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AIM SPECIAL OPPORTUNITIES FUNDS
AIM SMALL CAP OPPORTUNITIES FUND
Supplement dated November 4, 1999
to the Prospectus dated September 27, 1999
as supplemented November 3, 1999
This supplement supersedes and replaces in its entirety the supplement dated
November 3, 1999.
AIM Small Cap Opportunities Fund (the "fund") has reached a size in assets under
management where, due to the limited size of the market of common stocks of
small capitalized companies, it has become increasingly difficult to satisfy the
fund's investment objective and guidelines. For this reason, effective at the
close of business on November 4, 1999, the fund will be closed to new investors.
Existing shareholders of the fund who maintain open accounts will be permitted
to continue to make additional investments in the fund.
The fund will accept properly completed Account Applications postmarked by the
close of business on November 4, 1999. IRA transfers or rollovers will be
accepted if a properly completed IRA application and transfer form are
postmarked by the close of business on November 4, 1999. New Account
Applications, IRA applications or IRA transfer forms received by fax will not be
accepted.
During this period that the fund is closed to new investors, the distribution
and service (12b-1) fee for Class A shares will be reduced from 0.35% to 0.25%
of the fund's average daily net assets attributable to the Class A shares.
The 12b-1 fees for Class B and Class C shares will not be reduced during this
closed period.
The fund may resume sales of shares to new investors at some future date if the
Board of Trustees determines that it would be in the best interest of the
shareholders.
The third full paragraph under the heading "INVESTMENT OBJECTIVE AND STRATEGIES"
on page 1 of the Prospectus should be deleted in its entirety and replaced with
the following:
"The fund will invest at least 80% of its total assets in equity
securities, or securities convertible into equity securities, of companies
with market capitalizations, at the time of purchase, within the range of
market capitalizations of companies included in the Russell
2000--Registered Trademark-- Index. The Russell 2000--Registered
Trademark-- Index measures the performance of the smallest 2000 companies
in the Russell 3000--Registered Trademark-- Index, which measures the
performance of the 3000 largest U.S. companies based on the total market
capitalization. The fund may also invest up to 25% of its total assets
in foreign securities."
At a meeting held on November 4, 1999, the Board of Trustees of AIM Special
Opportunities Funds (the trust) voted to adopt a new advisory agreement for
the fund, a series portfolio of the trust, subject to shareholder approval.
The most significant difference between the current advisory agreement and the
new advisory agreement is that the current agreement provides that A I M
Advisors, Inc., the fund's investment adviser, will receive fees based solely
on the net asset value of the fund, while the new advisory agreement provides
that the adviser will receive a performance-based fee.
If shareholders approve the new advisory agreement, the fund will pay a base
fee at the annual rate of 1.00% of average daily net assets. (This is the fee
that the fund currently pays.) This base fee will be adjusted, on a monthly
basis, based on a rolling 12-month measurement period (i) upward at the rate
of 0.15%, on a pro rata basis, for each percentage point the investment
performance of Class A shares of the fund exceeds the sum of 2.00% and the
investment record of the Russell 2000--Registered Trademark-- Index, or (ii)
downward at the rate of 0.15%, on a pro rata basis, for each percentage
point the investment record of the Russell 2000--Registered Trademark-- Index
less 2.00% exceeds the investment performance of the Class A shares of the
fund. The maximum increase or decrease is 1.00% annually, resulting in a maximum
annual fee payable of 1.75% of average
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daily net assets and a minimum annual fee of 0.25% of average daily net assets.
If shareholders approve the new advisory agreement, the base fee will become
effective January 1, 2000. The first performance adjustment will be made in
January 2001, based on the performance period ending December 31, 2000.
At its meeting, the Board of Trustees also voted, subject to shareholder
approval, to
o amend all of the fund's fundamental investment restrictions,
as described more fully in a supplement dated November 4, 1999
to the trust's statement of additional information; and
o make the fund's investment objective non-fundamental and
therefore changeable in the future by the Board of Trustees
without shareholder approval.
The fund's adviser does not currently anticipate that either of these proposed
changes will have any material effect on the way it manages the fund. If
shareholders approve these changes, such changes will become effective
December 31, 1999.
The Board of Trustees has called a meeting of shareholders of the fund to be
held on or about December 20, 1999 to vote on all of these matters. Only
shareholders of record as of September 29, 1999 are entitled to vote on these
matters.
At its meeting, the Board of Trustees also voted to approve to amend the
non-fundamental investment policy relating to investing in securities of
companies involving a special opportunity for the fund. Effective December 21,
1999, the non-fundamental investment policy relating to investments in
securities of companies involving a special opportunity for the fund will be
replaced in its entirety with the following:
"The fund seeks to meet its objective by investing, normally, at least
65% of its total assets in securities of companies involving a special
opportunity, i.e., an unusual development in a company or group of
companies."
At its meeting, the Board of Trustees also voted to approve to amend the
non-fundamental investment policy relating to the market capitalization
measurement for the fund. Effective December 21, 1999, the third full paragraph
under the heading "INVESTMENT OBJECTIVE AND STRATEGIES" on page 1 of the
Prospectus should be deleted in its entirety and replaced with the following:
"The fund will invest at least 65% of its total assets in equity
securities, or securities convertible into equity securities, of companies
with market capitalizations, at the time of purchase, within the range of
market capitalizations of companies included in the Russell
2000--Registered Trademark-- Index. The Russell 2000--Registered
Trademark-- Index measures the performance of the smallest 2000 companies
in the Russell 3000--Registered Trademark-- Index, which measures the
performance of the 3000 largest U.S. companies based on the total market
capitalization. The fund may also invest up to 25% of its total assets
in foreign securities."
