfolio(b) 456,311,366 456,311,366
===============================================================
Total Money Market Funds
(Cost $912,622,732) 912,622,732
===============================================================
TOTAL INVESTMENTS-99.30%
(Cost $8,484,681,961) 11,117,593,318
===============================================================
OTHER ASSETS LESS
LIABILITIES-0.70% 78,926,373
===============================================================
NET ASSETS-100.00% $11,196,519,691
_______________________________________________________________
===============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)The money market fund and the Fund are affiliated by having the same
investment advisor.
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$8,484,681,961) $11,117,593,318
-------------------------------------------------------------
Foreign currencies, at market value (cost
$94,552,636) 93,958,307
-------------------------------------------------------------
Receivables for:
Collateral for securities loaned 481,391,900
-------------------------------------------------------------
Investments sold 28,386,536
-------------------------------------------------------------
Fund shares sold 15,376,420
-------------------------------------------------------------
Foreign currency 125,025
-------------------------------------------------------------
Dividends 8,112,276
-------------------------------------------------------------
Securities loaned 44,950
-------------------------------------------------------------
Investment for deferred compensation plan 170,032
-------------------------------------------------------------
Other assets 1,163,815
=============================================================
Total assets 11,746,322,579
=============================================================
LIABILITIES:
Payables for:
Investments purchased 40,692,751
-------------------------------------------------------------
Collateral upon return of securities
loaned 481,391,900
-------------------------------------------------------------
Fund shares reacquired 14,036,122
-------------------------------------------------------------
Deferred compensation plan 170,032
-------------------------------------------------------------
Accrued advisory fees 5,798,989
-------------------------------------------------------------
Accrued administrative services fees 39,955
-------------------------------------------------------------
Accrued distribution fees 5,403,062
-------------------------------------------------------------
Accrued transfer agent fees 1,489,451
-------------------------------------------------------------
Accrued operating expenses 780,626
=============================================================
Total liabilities 549,802,888
=============================================================
Net assets applicable to shares outstanding $11,196,519,691
_____________________________________________________________
=============================================================
NET ASSETS:
Class A $ 8,948,781,148
_____________________________________________________________
=============================================================
Class B $ 1,927,513,800
_____________________________________________________________
=============================================================
Class C $ 301,590,236
_____________________________________________________________
=============================================================
Institutional Class $ 18,634,507
_____________________________________________________________
=============================================================
SHARES OUTSTANDING, $0.001 PAR VALUE PER
SHARE:
Class A 317,745,991
_____________________________________________________________
=============================================================
Class B 71,856,609
_____________________________________________________________
=============================================================
Class C 11,234,005
_____________________________________________________________
=============================================================
Institutional Class 642,588
_____________________________________________________________
=============================================================
Class A:
Net asset value and redemption price per
share $ 28.16
-------------------------------------------------------------
Offering price per share:
(Net asset value of $28.16 divided by
94.50%) $ 29.80
_____________________________________________________________
=============================================================
Class B:
Net asset value and offering price per
share $ 26.82
_____________________________________________________________
=============================================================
Class C:
Net asset value and offering price per
share $ 26.85
_____________________________________________________________
=============================================================
Institutional Class
Net asset value, offering and redemption
price per share $ 29.00
_____________________________________________________________
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of
$790,408) $ 24,643,007
-------------------------------------------------------------
Dividends from affiliated money market funds 44,169,714
-------------------------------------------------------------
Interest 34,190
-------------------------------------------------------------
Security lending income 151,601
=============================================================
Total investment income 68,998,512
=============================================================
EXPENSES:
Advisory fees 75,254,931
-------------------------------------------------------------
Administrative services fees 473,764
-------------------------------------------------------------
Custodian fees 694,359
-------------------------------------------------------------
Distribution fees -- Class A 29,398,785
-------------------------------------------------------------
Distribution fees -- Class B 18,390,082
-------------------------------------------------------------
Distribution fees -- Class C 2,310,903
-------------------------------------------------------------
Transfer agent fees -- Class A 10,695,312
-------------------------------------------------------------
Transfer agent fees -- Class B 2,939,757
-------------------------------------------------------------
Transfer agent fees -- Class C 369,411
-------------------------------------------------------------
Transfer agent fees -- Institutional Class 13,407
-------------------------------------------------------------
Trustees' fees 50,685
-------------------------------------------------------------
Other 2,394,852
=============================================================
Total expenses 142,986,248
=============================================================
Less: Fees waived (5,181,384)
-------------------------------------------------------------
Expenses paid indirectly (207,062)
=============================================================
Net expenses 137,597,802
=============================================================
Net investment income (loss) (68,599,290)
=============================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FUTURES CONTRACTS AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 1,645,775,410
-------------------------------------------------------------
Foreign currencies 4,466,343
-------------------------------------------------------------
Futures contracts 9,049,301
-------------------------------------------------------------
Option contracts written (152,474,766)
=============================================================
1,506,816,288
=============================================================
Change in net unrealized appreciation
(depreciation) of:
Investment securities (540,721,720)
-------------------------------------------------------------
Foreign currencies (672,021)
-------------------------------------------------------------
Foreign currency contracts 125,025
-------------------------------------------------------------
Option contracts written 20,384,517
=============================================================
(520,884,199)
=============================================================
Net gain from investment securities, foreign
currencies, futures contracts and option
contracts 985,932,089
=============================================================
Net increase in net assets resulting from
operations $ 917,332,799
_____________________________________________________________
=============================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
--------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (68,599,290) $ (41,231,383)
-----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures contracts and option contracts 1,506,816,288 1,252,613,276
-----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, foreign currencies, futures
contracts and option contracts (520,884,199) 1,427,968,629
===============================================================================================
Net increase in net assets resulting from operations 917,332,799 2,639,350,522
===============================================================================================
Distributions to shareholders from net investment income:
Class A -- (3,691,627)
-----------------------------------------------------------------------------------------------
Institutional Class -- (343,112)
-----------------------------------------------------------------------------------------------
Distributions in excess of net investment income:
Class A -- (377,640)
-----------------------------------------------------------------------------------------------
Institutional Class -- (5,008)
-----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (912,274,100) (404,965,108)
-----------------------------------------------------------------------------------------------
Class B (156,090,644) (49,731,739)
-----------------------------------------------------------------------------------------------
Class C (13,701,366) (1,700,816)
-----------------------------------------------------------------------------------------------
Institutional Class (12,672,994) (4,837,664)
-----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 927,796,775 95,538,920
-----------------------------------------------------------------------------------------------
Class B 724,966,056 347,953,526
-----------------------------------------------------------------------------------------------
Class C 221,312,749 70,937,422
-----------------------------------------------------------------------------------------------
Institutional Class (100,840,055) 16,644,022
===============================================================================================
Net increase in net assets 1,595,829,220 2,704,771,698
===============================================================================================
NET ASSETS:
Beginning of year 9,600,690,471 6,895,918,773
===============================================================================================
End of year $11,196,519,691 $9,600,690,471
_______________________________________________________________________________________________
===============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 7,150,137,050 $5,279,351,381
-----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (388,227) (317,554)
-----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, futures contracts and
option contracts 1,414,418,150 1,168,419,727
-----------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies, futures contracts and
option contracts 2,632,352,718 3,153,236,917
===============================================================================================
$11,196,519,691 $9,600,690,471
_______________________________________________________________________________________________
===============================================================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Weingarten Fund (the "Fund") is a series portfolio of AIM Equity Funds (the
"Trust"). The Trust is a Delaware business trust 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, each
having an unlimited number of shares of beneficial interest. Prior to June 17,
2000 the Fund was organized as a series portfolio of AIM Equity Funds, Inc. At a
meeting held on February 3, 2000, the Board of Directors of AIM Equity Funds,
Inc. approved an Agreement and Plan of Reorganization (the "Reorganization")
which reorganized the Fund as a series portfolio of the Trust. Shareholders of
the Fund approved the Reorganization at a meeting held on June 16, 2000. 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. Institutional Class shares are sold without a
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 to provide growth of capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 -- Securities, including restricted securities, are
valued according to the following policy. 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 as of the
close of the customary trading session 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 Trust's officers in a manner specifically authorized
by the Board of Trustees. 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 Trustees.
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 on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
On October 31, 2000, undistributed net investment income was increased by
$68,528,617, undistributed net realized gains decreased by $166,078,761 and
paid-in capital increased by $97,550,144 as a result of differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes, foreign currency transactions and net
operating loss reclassifications. Net assets of the Fund were unaffected by
the reclassification discussed above.
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
otherwise taxable income (including net realized capital gains) which is
distributed to
12
<PAGE> 15
shareholders. Therefore, no provision for federal income taxes is recorded in
the financial statements.
E. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions. The Fund does
not separately account for the portion of the results of operations resulting
from changes in foreign exchange rates on investments and the fluctuations
arising from changes in market prices of securities held. Such fluctuations
are included with the net realized and unrealized gain or loss from
investments.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the 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. 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.
I. Expenses -- Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes'
operations. All other expenses which are attributable to more than one class
are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust 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 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 $350
million, plus 0.625% of the Fund's average daily net assets in excess of $350
million. AIM has agreed to waive advisory fees payable by the Fund to AIM at the
annual rate of 0.025% for each $5 billion increment in net assets over $5
billion, up to a maximum waiver of 0.175% on net assets in excess of $35
billion. During the year ended October 31, 2000, AIM waived fees of $5,181,384.
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 year ended October 31, 2000, AIM was
paid $473,764 for such services.
13
<PAGE> 16
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 year ended October 31, 2000, AFS was
paid $7,135,544 for such services.
The Trust 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, Class C and the Institutional Class shares of the Fund. The
Trust 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 year ended October 31, 2000, the Class A, Class B and Class
C shares paid AIM Distributors $29,398,785, $18,390,082 and $2,310,903,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $3,854,495 from sales of the Class A
shares of the Fund during the year ended October 31, 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 year ended October 31, 2000,
AIM Distributors received $139,887 in contingent deferred sales charges imposed
on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the year ended October 31, 2000, the Fund paid legal fees of $22,699
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the year ended October 31, 2000, the Fund received reductions in transfer
agency fees from AFS (an affiliate of AIM) of $162,324 and reductions in
custodian fees of $44,738 under expense offset arrangements which resulted in a
reduction of the Fund's total expenses of $207,062.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an
"interested person" of AIM. The Trust invests trustees' fees, if so elected by a
trustee, 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 Citibank, N.A. 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 year ended October 31,
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-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the Fund's
total assets. Such loans are secured by collateral equal to no less than the
market value, determined daily, of the loaned securities. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any of
its agencies. Cash collateral pursuant to these loans is invested in short-term
money market instruments or affiliated money market funds. Lending securities
entails a risk of loss to the Fund if and to the extent that the market value of
the securities loaned were to increase and the borrower did not increase the
collateral accordingly and failed to return the securities.
At October 31, 2000, securities with an aggregate value of $469,288,729 were
on loan to brokers. The loans were secured by cash collateral of $481,391,900
received by the Fund. For the year ended October 31, 2000, the Fund received
fees of $151,601 for securities lending.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 2000 was
$16,186,039,935 and $16,154,880,126, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of October 31, 2000 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $2,903,247,458
----------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (277,218,090)
==========================================================
Net unrealized appreciation of investment
securities $2,626,029,368
__________________________________________________________
==========================================================
Cost of investments for tax purposes is $8,491,563,950.
</TABLE>
14
<PAGE> 17
NOTE 8-CALL OPTION CONTRACTS
Transactions in call options written during the year ended October 31, 2000 are
summarized as follows:
<TABLE>
<CAPTION>
CALL OPTION CONTRACTS
--------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -------------
<S> <C> <C>
Beginning of year 91,902 $ 116,996,621
----------------------------------------------------------------------------------------
Closed (85,877) (111,818,048)
----------------------------------------------------------------------------------------
Exercised (6,025) (5,178,573)
========================================================================================
End of year -- $ --
________________________________________________________________________________________
========================================================================================
</TABLE>
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the years ended October 31, 2000 and 1999
were as follows:
<TABLE>
<CAPTION>
2000 1999
------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Sold:
Class A 38,693,394 $ 1,218,409,892 38,697,927 $ 994,480,979
-----------------------------------------------------------------------------------------------------------------------------
Class B 26,508,143 797,286,477 17,982,789 456,125,945
-----------------------------------------------------------------------------------------------------------------------------
Class C 8,102,015 244,073,425 3,622,407 92,753,207
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class 1,045,908 33,206,382 826,477 21,885,030
=============================================================================================================================
Issued as reinvestment of dividends:
Class A 29,963,538 854,837,292 16,540,521 383,078,048
-----------------------------------------------------------------------------------------------------------------------------
Class B 5,414,678 148,085,997 2,102,927 47,274,883
-----------------------------------------------------------------------------------------------------------------------------
Class C 480,423 13,149,166 71,213 1,602,275
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class 428,931 12,554,823 217,868 5,146,039
=============================================================================================================================
Reacquired:
Class A (36,659,424) (1,145,450,409) (50,133,647) (1,282,020,107)
-----------------------------------------------------------------------------------------------------------------------------
Class B (7,393,719) (220,406,418) (6,174,366) (155,447,302)
-----------------------------------------------------------------------------------------------------------------------------
Class C (1,209,352) (35,909,842) (926,007) (23,418,060)
-----------------------------------------------------------------------------------------------------------------------------
Institutional Class (4,771,038) (146,601,260) (391,478) (10,387,047)
=============================================================================================================================
60,603,497 $ 1,773,235,525 22,436,631 $ 531,073,890
_____________________________________________________________________________________________________________________________
=============================================================================================================================
</TABLE>
15
<PAGE> 18
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------------
2000(a) 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 28.31 $ 21.72 $ 22.72 $ 20.19 $ 20.33
--------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.14) (0.10) 0.02 0.01 0.06
--------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.18 8.16 2.38 4.82 2.51
================================================================================================================================
Total from investment operations 3.04 8.06 2.40 4.83 2.57
================================================================================================================================
Less distributions:
Dividends from net investment income -- (0.01) -- (0.06) --
--------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains (3.19) (1.46) (3.40) (2.24) (2.71)
================================================================================================================================
Total distributions (3.19) (1.47) (3.40) (2.30) (2.71)
================================================================================================================================
Net asset value, end of period $ 28.16 $ 28.31 $ 21.72 $ 22.72 $ 20.19
________________________________________________________________________________________________________________________________
================================================================================================================================
Total return(b) 10.61% 38.62% 12.34% 26.83% 14.81%
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $8,948,781 $8,089,739 $6,094,178 $5,810,582 $4,977,493
________________________________________________________________________________________________________________________________
================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.03%(c) 1.03% 1.04% 1.07% 1.12%
--------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.07%(c) 1.08% 1.09% 1.11% 1.15%
================================================================================================================================
Ratio of net investment income (loss) to average net assets (0.45)%(c) (0.38)% 0.07% 0.07% 0.33%
________________________________________________________________________________________________________________________________
================================================================================================================================
Portfolio turnover rate 145% 124% 125% 128% 159%
________________________________________________________________________________________________________________________________
================================================================================================================================
</TABLE>
(a)Calculated using average shares outstanding.
(b)Does not include sales charges.
(c)Ratios are based on average daily net assets of $9,799,594,989.
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------
YEAR ENDED OCTOBER 31,
------------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997(a) 1996(a)
---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 27.29 $ 21.12 $ 22.34 $ 19.98 $ 20.28
--------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.36) (0.30) (0.15) (0.15) (0.05)
--------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 3.08 7.93 2.33 4.75 2.46
==========================================================================================================================
Total from investment operations 2.72 7.63 2.18 4.60 2.41
==========================================================================================================================
Less distributions from net realized gains (3.19) (1.46) (3.40) (2.24) (2.71)
==========================================================================================================================
Net asset value, end of period $ 26.82 $ 27.29 $ 21.12 $ 22.34 $ 19.98
__________________________________________________________________________________________________________________________
==========================================================================================================================
Total return(b) 9.76% 37.59% 11.45% 25.78% 13.95%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,927,514 $1,291,456 $705,750 $486,105 $267,459
__________________________________________________________________________________________________________________________
==========================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.78%(c) 1.82% 1.83% 1.87% 1.95%
--------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.82%(c) 1.87% 1.87% 1.91% 1.98%
==========================================================================================================================
Ratio of net investment income (loss) to average net assets (1.20)%(c) (1.17)% (0.72)% (0.73)% (0.50)%
__________________________________________________________________________________________________________________________
==========================================================================================================================
Portfolio turnover rate 145% 124% 125% 128% 159%
__________________________________________________________________________________________________________________________
==========================================================================================================================
</TABLE>
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges.
(c)Ratios are based on average daily net assets of $1,839,008,229.
16
<PAGE> 19
NOTE 10-FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------
AUGUST 4, 1997
(DATE SALES
YEAR ENDED OCTOBER 31, COMMENCED)
------------------------------- TO OCTOBER 31,
2000(a) 1999(a) 1998(a) 1997(a)
-------- -------- ------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 27.30 $ 21.14 $22.34 $22.83
---------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.36) (0.30) (0.15) (0.04)
---------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 3.10 7.92 2.35 (0.45)
===============================================================================================================
Total from investment operations 2.74 7.62 2.20 (0.49)
===============================================================================================================
Less distributions from net realized gains (3.19) (1.46) (3.40) --
===============================================================================================================
Net asset value, end of period $ 26.85 $ 27.30 $21.14 $22.34
_______________________________________________________________________________________________________________
===============================================================================================================
Total return(b) 9.83% 37.50% 11.54% (2.15)%
_______________________________________________________________________________________________________________
===============================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $301,590 $105,420 $23,107 $2,326
_______________________________________________________________________________________________________________
===============================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.78%(c) 1.82% 1.83% 1.84%(d)
---------------------------------------------------------------------------------------------------------------
Without fee waivers 1.82%(c) 1.87% 1.87% 1.88%(d)
===============================================================================================================
Ratio of net investment income (loss) to average net assets (1.20)%(c) (1.17)% (0.72)% (0.70)%(d)
_______________________________________________________________________________________________________________
===============================================================================================================
Portfolio turnover rate 145% 124% 125% 128%
_______________________________________________________________________________________________________________
===============================================================================================================
</TABLE>
(a)Calculated using average shares outstanding.
(b)Does not include contingent deferred sales charges and is not annualized for
periods less than one year.
(c)Ratios are based on average daily net assets of $231,090,344.
(d)Annualized.
17
<PAGE> 20
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
AIM Equity Funds:
We have audited the accompanying statement of assets and
liabilities of AIM Weingarten Fund (a portfolio of AIM
Equity Funds), including the schedule of investments, as
of October 31, 2000, the related statement of operations
for the year then ended, the statement of changes in net
assets for each of the years in the two-year period then
ended, and financial highlights for each of the periods
in the five-year period then ended. These financial
statements and financial highlights are the
responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with auditing
standards generally accepted in the United States of
America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as
of October 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM
Weingarten Fund as of October 31, 2000, the results of
its operations for the year then ended, the changes in
its net assets for each of the years in the two-year
period then ended, and the financial highlights for each
of the periods in the five-year period then ended in
conformity with accounting principles generally accepted
in the United States of America.
KPMG LLP
December 6, 2000
Houston, Texas
18
<PAGE> 21
PROXY RESULTS (UNAUDITED)
A Special Meeting of Shareholders of AIM Weingarten Fund (the "Fund"), a
portfolio of AIM Equity Funds, Inc., a Maryland corporation (the "Company"),
reorganized as AIM Equity Funds, a Delaware business trust (the "Trust"), was
held on May 3, 2000. The meeting was held for the following purposes:
(1)* To elect ten directors as follows: Charles T. Bauer, Bruce L. Crockett,
Owen Daly II, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert
H. Graham, Prema Mathai-Davis, Lewis F. Pennock and Louis S. Sklar.
(2)* Approval of an Agreement and Plan of Reorganization which provides for the
reorganization of the company as a Delaware business trust.
(3) To approve a new Master Investment Advisory Agreement with A I M Advisors,
Inc.
(4) To approve changing the fundamental investment restrictions of the Fund.
(5) To ratify the selection of KPMG LLP as independent accountants of the Fund
for the fiscal year ending in 2000.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
VOTES WITHHELD/
DIRECTORS/MATTER VOTES FOR AGAINST ABSTENTIONS
---------------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
(1)* Charles T. Bauer............................................ 880,499,527 N/A 21,899,315
Bruce L. Crockett........................................... 880,943,079 N/A 21,455,763
Owen Daly II................................................ 880,468,204 N/A 21,930,638
Edward K. Dunn, Jr. ........................................ 880,922,500 N/A 21,476,342
Jack M. Fields.............................................. 880,960,800 N/A 21,438,042
Carl Frischling............................................. 880,836,332 N/A 21,562,510
Robert H. Graham............................................ 880,965,547 N/A 21,433,295
Prema Mathai-Davis.......................................... 880,635,296 N/A 21,763,546
Lewis F. Pennock............................................ 880,899,481 N/A 21,499,361
Louis S. Sklar.............................................. 880,825,241 N/A 21,573,601
(2)* Adjournment of approval of an Agreement and Plan of
Reorganization which provides for the reorganization of AIM
Equity Funds, Inc. as a Delaware business trust............. 610,634,359 17,637,580 274,126,903**
(3) Approval of a new Master Investment Advisory Agreement with
A I M Advisors, Inc......................................... 155,905,942 4,347,529 57,181,536**
(4)(a) Approval of changing or adding the Fundamental Restriction
on Issuer Diversification................................... 153,412,321 5,687,335 58,335,351**
(4)(b) Approval of changing the Fundamental Restriction on
Borrowing Money and Issuing Senior
Securities.................................................. 152,109,119 6,958,091 58,367,797**
(4)(c) Approval of changing the Fundamental Restriction on
Underwriting Securities..................................... 152,857,994 6,166,325 58,410,688**
(4)(d) Approval of changing the Fundamental Restriction on Industry
Concentration............................................... 151,163,387 5,866,440 58,405,180**
(4)(e) Approval of changing the Fundamental Restriction on
Purchasing or Selling Real Estate........................... 151,949,770 7,144,793 58,340,444**
(4)(f) Approval of changing the Fundamental Restriction on
Purchasing or Selling Commodities........................... 151,419,855 7,670,579 58,344,573**
(4)(g) Approval of changing the Fundamental Restriction on Making
Loans....................................................... 151,520,720 7,583,526 58,330,761**
(4)(h) Approval of a new Fundamental Investment Restriction on
Investing all of the Fund's assets in an Open-End Fund...... 151,798,097 7,213,173 58,423,737**
(4)(i) Approval of the Elimination of Fundamental Restriction on
Margin Transactions......................................... 149,576,371 9,393,604 58,465,032**
(4)(j) Approval of the Elimination of Fundamental Restriction on
Investing for the Purpose of Control........................ 152,446,648 6,906,673 58,081,686**
(5) Ratification of the selection of KPMG LLP as Independent
Accountants of the Fund..................................... 207,451,687 2,065,807 7,917,513
</TABLE>
The Special Meeting of Shareholders of the Company was reconvened on May
31, 2000. The following matter was then considered:
<TABLE>
<CAPTION>
VOTES WITHHELD/
MATTER VOTES FOR AGAINST ABSTENTIONS
------ ----------- ---------- -----------
<S> <C> <C> <C> <C>
(2)* Adjournment of approval of an Agreement and Plan of
Reorganization which provides for the reorganization of AIM
Equity Funds, Inc. as a Delaware business trust............. 771,237,475 25,045,711 214,550,642**
</TABLE>
The Special Meeting of Shareholders of the Company was reconvened on June
16, 2000. The following matter was then considered:
<TABLE>
<CAPTION>
VOTES WITHHELD/
MATTER VOTES FOR AGAINST ABSTENTIONS
------ ----------- ---------- -----------
<S> <C> <C> <C> <C>
(2)* Approval of an Agreement and Plan of Reorganization which
provides for the reorganization of AIM Equity Funds, Inc. as
a Delaware business trust................................... 824,680,935 26,389,312 203,059,248**
</TABLE>
---------------
* Proposals 1 and 2 required approval by a combined vote of all of the
portfolios of AIM Equity Funds, Inc.
** Includes Broker Non-Votes
---------------
Effective September 30, 2000, Charles T. Bauer retired from his positions as an
officer and trustee of the Trust and Robert H. Graham succeeded Mr. Bauer as
Chairman of the Board.
19
<PAGE> 22
ABOUT YOUR FUND'S BOARD
The board of trustees is elected by you to look after your interests as a
mutual-fund shareholder. Trustees' responsibilities include choosing investment
advisors for your fund; keeping an eye on performance, operations and expenses;
making decisions regarding dividends and other duties.
Nine of your fund's 10 trustees are independent. In other words, they have no
affiliation with AIM except as independent fund trustees charged with
representing the interest of fund investors. Representing a cross section of
businesses and industries, they have achieved success and recognition in their
respective fields. They bring their considerable expertise and experience to
their positions as trustees.
Listed below are the members of the board of trustees of your mutual fund and
their respective titles.
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Robert H. Graham Robert H. Graham 11 Greenway Plaza
Chairman, President and Chairman and President Suite 100
Chief Executive Officer Houston, TX 77046
A I M Management Group Inc. Carol F. Relihan
Senior Vice President and Secretary INVESTMENT ADVISOR
Bruce L. Crockett
Director Gary T. Crum A I M Advisors, Inc.
ACE Limited; Senior Vice President 11 Greenway Plaza
Formerly Director, President, and Suite 100
Chief Executive Officer Edgar M. Larsen Houston, TX 77046
COMSAT Corporation Vice President
SUB-ADVISOR
Owen Daly II Dana R. Sutton
Formerly Director Vice President and Treasurer A I M Capital Management, Inc.
Cortland Trust Inc. 11 Greenway Plaza
Jim A. Coppedge Suite 100
Albert R. Dowden Assistant Secretary Houston, TX 77046
Chairman of the Board of Directors,
The Cortland Trust and DHJ Media, Inc.; and Melville B. Cox TRANSFER AGENT
Director, Magellan Insurance Company, Vice President
Formerly Director, President and A I M Fund Services, Inc.
Chief Executive Officer, Mary J. Benson P.O. Box 4739
Volvo Group North America, Inc.; and Assistant Vice President and Houston, TX 77210-4739
Senior Vice President, AB Volvo Assistant Treasurer
CUSTODIAN
Edward K. Dunn Jr. Sheri Morris
Chairman, Mercantile Mortgage Corp.; Assistant Vice President and State Street Bank and Trust Company
Formerly Vice Chairman and President, Assistant Treasurer 225 Franklin Street
Mercantile-Safe Deposit & Trust Co.; and Boston, MA 02110
President, Mercantile Bankshares Renee A. Friedli
Assistant Secretary COUNSEL TO THE TRUSTEES
Jack Fields
Chief Executive Officer P. Michelle Grace Ballard Spahr
Twenty First Century, Inc.; Assistant Secretary Andrews & Ingersoll, LLP
Formerly Member 1735 Market Street
of the U.S. House of Representatives Nancy L. Martin Philadelphia, PA 19103
Assistant Secretary
Carl Frischling COUNSEL TO THE DIRECTORS
Partner Ofelia M. Mayo
Kramer, Levin, Naftalis & Frankel LLP Assistant Secretary Kramer, Levin, Naftalis & Frankel LLP
919 Third Avenue
Prema Mathai-Davis Lisa A. Moss New York, NY 10022
Formerly Chief Executive Officer, Assistant Secretary
YWCA of the U.S.A. DISTRIBUTOR
Kathleen J. Pflueger
Lewis F. Pennock Assistant Secretary A I M Distributors, Inc.
Partner 11 Greenway Plaza
Pennock & Cooper Suite 100
Houston, TX 77046
Louis S. Sklar
Executive Vice President AUDITORS
Hines Interests
Limited Partnership KPMG LLP
700 Louisiana
Houston, TX 77002
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION (UNAUDITED)
Of ordinary dividends paid to shareholders during the Fund's tax year ended
October 31, 2000, 17.40% is eligible for the dividends received deduction for
corporations. The Fund distributed long-term capital gains of $1,073,197,845 for
the Fund's tax year ended October 31, 2000 of which 100% is 20% rate gain.
20
<PAGE> 23
------------------------------------
THE AMOUNT OF INVESTMENT
RISK YOU UNDERTAKE
DEPENDS ON SEVERAL FAC-
TORS: YOUR FINANCIAL OBJEC-
TIVES, YOUR RISK TOLERANCE
AND YOUR TIME HORIZON.
------------------------------------
THE AIM FUNDS(SM) RISK SPECTRUM
On the back cover of this fund report, you'll find the funds in the AIM family
divided into the following categories: sector, international/global, domestic,
taxable and tax-free. You'll also notice that the funds in each category are
listed from more aggressive to more conservative.
Within each category of this risk spectrum, we assessed each fund on the
basis of three factors: its holdings, volatility patterns and diversification.
From that assessment, we assigned a degree of risk to each fund and ordered them
accordingly.
Mutual funds typically invest in stocks, bonds or money market instruments,
each with varying levels of potential risk and reward. Generally, the riskier
the investment, the greater the potential reward.
o Stock funds usually offer the most upside potential, but they also carry
the greatest risk. Funds that invest in large, well-established
companies generally have lower risk/reward potential than funds that
invest in small, fast-growing companies.
o Funds that invest in a broad range of industries are considered more
diversified and less risky--and potentially less rewarding--than funds
that invest in a single sector, such as technology.
o Funds that invest in international markets tend to have higher
risk/reward potential than those that invest solely in domestic
securities.
o Bond funds are generally considered safer and therefore potentially less
rewarding than stock funds. Funds that invest in U.S. Treasury
securities typically have lower risk/reward potential than funds that
invest in higher-yielding junk bonds.
o Money market funds, while considered extremely safe, typically produce
lower returns than stock and bond funds. Moreover, it is possible that a
money market fund's returns will not keep pace with inflation.
The amount of investment risk you undertake depends on several factors: your
financial objectives, your risk tolerance and your time horizon. Are you saving
for your later years or are you investing to buy a large item, like a car or a
house, soon? Are you a young adult early in your work life, or are you
approaching retirement?
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 may need to be more
conservative to meet your goal.
Because these factors change over time, it's a good idea to reassess your
portfolio periodically to make sure it still meets your needs. Your financial
advisor can help you figure out if your portfolio is right where it should be or
if it could use some fine-tuning.
In assessing your investments, remember to keep diversification in mind.
Such a strategy, where you spread your investments over several types of mutual
funds, may help mitigate volatility and/or risk in your portfolio because not
all investments behave the same way at the same time.
AIM has a large selection of mutual funds to choose from. See your financial
advisor for insight into which ones would best fit in your portfolio.
<PAGE> 24
THE AIM FAMILY OF FUNDS--Registered Trademark--
------------------------------------
A I M Management Group Inc. has
provided leadership in the mutual fund
industry since 1976 and managed
approximately $183 billion in assets for
more than eight million shareholders,
including individual investors, corporate
clients and financial institutions,
as of September 30, 2000.
The Aim Family of Funds--Registered Trademark--is distributed
nationwide, and aim today is the eighth-
largest mutual fund complex in the
United States in assets under management,
according to Strategic Insight, an
independent mutual fund monitor.
AIM is a subsidiary of AMVESCAP PLC,
one of the world's largest independent
financial services companies with $414
billion in assets under management as of
September 30, 2000.
------------------------------------
<TABLE>
<S> <C>
EQUITY FUNDS
DOMESTIC EQUITY FUNDS INTERNATIONAL/GLOBAL EQUITY FUNDS
MORE AGGRESSIVE MORE AGGRESSIVE
AIM Small Cap Opportunities(1) AIM Latin American Growth
AIM Mid Cap Opportunities(2) AIM Developing Markets
AIM Large Cap Opportunities(3) AIM European Small Company
AIM Emerging Growth AIM Asian Growth
AIM Small Cap Growth(4) AIM Japan Growth
AIM Aggressive Growth AIM International Emerging Growth
AIM Mid Cap Growth AIM European Development
AIM Small Cap Equity AIM Euroland Growth
AIM Capital Development AIM Global Aggressive Growth
AIM Constellation AIM International Equity
AIM Dent Demographic Trends AIM Advisor International Value
AIM Select Growth AIM Global Trends
AIM Large Cap Growth AIM Global Growth
AIM Weingarten
AIM Mid Cap Equity MORE CONSERVATIVE
AIM Value II
AIM Charter SECTOR EQUITY FUNDS
AIM Value
AIM Blue Chip MORE AGGRESSIVE
AIM Basic Value
AIM Large Cap Basic Value AIM New Technology
AIM Balanced AIM Global Telecommunications and Technology
AIM Advisor Flex AIM Global Resources
AIM Global Financial Services
MORE CONSERVATIVE AIM Global Health Care
AIM Global Consumer Products and Services
AIM Global Infrastructure
AIM Advisor Real Estate
AIM Global Utilities
MORE CONSERVATIVE
FIXED-INCOME FUNDS
TAXABLE FIXED-INCOME FUNDS TAX-FREE FIXED-INCOME FUNDS
MORE AGGRESSIVE MORE AGGRESSIVE
AIM Strategic Income AIM High Income Municipal
AIM High Yield II AIM Tax-Exempt Bond of Connecticut
AIM High Yield AIM Municipal Bond
AIM Income AIM Tax-Free Intermediate
AIM Global Income AIM Tax-Exempt Cash
AIM Floating Rate(5)
AIM Intermediate Government MORE CONSERVATIVE
AIM Limited Maturity Treasury
AIM Money Market
MORE CONSERVATIVE
</TABLE>
The AIM Risk Spectrum illustrates equity and fixed-income funds from more
aggressive to more conservative. When assessing the degree of risk, three
factors were considered: the funds' portfolio holdings, volatility patterns over
time and diversification permitted within the fund. Fund rankings are relative
to one another within The AIM Family of Funds--Registered Trademark-- and should
not be compared with other investments. There is no guarantee that any one AIM
fund will be less volatile than any other. (1) AIM Small Cap Opportunities Fund
closed to new investors Nov. 4, 1999. (2) AIM Mid Cap Opportunities Fund closed
to new investors March 21, 2000. (3) AIM Large Cap Opportunities Fund closed to
new investors Sept. 29, 2000. (4) AIM Small Cap Growth Fund closed to new
investors Nov. 8, 1999. (5) AIM Floating Rate Fund was restructured to offer
multiple share classes April 3, 2000. Existing shares were converted to Class B
shares, and Class C shares commenced offering.
FOR MORE COMPLETE INFORMATION ABOUT ANY AIM FUND, INCLUDING SALES CHARGES AND
EXPENSES, OBTAIN THE APPROPRIATE PROSPECTUS(ES) FROM YOUR FINANCIAL ADVISOR.
PLEASE READ THE PROSPECTUS(ES) CAREFULLY BEFORE YOU INVEST OR SEND MONEY. This
report is not authorized for distribution to prospective investors unless
preceded or accompanied by a currently effective fund prospectus. If used as
sales material after Jan. 20, 2001, this report must be accompanied by a fund
Performance & Commentary or by an AIM Quarterly Review of Performance for the
most recent quarter end.
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