<PAGE> 1
SEMIANNUAL REPORT / JANUARY 31 2000
AIM MID CAP OPPORTUNITIES FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[ COVER IMAGE ]
-------------------------------------
THE ARTIST'S GARDEN AT VETHEUIL BY CLAUDE MONET
A BEAUTIFUL GARDEN, SUCH AS THE ONE DEPICTED IN MONET'S CLASSIC
PAINTING, IS USUALLY A PLEASING COMBINATION OF MANY DIFFERENT
FLOWERING PLANTS. SIMILARLY, IN AIM MID CAP OPPORTUNITIES
FUND, WE SEEK TO OWN THE STOCKS OF A BROAD CROSS-SECTION OF
RAPIDLY GROWING MID-SIZED COMPANIES IN AN EFFORT TO PRODUCE
ATTRACTIVE TOTAL RETURN.
-------------------------------------
AIM Mid Cap Opportunities Fund is for shareholders who seek long-term growth of
capital by investing in a portfolio consisting primarily of the stocks of
medium-sized companies which management believes involve "special
opportunities."
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Mid Cap Opportunities Fund's performance figures are historical, and
they reflect changes in net asset value and the reinvestment of
distributions. Had expenses not been waived in the past, returns for the
fund would have been lower.
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
expenses.
o The fund's average annual total returns, including sales charges, for the
periods ended 12/31/99, the most recent calendar quarter end, were as
follows. Class A shares, one year, 113.19%; inception (12/30/98), 112.75%.
Class B shares, inception (11/12/99), 9.44%. Class C shares, inception
(11/12/99), 13.39%.
o Because the fund's Class B and Class C shares have been in existence for
less than a year (since 11/12/99), total return provided is cumulative total
return that has not yet been annualized.
o The fund participates in the initial public offering (IPO) market, and a
significant portion of the fund's returns is attributable to its investment
in IPOs, which have a magnified impact due to the fund's relatively small
asset base and, prior to 11/12/99, its limited distribution. There is no
guarantee that as the fund's assets grow, it will continue to experience
substantially similar performance by investing in IPOs.
o After the reporting period ended, AIM Mid Cap Opportunities Fund closed to
new investors on March 21, 2000. Existing shareholders may continue to make
purchases into their account.
o Upon favorable shareholder approval, the fund's base management fee was
increased to 1.50% on January 1, 2000. Effective January 1, 2000, this fee
is subject to a maximum 1.00% performance adjustment upward or downward. As
a result, beginning January 1, 2001, the fund could pay a management fee
that ranges from 0.50% to 2.50% of average daily net assets based on its
performance.
o Investing in smaller companies may involve greater risk and potential
reward than investing in more established companies.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Dow Jones Industrial Average (the Dow) is a price-weighted average of 30
actively traded primarily industrial stocks.
o The unmanaged Standard & Poor's 400 MidCap Index (the S&P 400) comprises the
common stocks of approximately 400 mid-capitalization companies.
o The unmanaged Russell MidCap Growth Index measures the performance of those
Russell mid-capitalization companies with higher price-to-book ratios and
higher forecasted growth values.
o An investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends and 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 MID CAP OPPORTUNITIES FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
During 1999 and very early this year, well-known indicators
[PHOTO OF of large-company stocks such as the Dow Jones Industrial
Charles T. Average and the S&P 500 began to seem unstoppable. Yet
Bauer, toward the close of the six-month period covered by this
Chairman of report, both came to an abrupt halt. The Dow had reached an
the Board of all-time high of 11,723 in mid-January; by January 31, it
THE FUND had declined to 10,940. Similarly, the S&P 500 reached its
APPEARS HERE] all-time high of 1,469 at the end of 1999; one month later
that index stood at 1,394.
However, some sectors of the stock market, particularly
technology, remained favorites. The tech-dominated NASDAQ
Composite Index continued to rise, reaching 3,940 on January
31, up 49.52% in six months and headed toward new highs
after the close of the reporting period. The ascent of this
sector had many worried, however, as market valuations of
some tech companies soared to untested heights. While a
number of observers anticipated a change in market sentiment, no one can predict
when that might occur.
We think this divergent market is a good environment for the long-short
strategy pursued by your fund. The strategy, which is explained in further
detail in the pages that follow, attempts to take advantage of downturns in
segments of the market as well as rallies.
LOOKING AHEAD
As we look about at the close of this reporting period, we are encouraged by
multiple signs of economic health in Europe and Asia, not to mention the U.S.
economic expansion, which is now the longest on record; and we welcome the
Federal Reserve's vigilant stance on inflation. However, we know how quickly
the fortunes of the market or of a market segment can change. For our
shareholders, we therefore reiterate our commitment to investing through a
financial advisor. In addition to helping you select investments appropriate to
your time horizon and risk tolerance, a financial advisor can keep you informed
about how shifting market conditions affect you and your portfolio--and help
assure that when you do alter your investments, there's a logical reason for
doing so. AIM believes every investor should be guided by a financial
professional.
FUND MANAGERS COMMENT
In the pages that follow, your fund's portfolio managers discuss how they
managed your fund during the six months ended January 31, how the markets
behaved and what they foresee for the near future. We trust you will find their
discussion informative. If you have any questions or comments, we invite you to
contact us, either at our Web site, aimfunds.com, or through our Client Services
department at 800-959-4246. Information about your account is also available
through our automated AIM Investor Line, 800-246-5463.
Thank you for your continued participation in The AIM Family of Funds
- --Registered Trademark--.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
A I M Advisors, Inc.
-------------------------------------
WE THINK THIS
DIVERGENT MARKET IS A
GOOD ENVIRONMENT FOR
THE LONG-SHORT STRATEGY
PURSUED BY YOUR FUND.
-------------------------------------
AIM MID CAP OPPORTUNITIES FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
FUND BENEFITS FROM STRONG TECH-STOCK RALLY
MID-CAP STOCKS RECORDED RESPECTABLE GAINS DURING THE REPORTING PERIOD. HOW DID
AIM MID CAP OPPORTUNITIES FUND PERFORM?
The fund's performance was excellent. Excluding sales charges, total returns
were 42.37% for Class A shares for the six months ended January 31, 2000. The
fund significantly outperformed the Russell MidCap Index and the S&P 400 MidCap
Index, which posted gains of 6.53% and 6.59%, respectively.
Class B and Class C shares, which began sales on November 12, 1999, both
posted cumulative total returns of 13.94%. During the six-month reporting
period, the fund's total net assets increased from $4.8 million to $237.3
million.
HOW DID THE STOCK MARKET FARE DURING THE REPORTING PERIOD?
Several stock indexes, including the Dow, soared to new heights during the
reporting period, but this record-setting performance masked a relatively narrow
market. The best-performing stocks were those with the most perceived growth
potential: technology, telecommunications and broadcasting. Computers,
e-commerce and the Internet are changing the way the world communicates and
conducts business, and investors sought to capitalize on this revolution.
Stock markets were volatile as investors were concerned about rising
interest rates. During the reporting period, the Federal Reserve Board (the Fed)
raised the key federal funds rate from 5% to 5.50%. In December, a Fed decision
to leave rates unchanged sparked a market rally. Markets dipped in late January
amid heightened concerns that the Fed would again tighten monetary policy.
Large-, mid- and small-cap stock indexes all posted respectable gains for
the period. Value stocks underperformed as investors favored growth stocks by a
wide margin.
WHAT WAS BEHIND THE IMPROVED PERFORMANCE OF MID-CAP STOCKS?
The underperformance of mid-cap stocks in recent years left them favorably
priced relative to large-cap stocks, making mid-cap issues more attractive to
investors. Additionally, mid-cap companies are experiencing more dramatic
earnings growth than large firms. Unlike many large, multinational corporations,
mid-cap companies tend to conduct most of their business in the United States,
where economic growth has been robust. Consequently, the profits of mid-cap
firms are usually less affected by economic downturns abroad.
WHAT WAS BEHIND THE FUND'S
SOLID PERFORMANCE?
The fund's heavy weighting in technology stocks allowed it to take advantage of
the strong rally in that sector. At the end of the reporting period, technology
stocks made up 47% of the fund's holdings. Over the period, we reduced the
consumer-cyclical weighting from 19% to about 9% of the portfolio.
Please keep in mind that our sector weightings were the result of our
stock-selection process, which is based on company earnings and not
macro-economic predictions. We believe that earnings drive stock prices. We are
finding more companies with excellent growth prospects in the technology sector.
The fund participates in the initial public offering (IPO) market, and a
portion of the fund's returns is attributable to its investment in IPOs, which
had a magnified impact due to the fund's relatively small asset base and, prior
to November 11, 1999, its limited distribution. There is no guarantee that as
the fund's assets grow, it will continue to experience substantially similar
performance by investing in IPOs.
CUMULATIVE TOTAL RETURNS
For the six months ended 1/31/00, excluding sales charges
BAR CHART
================================================================================
Class A shares 42.37%
S&P 400 MidCap Index 6.59%
Russell MidCap Index 6.53%
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-
TERM PERFORMANCE. RESULTS OF AN INVESTMENT
MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE
HISTORICAL PERFORMANCE SHOWN.
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 1/31/00, including sales charges
================================================================================
CLASS A SHARES
Inception (12/30/98) 99.84%
1 year 94.69*
*105.93% excluding sales charges
CLASS B SHARES
Inception (11/12/99) 8.94%*
*13.94% excluding CDSC
Total return is cumulative total return that has not been annualized.
CLASS C SHARES
Inception (11/12/99) 12.94%*
* 13.94% excluding CDSC
Total return is cumulative total return that has not been annualized.
Your fund's total return includes sales charges, expenses and management fees.
For fund performance calculations and descriptions of the indexes cited on this
page, please see the inside front cover.
Past performance cannot guarantee comparable future results.
================================================================================
See important fund and index disclosures inside front cover.
AIM MID CAP OPPORTUNITIES FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
CAN YOU DESCRIBE THE FUND'S ALTERNATIVE INVESTMENT STRATEGY?
The fund may employ short selling and leveraging. While the fund owns the stocks
of companies expected to experience rapid earnings growth, it can borrow the
stocks of firms expected to experience declining earnings. These borrowed stocks
(short positions) are later sold, with the intention of buying them at an
anticipated lower price. We believe a mixed portfolio of owned and borrowed
stocks (long and short positions) can potentially protect the fund during market
downturns while allowing it to take advantage of rallies. Leveraging involves
borrowing money, usually to buy additional stocks.
HOW WAS THE FUND STRUCTURED AT THE END OF THE REPORTING PERIOD?
As of January 31, 2000, the fund owned more than 125 stocks and had 25 short
positions. Mid-cap stocks made up about 70% of the fund's long positions while
large-cap stocks made up 24%.
WHAT TECHNOLOGY STOCKS DID YOU LIKE?
Tech stocks in the portfolio included Kopin, the fund's top holding. The company
makes semiconductor wafers used in the manufacture of integrated circuits for
wireless and fiber telecommunications products. Advanced Fibre Communications,
the fund's second-largest holding, makes products that give telephone companies
and other telecommunications providers a cost-effective method of delivering
voice, video and data signals to small and medium-sized service areas. National
Information Consortium creates Web sites that allow people and companies to
transact business with government agencies.
Other tech stocks the fund owned were SanDisk, which makes computer-memory
storage devices; Scientific-Atlanta, which manufactures set-top boxes for
receiving cable-television programing; and SDL, which sells semiconductor
equipment to operators of fiber-opmtic, cable-television and
satellite-communications systems.
WHAT OTHER STOCKS PERFORMED WELL FOR THE FUND?
Cooper Cameron makes safety devices and other equipment for the oil and gas
industry while Jones Pharma distributes specialty pharmaceutical products.
WHAT IS YOUR OUTLOOK?
The unprecedented economic expansion of the past few years has helped push
stock-market indexes to record heights. Over the near term, we expect healthy
economic growth to continue. While such a trend would seemingly bode well for
stocks, it could contribute to volatility in the market, especially if the Fed
deems that the economy is growing too rapidly. On February 2, shortly after the
close of the reporting period, the central bank raised the federal funds rate to
5.75%. Although by no means a certainty, it appears that the Fed is poised to
raise interest rates again in the months ahead to slow economic growth and
forestall inflation. Uncertainty about the Fed's direction could have an
unsettling effect on the stock market.
However, we remain optimistic about the long-term prospects for mid-cap
stocks because of their attractive prices and the encouraging earnings-growth
projections for many mid-cap companies.
PORTFOLIO COMPOSITION
As of 1/31/00, based on total net assets
<TABLE>
<CAPTION>
===================================================================================================================================
TOP 10 STOCK HOLDINGS TOP 10 INDUSTRIES TOP 10 SHORT POSITIONS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Kopin Corp. 1.18% 1. Computers (Software & Services) 22.80% 1. Waters Corp. 0.99%
2. Advanced Fibre 2. Electronics (Semiconductors) 8.09 2. Rambus, Inc. 0.95
Communications, Inc. 1.16
3. National Information 3. Oil & Gas (Drilling & Equipment) 6.75 3. Guidant Corp. 0.82
Consortium, Inc. 1.13
4. SanDisk Corp 1.13 4. Communications Equipment 5.72 4. Chemdex Corp. 0.82
5. Scientific-Atlanta, Inc. 1.10 5. Broadcasting (Television, 5. Tidewater, Inc. 0.69
Radio & Cable) 3.63
6. SDL, Inc. 1.07 6. Electrical Equipment 3.12 6. Quintiles Transnational Corp. 0.69
7. Jones Pharma, Inc. 1.06 7. Health Care (Drugs--Generic
& other) 2.77 7. IDEC Pharmaceuticals Corp. 0.58
8. Cooper Cameron Corp. 1.06 8. Computers (Peripherals) 2.47 8. Profit Recovery Group
International, Inc. (The) 0.58
9. OnDisplay, Inc. 1.05 9. Equipment (Semiconductors) 2.26 9. Gap, Inc. (The) 0.58
10. Mercury Interactive Corp. 1.05 10. Computers (Networking) 2.17 10. Stryker Corp. 0.53
Keep in mind that the fund's portfolio is subject to change and there is no assurance that the fund will continue to hold
any particular security.
===================================================================================================================================
</TABLE>
See important fund and index disclosures inside front cover.
<PAGE> 6
SCHEDULE OF INVESTMENTS
January 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY
INTERESTS-86.07%
AUTO PARTS & EQUIPMENT-0.79%
Danaher Corp. 20,000 $ 862,500
- --------------------------------------------------------------
Lear Corp.(a) 36,000 1,010,250
- --------------------------------------------------------------
1,872,750
- --------------------------------------------------------------
BANKS (REGIONAL)-0.35%
Zions Bancorp 14,000 827,750
- --------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-3.63%
Adelphia Communications Corp.(a) 19,700 1,303,894
- --------------------------------------------------------------
Hispanic Broadcasting Corp.(a) 22,400 2,328,200
- --------------------------------------------------------------
Univision Communications,
Inc.-Class A(a) 20,400 2,185,350
- --------------------------------------------------------------
USA Networks, Inc.(a) 25,500 1,265,437
- --------------------------------------------------------------
Westwood One, Inc.(a) 25,000 1,521,875
- --------------------------------------------------------------
8,604,756
- --------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-5.72%
ADC Telecommunications, Inc.(a) 24,100 1,589,094
- --------------------------------------------------------------
Comverse Technology, Inc.(a) 12,000 1,720,500
- --------------------------------------------------------------
Copper Mountain Networks, Inc.(a) 25,800 1,425,450
- --------------------------------------------------------------
Ditech Communications Corp.(a) 13,700 1,611,462
- --------------------------------------------------------------
Finisar Corp.(a) 16,500 999,281
- --------------------------------------------------------------
Gilat Satellite Networks Ltd.
(Israel)(a) 15,400 1,643,950
- --------------------------------------------------------------
Polycom, Inc.(a) 33,000 1,992,375
- --------------------------------------------------------------
Scientific-Atlanta, Inc. 33,800 2,604,712
- --------------------------------------------------------------
13,586,824
- --------------------------------------------------------------
COMPUTERS (NETWORKING)-1.95%
Emulex Corp.(a) 12,800 1,280,000
- --------------------------------------------------------------
Extreme Networks, Inc.(a) 18,400 1,557,100
- --------------------------------------------------------------
VeriSign, Inc.(a) 11,200 1,794,800
- --------------------------------------------------------------
4,631,900
- --------------------------------------------------------------
COMPUTERS (PERIPHERALS)-2.47%
Adaptec, Inc.(a) 33,100 1,733,612
- --------------------------------------------------------------
QLogic Corp.(a) 9,500 1,452,906
- --------------------------------------------------------------
SanDisk Corp.(a) 20,000 2,677,500
- --------------------------------------------------------------
5,864,018
- --------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-21.95%
Adobe Systems, Inc. 21,800 1,200,362
- --------------------------------------------------------------
Advanced Fibre Communications,
Inc.(a) 75,000 2,760,937
- --------------------------------------------------------------
Alteon Websystems, Inc.(a) 11,100 1,091,962
- --------------------------------------------------------------
Aspect Development, Inc.(a) 23,500 1,574,500
- --------------------------------------------------------------
BEA Systems, Inc.(a) 20,800 1,567,800
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
BindView Development Corp.(a) 19,200 $ 883,200
- --------------------------------------------------------------
Broadbase Software, Inc.(a) 19,600 1,727,250
- --------------------------------------------------------------
Check Point Software Technologies
Ltd. (Israel)(a) 16,600 1,828,853
- --------------------------------------------------------------
Electronics for Imaging, Inc.(a) 27,600 1,293,750
- --------------------------------------------------------------
Entrust Technologies, Inc. 24,000 1,137,000
- --------------------------------------------------------------
FreeMarkets, Inc.(a) 4,700 1,076,300
- --------------------------------------------------------------
Go2Net, Inc.(a) 26,700 2,149,350
- --------------------------------------------------------------
HomeStore.com, Inc.(a) 15,000 1,463,437
- --------------------------------------------------------------
Inktomi Corp.(a) 23,200 2,306,950
- --------------------------------------------------------------
IONA Technologies PLC-ADR
(Ireland)(a) 39,500 1,876,250
- --------------------------------------------------------------
J.D. Edwards & Co.(a) 64,800 1,931,850
- --------------------------------------------------------------
Lycos, Inc.(a) 27,700 2,034,219
- --------------------------------------------------------------
Macrovision Corp.(a) 13,400 1,255,412
- --------------------------------------------------------------
Mercury Interactive Corp.(a) 22,800 2,493,750
- --------------------------------------------------------------
Micromuse, Inc.(a) 10,400 1,697,150
- --------------------------------------------------------------
OnDisplay, Inc.(a) 31,000 2,499,375
- --------------------------------------------------------------
Orbotech, Ltd. (Israel)(a) 21,100 1,603,600
- --------------------------------------------------------------
Portal Software, Inc.(a) 37,200 1,846,050
- --------------------------------------------------------------
Preview Systems, Inc.(a) 30,500 1,494,500
- --------------------------------------------------------------
QRS Corp.(a) 11,600 838,100
- --------------------------------------------------------------
Rational Software Corp.(a) 33,400 1,736,800
- --------------------------------------------------------------
RealNetworks, Inc.(a) 15,500 2,436,406
- --------------------------------------------------------------
Software.com, Inc.(a) 12,300 834,862
- --------------------------------------------------------------
Telescan, Inc.(a) 78,200 1,671,525
- --------------------------------------------------------------
Verio, Inc.(a) 27,900 1,796,062
- --------------------------------------------------------------
WebTrends Corp.(a) 23,000 1,980,875
- --------------------------------------------------------------
52,088,437
- --------------------------------------------------------------
ELECTRIC COMPANIES-0.99%
Montana Power Co. (The) 57,800 2,340,900
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-3.12%
American Power Conversion Corp.(a) 42,000 1,158,937
- --------------------------------------------------------------
CommScope, Inc.(a) 32,650 1,242,741
- --------------------------------------------------------------
Cree, Inc.(a) 24,800 2,334,300
- --------------------------------------------------------------
Molex, Inc.-Class A 33,500 1,281,375
- --------------------------------------------------------------
Sanmina Corp.(a) 13,000 1,381,250
- --------------------------------------------------------------
7,398,603
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-8.09%
Amkor Technology, Inc.(a) 39,100 1,241,425
- --------------------------------------------------------------
Atmel Corp.(a) 46,100 1,431,981
- --------------------------------------------------------------
Burr-Brown Corp.(a) 27,250 1,008,250
- --------------------------------------------------------------
Flextronics International Ltd.
(Singapore)(a) 44,500 2,211,094
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)
GlobeSpan, Inc.(a) 15,900 $ 1,764,900
- --------------------------------------------------------------
Micrel, Inc.(a) 19,200 1,214,400
- --------------------------------------------------------------
Microchip Technology, Inc.(a) 11,700 735,637
- --------------------------------------------------------------
RF Micro Devices, Inc.(a) 30,100 2,438,100
- --------------------------------------------------------------
SDL, Inc.(a) 9,800 2,540,037
- --------------------------------------------------------------
Semtech Corp.(a) 23,200 1,392,000
- --------------------------------------------------------------
St Assembly Test Services Ltd.-ADR
(Singapore)(a) 44,300 1,705,550
- --------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 8,600 374,100
- --------------------------------------------------------------
Xilinx, Inc.(a) 25,100 1,148,325
- --------------------------------------------------------------
19,205,799
- --------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-2.26%
Credence Systems Corp.(a) 20,000 1,697,500
- --------------------------------------------------------------
Lam Research Corp.(a) 13,000 1,623,375
- --------------------------------------------------------------
Novellus Systems, Inc.(a) 41,600 2,043,600
- --------------------------------------------------------------
5,364,475
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-1.01%
MGIC Investment Corp. 22,000 1,024,375
- --------------------------------------------------------------
SEI Investments Co. 13,200 1,376,100
- --------------------------------------------------------------
2,400,475
- --------------------------------------------------------------
GAMING, LOTTERY & PARIMUTUEL
COMPANIES-0.56%
Park Place Entertainment Corp.(a) 126,700 1,330,350
- --------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.00%
Allergan, Inc. 41,800 2,382,600
- --------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-2.77%
Forest Laboratories, Inc.-Class
A(a) 32,100 2,166,750
- --------------------------------------------------------------
Jones Pharma Inc. 43,400 2,519,913
- --------------------------------------------------------------
Medicis Pharmaceutical Corp.-Class
A(a) 45,400 1,895,450
- --------------------------------------------------------------
6,582,113
- --------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.01%
Bausch & Lomb, Inc. 18,300 1,134,600
- --------------------------------------------------------------
Biomet, Inc. 31,500 1,254,094
- --------------------------------------------------------------
2,388,694
- --------------------------------------------------------------
HEALTH CARE (SPECIALIZED
SERVICES)-0.60%
Lincare Holdings, Inc.(a) 40,400 1,431,675
- --------------------------------------------------------------
INSURANCE (PROPERTY-CASUALTY)-0.54%
Radian Group Inc. 31,600 1,273,875
- --------------------------------------------------------------
INVESTMENT MANAGEMENT-0.33%
Knight/Trimark Group, Inc.-Class
A(a) 24,500 774,813
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
LEISURE TIME (PRODUCTS)-1.05%
Harley-Davidson, Inc. 35,400 $ 2,484,638
- --------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-1.18%
Kopin Corp.(a) 39,900 2,807,963
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-1.49%
Millipore Corp. 44,400 1,900,875
- --------------------------------------------------------------
Zebra Technologies Corp.-Class A(a) 27,700 1,639,494
- --------------------------------------------------------------
3,540,369
- --------------------------------------------------------------
NATURAL GAS-0.87%
Dynegy, Inc. 66,600 2,064,600
- --------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-6.75%
BJ Services Co.(a) 40,800 1,749,300
- --------------------------------------------------------------
Cooper Cameron Corp.(a) 50,600 2,504,700
- --------------------------------------------------------------
ENSCO International Inc. 85,400 1,953,525
- --------------------------------------------------------------
Nabors Industries, Inc.(a) 52,600 1,558,275
- --------------------------------------------------------------
R&B Falcon Corp.(a) 139,100 1,764,831
- --------------------------------------------------------------
Rowan Companies, Inc.(a) 59,700 1,354,444
- --------------------------------------------------------------
Smith International, Inc.(a) 34,400 1,765,150
- --------------------------------------------------------------
Transocean Sedco Forex Inc. 53,200 1,692,425
- --------------------------------------------------------------
Weatherford International, Inc.(a) 44,400 1,667,775
- --------------------------------------------------------------
16,010,425
- --------------------------------------------------------------
OIL & GAS (EXPLORATION &
PRODUCTION)-0.36%
EOG Resources, Inc. 53,400 847,725
- --------------------------------------------------------------
RAILROADS-0.89%
Kansas City Southern Industries,
Inc. 30,600 2,117,138
- --------------------------------------------------------------
RESTAURANTS-0.49%
Outback Steakhouse, Inc.(a) 46,950 1,162,013
- --------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.83%
Dollar Tree Stores, Inc.(a) 24,900 1,097,156
- --------------------------------------------------------------
Ross Stores, Inc. 68,200 869,550
- --------------------------------------------------------------
1,966,706
- --------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.81%
BJ's Wholesale Club, Inc.(a) 55,100 1,928,500
- --------------------------------------------------------------
RETAIL (SPECIALTY)-1.87%
Bed Bath & Beyond, Inc.(a) 21,700 589,969
- --------------------------------------------------------------
Tiffany & Co. 17,300 1,280,200
- --------------------------------------------------------------
Williams-Sonoma, Inc.(a) 42,500 1,346,719
- --------------------------------------------------------------
Zale Corp.(a) 34,200 1,222,650
- --------------------------------------------------------------
4,439,538
- --------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-1.58%
American Eagle Outfitters, Inc.(a) 30,250 1,098,453
- --------------------------------------------------------------
Men's Wearhouse, Inc. (The)(a) 51,000 1,217,625
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (SPECIALTY-APPAREL)-(CONTINUED)
Talbots, Inc. (The) 40,200 $ 1,424,588
- --------------------------------------------------------------
3,740,666
- --------------------------------------------------------------
SERVICES
(ADVERTISING/MARKETING)-1.35%
Lamar Advertising Co.(a) 33,500 1,963,938
- --------------------------------------------------------------
Young & Rubicam Inc. 23,100 1,244,513
- --------------------------------------------------------------
3,208,451
- --------------------------------------------------------------
SERVICES (COMMERCIAL &
CONSUMER)-1.17%
Ariba, Inc.(a) 500 81,313
- --------------------------------------------------------------
National Information Consortium,
Inc.(a) 61,300 2,689,538
- --------------------------------------------------------------
2,770,851
- --------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-1.67%
Clarent Corp.(a) 15,500 1,344,625
- --------------------------------------------------------------
Critical Path, Inc.(a) 19,500 1,249,219
- --------------------------------------------------------------
Safeguard Scientifics, Inc.(a) 9,700 1,377,400
- --------------------------------------------------------------
3,971,244
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-2.10%
CSG Systems International, Inc.(a) 42,100 1,591,906
- --------------------------------------------------------------
DST Systems, Inc.(a) 28,400 1,764,350
- --------------------------------------------------------------
Fiserv, Inc.(a) 48,300 1,639,181
- --------------------------------------------------------------
4,995,437
- --------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-0.47%
Western Wireless Corp.-Class A(a) 20,500 1,117,250
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-0.40%
Primus Telecommunications Group,
Inc.(a) 29,700 948,544
- --------------------------------------------------------------
TELEPHONE-0.83%
RCN Corp.(a) 33,000 1,961,438
- --------------------------------------------------------------
TEXTILES (APPAREL)-0.77%
Jones Apparel Group, Inc.(a) 83,001 1,826,022
- --------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$196,449,673) 204,260,325
- --------------------------------------------------------------
PREFERRED STOCKS-0.32%
OIL & GAS (EXPLORATION &
PRODUCTION)-0.32%
Kerr-McGee Corp.-5.50% Pfd. DECS
(Cost $719,785) 21,000 750,750
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
CORPORATE CONVERTIBLE BONDS-0.96%
COMPUTERS (NETWORKING)-0.22%
Exodus Communications, Inc., Conv.
Bonds 4.75%, 07/15/08 (Acquired
12/02/99; Cost $310,000)(b) $ 310,000 538,904
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE &
SERVICES)-0.74%
Rational Software Corp., Conv.
Bonds 5.00%, 02/01/07 (Acquired
01/28/00; Cost $1,787,875)(b) $1,780,000 $ 1,753,300
- --------------------------------------------------------------
Total Corporate Convertible
Bonds & Notes (Cost
$2,097,875) 2,292,204
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF EXERCISE EXPIRATION
CONTRACTS PRICE DATE
<S> <C> <C> <C> <C>
OPTIONS
PURCHASED-2.42%
CALLS-0.20%
Lycos, Inc.
(Computers-
Software &
Services) 285 $ 90 Apr-00 185,250
- -----------------------------------------------------------------------
Mirage Resorts,
Inc. (Gaming,
Lottery &
Parimutuel
Companies) 1,898 15 Feb-00 47,450
- -----------------------------------------------------------------------
Morgan Stanley
Cyclical Index
(Investments) 270 590 Mar-00 62,438
- -----------------------------------------------------------------------
Network Associates,
Inc. (Computers-
Software &
Services) 1,123 30 Feb-00 77,206
- -----------------------------------------------------------------------
OSX Index (Oil &
Gas-Services) 450 90 Feb-00 106,875
- -----------------------------------------------------------------------
479,219
- -----------------------------------------------------------------------
PUTS-2.22%
S&P 500 Index 344 1,375 Feb-00 709,500
341 1,400 Feb-00 1,005,950
180 1,375 Mar-00 600,750
372 1,400 Mar-00 1,564,725
200 1,450 Mar-00 1,390,000
- -----------------------------------------------------------------------
5,270,925
- -----------------------------------------------------------------------
Total Options Purchased
(Cost $6,188,781) 5,750,144
- -----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
MONEY MARKET FUNDS-12.66%
STIC Liquid Assets Portfolio(c) 15,018,026 15,018,026
- ---------------------------------------------------------------
STIC Prime Portfolio(c) 15,018,026 15,018,026
- ---------------------------------------------------------------
Total Money Market Funds (Cost
$30,036,052) 30,036,052
- ---------------------------------------------------------------
TOTAL INVESTMENTS-102.43% (Cost
$235,492,166) 243,089,475
- ---------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(2.43%) (5,760,387)
- ---------------------------------------------------------------
NET ASSETS-100.00% $237,329,088
===============================================================
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
SHARES
SOLD MARKET
SHORT VALUE
<S> <C> <C>
SECURITIES SOLD SHORT(d)
Abercrombie & Fitch Co.-Class A 45,000 $ 961,875
- --------------------------------------------------------------
Blyth Industries, Inc. 27,000 632,813
- --------------------------------------------------------------
Cardinal Health, Inc. 21,200 1,013,625
- --------------------------------------------------------------
Chemdex Corp. 19,900 1,940,250
- --------------------------------------------------------------
Equifax, Inc. 26,300 565,450
- --------------------------------------------------------------
Gap, Inc. (The) 30,600 1,367,438
- --------------------------------------------------------------
Globalstar Telecommunications Ltd. 34,500 1,136,344
- --------------------------------------------------------------
Guidant Corp. 37,000 1,947,125
- --------------------------------------------------------------
IDEC Pharmaceuticals Corp. 11,000 1,388,063
- --------------------------------------------------------------
Newell Rubbermaid, Inc. 28,500 855,000
- --------------------------------------------------------------
Polaroid Corp. 13,750 326,562
- --------------------------------------------------------------
Profit Recovery Group International,
Inc. (The) 50,800 1,377,950
- --------------------------------------------------------------
Progressive Corp. (The) 9,200 572,700
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
SOLD MARKET
SHORT VALUE
<S> <C> <C>
SECURITIES SOLD SHORT(d)-(CONTINUED)
Quintiles Transnational Corp. 61,900 $ 1,636,481
- --------------------------------------------------------------
Rambus, Inc. 30,000 2,261,250
- --------------------------------------------------------------
Royal Caribbean Cruises Ltd. 25,000 1,235,937
- --------------------------------------------------------------
SafeScience, Inc. 1,000 14,188
- --------------------------------------------------------------
Stryker Corp. 20,000 1,260,000
- --------------------------------------------------------------
Sunrise Technologies International, Inc. 35,000 249,375
- --------------------------------------------------------------
Tech Data Corp. 32,000 713,000
- --------------------------------------------------------------
Tidewater Inc. 58,000 1,649,375
- --------------------------------------------------------------
Tyco International Ltd. 2,250 96,187
- --------------------------------------------------------------
VISX, Inc. 37,600 1,066,900
- --------------------------------------------------------------
Waters Corp. 31,700 2,341,837
- --------------------------------------------------------------
Whole Foods Market, Inc. 2,900 133,400
- --------------------------------------------------------------
$26,743,125
==============================================================
</TABLE>
Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
DECS - Dividend Enhanced Convertible Stock
Pfd. - Preferred
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The
aggregate market value of these securities represented 0.96% of the Fund's
net assets.
(c) The money market fund has the same investment advisor as the Fund.
(d) Collateral on short sales was segregated by the fund in the amount
of $30,907,530 which represents 115.57% of market value.
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
January 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments, at market value (cost
$235,492,166) $243,089,475
- ---------------------------------------------------------
Receivables for:
Investments sold 4,922,935
- ---------------------------------------------------------
Short positions covered 22,952
- ---------------------------------------------------------
Investments sold short 25,961,005
- ---------------------------------------------------------
Fund shares sold 13,388,325
- ---------------------------------------------------------
Interest on short positions 52,459
- ---------------------------------------------------------
Amount due from advisor 1,438
- ---------------------------------------------------------
Dividends and interest 152,673
- ---------------------------------------------------------
Investment for deferred compensation plan 5,817
- ---------------------------------------------------------
Other assets 120,669
- ---------------------------------------------------------
Total assets 287,717,748
=========================================================
LIABILITIES:
Payables for:
Investments purchased 22,545,492
- ---------------------------------------------------------
Fund shares repurchased 524,975
- ---------------------------------------------------------
Amount due to broker 197,287
- ---------------------------------------------------------
Deferred compensation plan 5,817
- ---------------------------------------------------------
Dividends on short positions 8,728
- ---------------------------------------------------------
Market value of securities sold short
(proceeds from short sales $25,961,005) 26,743,125
- ---------------------------------------------------------
Accrued administrative services fees 4,235
- ---------------------------------------------------------
Accrued distribution fees 113,041
- ---------------------------------------------------------
Accrued trustees' fees 513
- ---------------------------------------------------------
Accrued transfer agent fees 18,629
- ---------------------------------------------------------
Accrued operating expenses 226,818
- ---------------------------------------------------------
Total liabilities 50,388,660
- ---------------------------------------------------------
Net assets applicable to shares outstanding $237,329,088
=========================================================
NET ASSETS:
Class A $117,211,387
=========================================================
Class B $ 89,131,556
=========================================================
Class C $ 30,986,145
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 5,769,706
=========================================================
Class B 4,391,423
=========================================================
Class C 1,526,742
=========================================================
Class A:
Net asset value and redemption price per
share $ 20.31
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $20.31 / 94.50%) $ 21.49
=========================================================
Class B:
Net asset value and offering price per
share $ 20.30
=========================================================
Class C:
Net asset value and offering price per
share $ 20.30
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended January 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C>
Interest $ 319,642
- ---------------------------------------------------------
Dividend 244,017
- ---------------------------------------------------------
Total investment income 563,659
- ---------------------------------------------------------
EXPENSES:
Advisory fees 370,827
- ---------------------------------------------------------
Administrative services fees 22,184
- ---------------------------------------------------------
Professional fees 50,695
- ---------------------------------------------------------
Custodian fees 13,102
- ---------------------------------------------------------
Transfer agent fees-Class A 20,547
- ---------------------------------------------------------
Transfer agent fees-Class B 16,924
- ---------------------------------------------------------
Transfer agent fees-Class C 5,570
- ---------------------------------------------------------
Trustees' fees 3,420
- ---------------------------------------------------------
Distribution fees-Class A 54,874
- ---------------------------------------------------------
Distribution fees-Class B 98,899
- ---------------------------------------------------------
Distribution fees-Class C 32,549
- ---------------------------------------------------------
Registration and filing fees 71,118
- ---------------------------------------------------------
Dividends on short sales 14,134
- ---------------------------------------------------------
Other 11,039
- ---------------------------------------------------------
Total expenses 785,882
- ---------------------------------------------------------
Less: Expenses paid indirectly (1,658)
- ---------------------------------------------------------
Fees waived by advisor (153,322)
- ---------------------------------------------------------
Net expenses 630,902
- ---------------------------------------------------------
Net investment income (loss) (67,243)
=========================================================
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, SECURITIES SOLD
SHORT, FUTURES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 6,764,615
- ---------------------------------------------------------
Futures contracts (3,973)
- ---------------------------------------------------------
Securities sold short (166,548)
- ---------------------------------------------------------
Option contracts written (1,400,152)
- ---------------------------------------------------------
5,193,942
- ---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 6,777,046
- ---------------------------------------------------------
Securities sold short (783,954)
- ---------------------------------------------------------
Option contracts written 3,919
- ---------------------------------------------------------
5,997,011
- ---------------------------------------------------------
Net gain from investment securities,
securities sold short, futures and option
contracts 11,190,953
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $11,123,710
=========================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended January 31, 2000 and the period December 30, 1998 (date
operations commenced) through July 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
JANUARY 31, JULY 31,
2000 1999
------------ ----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (67,243) $ (12,670)
- ---------------------------------------------------------------------------------------
Net realized gain from investment securities, securities
sold short, futures and option contracts 5,193,942 454,839
- ---------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, securities sold short and option contracts 5,997,011 818,178
- ---------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 11,123,710 1,260,347
- ---------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (50,836) --
- ---------------------------------------------------------------------------------------
Class B (21,194) --
- ---------------------------------------------------------------------------------------
Class C (6,683) --
- ---------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (685,178) --
- ---------------------------------------------------------------------------------------
Class B (9,187) --
- ---------------------------------------------------------------------------------------
Class C (2,919) --
- ---------------------------------------------------------------------------------------
Share transactions-net:
Class A 106,347,599 3,529,528
- ---------------------------------------------------------------------------------------
Class B 85,851,932 --
- ---------------------------------------------------------------------------------------
Class C 29,991,969 --
- ---------------------------------------------------------------------------------------
Net increase in net assets 232,539,213 4,789,875
- ---------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 4,789,875 --
- ---------------------------------------------------------------------------------------
End of period $237,329,088 $4,789,875
- ---------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Shares of beneficial interest $225,721,028 $3,529,528
- ---------------------------------------------------------------------------------------
Undistributed net investment income (loss) (145,956) --
- ---------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, securities sold short, futures and option
contracts 4,938,827 442,169
- ---------------------------------------------------------------------------------------
Unrealized appreciation of investment securities,
securities sold short and option contracts 6,815,189 818,178
- ---------------------------------------------------------------------------------------
$237,329,088 $4,789,875
=======================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
January 31, 2000
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Mid Cap Opportunities Fund (the "Fund") is a series portfolio of AIM Special
Opportunities 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 three
separate portfolios, each having an unlimited number of shares of beneficial
interest. The Fund currently offers three different classes of shares: Class A
shares, Class B shares and Class C shares. Class A shares are sold with a
front-end sales charge. Class B shares and Class C shares are sold with a
contingent deferred sales charge. Class B shares and Class C shares commenced
sales on November 12, 1999. Matters affecting each portfolio or class will be
voted on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is long-term capital appreciation.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The following is a summary of the significant accounting policies
followed by the Fund in the preparation of its financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price 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 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, quality, 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 trading 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 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 as earned from settlement date and is recorded
on the accrual basis. Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income and net realized capital gains,
if any, are generally paid annually and recorded on ex-dividend date. The
Fund may elect to use a portion of the proceeds of fund share redemptions as
distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
E. Securities Sold Short -- When the Fund sells common stock short, an amount
equal to the proceeds of the sales is recorded as an asset. This asset is
offset by a liability (representing the borrowed security) recorded on the
books of the Fund at the market value of the common stock determined each
day in accordance with the procedures for security valuations disclosed in
"A" above. The Fund's risk is that the value of the security will increase
rather than decline and thus an unrealized loss will be recorded. When the
Fund closes out a short position by delivering the stock sold short, the
Fund will realize a gain or loss and the liability related to such short
position will be eliminated. The Fund is required to segregate cash or
securities as collateral at a level that is equal to the obligation to the
broker who delivered such securities to the
10
<PAGE> 13
buyer on behalf of the Fund. The amount segregated as collateral deposits
will not at any time exceed 25% of the Fund's net assets. Dividend expense
on short sales is recorded on ex-dividend date.
F. Call Options -- The Fund may write and buy call options, including
securities index options. 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 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.
An option on a securities index gives the holder the right to receive a
cash "exercise settlement amount" equal to the difference between the
exercise price of the option and the value of the underlying stock index on
the exercise date, multiplied by a fixed "index multiplier." A securities
index fluctuates with changes in the market values of the securities
included in the index. In the purchase of securities index options the
principal risk is that the premium and transaction costs paid by the Fund in
purchasing an option will be lost if the changes in the level of the index
do not exceed the cost of the option. In writing securities index options,
the principal risk is that the Fund could bear a loss on the options that
would be only partially offset (or not offset at all) by the increased value
or reduced cost of hedged securities. Moreover, in the event the Fund were
unable to close an option it had written, it might be unable to sell the
securities used as cover. The Fund will not write options if, immediately
thereafter, the aggregate value of the securities underlying all such
options, determined as of the dates such options were written, would exceed
50% of the total assets of the Fund.
G. Put Options -- The Fund may purchase and write put options including
securities index options. By purchasing a put option, the Fund obtains the
right (but not the obligation) to sell the options' underlying instrument at
a fixed strike price. In return for this right, the Fund pays an option
premium. The option's underlying instrument may be a security, securities
index, or a futures contract. Put options may be used by the Fund to hedge
securities it owns by locking in a minimum price at which the Fund can sell.
If security prices fall, the put option could be exercised to offset all or
a portion of the Fund's resulting losses. At the same time, because the
maximum the Fund has at risk is the cost of the option, purchasing put
options does not eliminate the potential for the Fund to profit from an
increase in the value of the securities hedge. The Fund may write put
options to earn additional income in the form of option premiums if it
expects the price of the underlying securities to remain stable or rise
during the option period so that the option will not be exercised. The risk
in this strategy is that the price of the underlying securities may decline
by an amount greater than the premium received. The Fund will not purchase
options if, at the time of the investment, the aggregate premiums paid for
outstanding options will exceed 25% of the Fund's total assets.
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 transfer agency expenses directly
attributable to a class of shares are charged to that class' operations. All
other expenses which are attributable to more than one class are allocated
among the classes.
11
<PAGE> 14
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 comprised of two components. The Fund
pays AIM a base management fee calculated at the annual rate of 1.50% of the
Fund's average daily net assets. The base management fee will be adjusted, on a
monthly basis starting January 1, 2001, (i) upward at the rate of 0.20%, on a
pro rata basis, for each percentage point the 12-month rolling investment
performance of the Class A shares exceeds the sum of 2.00% and the 12-month
rolling investment record of the S&P MidCap 400 Index, or (ii) downward at the
rate of 0.20%, on a pro rata basis, for each percentage point the 12-month
rolling investment record of the S&P MidCap 400 Index less 2.00% exceeds the
12-month rolling investment performance of the Class A shares. Prior to January
1, 2000, the advisory fee was 1.00% of the Fund's average daily net assets.
During the six months ended January 31, 2000, AIM waived fees of $153,322.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended January 31, 2000, AIM
was paid $22,184 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the six months ended January 31, 2000, AFS
was paid $20,025 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 and Class C 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
0.35% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the six months ended January 31,
2000, the Class A, Class B and Class C shares paid AIM Distributors $54,874,
$98,899 and $32,549, respectively, as compensation under the Plans.
AIM Distributors received commissions of $282,036, from sales of the Class A
shares of the Fund during the six months ended January 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 six months
ended January 31, 2000, AIM Distributors received $2,480 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 six months ended January 31, 2000, the Fund paid legal fees of
$1,580 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel
to the Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
During the six months ended January 31, 2000, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian
fees of $368 and $1,290, respectively, under expense offset arrangements. The
effect of the above arrangements resulted in a reduction of the Fund's total
expenses of $1,658 during the six months ended January 31, 2000.
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 The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $240,000,000 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. The funds which
are party to the line of credit are charged a commitment fee of 0.10% on the
unused balance of the committed line. Commitment fees paid by the Fund for the
six months ended January 31, 2000 were $1,423.
During the six months ended January 31, 2000 the Fund did not borrow under the
line of credit.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended January 31, 2000 was
$235,432,661 and $45,004,379, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
and securities sold short, for tax purposes, as of January 31, 2000 was as
follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of:
Investment securities $ 18,542,026
- ---------------------------------------------------------
Securities sold short 1,348,026
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of:
Investment securities (10,951,977)
- ---------------------------------------------------------
Securities sold short (2,130,146)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $ 6,807,929
=========================================================
Cost of investments for tax purposes is $235,499,426.
Proceeds from securities sold short is the same for tax
and financial statement reporting purposes.
</TABLE>
12
<PAGE> 15
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended January 31, 2000 and
the year ended July 31, 1999 were as follows:
<TABLE>
<CAPTION>
JANUARY 31, 2000 JULY 31, 1999
------------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ------- ----------
<S> <C> <C> <C> <C>
Sold:
Class A 5,747,100 $111,904,786 331,198 $3,867,041
- --------------------------------------------------------------------------------------------------------------
Class B* 4,415,608 86,333,021 -- --
- --------------------------------------------------------------------------------------------------------------
Class C* 1,599,193 30,440,034 -- --
- --------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 39,350 706,145 -- --
- --------------------------------------------------------------------------------------------------------------
Class B* 1,106 21,545 -- --
- --------------------------------------------------------------------------------------------------------------
Class C* 511 9,927 -- --
- --------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (320,225) (6,263,332) (27,717) (337,513)
- --------------------------------------------------------------------------------------------------------------
Class B* (25,291) (502,634) -- --
- --------------------------------------------------------------------------------------------------------------
Class C* (72,962) (457,992) -- --
- --------------------------------------------------------------------------------------------------------------
11,384,390 $222,191,500 303,481 $3,529,528
==============================================================================================================
</TABLE>
* Class B and Class C commenced sales on November 12, 1999.
13
<PAGE> 16
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A outstanding
during the six months ended January 31, 2000 and during the period December 30,
1998 (date operations commenced) through July 31, 1999, for a share of Class B
outstanding during the period November 12, 1999 (date sales commenced) through
January 31, 2000 and for a share of Class C outstanding during the period
November 12, 1999 (date sales commenced) through January 31, 2000.
<TABLE>
<CAPTION>
CLASS A
----------------------
JANUARY 31, JULY 31,
2000 1999
----------- --------
<S> <C> <C>
Net asset value, beginning of period $ 15.78 $ 10.00
- ------------------------------------------------------------ -------- -------
Income from investment operations:
Net investment income (loss) 0.01 (0.04)
- ------------------------------------------------------------ -------- -------
Net gains on securities (both realized and unrealized) 6.42 5.82
- ------------------------------------------------------------ -------- -------
Total from investment operations 6.43 5.78
- ------------------------------------------------------------ -------- -------
Distributions to shareholders:
From net investment income (0.02) --
- ------------------------------------------------------------ -------- -------
From net realized capital gains on investments (1.88) --
- ------------------------------------------------------------ -------- -------
Total distributions (1.90) --
- ------------------------------------------------------------ -------- -------
Net asset value, end of period $ 20.31 $ 15.78
============================================================ ======== =======
Total return(a) 42.37% 57.80%
============================================================ ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $117,211 $ 4,790
============================================================ ======== =======
Ratio of expense to average net assets including interest
expense and dividends on short sales expense:
With fee waivers 1.88%(c) 2.28%(b)
- ------------------------------------------------------------ -------- -------
Without fee waivers 2.41%(c) 7.55%(b)
============================================================ ======== =======
Ratio of expenses to average net assets excluding interest
expense and dividends on short sales expense:
With fee waivers 1.83%(c) 2.20%(b)
- ------------------------------------------------------------ -------- -------
Without fee waivers 2.36%(c) 7.47%(b)
============================================================ ======== =======
Ratio of interest expense and dividends on short sales
expense to average net assets 0.05%(c) 0.08%(b)
============================================================ ======== =======
Ratio of net investment income (loss) to average net assets 0.08%(c) (0.79)%(b)
============================================================ ======== =======
Portfolio turnover rate 97% 135%
============================================================ ======== =======
</TABLE>
(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) Annualized.
(c) Ratios are annualized and based on average net assets of $31,186,181.
14
<PAGE> 17
NOTE 8-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B CLASS C
----------- -----------
JANUARY 31, JANUARY 31,
2000 2000
----------- -----------
<S> <C> <C>
Net asset value, beginning of period $ 17.83 $ 17.83
- ------------------------------------------------------------ ------- -------
Income from investment operations:
Net investment income (loss) (0.01) (0.01)
- ------------------------------------------------------------ ------- -------
Net gains on securities (both realized and unrealized) 2.49 2.49
- ------------------------------------------------------------ ------- -------
Total from investment operations 2.48 2.48
- ------------------------------------------------------------ ------- -------
Distributions to shareholders:
From net investment income (0.01) (0.01)
- ------------------------------------------------------------ ------- -------
From net realized capital gains on investments -- --
- ------------------------------------------------------------ ------- -------
Total distributions (0.01) (0.01)
- ------------------------------------------------------------ ------- -------
Net asset value, end of period $ 20.30 $ 20.30
============================================================ ======= =======
Total return(a) 13.94% 13.94%
============================================================ ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $89,132 $30,986
============================================================ ======= =======
Ratio of expense to average net assets including interest
expense and dividends on short sales expense:
With fee waivers 2.58%(b) 2.58%(b)
- ------------------------------------------------------------ ------- -------
Without fee waivers 3.11%(b) 3.11%(b)
============================================================ ======= =======
Ratio of expenses to average net assets excluding interest
expense and dividends on short sales expense:
With fee waivers 2.53%(b) 2.53%(b)
- ------------------------------------------------------------ ------- -------
Without fee waivers 3.06%(b) 3.06%(b)
============================================================ ======= =======
Ratio of interest expense and dividends on short sales
expense to average net assets 0.05%(b) 0.05%(b)
============================================================ ======= =======
Ratio of net investment income (loss) to average net assets (0.62)%(b) (0.62)%(b)
============================================================ ======= =======
Portfolio turnover rate 97% 97%
============================================================ ======= =======
</TABLE>
(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) Ratios are annualized and based on average net assets of $44,687,480 and
$14,707,293 for Class B and Class C, respectively.
15
<PAGE> 18
PROXY RESULTS
(UNAUDITED)
A meeting of shareholders of certain portfolios of AIM Special Opportunities
Funds (the "Trust"), was held on December 20, 1999. The meeting was held for the
following purposes:
(1) To elect Trustees as follows: Charles T. Bauer, Bruce L. Crockett, Owen Daly
II, Edward K. Dunn, Jr., Jack Fields, Carl Frischling, Robert H. Graham,
Prema Mathai-Davis, Lewis F. Pennock and Louis S. Sklar.
(2) To approve a new Master Investment Advisory Agreement with A I M Advisors,
Inc. with respect to AIM Mid Cap Opportunities Fund and AIM Small Cap
Opportunities Fund, each a portfolio of the Trust (each a "Fund," and
collectively, the "Funds").
(3) To approve amending the Funds' fundamental investment restrictions.
(4) To approve changing the Funds' investment objectives from fundamental
policies to non-fundamental policies.
(5) To ratify the selection of KPMG LLP as independent accountants for each of
the Funds for the fiscal year ending in 2000.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
VOTES WITHHELD/
TRUSTEE/MATTER VOTES FOR AGAINST ABSTENTIONS
-------------- ---------- ------- -----------
<S> <C> <C> <C> <C>
(1) Charles T. Bauer............................................ 13,630,194 7,836 417,409
Bruce L. Crockett........................................... 13,652,468 7,836 395,134
Owen Daly II................................................ 13,635,704 7,836 411,899
Edward K. Dunn, Jr.......................................... 13,649,355 7,836 398,248
Jack Fields................................................. 13,645,534 7,836 402,069
Carl Frischling............................................. 13,636,947 7,836 410,656
Robert H. Graham............................................ 13,650,808 7,836 396,795
Prema Mathai-Davis.......................................... 13,645,820 7,836 401,783
Lewis F. Pennock............................................ 13,648,072 7,836 399,531
Louis S. Sklar.............................................. 13,648,207 7,836 399,395
(2) Approval of investment advisory agreement................... 256,001 349 0
(3)(a) Modification of Fundamental Restriction on Industry
Concentration............................................... 256,351 0 0
(3)(b) Modification of Fundamental Restriction on Purchasing
Securities of Other Investment Companies.................... 256,351 0 0
(3)(c) Modification of Fundamental Restriction on Underwriting
Securities.................................................. 256,351 0 0
(3)(d) Modification of Fundamental Restriction on Purchasing or
Selling Real Estate......................................... 256,351 0 0
(3)(e) Modification of Fundamental Restriction on Purchasing or
Selling Commodities......................................... 256,351 0 0
(3)(f) Modification of Fundamental Restriction on Making Loans..... 256,351 0 0
(3)(g) Modification of Fundamental Restriction on Borrowing Money
and Issuing Senior Securities............................... 256,351 0 0
(3)(h) Modification of Fundamental Restriction on Investing in an
Investment Company with the Same Objectives, Policies and
Limitations................................................. 256,351 0 0
(4) Approval of Changing Investment Objective from Fundamental
to Non-Fundamental.......................................... 256,351 0 0
(5) Ratification of the selection of KPMG LLP as the Trust's
Independent Public Accountants.............................. 13,508,491 152,032 386,605
</TABLE>
16
<PAGE> 19
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director
ACE Limited; Carol F. Relihan A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Secretary 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Gary T. Crum Houston, TX 77046
Senior Vice President
Owen Daly II TRANSFER AGENT
Director Edgar M. Larsen
Cortland Trust Inc. Senior Vice President A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn Jr. Dana R. Sutton Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President and Treasurer
Formerly Vice Chairman, President and CUSTODIAN
Chief Operating Officer, Melville B. Cox
Mercantile-Safe Deposit & Trust Co.; and Vice President State Street Bank and Trust Company
President, Mercantile Bankshares 225 Franklin Street
Mary J. Benson Boston, MA 02110
Jack Fields Assistant Vice President and
Chief Executive Officer Assistant Treasurer COUNSEL TO THE FUND
Texana Global, Inc.;
Formerly Member Sheri Morris Ballard Spahr
of the U.S. House of Representatives Assistant Vice President and Andrews & Ingersoll, LLP
Assistant Treasurer 1735 Market Street
Carl Frischling Philadelphia, PA 19103
Partner Renee A. Friedli
Kramer, Levin, Naftalis & Frankel LLP Assistant Secretary COUNSEL TO THE TRUSTEES
Robert H. Graham P. Michelle Grace Kramer Levin Naftalis & Frankel LLP
President and Chief Executive Officer Assistant Secretary 919 Third Avenue
A I M Management Group Inc. New York, NY 10022
Nancy L. Martin
Prema Mathai-Davis Assistant Secretary DISTRIBUTOR
Chief Executive Officer, YWCA of the U.S.A.
Ofelia M. Mayo A I M Distributors, Inc.
Lewis F. Pennock Assistant Secretary 11 Greenway Plaza
Attorney Suite 100
Lisa A. Moss Houston, TX 77046
Louis S. Sklar Assistant Secretary
Executive Vice President
Hines Interests Kathleen J. Pflueger
Limited Partnership Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
</TABLE>
<PAGE> 20
THE AIM FAMILY OF FUNDS --Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS* A I M Management Group Inc. has
AIM Aggressive Growth Fund AIM Money Market Fund provided leadership in the mutual
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund fund industry since 1976 and
AIM Capital Development Fund managed approximately $160 billion
AIM Constellation Fund(1) INTERNATIONAL GROWTH FUNDS in assets for more than 6.6 million
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund shareholders, including individual
AIM Large Cap Growth Fund AIM Asian Growth Fund investors, corporate clients and
AIM Mid Cap Equity Fund AIM Developing Markets Fund financial institutions, as of
AIM Mid Cap Growth Fund AIM Euroland Growth Fund(5) December 31, 1999.
AIM Mid Cap Opportunities Fund(2) AIM European Development Fund The AIM Family of Funds
AIM Select Growth Fund AIM International Equity Fund --Registered Trademark-- is
AIM Small Cap Growth Fund(3) AIM Japan Growth Fund distributed nationwide, and AIM
AIM Small Cap Opportunities Fund(4) AIM Latin American Growth Fund today is the eighth-largest mutual
AIM Value Fund AIM New Pacific Growth Fund fund complex in the United States
AIM Weingarten Fund in assets under management,
GLOBAL GROWTH FUNDS according to Strategic Insight, an
AIM Global Aggressive Growth Fund independent mutual fund monitor.
GROWTH & INCOME FUNDS AIM Global Growth Fund
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund GLOBAL GROWTH & INCOME FUNDS
AIM Advisor Real Estate Fund AIM Global Growth & Income Fund
AIM Balanced Fund AIM Global Utilities Fund
AIM Basic Value Fund
AIM Charter Fund GLOBAL INCOME FUNDS
AIM Emerging Markets Debt Fund
INCOME FUNDS AIM Global Government Income Fund
AIM Floating Rate Fund AIM Global Income Fund
AIM High Yield Fund AIM Strategic Income Fund
AIM High Yield Fund II
AIM Income Fund THEME FUNDS
AIM Intermediate Government Fund AIM Global Consumer Products and Services Fund
AIM Limited Maturity Treasury Fund AIM Global Financial Services Fund
AIM Global Health Care Fund
TAX-FREE INCOME FUNDS AIM Global Infrastructure Fund
AIM High Income Municipal Fund AIM Global Resources Fund
AIM Municipal Bond Fund AIM Global Telecommunications and Technology Fund(6)
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Trends Fund(7)
AIM Tax-Free Intermediate Fund
</TABLE>
(1) Effective December 1, 1999, AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations. (2) AIM Mid
Cap Opportunities Fund closed to new investors on March 21, 2000. (3) AIM Small
Cap Growth Fund closed to new investors on November 8, 1999. (4) AIM Small Cap
Opportunities Fund closed to new investors on November 4, 1999. (5) On September
1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund. Previously
the fund invested in all size companies in most areas of Europe. The fund now
seeks to invest at least 65% of its assets in large-cap companies within
countries using the euro as their currency (EMU-member countries). (6) On June
1, 1999, AIM Global Telecommunications Fund was renamed AIM Global
Telecommunications and Technology Fund. (7) Effective August 27, 1999, AIM
Global Trends Fund was restructured to operate as a traditional mutual fund.
Before that date, the fund operated as a fund of funds. For more complete
information about any AIM fund(s), including sales charges and expenses, ask
your financial advisor or securities dealer for a free prospectus(es). Please
read the prospectus(es) carefully before you invest or send money. If used as
sales material after April 20, 2000, this report must be accompanied by a
current Quarterly Review of Performance for AIM Funds.*An investment in any AIM
money market fund is not insured by the Federal Deposit Insurance Corporation or
any other government agency.
[DALBAR LOGO APPEARS HERE] [AIM LOGO APPEARS HERE]
INVEST WITH DISCIPLINE
--Registered Trademark--
AIM Distributors, Inc. MCO-SAR-1
