<PAGE> 1
ANNUAL REPORT / OCTOBER 31 2000
AIM LARGE CAP OPPORTUNITIES FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[COVER IMAGE]
-------------------------------------
MIDMORNING, DONNINGTON, GLOUCESTER
BY CHARLES NEAL
A BEAUTIFUL PAINTING IS A BLEND OF CAREFULLY SELECTED
COLORS. SIMILARLY, IN CONSTRUCTING THE PORTFOLIO OF AIM
LARGE CAP OPPORTUNITIES FUND, WE CAREFULLY SELECT THE STOCKS
OF LARGER COMPANIES THAT WE BELIEVE HAVE EXCITING PROSPECTS.
-------------------------------------
AIM Large Cap Opportunities Fund is for shareholders who seek long-term growth
of capital. The fund invests in a portfolio consisting primarily of
large-company stocks which management believes involve "special opportunities."
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Large Cap Opportunities Fund's performance figures are historical, and
they reflect the reinvestment of distributions and changes in net asset
value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B and Class C shares will differ from
that of its Class A shares due to different sales-charge structure and class
expenses
o In addition to returns as of the close of the fiscal year, found later in
this report, industry regulations require us to provide cumulative total
returns (including sales charges) as of 9/30/00, the most recent calendar
quarter end, which were: Class A shares, inception (12/30/99), 34.31%. Class
B shares, inception (3/31/00), 5.62%. Class C shares, inception (3/31/00),
9.62%.
o Because the fund has been in existence for less than a year, 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 its returns may be attributable to its investment in
IPOs, which may have a magnified impact due to its relatively small asset
base. There is no guarantee that as the fund's assets grow, it will continue
to experience substantially similar performance by investing in IPOs.
o Leveraging and short selling, along with other hedging strategies, may
present higher risks, but also offer greater potential rewards. Short sales
are riskier because they rely on the managers' ability to anticipate a
security's future value. The fund, which is not a complete investment
program, may not be appropriate for all investors. There is no guarantee
that the fund managers' investment strategies will help investors attain
their goals. Please see the prospectus for more information about specific
investment strategies and risks.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lipper Large-Cap Core Fund Index represents an average of the
performance of the 30 largest large-capitalization core funds tracked by
Lipper, Inc., an independent mutual fund performance monitor.
o The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500)
is widely regarded as representative of the performance of the U.S. stock
market.
o An investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends, and they do not reflect sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF
YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the fund.
-------------------------------------
Since our last report to you, AIM Large Cap Opportunities Fund's fiscal year-end
was changed from July 31 to October 31. This change was made to better manage
distribution requirements in light of current excise tax rules. You will receive
an annual report dated October 31 and a semiannual report dated April 30 each
year.
-------------------------------------
AIM LARGE CAP OPPORTUNITIES FUND
<PAGE> 3
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
It's an honor to address you as the AIM Funds' new chairman.
I feel privileged to succeed Ted Bauer, who recently retired
[PHOTO OF from the funds' board and will soon retire as A I M
Robert H. Management Group's chairman after a long, successful career
Graham, in the investment industry. Ted has always shown the highest
Chairman of degree of integrity and commitment to excellence, and I have
the Board of always admired him. I'm also proud to be part of the team
THE FUND that launched AIM almost 25 years ago. From the beginning,
APPEARS HERE] AIM has been a very people-oriented, service-minded company,
and I plan to carry on the tradition for our shareholders,
financial advisors and employees.
UNCERTAIN MARKETS
The markets this year have been particularly volatile and
confusing for many investors, especially for those who have
only experienced the bull market of the 1990s. After almost a
decade of double-digit returns, the S&P 500 was down 1.81% year-to-date as of
October 31, 2000. But market returns in the 20% to 30% range, such as we have
seen in recent years, are not typical. If you expect these kinds of returns
every year, you'll be disappointed. Historically, markets decline in one out of
every four years. What we're seeing now is a normal downturn.
This appears to be a worldwide trend. Throughout 2000, overseas markets
generally have been more turbulent than their U.S. counterpart.
REASONS FOR OPTIMISM
While investors may need to temper their expectations, there are plenty of
reasons to be optimistic. Economic fundamentals remain strong, and many believe
that the Federal Reserve Board may have succeeded in bringing the economy to a
"soft landing." Gross domestic product growth slowed to 2.4% in the third
quarter from the rapid pace of about 7% a year ago. With this slowdown, it seems
unlikely that the Fed will raise interest rates in the near future, and stable
interest rates provide a solid environment for both stocks and bonds.
In Europe, the region's economic and investment future continues to look
bright despite the weak euro. Restructuring, merger activity and tax reform bode
well for European economies. In Asia, most analysts think the continuing
strength of the U.S. economy will help boost Asian stock markets.
THE VALUE OF ADVICE
The current environment illustrates the value of professional money management.
Knowing when to buy and sell takes expertise and discipline even in the best of
markets. During downturns, many investors may be tempted to make decisions based
on emotions instead of strategy. The wisest choice is to rely on a professional
money manager to make these decisions for you.
In these uncertain times, it's important to keep market volatility in
perspective. Mutual fund investing should be a long-term endeavor. Remember why
you're investing, whether it's for your retirement or your child's education,
and think about your time frame. If you're unsure about whether your investments
can meet your goals, visit your financial advisor for help.
In the following pages, your fund's portfolio managers discuss market
activity, how they managed your fund during the fiscal year and their near-term
outlook. If you have any questions or comments, please contact us through our
Web site, www.aimfunds.com, or call our Client Services Department at
800-959-4246 during normal business hours. Information about your account is
available at our Web site and on our automated AIM Investor Line, 800-246-5463.
Thank you for your continued participation in The AIM Family of Funds
--Registered Trademark--.
Sincerely,
/s/ ROBERT H. GRAHAM
Robert H. Graham
Chairman
-------------------------------------------
THE CURRENT
ENVIRONMENT
ILLUSTRATES THE VALUE
OF PROFESSIONAL
MONEY MANAGEMENT.
KNOWING WHEN TO BUY
AND SELL TAKES
EXPERTISE AND
DISCIPLINE EVEN IN THE
BEST OF MARKETS.
-------------------------------------------
AIM LARGE CAP OPPORTUNITIES FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND SHINES IN DIFFICULT MARKET ENVIRONMENT
MANY KEY STOCK-MARKET INDEXES LOST VALUE DURING THE REPORTING PERIOD. HOW DID
AIM LARGE CAP OPPORTUNITIES FUND PERFORM?
Despite an unfavorable market for large-cap growth stocks, the fund's Class A
shares, which began sales on December 30, 1999, posted excellent returns for the
reporting period ended October 31, 2000. Excluding sales charges, Class A shares
recorded a cumulative total return of 36.60%. That was better than the -1.81%
return of the S&P 500 and the 0.34% return of the Lipper Large-Cap Core Fund
Index from December 31, 1999, to October 31, 2000.
Class B and Class C shares began sales on March 31, 2000, and posted
cumulative total returns, excluding sales charges, of 6.32% and 6.25%,
respectively, through October 31. Over that same period, returns for the S&P 500
and the Lipper Large-Cap Core Fund Index were -4.01% and -3.77%, respectively.
The fund was closed to new investors at the close of business on September
29, 2000.
WHAT WERE KEY MARKET TRENDS?
A strong market rally in the early months of 2000 was followed by a choppy,
downward-trending market after March. Technology stocks led the market surge at
the beginning of the year and continued to soar well into March. Toward the end
of the month, however, investors became concerned that tech stocks might be
overvalued, sparking a sharp sell-off in this sector. The stocks of Internet
companies with no earnings were particularly hard hit. Investors were also
concerned that the Federal Reserve Board (the Fed) might continue to raise
interest rates to slow torrid economic growth and to contain inflation.
Interest-rate concerns prompted a sell-off that affected nearly every
stock-market sector in April.
After raising interest rates in May, the Fed ceased its monetary tightening
policy for the remainder of the reporting period. Markets rallied in late May
and June amid mounting evidence that economic growth was slowing, reducing the
probability of additional Fed rate hikes. However, in late summer and early
fall, rising oil prices, unrest in the Middle East and concern about corporate
earnings converged to produce another steep market decline. A number of major
corporations reported earnings disappointments in September and October.
Many key market indexes, including the S&P 500, recorded losses for the
first 10 months of 2000. However, after tech stocks faded, stocks in several
other sectors, such as health care, financial services, energy and utilities,
posted healthy gains. Mid-cap stocks outperformed large- and small-cap stocks.
For most of the year, value stocks outperformed growth stocks.
WHY DID THE FUND OUTPERFORM ITS INDEXES?
We attribute the fund's excellent performance to careful stock selection. In
choosing holdings for the portfolio, we endeavor to own the large-cap stocks of
high-quality companies with accelerating earnings growth. By following this
strategy, we generally avoided those companies whose stocks plummeted because of
disappointing earnings.
The fund participates in the initial public offering (IPO) market, and a
significant portion of its returns may be attributable to its investment in
IPOs, which may have a magnified impact due to the fund's relatively small asset
base. As the fund's assets grow, it is probable that the effect of its
investment in IPOs on its total return will decline, which may reduce the fund's
total return.
The fund also benefited from its alternative investment strategy.
HOW DOES THIS ALTERNATIVE INVESTMENT STRATEGY WORK?
The fund can employ short-selling and leveraging. While the fund owns the stocks
of companies expected to experience strong earnings growth, it can borrow the
stocks of firms expected to experience declining earnings. These borrowed stocks
(short positions) are subsequently sold, with the intention of buying them later
at an anticipated lower price. More traditional stock purchases, or stocks that
are purchased with the intention of seeking capital appreciation, are referred
to as long posi-
[ART WORK]
<TABLE>
<S> <C>
FUND VS INDEXES
Cumulative total returns, excluding sales
charges, Class A shares,
12/30/99-10/31/00*
===========================================
FUND CLASS A SHARES 36.60%
S&P 500 INDEX (1.81)%
LIPPER LARGE-CAP CORE FUND INDEX 0.34%
===========================================
</TABLE>
<TABLE>
<S> <C>
CUMULATIVE TOTAL RETURNS
As of 10/31/00, including sales charges
===========================================
Class A Shares
Inception (12/30/99) 29.11%*
*36.60% excluding sales charges
Class B Shares
Inception (3/31/00) 1.32*
*6.32% excluding CDSC
Class C Shares
Inception (3/31/00) 5.25%*
*6.25% excluding CDSC
===========================================
</TABLE>
*Index performance is from 12/31/99-10/31/00
Past performance cannot guarantee comparable future results. MARKET VOLATILITY
CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN INVESTMENT MADE
TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE SHOWN.
See important fund and index disclosures inside front cover.
AIM LARGE CAP OPPORTUNITIES FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
tions. We believe that a mixed portfolio of long and short positions can
potentially protect the fund during market downturns while allowing it to take
advantage of market rallies. Leveraging involves borrowing money, usually to buy
additional stocks.
HOW WAS THE FUND POSITIONED?
As of October 31, 2000, technology stocks made up more than 40% of the long
holdings. Within the tech sector, the focus was on optical networking,
data-storage and security companies.
Financial-company stocks made up 13% of the portfolio. The financial sector
benefited from merger and acquisition activity, the cessation of Fed
interest-rate hikes and investor preference for value stocks.
WHAT WERE SOME OF THE FUND'S LEADING TECH STOCKS?
o Brocade Communications Systems, the fund's largest holding, makes fiber
channel switches and related software for connecting corporate storage
systems and servers, transforming them into storage-area networks.
o VERITAS is the world's largest maker of storage-management software, which
protects networks against data loss from crashes and errors, expedites data
recovery and manages corporate storage.
o Corning is the inventor and one of the world's top manufacturers of
fiber-optic cable.
o Check Point Software Technologies supplies software that protects corporate
networks from unauthorized access.
o Comverse Technology designs, manufactures and supports telecommunications
systems and software which allows service providers to offer value-added
enhancements such as caller identification.
WHAT WERE A FEW OF ITS HOLDINGS OUTSIDE THE TECH SECTOR?
o J.P. Morgan, a leading international banking company, offers commercial and
investment-banking services.
o American Home Products makes treatments for cardiovascular, muscular and
neurological disorders.
WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
At the close of the reporting period, the economic climate appeared favorable
for stocks despite often extreme market volatility. The nation's unemployment
rate was at its lowest level in three decades. And except for higher oil prices,
inflation was moderate.
Interest rates had stabilized as the Fed took at least a temporary respite
from its monetary tightening policy. Corporate profits, while declining, were
still impressive for many companies. However, because of a degree of uncertainty
surrounding near-term events, markets may continue to be volatile.
PORTFOLIO COMPOSITION
As of 10/31/00, based on total net assets
<TABLE>
<CAPTION>
====================================================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES TOP 10 SHORT POSITIONS
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Brocade Communications 1. Computers (Software & Services) 14.18% 1. Symbol Technologies, Inc. 1.22%
Systems, Inc. 3.56% 2. Financial (Diversified) 6.12 2. Coca-Cola Co. (The) 1.18
2. VERITAS Software Corp. 3.13 3. Communications Equipment 5.97 3. Adobe Systems, Inc. 1.02
3. J.P. Morgan & Co. Inc. 2.86 4. Broadcasting (Television, 4. Sigma-Aldrich Corp. 0.93
4. Corning Inc. 2.74 Radio & Cable) 5.85 5. Administaff, Inc. 0.88
5. American Home Products Corp. 2.69 5. Electronics (Semiconductors) 5.11 6. Home Depot, Inc. (The) 0.85
6. Check Point Software Technologies 6. Computers (Networking) 4.74 7. eBay, Inc. 0.84
Ltd. (Israel) 2.68 7. Computers (Peripherals) 4.52 8. Amazon.com, Inc. 0.82
7. Ariba, Inc. 2.47 8. Oil & Gas (Drilling & Equipment) 4.08 9. Fastenal Co. 0.79
8. Juniper Networks, Inc. 2.39 9. Oil & Gas (Exploration & Production) 4.02 10. King Pharmaceuticals, Inc. 0.77
9. i2 Technologies, Inc. 2.33 10. Investment Banking/Brokerage 3.48
10. Kerr-McGee Corp. 2.17
The fund's portfolio composition is subject to change, and there is no assurance
that the fund will continue to hold any particular security.
====================================================================================================================================
</TABLE>
READ THIS REPORT ONLINE!
-------------------------------------
Early in 2001, a new service will be
available--electronic delivery of fund
reports and prospectuses. Soon, you can
read the same AIM report you are reading
now--online. Once you sign up for
the service, we will send you a link to the
report via e-mail. If you choose to
receive your reports online, you will not
receive a paper copy by mail. You may
cancel the service at any time by visiting
our Web site.
Please visit our Web site at
www.aimfunds.com and go to "Your
AIM Account." Log into your account
and then click on the "View Other
Account Options" dropdown menu
and select "eDelivery."
-------------------------------------
See important fund and index disclosures inside front cover.
AIM LARGE CAP OPPORTUNITIES FUND
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY
INTERESTS-84.53%
BIOTECHNOLOGY-1.94%
Affymetrix, Inc.(a) 185,000 $ 10,244,375
-------------------------------------------------------------
Amgen Inc.(a) 80,000 4,635,000
=============================================================
14,879,375
=============================================================
BROADCASTING (TELEVISION, RADIO &
CABLE)-5.85%
Cablevision Systems Corp.-Class A(a) 150,000 11,175,000
-------------------------------------------------------------
Comcast Corp.-Class A(a) 350,000 14,262,500
-------------------------------------------------------------
General Motors Corp.-Class H(a) 350,000 11,340,000
-------------------------------------------------------------
Pegasus Communications Corp.(a) 226,300 8,047,794
=============================================================
44,825,294
=============================================================
COMMUNICATIONS EQUIPMENT-5.97%
ADC Telecommunications, Inc.(a) 250,000 5,343,750
-------------------------------------------------------------
Comverse Technology, Inc.(a) 137,500 15,365,625
-------------------------------------------------------------
Corning Inc. 275,000 21,037,500
-------------------------------------------------------------
JDS Uniphase Corp.(a) 49,300 4,011,787
=============================================================
45,758,662
=============================================================
COMPUTERS (HARDWARE)-2.86%
Palm, Inc.(a) 270,000 14,461,875
-------------------------------------------------------------
Sun Microsystems, Inc.(a) 67,500 7,484,062
=============================================================
21,945,937
=============================================================
COMPUTERS (NETWORKING)-4.74%
Cisco Systems, Inc.(a) 150,000 8,081,250
-------------------------------------------------------------
Juniper Networks, Inc.(a) 93,800 18,291,000
-------------------------------------------------------------
Tellium, Inc.-Series E, Conv. Pfd.
(Acquired 09/19/00; Cost
$3,410,010)(a)(b) 113,667 3,410,010
-------------------------------------------------------------
VeriSign, Inc.(a) 50,000 6,600,000
=============================================================
36,382,260
=============================================================
COMPUTERS (PERIPHERALS)-4.52%
Brocade Communications Systems,
Inc.(a) 120,000 27,285,000
-------------------------------------------------------------
EMC Corp.(a) 82,500 7,347,656
=============================================================
34,632,656
=============================================================
COMPUTERS (SOFTWARE &
SERVICES)-14.18%
Ariba, Inc.(a) 150,000 18,956,250
-------------------------------------------------------------
Check Point Software Technologies
Ltd.-ADR (Israel)(a) 130,000 20,588,750
-------------------------------------------------------------
i2 Technologies, Inc.(a) 105,000 17,850,000
-------------------------------------------------------------
InfoSpace, Inc.(a) 325,000 6,540,625
-------------------------------------------------------------
Oracle Corp.(a) 220,000 7,260,000
-------------------------------------------------------------
Quest Software, Inc.(a) 200,000 8,737,500
-------------------------------------------------------------
Rational Software Corp.(a) 81,100 4,840,656
-------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
VERITAS Software Corp.(a) 170,000 $ 23,972,656
=============================================================
108,746,437
=============================================================
ELECTRONICS (SEMICONDUCTORS)-5.11%
Celestica Inc. (Canada)(a) 125,000 8,984,375
-------------------------------------------------------------
Maxim Integrated Products, Inc.(a) 75,000 4,973,437
-------------------------------------------------------------
SDL, Inc.(a) 50,000 12,962,500
-------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 175,000 12,239,062
=============================================================
39,159,374
=============================================================
EQUIPMENT (SEMICONDUCTOR)-2.10%
Broadcom Corp.-Class A(a) 52,500 11,674,687
-------------------------------------------------------------
KLA-Tencor Corp.(a) 130,000 4,395,625
=============================================================
16,070,312
=============================================================
FINANCIAL (DIVERSIFIED)-6.12%
American Express Co. 175,000 10,500,000
-------------------------------------------------------------
Citigroup Inc. 275,000 14,471,875
-------------------------------------------------------------
J.P. Morgan & Co., Inc. 132,500 21,928,750
=============================================================
46,900,625
=============================================================
HEALTH CARE (DIVERSIFIED)-2.69%
American Home Products Corp. 325,000 20,637,500
=============================================================
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-1.55%
Pfizer Inc. 275,000 11,876,562
=============================================================
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.37%
PE Corp-PE Biosystems Group 90,000 10,530,000
=============================================================
INSURANCE (MULTI-LINE)-2.01%
American International Group, Inc. 157,500 15,435,000
=============================================================
INVESTMENT BANKING/BROKERAGE-3.48%
Goldman Sachs Group, Inc. (The) 135,000 13,474,688
-------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 165,000 13,251,563
=============================================================
26,726,251
=============================================================
INVESTMENT MANAGEMENT-0.88%
Stilwell Financial, Inc. 150,000 6,721,875
=============================================================
INVESTMENTS-1.54%
Nasdaq 100 Shares(a)(c) 144,500 11,830,938
=============================================================
LEISURE TIME (PRODUCTS)-2.63%
Harley-Davidson, Inc. 285,000 13,733,438
-------------------------------------------------------------
Mattel, Inc. 500,000 6,468,750
=============================================================
20,202,188
=============================================================
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MANUFACTURING (SPECIALIZED)-0.84%
Coflexip S.A.-ADR (France) 85,000 $ 4,850,313
-------------------------------------------------------------
Millipore Corp. 29,700 1,559,250
=============================================================
6,409,563
=============================================================
NATURAL GAS-1.50%
Enron Corp. 140,000 11,488,750
=============================================================
OIL & GAS (DRILLING &
EQUIPMENT)-4.08%
ENSCO International Inc. 160,000 5,320,000
-------------------------------------------------------------
Lone Star Technologies, Inc.(a) 107,500 4,316,125
-------------------------------------------------------------
Schlumberger Ltd. 125,000 9,515,625
-------------------------------------------------------------
Transocean Sedco Forex Inc. 105,000 5,565,000
-------------------------------------------------------------
Weatherford International, Inc.(a) 180,000 6,570,000
=============================================================
31,286,750
=============================================================
OIL & GAS (EXPLORATION &
PRODUCTION)-4.02%
Apache Corp. 222,500 12,307,031
-------------------------------------------------------------
Apache Corp.-$2.02 Conv. Pfd. 40,000 1,900,000
-------------------------------------------------------------
Kerr-McGee Corp. 255,000 16,654,688
=============================================================
30,861,719
=============================================================
OIL & GAS (REFINING &
MARKETING)-0.58%
Valero Energy Corp.-$1.94 Conv. Pfd. 160,000 4,480,000
=============================================================
POWER PRODUCERS (INDEPENDENT)-0.57%
Calpine Corp.(a) 55,000 4,341,563
=============================================================
RETAIL (BUILDING SUPPLIES)-0.89%
Lowe's Cos., Inc. 150,000 6,853,125
=============================================================
SERVICES
(ADVERTISING/MARKETING)-0.76%
Lamar Advertising Co.(a) 121,000 5,808,000
=============================================================
TELECOMMUNICATIONS
(CELLULAR/WIRELESS)-1.75%
Phone.com, Inc.(a) 145,000 13,421,563
=============================================================
Total Common Stocks & Other
Equity Interests (Cost
$640,131,663) 648,212,279
=============================================================
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS &
NOTES-1.34%
COMMUNICATIONS EQUIPMENT-0.95%
Cyras Systems, Inc., Conv. Sub.
Notes, 4.50%, 08/15/05 (Acquired
08/15/00; Cost $1,250,000)(b) 1,250,000 1,450,000
--------------------------------------------------------------
Kestrel Solutions, Conv. Sub. Notes,
5.50%, 07/15/05 (Acquired
07/20/00-10/10/00; Cost
$5,800,000)(b) 5,500,000 5,830,000
==============================================================
7,280,000
==============================================================
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
ELECTRONICS (SEMICONDUCTORS)-0.39%
Celestica Inc. (Canada), Conv. Yankee
Bonds, 3.19%, 08/01/20(a) 5,800,000 $ 2,972,500
==============================================================
Total Convertible Corporate Bonds
& Notes (Cost $9,951,297) 10,252,500
==============================================================
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF EXERCISE EXPIRATION
CONTRACTS PRICE DATE
<S> <C> <C> <C> <C>
OPTIONS
PURCHASED-2.11%
CALLS-0.42%
Amex Biotechnology
Index (The)
(Biotechnology) 110 $600 Jan-01 $1,846,625
---------------------------------------------------------------------
Philadelphia Oil
Service Sector
Index (Oil &
Gas-Exploration &
Production) 2,444 125 Dec-00 1,344,200
=====================================================================
3,190,825
=====================================================================
PUTS-1.69%
Nasdaq 100 Index
(Investments) 80 3,100 Dec-00 1,239,000
---------------------------------------------------------------------
350 3,025 Dec-00 4,541,250
---------------------------------------------------------------------
Russell 2000 Index
(Investments) 1,126 460 Dec-00 1,013,400
---------------------------------------------------------------------
2,700 480 Dec-00 3,712,500
---------------------------------------------------------------------
S&P 500 Index
(Investments) 736 1,350 Nov-00 423,200
---------------------------------------------------------------------
520 1,375 Nov-00 487,500
---------------------------------------------------------------------
1,780 1,300 Dec-00 1,557,500
=====================================================================
12,974,350
=====================================================================
Total Options
Purchased (Cost
$30,814,368) 16,165,175
=====================================================================
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
MONEY MARKET FUNDS-11.01%
STIC Liquid Assets Portfolio(d) 42,238,227 42,238,227
--------------------------------------------------------------
STIC Prime Portfolio(d) 42,238,227 42,238,227
==============================================================
Total Money Market Funds (Cost
$84,476,454) 84,476,454
==============================================================
TOTAL INVESTMENTS-98.99% (Cost
$765,373,782) 759,106,408
==============================================================
OTHER ASSETS LESS LIABILITIES-1.01% 7,711,781
==============================================================
NET ASSETS-100.00% $766,818,189
______________________________________________________________
==============================================================
</TABLE>
<TABLE>
<CAPTION>
SHARES
SOLD MARKET
SHORT VALUE
<S> <C> <C>
SECURITIES SOLD SHORT(e)
Administaff, Inc. 190,000 $ 6,745,000
-------------------------------------------------------------
Adobe Systems Inc. 102,400 7,788,800
-------------------------------------------------------------
Advanced Micro Devices, Inc. 93,000 2,104,126
-------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
SHARES
SOLD MARKET
SHORT VALUE
<S> <C> <C>
SECURITIES SOLD SHORT-(CONTINUED)
Allergan, Inc. 50,900 $ 4,278,781
-------------------------------------------------------------
Amazon.com, Inc. 171,700 6,288,513
-------------------------------------------------------------
Autodesk, Inc. 78,500 1,731,906
-------------------------------------------------------------
Broadvision Inc. 154,300 4,590,425
-------------------------------------------------------------
Clear Channel Communications, Inc. 74,800 4,492,675
-------------------------------------------------------------
Coca-Cola Co. (The) 150,000 9,056,250
-------------------------------------------------------------
Computer Sciences Co. 42,000 2,646,000
-------------------------------------------------------------
Corvis Corp. 84,800 5,565,000
-------------------------------------------------------------
Costco Wholesale Corp. 50,000 1,831,250
-------------------------------------------------------------
Cytyc Corp. 48,300 2,867,813
-------------------------------------------------------------
eBay Inc. 125,000 6,437,500
-------------------------------------------------------------
Exodus Communications, Inc. 99,900 3,352,844
-------------------------------------------------------------
Fastenal Co. 105,000 6,030,938
-------------------------------------------------------------
First Tennessee National Corp. 152,300 3,502,900
-------------------------------------------------------------
Fluor Corp. 100,000 3,500,000
-------------------------------------------------------------
Guidant Corp. 56,100 2,969,794
-------------------------------------------------------------
Home Depot, Inc. (The) 152,100 6,540,300
-------------------------------------------------------------
King Pharmaceuticals, Inc. 132,000 5,915,250
-------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
SOLD MARKET
SHORT VALUE
<S> <C> <C>
SECURITIES SOLD SHORT-(CONTINUED)
Krispy Kreme Doughnuts, Inc. 14,000 $ 1,379,875
-------------------------------------------------------------
MGM Mirage Inc. 60,000 2,073,750
-------------------------------------------------------------
Network Appliance, Inc. 25,500 3,034,500
-------------------------------------------------------------
Nike, Inc.-Class B 97,900 3,909,881
-------------------------------------------------------------
Nortel Networks Corp. 65,000 2,957,500
-------------------------------------------------------------
NVIDIA Corp. 50,000 3,107,031
-------------------------------------------------------------
QLT Inc. 77,600 3,859,387
-------------------------------------------------------------
SCI Systems, Inc. 95,200 4,093,600
-------------------------------------------------------------
Scient Corp. 9,000 162,000
-------------------------------------------------------------
724 Solutions Inc. 115,000 3,126,551
-------------------------------------------------------------
Sigma-Aldrich Corp. 200,000 7,150,000
-------------------------------------------------------------
Silicon Storage Technology, Inc. 117,500 2,673,125
-------------------------------------------------------------
Solectron Corp. 120,000 5,280,000
-------------------------------------------------------------
Stryker Corp. 65,400 3,081,974
-------------------------------------------------------------
Symbol Technologies, Inc. 205,000 9,314,688
=============================================================
Total Securities Sold Short $153,439,927
_____________________________________________________________
=============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Pfd. - Preferred
Sub. - Subordinated
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 aggregate market value of these securities at 10/31/00
was $10,690,010, which represented 1.39% of the Fund's net assets.
(c) A portion of this security is subject to call options written. See Note 7.
(d) The money market fund and the Fund are affiliated by having the same
investment advisor.
(e) Collateral on short sales was segregated by the Fund in the amount of
$184,185,088, which represents 120.04% of market value of securities sold
short.
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $765,373,782) $759,106,408
----------------------------------------------------------------
Cash 15,549,353
----------------------------------------------------------------
Receivables for:
Investments sold 13,720,412
----------------------------------------------------------------
Fund shares sold 2,008,019
----------------------------------------------------------------
Dividends and interest 659,308
----------------------------------------------------------------
Investments sold short 146,147,072
----------------------------------------------------------------
Options sold 7,393,753
----------------------------------------------------------------
Short stock rebates 664,305
----------------------------------------------------------------
Investment for deferred compensation plan 3,893
----------------------------------------------------------------
Other assets 16,469
================================================================
Total assets 945,268,992
================================================================
LIABILITIES:
Payables for:
Investments purchased 15,759,932
----------------------------------------------------------------
Fund shares reacquired 596,351
----------------------------------------------------------------
Options written (premiums received $3,200,705) 3,552,900
----------------------------------------------------------------
Deferred compensation plan 3,893
----------------------------------------------------------------
Short stock account interest and dividends 4,807
----------------------------------------------------------------
Short positions 3,582,158
----------------------------------------------------------------
Market value of securities sold short (proceeds
from short sales $146,147,072) 153,439,927
----------------------------------------------------------------
Accrued advisory fees 1,001,614
----------------------------------------------------------------
Accrued administrative services fees 11,501
----------------------------------------------------------------
Accrued distribution fees 492,007
----------------------------------------------------------------
Accrued trustees' fees 772
----------------------------------------------------------------
Accrued transfer agent fees 4,941
----------------------------------------------------------------
Total liabilities 178,450,803
================================================================
Net assets applicable to shares outstanding $766,818,189
________________________________________________________________
================================================================
NET ASSETS:
Class A $373,614,314
________________________________________________________________
================================================================
Class B $282,120,340
________________________________________________________________
================================================================
Class C $111,083,535
________________________________________________________________
================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 27,471,272
________________________________________________________________
================================================================
Class B 20,814,721
________________________________________________________________
================================================================
Class C 8,197,433
________________________________________________________________
================================================================
Class A:
Net asset value and redemption price per share $ 13.60
----------------------------------------------------------------
Offering price per share:
(Net asset value of $13.60 divided by 94.50%) $ 14.39
________________________________________________________________
================================================================
Class B:
Net asset value and offering price per share $ 13.55
________________________________________________________________
================================================================
Class C:
Net asset value and offering price per share $ 13.55
________________________________________________________________
================================================================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
DECEMBER 30,
1999 (DATE
THREE MONTHS OPERATIONS
ENDED COMMENCED)
OCTOBER 31, THROUGH
2000 JULY 31, 2000
------------ -------------
<S> <C> <C>
INVESTMENT INCOME:
Short stock rebates $ 1,304,717 $ 443,705
-----------------------------------------------------------------
Dividends from affiliated money
market funds 1,077,250 423,405
-----------------------------------------------------------------
Dividends (net of foreign
withholding tax of $267 and
$4,961, respectively) 393,991 159,509
-----------------------------------------------------------------
Interest 316,294 69,932
=================================================================
Total investment income 3,092,252 1,096,551
=================================================================
EXPENSES:
Advisory fees 2,203,831 749,188
-----------------------------------------------------------------
Administrative services fee 30,873 29,372
-----------------------------------------------------------------
Custodian fees 17,343 24,373
-----------------------------------------------------------------
Distribution fees -- Class A 239,710 98,668
-----------------------------------------------------------------
Distribution fees -- Class B 544,606 162,407
-----------------------------------------------------------------
Distribution fees -- Class C 208,446 55,143
-----------------------------------------------------------------
Interest 14,587 10,212
-----------------------------------------------------------------
Transfer agent fees -- Class A 50,469 31,715
-----------------------------------------------------------------
Transfer agent fees -- Class B 38,996 23,773
-----------------------------------------------------------------
Transfer agent fees -- Class C 14,925 8,072
-----------------------------------------------------------------
Trustees' fees 1,821 4,117
-----------------------------------------------------------------
Dividends on short sales 59,505 24,835
-----------------------------------------------------------------
Other 169,613 171,138
=================================================================
Total expenses 3,594,725 1,393,013
=================================================================
Less: Fees waived (21,792) (39,872)
------------------------------------------------------------------
Expenses paid indirectly (14,412) (4,522)
=================================================================
Net expenses 3,558,521 1,348,619
=================================================================
Net investment income (loss) (466,269) (252,068)
=================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES,
SECURITIES SOLD SHORT, FUTURES
CONTRACTS AND OPTION CONTRACTS
Net realized gain (loss) from:
Investment securities (2,638,851) (2,400,360)
-----------------------------------------------------------------
Securities sold short 21,896,768 1,764,828
-----------------------------------------------------------------
Futures contracts 633,599 (881,182)
-----------------------------------------------------------------
Option contracts 807,967 2,403,105
=================================================================
20,699,483 886,391
=================================================================
Change in net unrealized
appreciation (depreciation) of:
Investment securities (19,141,316) 12,873,942
-----------------------------------------------------------------
Securities sold short (8,416,941) 1,124,086
-----------------------------------------------------------------
Option contracts (663,491) 311,296
=================================================================
(28,221,748) 14,309,324
=================================================================
Net gain (loss) on investment
securities, securities sold short,
futures contracts and option
contracts (7,522,265) 15,195,715
=================================================================
Net increase (decrease) in net
assets resulting from operations $(7,988,534) $14,943,647
_________________________________________________________________
=================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
THREE DECEMBER 30, 1999
MONTHS (DATE OPERATIONS
ENDED COMMENCED)
OCTOBER 31, THROUGH JULY 31,
2000 2000
------------ -----------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (466,269) $ (252,068)
----------------------------------------------------------------------------------------------
Net realized gain from investment securities, securities
sold short, futures contracts and option contracts 20,699,483 886,391
----------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities, securities sold short and option
contracts (28,221,748) 14,309,324
==============================================================================================
Net increase (decrease) in net assets resulting from
operations (7,988,534) 14,943,647
==============================================================================================
Share transactions-net:
Class A 238,637,832 130,133,895
----------------------------------------------------------------------------------------------
Class B 182,555,330 97,595,645
----------------------------------------------------------------------------------------------
Class C 77,641,463 33,298,911
==============================================================================================
Net increase in net assets 490,846,091 275,972,098
==============================================================================================
NET ASSETS:
Beginning of period 275,972,098 --
----------------------------------------------------------------------------------------------
End of period $766,818,189 $ 275,972,098
______________________________________________________________________________________________
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $760,048,346 $ 261,023,720
----------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (90,606) (49,823)
----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, securities sold short, futures contracts and
option contracts 20,772,873 688,877
----------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, securities sold short and option contracts (13,912,424) 14,309,324
==============================================================================================
$766,818,189 $ 275,972,098
______________________________________________________________________________________________
==============================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Large 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 Board of Trustees of the Trust approved a change in the Fund's
fiscal year-end from July 31 to October 31. As a result, this report includes
financial information for the period ended October 31, 2000 (three months) and
the period December 30, 1999 (date operations commenced) through July 31, 2000.
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 A shares commenced sales on December 30, 1999.
Class B and C shares commenced sales on March 31, 2000. The Fund was closed to
new investors as of September 29, 2000. Matters affecting each portfolio or
class will be voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is long-term growth of
capital.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of the significant
accounting policies followed by the Fund in the preparation of its financial
statements.
A. Security Valuations -- Securities, including restricted securities, are
valued according to the following policy. A security listed or traded on an
exchange (except convertible bonds) is valued at its last sales price as of
the close of the customary trading session on the exchange where the security
is principally traded, or lacking any sales on a particular day, the security
is valued at the closing bid price on that day. Each security reported on the
NASDAQ National Market System is valued at the last sales price as of the
close of the customary trading session on the valuation date or absent a last
sales price, at the closing bid price. Debt obligations (including
convertible bonds) are valued on the basis of prices provided by an
independent pricing service. Prices provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as yield, type of issue, coupon rate and maturity
date. Securities for which market prices are not provided by any of the above
methods are valued based upon quotes furnished by independent sources and are
valued at the last bid price in the case of equity securities and in the case
of debt obligations, the mean between the last bid and asked prices.
Securities for which market quotations are not readily available or are
questionable are valued at fair value as determined in good faith by or under
the supervision of the Trust's officers in a manner specifically authorized
by the Board of Trustees. Short-term obligations having 60 days or less to
maturity are valued at amortized cost which approximates market value. For
purposes of determining net asset value per share, futures and option
contracts generally will be valued 15 minutes after the close of the
customary trading session of the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the customary
trading session of the NYSE which would not be reflected in the computation
of the Fund's net asset value. If events materially affecting the value of
such securities occur during such period, then these securities will be
valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income and short stock rebate income are recorded on the accrual
basis. Dividend income and dividend expense on short sales are recorded on
the ex-dividend date.
On October 31, 2000, undistributed net investment income was increased by
$425,486, undistributed net realized gains were decreased by $615,487 and
paid in capital was increased by $190,001 as a result of differences due to
utilization of a portion of the proceeds from redemptions as distributions
for federal income tax purposes and net operating loss reclassifications. Net
assets of the Fund were unaffected by the reclassification discussed above.
C. Distributions -- Distributions from income and net realized capital gains, if
any, are generally paid annually and recorded on ex-dividend date. The Fund
may elect to use a portion of the proceeds from redemptions as distributions
for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
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 -- The Fund may enter into short sales of securities
which it concurrently holds (against the box) or for which it holds no
corresponding position (naked). Securities sold short represent a liability
of the Fund to acquire specific securities at prevailing market prices at a
future date in order to satisfy the obligation to deliver the securities
sold. The liability is recorded on the books of the Fund at the market value
of the common stock determined each day in accordance
9
<PAGE> 12
with the procedures for security valuations disclosed in "A" above. The Fund
will incur a loss if the price of the security increases between the date of
the short sale and the date on which the Fund replaces the borrowed security.
The Fund realizes a gain if the price of the security declines between those
dates.
The Fund is required to segregate cash or securities as collateral in
margin accounts at a level that is equal to the obligation to the broker who
delivered such securities to the buyer on behalf of the Fund. The short stock
rebate presented in the statement of operations represents income earned on
short sale proceeds held on deposit with the broker. The Fund may also earn
or incur margin interest on short sales transactions. Margin interest is the
income earned (expense incurred) as a result of the market value of
securities sold short being less than (greater than) the proceeds received
from the short sales.
F. 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 option's 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 a 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.
G. 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.
H. Futures Contracts -- The Fund may purchase or sell futures contracts as a
hedge against changes in market conditions. Initial margin deposits required
upon entering into futures contracts are satisfied by the segregation of
specific securities as collateral for the account of the broker (the Fund's
agent in acquiring the futures position). During the period the futures
contracts are open, changes in the value of the contracts are recognized as
unrealized gains or losses by "marking to market" on a daily basis to reflect
the market value of the contracts at the end of each day's trading. Variation
margin payments are made or received depending upon whether unrealized gains
or losses are incurred. When the contracts are closed, the Fund recognizes a
realized gain or loss equal to the difference between the proceeds from, or
cost of, the closing transaction and the Fund's basis in the contract. Risks
include the possibility of an illiquid market and that a change in value of
the contracts may not correlate with changes in the value of the securities
being hedged.
I. Expenses -- Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes'
operations. All other expenses which are attributable to more than one class
are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays a base management fee calculated at the annual rate of
1.50% of the Fund's average
10
<PAGE> 13
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 500 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 500 Index less 2.00% exceeds the 12-month rolling investment performance
of the Class A shares. During the three-month period ended October 31, 2000 and
the period ended July 31, 2000, AIM waived fees of $0 and $39,872, respectively.
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 three-month period ended October 31,
2000 and the period ended July 31, 2000, AIM was paid $30,873 and $29,372,
respectively, 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 three-month period ended October 31,
2000 and the period ended July 31, 2000, AFS was paid $77,112 and $23,127,
respectively, 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 three-month period ended
October 31, 2000, the Class A, Class B and Class C shares paid AIM Distributors
$239,710, $544,606 and $208,446, respectively, as compensation under the Plans.
For the period ended July 31, 2000, the Class A, Class B and Class C shares paid
AIM Distributors $98,668, $162,407 and $55,143, respectively, as compensation
under the Plans. For the three-month period ended October 31, 2000, AIM waived
fees of $21,792.
AIM Distributors received commissions of $669,665 and $355,159, respectively,
from sales of the Class A shares of the Fund during the three-month period ended
October 31, 2000 and the period ended July 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 three-month period ended
October 31, 2000 and the period ended July 31, 2000, AIM Distributors received
$3,638 and $3,607, respectively, 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 three-month period ended October 31, 2000 and the period ended July
31, 2000, the Fund paid legal fees of $1,154 and $2,270, respectively, 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
For the three-month period ended October 31, 2000 and the period ended July 31,
2000, the Fund received reductions in transfer agency fees from AFS (an
affiliate of AIM) of $2,778 and $372, respectively, and reductions in custodian
fees of $11,634 and $4,150, respectively, under expense offset arrangements
which resulted in a reduction of the Fund's total expenses of $14,412 and
$4,522, respectively, for the three-month period ended October 31, 2000 and the
year ended July 31, 2000, respectively.
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. During the three-month period ended
October 31, 2000 and the period ended July 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 three-month period ended October 31,
2000 was $662,775,257 and $179,253,637, respectively and during the period ended
July 31, 2000 was $288,400,654 and $92,740,607, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes was as follows:
<TABLE>
<CAPTION>
OCTOBER 31, JULY 31,
2000 2000
------------ ------------
<S> <C> <C>
Aggregate unrealized appreciation
of:
Investment securities $ 40,625,503 $ 23,850,469
---------------------------------------------------------------
Securities sold short 8,615,521 3,712,964
---------------------------------------------------------------
Aggregate unrealized
(depreciation) of:
Investment securities (40,390,769) (12,342,197)
---------------------------------------------------------------
Securities sold short (7,639,045) (2,588,878)
===============================================================
Net unrealized appreciation of
investment securities $ 1,211,210 $ 12,632,358
_______________________________________________________________
===============================================================
Cost of investments for tax purposes is $758,871,674 and
$252,650,411, respectively, for three-months ended October
31, 2000 and the year ended July 31, 2000.
Proceeds from securities sold short for tax purposes is
$152,463,451 and $46,493,930, respectively, for three-months
ended October 31, 2000 and the year ended July 31, 2000.
</TABLE>
11
<PAGE> 14
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the period ended October 31, 2000
are summarized as follows:
<TABLE>
<CAPTION>
CALL OPTION CONTRACTS
-----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -----------
<S> <C> <C>
Beginning of year -- $ --
-------------------------------------------------------------------------------------
Written 5,058 $ 6,212,938
-------------------------------------------------------------------------------------
Closed (4,346) (4,038,447)
-------------------------------------------------------------------------------------
Expired -- --
=====================================================================================
End of year 712 $ 2,174,491
_____________________________________________________________________________________
=====================================================================================
</TABLE>
Open call option contracts written at October 31, 2000 were as follows:
<TABLE>
<CAPTION>
OCTOBER 31,
NUMBER 2000
CONTRACT STRIKE OF PREMIUMS MARKET UNREALIZED
ISSUE MONTH PRICE CONTRACTS RECEIVED VALUE APPRECIATION
----- -------- ------ --------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq 100 Index Dec-00 440 505 705,461 517,625 $ 187,836
-------------------------------------------------------------------------------------------
Mar-01 450 207 1,469,030 1,361,025 108,005
===========================================================================================
712 2,174,491 1,878,650 $ 295,841
___________________________________________________________________________________________
===========================================================================================
</TABLE>
NOTE 8-PUT OPTION CONTRACTS
Transactions in put options contracts written during the period ended October
31, 2000 are summarized as follows:
<TABLE>
<CAPTION>
PUT OPTION CONTRACTS
-----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -----------
<S> <C> <C>
Beginning of period 47 $ 398,246
-------------------------------------------------------------------------------------
Purchased 2,614 1,843,789
-------------------------------------------------------------------------------------
Closed (1,931) (1,215,821)
-------------------------------------------------------------------------------------
Expired -- --
=====================================================================================
End of period 730 $ 1,026,214
_____________________________________________________________________________________
=====================================================================================
</TABLE>
Open put option contracts written at October 31, 2000 were as follows:
<TABLE>
<CAPTION>
OCTOBER 31,
NUMBER 2000 UNREALIZED
CONTRACT STRIKE OF PREMIUMS MARKET APPRECIATION
ISSUE MONTH PRICE CONTRACTS RECEIVED VALUE (DEPRECIATION)
------------------ -------- ------ --------- --------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq 100 Index Dec-00 290 130 720,524 1,231,750 $ (511,226)
---------------------------------------------------------------------------------------------
Russell 2000 Index Dec-00 450 600 305,690 442,500 (136,810)
=============================================================================================
730 1,026,214 1,674,250 $ (648,036)
_____________________________________________________________________________________________
=============================================================================================
</TABLE>
12
<PAGE> 15
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the three-month period ended October 31,
2000 and the period ended July 31, 2000 were as follows:
<TABLE>
<CAPTION>
OCTOBER 31, 2000 JULY 31, 2000
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A* 18,008,430 $253,658,152 12,111,778 $149,479,697
---------------------------------------------------------------------------------------------------------------------
Class B** 13,162,915 185,297,506 7,973,127 99,165,325
---------------------------------------------------------------------------------------------------------------------
Class C** 5,695,261 80,003,764 2,722,459 33,913,845
=====================================================================================================================
Reacquired:
Class A (1,070,129) (15,020,320) (1,578,807) (19,345,802)
---------------------------------------------------------------------------------------------------------------------
Class B (196,601) (2,742,176) (124,720) (1,569,680)
---------------------------------------------------------------------------------------------------------------------
Class C (168,610) (2,362,301) (51,677) (614,934)
=====================================================================================================================
35,431,266 $498,834,625 21,052,160 $261,028,451
_____________________________________________________________________________________________________________________
=====================================================================================================================
</TABLE>
* Class A shares commenced sales on December 30, 1999.
** Class B & C shares commenced sales on March 31, 2000.
13
<PAGE> 16
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for a share of the Fund
outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------
DECEMBER 30, 1999
(DATE OPERATIONS
THREE MONTHS ENDED COMMENCED) TO
OCTOBER 31, 2000(a) JULY 31, 2000
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period $ 13.12 $ 10.00
--------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) -- (0.01)
--------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 0.48 3.13
==================================================================================================
Total from investment operations 0.48 3.12
==================================================================================================
Net asset value, end of period $ 13.60 $ 13.12
__________________________________________________________________________________________________
==================================================================================================
Total return(b) 3.66% 31.20%
__________________________________________________________________________________________________
==================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $373,614 $ 138,205
__________________________________________________________________________________________________
==================================================================================================
Ratio of expenses to average net assets (including interest
expense and dividends on short sale expense)
With fee waivers 2.07%(c) 2.41%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 2.10%(c) 2.49%(d)
==================================================================================================
Ratio of expenses to average net assets (excluding interest
expense and dividends on short sale expense)
With fee waivers 2.03%(c) 2.34%(d)
--------------------------------------------------------------------------------------------------
Without fee waivers 2.06%(c) 2.42%(d)
==================================================================================================
Ratio of net investment income (loss) to average net assets 0.04%(c) (0.20)%(d)
__________________________________________________________________________________________________
==================================================================================================
Ratio of interest expense and dividends on short sales
expense to average net assets 0.04%(c) 0.07%(d)
__________________________________________________________________________________________________
==================================================================================================
Portfolio turnover rate 38% 125%
__________________________________________________________________________________________________
==================================================================================================
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not include sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average daily net assets of $284,131,822
for October 31, 2000.
(d) Annualized.
<TABLE>
<CAPTION>
CLASS B CLASS C
----------------------------- -----------------------------
THREE MONTHS MARCH 31, 2000 THREE MONTHS MARCH 31, 2000
ENDED (DATE SALES ENDED (DATE SALES
OCTOBER 31, COMMENCED) TO OCTOBER 31, COMMENCED) TO
2000(a) JULY 31, 2000 2000(a) JULY 31, 2000
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.10 $ 12.81 $ 13.09 $ 12.81
------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.02) (0.02) (0.02) (0.02)
------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 0.47 0.31 0.48 0.30
========================================================================================================================
Total from investment operations 0.45 0.29 0.46 0.28
========================================================================================================================
Net asset value, end of period $ 13.55 $ 13.10 $ 13.55 $ 13.09
________________________________________________________________________________________________________________________
========================================================================================================================
Total return(b) 3.44% 2.26% 3.51% 2.19%
________________________________________________________________________________________________________________________
========================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $282,120 $102,795 $111,084 $ 34,972
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of expenses to average net assets (including interest
expense and dividends on short sale expense)
With fee waivers 2.77%(c) 3.10% 2.77%(c) 3.10%
------------------------------------------------------------------------------------------------------------------------
Without fee waivers 2.77%(c) 3.18% 2.77%(c) 3.18%
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of expenses to average net assets (excluding interest
expense and dividends on short sale expense)
With fee waivers 2.73%(c) 3.03% 2.73%(c) 3.03%
------------------------------------------------------------------------------------------------------------------------
Without fee waivers 2.73%(c) 3.11% 2.73%(c) 3.11%
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of net investment income (loss) to average net assets (0.66)%(c) (0.89)% (0.66)%(c) (0.89)%
________________________________________________________________________________________________________________________
========================================================================================================================
Ratio of interest expense and dividends on short sales
expense to average net assets 0.04%(c) 0.07% 0.04%(c) 0.07%
________________________________________________________________________________________________________________________
========================================================================================================================
Portfolio turnover rate 38% 125% 38% 125%
________________________________________________________________________________________________________________________
========================================================================================================================
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not include contingent deferred sales charges and is not annualized
for periods less than one year.
(c) Ratios are annualized and based on average daily net assets of $216,066,635
and $82,698,655 for Class B and C, respectively, for October 31, 2000.
14
<PAGE> 17
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders of
AIM Large Cap Opportunities Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Large Cap Opportunities Fund (a series
of AIM Special Opportunities Funds) including the
schedule of investments, as of October 31, 2000, and the
related statement of operations, the statement of changes
in net assets, and financial highlights for the three
months ended October 31, 2000 and the period December 30,
1999 (date operations commenced) through July 31, 2000.
These financial statements and financial highlights are
the responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with auditing
standards generally accepted in the United States of
America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as
of October 31, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall
financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Large
Cap Opportunities Fund as of October 31, 2000, the
results of its operations, the changes in its net assets
and financial highlights for the three months ended
October 31, 2000 and the period December 30, 1999 (date
operations commenced) through July 31, 2000, in
conformity with accounting principles generally accepted
in the United States of America.
KPMG LLP
December 6, 2000
Houston, Texas
15
<PAGE> 18
ABOUT YOUR FUND'S BOARD
The board of trustees is elected by you to look after your interests as a
mutual-fund shareholder. Trustees' responsibilities include choosing investment
advisors for your fund; keeping an eye on performance, operations and expenses;
making decisions regarding dividends and other duties.
Nine of your fund's 10 trustees are independent. In other words, they have no
affiliation with AIM except as independent fund trustees charged with
representing the interest of fund investors. Representing a cross section of
businesses and industries, they have achieved success and recognition in their
respective fields. They bring their considerable expertise and experience to
their positions as trustees.
Listed below are the members of the board of trustees of your mutual fund and
their respective titles.
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Robert H. Graham Robert H. Graham 11 Greenway Plaza
Chairman, President and Chief Executive Officer Chairman and President Suite 100
A I M Management Group Inc. Houston, TX 77046
Carol F. Relihan
Bruce L. Crockett Senior Vice President and Secretary INVESTMENT ADVISOR
Director
ACE Limited; Gary T. Crum A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Edgar M. Larsen Houston, TX 77046
Senior Vice President
Owen Daly II TRANSFER AGENT
Formerly Director Dana R. Sutton
Cortland Trust Inc. Vice President and Treasurer A I M Fund Services, Inc.
P.O. Box 4739
Albert R. Dowden Melville B. Cox Houston, TX 77210-4739
Chairman of the Board of Directors, Vice President
The Cortland Trust and DHJ Media, Inc.; and CUSTODIAN
Director, Magellan Insurance Company, Mary J. Benson
Formerly Director, President and Assistant Vice President and State Street Bank and Trust Company
Chief Executive Officer, Assistant Treasurer 225 Franklin Street
Volvo Group North America, Inc.; and Boston, MA 02110
Senior Vice President, AB Volvo Sheri Morris
Assistant Vice President and COUNSEL TO THE FUND
Edward K. Dunn Jr. Assistant Treasurer
Chairman, Mercantile Mortgage Corp.; Ballard Spahr
Formerly Vice Chairman and President, Jim A. Coppedge Andrews & Ingersoll, LLP
Mercantile-Safe Deposit & Trust Co.; and Assistant Secretary 1735 Market Street
President, Mercantile Bankshares Philadelphia, PA 19103
Renee A. Friedli
Jack Fields Assistant Secretary COUNSEL TO THE TRUSTEES
Chief Executive Officer
Twenty First Century, Inc.; P. Michelle Grace Kramer, Levin, Naftalis & Frankel LLP
Formerly Member Assistant Secretary 919 Third Avenue
of the U.S. House of Representatives New York, NY 10022
Nancy L. Martin
Carl Frischling Assistant Secretary DISTRIBUTOR
Partner
Kramer, Levin, Naftalis & Frankel LLP Ofelia M. Mayo A I M Distributors, Inc.
Assistant Secretary 11 Greenway Plaza
Prema Mathai-Davis Suite 100
Formerly Chief Executive Officer, Lisa A. Moss Houston, TX 77046
YWCA of the U.S.A. Assistant Secretary
AUDITORS
Lewis F. Pennock Kathleen J. Pflueger
Partner Assistant Secretary KPMG LLP
Pennock & Cooper 700 Louisiana
Houston, TX 77002
Louis S. Sklar
Executive Vice President
Hines Interests
Limited Partnership
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION (UNAUDITED)
Of ordinary dividends paid to shareholders during the Fund's tax year ended
October 31, 2000, 0% is eligible for the dividends received deduction for
corporations. The Fund distributed long-term capital gains of $190,000 for the
Fund's tax year ended October 31, 2000 of which 100% is 20% rate gain.
16
<PAGE> 19
THE AIM FUNDS
RISK SPECTRUM
On the back cover of this fund report, you'll find the funds in the AIM family
divided into the following categories: sector, international/global, domestic,
taxable and tax-free. You'll also notice that the funds in each category are
listed from more aggressive to more conservative.
Within each category of this risk spectrum, we assessed each fund on the
basis of three factors: its holdings, volatility patterns and diversification.
From that assessment, we assigned a degree of risk to each fund and ordered them
accordingly.
Mutual funds typically invest in stocks, bonds or money market instruments,
each with varying levels of potential risk and reward. Generally, the riskier
the investment, the greater the potential reward.
o Stock funds usually offer the most upside potential, but they also carry the
greatest risk. Funds that invest in large, well-established companies
generally have lower risk/reward potential than funds that invest in small,
fast-growing companies.
o Funds that invest in a broad range of industries are considered more
diversified and less risky--and potentially less rewarding--than funds that
invest in a single sector, such as technology.
o Funds that invest in international markets tend to have higher risk/reward
potential than those that invest solely in domestic securities.
o Bond funds are generally considered safer and therefore potentially less
rewarding than stock funds. Funds that invest in U.S. Treasury securities
typically have lower risk/reward potential than funds that invest in
higher-yielding junk bonds.
o Money market funds, while considered extremely safe, typically produce lower
returns than stock and bond funds. Moreover, it is possible that a money
market fund's returns will not keep pace with inflation.
The amount of investment risk you undertake depends on several factors: your
financial objectives, your risk tolerance and your time horizon. Are you saving
for your later years or are you investing to buy a large item, like a car or a
house, soon? Are you a young adult early in your work life, or are you
approaching retirement?
If your investment plan has a rather long time horizon, you may be able to
invest more aggressively because you could have time to recoup should you
experience losses. If your needs are more immediate, you may need to be more
conservative to meet your goal.
Because these factors change over time, it's a good idea to reassess your
portfolio periodically to make sure it still meets your needs. Your financial
advisor can help you figure out if your portfolio is right where it should be or
if it could use some fine-tuning.
In assessing your investments, remember to keep diversification in mind.
Such a strategy, where you spread your investments over several types of mutual
funds, may help mitigate volatility and/or risk in your portfolio because not
all investments behave the same way at the same time.
AIM has a large selection of mutual funds to choose from. See your financial
advisor for insight into which ones would best fit in your portfolio.
------------------------------------
THE AMOUNT OF INVESTMENT
RISK YOU UNDERTAKE DEPENDS
ON SEVERAL FACTORS: YOUR
FINANCIAL OBJECTIVES, YOUR
RISK TOLERANCE AND YOUR
TIME HORIZON.
------------------------------------
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
EQUITY FUNDS
DOMESTIC EQUITY FUNDS INTERNATIONAL/GLOBAL EQUITY FUNDS A I M Management Group Inc. has
provided leadership in the mutual
MORE AGGRESSIVE MORE AGGRESSIVE fund industry since 1976 and
managed approximately $183 billion
AIM Small Cap Opportunities(1) AIM Latin American Growth in assets for more than eight
AIM Mid Cap Opportunities(2) AIM Developing Markets million shareholders, including
AIM Large Cap Opportunities(3) AIM European Small Company individual investors, corporate
AIM Emerging Growth AIM Asian Growth clients and financial institutions,
AIM Small Cap Growth(4) AIM Japan Growth as of September 30, 2000.
AIM Aggressive Growth AIM International Emerging Growth The AIM Family of Funds
AIM Mid Cap Growth AIM European Development --Registered Trademark-- is
AIM Small Cap Equity AIM Euroland Growth distributed nationwide, and AIM
AIM Capital Development AIM Global Aggressive Growth today is the eighth-largest mutual
AIM Constellation AIM International Equity fund complex in the United States
AIM Dent Demographic Trends AIM Advisor International Value in assets under management,
AIM Select Growth AIM Global Trends according to Strategic Insight, an
AIM Large Cap Growth AIM Global Growth independent mutual fund monitor.
AIM Weingarten AIM is a subsidiary of
AIM Mid Cap Equity MORE CONSERVATIVE AMVESCAP PLC, one of the world's
AIM Value II largest independent financial
AIM Charter SECTOR EQUITY FUNDS services companies with $414
AIM Value billion in assets under management
AIM Blue Chip MORE AGGRESSIVE as of September 30, 2000.
AIM Basic Value
AIM Large Cap Basic Value AIM New Technology
AIM Balanced AIM Global Telecommunications and Technology
AIM Advisor Flex AIM Global Resources
AIM Global Financial Services
MORE CONSERVATIVE AIM Global Health Care
AIM Global Consumer Products and Services
AIM Global Infrastructure
AIM Advisor Real Estate
AIM Global Utilities
MORE CONSERVATIVE
FIXED-INCOME FUNDS
TAXABLE FIXED-INCOME FUNDS TAX-FREE FIXED-INCOME FUNDS
MORE AGGRESSIVE MORE AGGRESSIVE
AIM Strategic Income AIM High Income Municipal
AIM High Yield II AIM Tax-Exempt Bond of Connecticut
AIM High Yield AIM Municipal Bond
AIM Income AIM Tax-Free Intermediate
AIM Global Income AIM Tax-Exempt Cash
AIM Floating Rate(5)
AIM Intermediate Government MORE CONSERVATIVE
AIM Limited Maturity Treasury
AIM Money Market
MORE CONSERVATIVE
</TABLE>
The AIM Risk Spectrum illustrates equity and fixed-income funds from more
aggressive to more conservative. When assessing the degree of risk, three
factors were considered: the funds' portfolio holdings, volatility patterns over
time and diversification permitted within the fund. Fund rankings are relative
to one another within The AIM Family of Funds--Registered Trademark-- and should
not be compared with other investments. There is no guarantee that any one AIM
fund will be less volatile than any other. (1) AIM Small Cap Opportunities Fund
closed to new investors Nov. 4, 1999. (2) AIM Mid Cap Opportunities Fund closed
to new investors March 21, 2000. (3) AIM Large Cap Opportunities Fund closed to
new investors Sept. 29, 2000. (4) AIM Small Cap Growth Fund closed to new
investors Nov. 8, 1999. (5) AIM Floating Rate Fund was restructured to offer
multiple share classes April 3, 2000. Existing shares were converted to Class B
shares, and Class C shares commenced offering.
FOR MORE COMPLETE INFORMATION ABOUT ANY AIM FUND, INCLUDING SALES CHARGES
AND EXPENSES, OBTAIN THE APPROPRIATE PROSPECTUS(ES) FROM YOUR FINANCIAL ADVISOR.
PLEASE READ THE PROSPECTUS(ES) CAREFULLY BEFORE YOU INVEST OR SEND MONEY. This
report is not authorized for distribution to prospective investors unless
preceded or accompanied by a currently effective fund prospectus. If used as
sales material after Jan. 20, 2001, this report must be accompanied by a fund
Performance & Commentary or by an AIM Quarterly Review of Performance for the
most recent quarter end.
[DALBAR LOGO APPEARS HERE] [AIM LOGO APPEARS HERE]
--Registered Trademark--
INVEST WITH DISCIPLINE
A I M Distributors, Inc. --Registered Trademark--
LCO-AR-1
