<PAGE> 1
[AIM LOGO APPEARS HERE]
(GRAPHIC COLLAGE APPEARS HERE)
AIM INCOME FUND
SEMIANNUAL REPORT
JUNE 30, 1995
<PAGE> 2
AIM INCOME FUND
For shareholders who seek a high level of current income consistent with a
reasonable concern for safety of principal by investing in a portfolio
consisting primarily of fixed-rate corporate debt and U.S. Government
obligations.
ABOUT FUND PERFORMANCE AND DATA THROUGHOUT THIS REPORT:
o Unless otherwise indicated, Fund results were computed at net asset value
without reflecting sales charges. When sales charges are included in
performance figures, Class A share performance reflects the maximum 4.75%
sales charge, and Class B share performance reflects the applicable
contingent deferred sales charge (CDSC) for the period involved. The CDSC
declines from 5% to reach 0% at the beginning of the seventh year. The
performance of the Fund's Class B shares will differ from that of Class A
shares. Total return reflects reinvestment of all distributions.
o The 30-day yield calculation reflects investment income net of expenses
over the 30-day period attributable to a share of the Fund, expressed as an
annualized percentage of the maximum offering price per share. It is a
function of the type and quality of the Fund's investments, its maturity,
and its operating expense ratio.
o The Fund's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o Past performance cannot guarantee comparable future results.
o The Fund's portfolio composition is subject to change, and there is no
assurance the Fund will continue to hold these same securities.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Lipper General Bond Fund Category represents an average of the
performance of all general bond funds charted by Lipper Analytical
Services, Inc., an independent mutual fund performance monitor.
Category results shown reflect reinvestment of dividends.
o The Lehman Brothers Aggregate Bond Index is an unmanaged index generally
representative of intermediate and long-term government and
investment-grade corporate debt securities. Index results shown reflect
reinvestment of dividends.
o An investment cannot be made in an index. Index results do not reflect
sales charges; results shown reflect the reinvestment of dividends.
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
For periods ended June 30, 1995
<TABLE>
<CAPTION>
Without With
Sales Charge Sales Charge
------------ ------------
<S> <C> <C>
CLASS A SHARES
10 Years 9.93% 9.39%
5 Years 9.44 8.37
1 Year 13.81 8.43
6 Months 12.87 7.49
CLASS B SHARES
Inception (9/1/93) 1.16% -0.76%
1 Year 12.85 7.85
6 Months 12.41 7.41
</TABLE>
Six-month performance figures include reinvested distributions of $0.30 per
share and $0.267 per share for Class A shares and Class B shares, respectively.
- --------------------------------------------------------------------------------
<PAGE> 3
CHAIRMAN'S LETTER
Dear Shareholder:
Turning the strong rally in the bond market to its
[PHOTO of advantage, AIM Income Fund provided shareholders attractive
Charles T. total returns of 12.87% and 12.41% for Class A and Class B
Bauer, shares, respectively, during the six months ended June 30,
Chairman of 1995.
the Board of Your Fund's performance outpaced the 10.69% total
the Fund, return of the Lipper General Bond Fund Category, an average
APPEARS HERE] of the performance of all general bond funds tracked by
Lipper. As of June 30, combined net assets of the Fund's A
and B shares were $244.8 million, up from $214.0 million
six months earlier.
AIM Income Fund's performance has rebounded from 1994, which was marked by
turmoil in fixed-income markets as the Federal Reserve Board repeatedly raised
short-term interest rates. During the first half of 1995, the Fund was able to
capitalize on the turnaround in the bond market as interest rates finally
stabilized and even began to decline. A more detailed discussion of the
economy, your Fund's portfolio strategy, and our outlook for the months
ahead appears in this report's DISCUSSION & ANALYSIS, which begins on the
following page.
Your Fund has built an impressive record of long-term results.
Nevertheless, it is important to keep in mind that over time, AIM Income Fund
and the financial markets in general have experienced a variety of up and down
years. Although past performance does not ensure comparable future results, we
believe shareholders who keep a long-range outlook will have greater
opportunity for reaping rewards over time.
We remain committed to managing your Fund according to AIM's
research-based, credit-quality-oriented investment discipline. We believe our
faithful application of this philosophy has been a major contributor to the
growth of The AIM Family of Funds(R). During the first six months of this year,
total assets under AIM's management increased by more than 18%, from
approximately $27.5 billion to approximately $32.5 billion. While part of this
growth can be attributed to favorable market conditions, it also reflects the
opening of more than 320,000 new shareholder accounts during the period.
We are pleased to send you this shareholder report for AIM Income
Fund. If you have any questions concerning your AIM account, remember that you
can now access information on current yield and total return of your AIM Fund
in addition to data on your individual account by calling 800-246-5463 at any
time. Or if you prefer, you can speak with a customer service representative by
calling AIM Client Services at 800-959-4246 during normal business hours.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE> 4
DISCUSSION & ANALYSIS
----------------
The Fund generally
increased its
holdings of
intermediate and
long-term securities
as yields early in the
year were viewed
as attractive.
----------------
AIM INCOME FUND CAPITALIZES ON BOND MARKET
RALLY TO PRODUCE SUPERIOR RETURNS
Following 1994, when bonds had one of their worst years on record, investors
were more than ready for good news.
The good news came in the form of evidence that the Federal Reserve
Board's much-sought "soft landing" for the economy--slowing growth but not to
the point of recession--was occurring. More than a year after the Fed began
trying to slow economic growth to a more sustainable 2.5% annual pace, the
results were in. A 2.7% annualized growth rate in the first quarter of 1995
showed the economy had slowed decidedly from the 5.1% annualized rate logged
in the fourth quarter of 1994.
During the second quarter of 1995, economic growth dropped to an
annual rate of less than 1%. Markets began to discount the possibility that the
Federal Reserve Board would ease short-term interest rates. Even a moderate
reduction in interest rates would save corporations and consumers billions of
dollars in borrowing costs and help to extend the favorable business cycle.
News that economic activity was moderating was a tonic for the
financial markets. After the Federal Reserve Board's final short-term interest
rate hike in February 1995, the Federal Funds rate remained targeted at 6.00%.
Longer-term rates began to decline. As of June 30, 1995, for example, the yield
on a 30-year U.S. Treasury Bond was 6.62%, down from 7.88% on December 30,
1994. Bond prices rallied. The Lehman Brothers Aggregate Bond Index was up
11.44% for the six-month period. A brief discussion of how interest rates and
bond prices interact appears on the opposite page.
Toward the end of the reporting period, evidence began to mount that
the economic slowdown could be both more abrupt and more pronounced than
desirable. The word "recession" began to supplant the phrase "soft landing"
when the business press attempted to forecast what lay ahead. Economic data
seemed contradictory. For example, while the Conference Board, a business
research organization, reported a sharp decline in consumer confidence during
May, Dun & Bradstreet Corp. found corporate executives more optimistic than
they had been earlier in the year. Personal income declined 0.2% during May,
but the housing market boomed with sales of new single-family homes up 12.5%.
YOUR INVESTMENT PORTFOLIO
AIM Income Fund thrived in this changing environment.
The Fund generally increased its holdings of intermediate and long-term
securities as yields early in the year were viewed as attractive. The
weighted average maturity of portfolio holdings was lengthened to 12 years from
less than 10 years as the bond market environment stabilized.
In addition, because of the significant increase in foreign interest
rates in 1994, foreign bonds offered attractive yields and return
possibilities. About 25% of holdings were in foreign bonds during the period.
Specifically, foreign holdings were allocated to Germany, the United Kingdom,
Canada, and Australia.
================================================================================
TOP 5 HOLDINGS
(AS OF 6/30/95)
<TABLE>
<CAPTION>
ISSUER COUPON MATURITY
- --------------------------------------------------------------------
<S> <C> <C>
1. Indiana Michigan Power Co. 9.82% 12/07/22
2. Province of Manitoba 7.75% 07/17/16
3. General Motors Corp. 8.80% 03/01/21
4. ITT Corp. 8.85% 07/15/05
5. Westinghouse Credit Corp. 8.875% 06/14/14
</TABLE>
See important Fund disclosure on inside front cover.
2
<PAGE> 5
================================================================================
CURRENT YIELD ADVANTAGE
30-DAY YIELD AS OF 6/30/95
[BAR CHART APPEARS HERE DEPICTING 30-DAY YIELD AS OF JUNE 30, 1995 FOR
6-MONTH CDs (4.96%)** AND AIM INCOME FUND CLASS A (7.36%)*]
Source: Towers Data Systems HYPO(R) and Bank Rate Monitor.
*6.88% was the Class B 30-day yield. Performance of Class B shares will differ.
**Bank certificates of deposit, which are insured by the FDIC for up to
$100,000, are short-term investments that pay fixed principal and interest, but
are subject to fluctuating rollover rates and early withdrawal penalties. CD
income is calculated using the six-month annualized average monthly CD rate
reported by the Federal Reserve Board. Fund shares are not insured and their
value will vary with market conditions.
OUTLOOK FOR THE FUTURE
Shortly after the close of the period covered by this report, the Federal
Reserve Board lowered the Federal Funds rate by 0.25%. Major banks such as
Citibank and Chase Manhattan lowered their prime lending rates from the highest
point in more than four years, even as the market speculated whether the Fed's
move was an isolated cut or the first in a series of reductions. The Fed, in
the past, has not refrained from a policy of easing after a single 0.25% rate
cut.
A more accommodative monetary policy by the Federal Reserve should
spur continued growth in the economy. One important message revealed by the
bond market's impressive performance so far this year is that investors do not
believe inflation is a problem, even with moderate economic growth.
Fund management believes the bond market can be expected to benefit
from the lower and more stable interest rate climate, and therefore will
continue to provide shareholders with attractive total returns.
Rather than trying to determine the future direction of interest
rates, Fund management remains committed to its bottom-up investment strategy,
which seeks attractive portfolio positions one security at a time. By confining
our analysis to individual issues, we can rely on what we know about a
particular company and security rather than on a projection about the future.
Working within predetermined maturity targets, AIM's fixed-income portfolio
managers utilize an ongoing review process that concentrates on the credit and
structure of each security and how each security impacts the portfolio.
================================================================================
INTEREST RATES AND BOND PRICES
The relationship between interest rates and the market value of a bond is
inverse. As interest rates rise, as they did during 1994, the value of an
existing bond generally declines--investors are less inclined to pay full price
for an older bond that yields, for example, 6% when a newer bond yields 9%.
Conversely, when interest rates fall, as they slowly did during the
first half of 1995, the market value of existing bonds generally rises;
investors are willing to pay a premium for an older bond yielding 9% if new
bonds yield only 6%. This situation is depicted in the accompanying see-saw
illustration.
In general, the longer the maturity of a bond, the more its value will
be affected by a change in interest rates. While this translates into the
potential for greater volatility in a bond fund that holds relatively long-term
bonds, it also translates into the potential for greater long-term reward.
[SEE-SAW ILLUSTRATION OF RELATIONSHIP OF INTEREST RATES, MATURITY
AND MARKET VALUE OF BONDS APPEARS HERE]
This information is for illustrative purposes only.
See important Fund disclosure on inside front cover.
3
<PAGE> 6
FINANCIALS
SCHEDULE OF INVESTMENTS
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
MATURITY AMOUNT VALUE
<S> <C> <C> <C>
U.S. DOLLAR DENOMINATED NON-CONVERTIBLE BONDS
& NOTES-62.54%
ADVERTISING/BROADCASTING-0.41%
Comcast Corp.,
Sr. Sub. Deb., 9.50% 01/15/08 $ 1,000,000 $ 997,500
- --------------------------------------------------------------------------------------------------------------------
AIRLINES-3.08%
Delta Air Lines,
Deb., 10.375% 02/01/11 1,500,000 1,738,155
- --------------------------------------------------------------------------------------------------------------------
Equipment Trust Certificates, 10.50% 04/30/16 5,000,000 5,808,950
- --------------------------------------------------------------------------------------------------------------------
7,547,105
- --------------------------------------------------------------------------------------------------------------------
AUTOMOBILE (MANUFACTURERS)-3.10%
General Motors Corp.,
Deb., 8.80% 03/01/21 6,700,000 7,588,956
- --------------------------------------------------------------------------------------------------------------------
AUTOMOBILE/TRUCKS PARTS & TIRES-0.41%
Pronet,
Sr. Sub. Notes., 11.875% (acquired 06/12/95;
cost $1,053,260)(a) 06/15/05 1,000,000 1,007,500
- --------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS-0.41%
Triangle Pacific Corp.,
Sr. Notes, 10.50% 08/01/03 1,000,000 1,017,500
- --------------------------------------------------------------------------------------------------------------------
CABLE TELEVISION-2.24%
Heartland Wireless Communications,
Sr. Notes, 13.00% (acquired 04/20/95-04/21/95;
cost $1,211,250)(a) 04/15/03 1,200,000 1,272,000
- --------------------------------------------------------------------------------------------------------------------
Marcus Cable Operating Co.,
Sr. Disc. Notes, 13.50%(b) 08/01/04 5,000,000 3,162,500
- --------------------------------------------------------------------------------------------------------------------
Videotron Ltd.,
Yankee Sr. Sub. Notes, 10.625% 02/15/05 1,000,000 1,052,500
- --------------------------------------------------------------------------------------------------------------------
5,487,000
- --------------------------------------------------------------------------------------------------------------------
CONTAINERS-1.59%
Ivex Packaging Inc.,
Sr. Sub. Notes, 12.50% 12/15/02 1,500,000 1,612,500
- --------------------------------------------------------------------------------------------------------------------
Owens-Illinois Inc.,
Sr. Sub. Notes, 10.00% 08/01/02 2,000,000 2,035,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 7
FINANCIALS
<TABLE>
<CAPTION>
PRINCIPAL MARKET
MATURITY AMOUNT VALUE
<S> <C> <C> <C>
CONTAINERS-(continued)
Venture Holdings,
Sr. Sub. Notes, 9.75% 04/01/04 $ 290,000 $ 242,150
- --------------------------------------------------------------------------------------------------------------------
3,889,650
- --------------------------------------------------------------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-12.54%
Associates Corp.,
Deb., 7.95% 02/15/10 6,000,000 6,525,000
- --------------------------------------------------------------------------------------------------------------------
GMAC,
Notes, 5.50%(c) 10/15/02 3,425,000 3,803,565
- --------------------------------------------------------------------------------------------------------------------
GPA Delaware Inc.,
Deb., 8.75% 12/15/98 2,000,000 1,700,000
- --------------------------------------------------------------------------------------------------------------------
ITT Corp.,
Deb., 8.85% 07/15/05 6,500,000 7,583,290
- --------------------------------------------------------------------------------------------------------------------
Loehmann's Holdings,
Sr. Sub. Notes, 13.75% 02/15/99 1,235,000 1,210,300
- --------------------------------------------------------------------------------------------------------------------
Olympic Financial Ltd.,
Deb., 13.00% 05/01/00 1,000,000 1,025,000
- --------------------------------------------------------------------------------------------------------------------
Sea Containers,
Sr. Sub. Deb., 12.50% 12/01/04 2,000,000 2,180,000
- --------------------------------------------------------------------------------------------------------------------
Westinghouse Credit Corp.,
Deb., 8.875% 06/14/14 6,000,000 6,660,000
- --------------------------------------------------------------------------------------------------------------------
30,687,155
- --------------------------------------------------------------------------------------------------------------------
FOOD PROCESSING-3.36%
ConAgra Inc.,
Sub. Notes, 9.75% 03/01/21 4,000,000 4,851,520
- --------------------------------------------------------------------------------------------------------------------
Curtice-Burns,
Sr. Sub. Notes., 12.25% 02/01/05 1,300,000 1,378,000
- --------------------------------------------------------------------------------------------------------------------
Fleming Companies Inc.,
Sr. Notes, 10.625% 12/15/01 1,000,000 1,052,500
- --------------------------------------------------------------------------------------------------------------------
Pilgrim's Pride Corp.,
Sr. Sub. Notes, 10.875% 08/01/03 1,000,000 942,500
- --------------------------------------------------------------------------------------------------------------------
8,224,520
- --------------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT-3.22%
Province of Manitoba,
Yankee Bond, 7.75% 07/17/16 7,500,000 7,887,675
- --------------------------------------------------------------------------------------------------------------------
GAMING-1.50%
Showboat Inc.,
First Mortgage Notes, 9.25% 05/01/08 4,000,000 3,670,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 8
FINANCIALS
<TABLE>
<CAPTION>
PRINCIPAL MARKET
MATURITY AMOUNT VALUE
<S> <C> <C> <C>
HOMEBUILDING-0.41%
Continental Homes Holdings,
Sr. Notes, 12.00% 08/01/99 $ 1,000,000 $ 1,005,000
- --------------------------------------------------------------------------------------------------------------------
HOTELS/MOTELS-0.51%
John Q. Hammons Hotels,
Gtd. First Mortgage Notes, 8.875% 02/15/04 1,300,000 1,261,000
- --------------------------------------------------------------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-1.69%
American Life Holding,
Sr. Sub. Notes, 11.25% 09/15/04 1,300,000 1,352,000
- --------------------------------------------------------------------------------------------------------------------
Americo Life Inc.,
Sr. Sub. Notes, 9.25% 06/01/05 3,000,000 2,775,000
- --------------------------------------------------------------------------------------------------------------------
4,127,000
- --------------------------------------------------------------------------------------------------------------------
INSURANCE (MULTI-LINE/PROPERTY)-0.41%
Terra Nova Holdings,
Yankee Sr. Notes, 10.75% 07/01/05 1,000,000 1,007,500
- --------------------------------------------------------------------------------------------------------------------
LEISURE & RECREATION-3.44%
Icon Health & Fitness, Sr. Sub. Notes, 13.00%
(acquired 11/04/94-12/07/94; cost $1,475,133)(a) 07/15/02 1,500,000 1,552,500
- --------------------------------------------------------------------------------------------------------------------
Stratosphere Corp.,
First Mortgage Notes, 14.25% 05/15/02 1,000,000 1,020,000
- --------------------------------------------------------------------------------------------------------------------
Time Warner Entertainment,
Notes, 10.15% 05/01/12 5,000,000 5,843,700
- --------------------------------------------------------------------------------------------------------------------
8,416,200
- --------------------------------------------------------------------------------------------------------------------
MACHINERY (HEAVY)-2.71%
Caterpillar Inc.,
Deb., 9.375% 08/15/11 5,000,000 6,016,400
- --------------------------------------------------------------------------------------------------------------------
Primeco Inc.,
Sr. Sub. Notes, 12.75% 03/01/05 600,000 612,000
- --------------------------------------------------------------------------------------------------------------------
6,628,400
- --------------------------------------------------------------------------------------------------------------------
MACHINERY (MISCELLANEOUS)-1.42%
AM General Corp.,
Sr. Notes, 12.875% (acquired 04/21/95;
cost $1,492,005)(a) 05/01/02 1,500,000 1,425,000
- --------------------------------------------------------------------------------------------------------------------
Interlake Corp.,
Sr. Notes, 12.00% 11/15/01 1,000,000 1,015,000
- --------------------------------------------------------------------------------------------------------------------
MVE Inc.,
Sr. Sec. Notes, 12.50% 02/15/02 1,000,000 1,040,000
- --------------------------------------------------------------------------------------------------------------------
3,480,000
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
FINANCIALS
<TABLE>
<CAPTION>
PRINCIPAL MARKET
MATURITY AMOUNT VALUE
<S> <C> <C> <C>
MEDICAL (PATIENT SERVICES)-0.45%
OrNda Healthcorp,
Sr. Sub. Notes, 11.375% 08/15/04 $ 1,000,000 $ 1,092,500
- --------------------------------------------------------------------------------------------------------------------
NATURAL GAS PIPELINE-2.01%
Transco Energy Co.,
Deb., 9.875% 06/15/20 4,000,000 4,914,160
- --------------------------------------------------------------------------------------------------------------------
OIL & GAS-3.27%
Petroleum Heat & Power,
Sub. Deb., 12.25% 02/01/05 1,370,000 1,452,200
- --------------------------------------------------------------------------------------------------------------------
Sun Company,
Deb., 9.00% 11/01/24 4,000,000 4,570,840
- --------------------------------------------------------------------------------------------------------------------
Talisman Energy,
Yankee Deb., 7.125% 06/01/07 2,000,000 1,985,000
- --------------------------------------------------------------------------------------------------------------------
8,008,040
- --------------------------------------------------------------------------------------------------------------------
RETAIL (FOOD & DRUG)-1.40%
Dominick's Finer Foods,
Sr. Sub. Notes, 10.875% (acquired 04/27/95;
cost $750,000)(a) 05/01/05 750,000 761,250
- --------------------------------------------------------------------------------------------------------------------
Penn Traffic Co.,
Sr. Notes, 10.65% 11/01/04 1,580,000 1,655,050
- --------------------------------------------------------------------------------------------------------------------
Ralph's Grocery Co.,
Sr. Notes, 10.45% 06/15/04 1,000,000 1,000,000
- --------------------------------------------------------------------------------------------------------------------
3,416,300
- --------------------------------------------------------------------------------------------------------------------
RETAIL (STORES)-1.53%
Pamida Inc.,
Sr. Sub. Notes, 11.75% 03/15/03 1,000,000 890,000
- --------------------------------------------------------------------------------------------------------------------
Specialty Retail,
Sr. Sub. Notes, 11.00% 08/15/03 2,000,000 1,840,000
- --------------------------------------------------------------------------------------------------------------------
United Stationer Supply,
Sr. Sub. Notes, 12.75% (acquired 04/26/95-05/22/95;
cost $1,005,225)(a) 05/01/05 1,000,000 1,020,000
- --------------------------------------------------------------------------------------------------------------------
3,750,000
- --------------------------------------------------------------------------------------------------------------------
STEEL-0.94%
GS Technologies Inc.,
Sr. Notes, 12.00% 09/01/04 1,000,000 985,000
- --------------------------------------------------------------------------------------------------------------------
Gulf States Steel,
Sr. Notes, 13.50% (acquired 04/12/95;
cost $1,364,500)(a) 04/15/03 1,360,000 1,305,600
- --------------------------------------------------------------------------------------------------------------------
2,290,600
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 10
FINANCIALS
<TABLE>
<CAPTION>
PRINCIPAL MARKET
MATURITY AMOUNT VALUE
<S> <C> <C> <C>
TELECOMMUNICATIONS-0.44%
Mobile Telecomm Technology,
Sr. Notes, 13.50% 12/15/02 $ 1,000,000 $ 1,072,500
- --------------------------------------------------------------------------------------------------------------------
TEXTILES-2.02%
Consoltex Group,
Sr. Sub. Notes, 11.00% 10/01/03 1,500,000 1,372,500
- --------------------------------------------------------------------------------------------------------------------
Fieldcrest Cannon Inc.,
Sr. Sub. Deb., 11.25% 06/15/04 2,000,000 2,080,000
- --------------------------------------------------------------------------------------------------------------------
Tarkett International,
Sr. Sub. Notes, 9.00% (acquired 02/08/94;
cost $1,500,000)(a) 03/01/02 1,500,000 1,492,500
- --------------------------------------------------------------------------------------------------------------------
4,945,000
- --------------------------------------------------------------------------------------------------------------------
TRANSPORTATION (MISCELLANEOUS)-0.84%
Gearbulk Holdings Ltd,
Sr. Notes, 11.25% 12/01/04 1,000,000 1,060,000
- --------------------------------------------------------------------------------------------------------------------
Trans Ocean Container,
Sr. Sub. Notes, 12.25% 07/01/04 1,000,000 1,010,000
- --------------------------------------------------------------------------------------------------------------------
2,070,000
- --------------------------------------------------------------------------------------------------------------------
UTILITIES-7.19%
California Energy Company, Inc.,
Sr. Disc. Notes, 10.25%(b) 01/15/04 1,500,000 1,275,000
- --------------------------------------------------------------------------------------------------------------------
Indiana-Michigan Power Co.,
Sec. Lease Obligation Bonds, 9.82% 12/07/22 8,991,749 11,076,756
- --------------------------------------------------------------------------------------------------------------------
Kansas Gas & Electric,
Sec. Lease Obligation Bonds, 8.29% 03/29/16 5,000,000 5,239,200
- --------------------------------------------------------------------------------------------------------------------
17,590,956
- --------------------------------------------------------------------------------------------------------------------
Total U.S. Dollar Denominated
Non-Convertible Bonds & Notes 153,079,717
- --------------------------------------------------------------------------------------------------------------------
U.S. DOLLAR DENOMINATED CONVERTIBLE BONDS & NOTES-1.12%
COMPUTER NETWORKING-0.42%
3COM Corp.,
Conv. Sub. Notes, 10.25% (acquired 11/08/94;
cost $800,000)(a) 11/01/01 800,000 1,024,000
- --------------------------------------------------------------------------------------------------------------------
FINANCE-(CONSUMER CREDIT)-0.70%
Henderson Capital,
Conv. Bonds, 4.50% 10/27/96 1,700,000 1,708,500
- --------------------------------------------------------------------------------------------------------------------
Total U.S. Dollar Denominated
Convertible Bonds & Notes 2,732,500
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
FINANCIALS
<TABLE>
<CAPTION>
PRINCIPAL MARKET
MATURITY AMOUNT VALUE
<S> <C> <C> <C>
NON-U.S. DOLLAR DENOMINATED NON-CONVERTIBLE BONDS
& NOTES(d)-8.33%
CANADA-3.47%
Bell Canada (Telecommunications),
Deb., 10.875% 10/11/04 CAD3,000,000 $ 2,499,818
- --------------------------------------------------------------------------------------------------------------------
Canadian Oil Debco Inc. (Oil & Gas),
Deb., 11.00% 10/31/00 3,200,000 2,577,939
- --------------------------------------------------------------------------------------------------------------------
IPL Energy Inc. (Oil Equipment & Supplies)
Deb., Series A, 9.67% 02/23/00 3,100,000 2,390,171
- --------------------------------------------------------------------------------------------------------------------
Rogers Cablesystem, Inc. (Cable Television),
Sr. Sec. Second Priority Deb., 9.65% 01/15/14 1,750,000 1,032,034
- --------------------------------------------------------------------------------------------------------------------
8,499,962
- --------------------------------------------------------------------------------------------------------------------
GERMANY-4.50%
International Bank for Reconstruction & Development
(Supranational Organization),
Unsub. Global Bonds, 5.875% 11/10/03 DEM7,000,000 4,673,584
- --------------------------------------------------------------------------------------------------------------------
Unsub. Global Bonds, 7.125% 04/12/05 8,800,000 6,330,350
- --------------------------------------------------------------------------------------------------------------------
11,003,934
- --------------------------------------------------------------------------------------------------------------------
ITALY-0.36%
KFW International Finance (Finance-Consumer Credit),
Gtd. Notes, 11.625% 11/27/98 ITL1,430,000,000 873,076
- --------------------------------------------------------------------------------------------------------------------
Total Non-U.S. Dollar Denominated
Non-Convertible Bonds & Notes 20,376,972
- --------------------------------------------------------------------------------------------------------------------
NON-U.S. DOLLAR DENOMINATED CONVERTIBLE BONDS
& NOTES(d)-5.39%
AUSTRALIA-0.43%
Lion Nathan Ltd.(Beverages)
Conv. Sub. Deb., 11.76% 09/30/00 AUD1,490,300 1,056,132
- --------------------------------------------------------------------------------------------------------------------
CANADA-1.01%
Repap Enterprise (Paper & Forest Products),
Conv. Deb., 9.00% 06/30/98 CAD3,500,000 2,471,787
- --------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM-3.95%
ELF Enterprise Finance PLC (Finance-Consumer Credit),
Gtd. Conv. Bonds, 8.75% 06/27/06 BPS2,900,000 4,543,502
- --------------------------------------------------------------------------------------------------------------------
Lasmo PLC (Oil Equipment & Supplies)
Conv. Deb., 7.75% 10/04/05 3,700,000 5,120,089
- --------------------------------------------------------------------------------------------------------------------
9,663,591
- --------------------------------------------------------------------------------------------------------------------
Total Non-U.S. Dollar Denominated
Convertible Bonds & Notes 13,191,510
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 12
FINANCIALS
<TABLE>
<CAPTION>
PRINCIPAL MARKET
MATURITY AMOUNT VALUE
<S> <C> <C> <C>
NON-U.S. DOLLAR DENOMINATED GOVERNMENT BONDS
& NOTES(d)-10.15%
AUSTRALIA-5.03%
Australia (Commonwealth of)
Gtd. Notes, 6.75% 11/15/06 AUD9,600,000 $ 5,633,092
- --------------------------------------------------------------------------------------------------------------------
Treasury Corp. of Victoria
Gtd. Notes, 10.25% 09/15/99 2,300,000 1,726,962
- --------------------------------------------------------------------------------------------------------------------
Western Australia Treasury Corp.
Gtd. Notes, 8.00% 07/15/03 7,500,000 4,943,710
- --------------------------------------------------------------------------------------------------------------------
12,303,764
- --------------------------------------------------------------------------------------------------------------------
CANADA-1.07%
New Brunswick (Province of),
Deb, 8.94% 01/15/05 CAD3,500,000 2,618,311
- --------------------------------------------------------------------------------------------------------------------
GERMANY-4.05%
Bundesrepublik Deutschland
Deb., 6.75% 07/15/04 DEM5,250,000 3,721,582
- --------------------------------------------------------------------------------------------------------------------
Deb., 6.875% 05/12/05 8,600,000 6,187,100
- --------------------------------------------------------------------------------------------------------------------
9,908,682
- --------------------------------------------------------------------------------------------------------------------
Total Non-U.S. Dollar Denominated
Government Bonds & Notes 24,830,757
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
SHARES
<S> <C> <C> <C>
EQUITY SECURITIES-0.63%
CONVERTIBLE PREFERRED STOCKS-0.42%
FINANCE (ASSET MANAGEMENT)-0.42%
American General Life Insurance of Delaware-Series A, $3.00 Conv. Pfd. 20,000 1,037,500
- --------------------------------------------------------------------------------------------------------------------
COMMON STOCKS-0.21%
UTILITIES-0.21%
National Power PLC-ADR 24,300 300,713
- --------------------------------------------------------------------------------------------------------------------
Powergen PLC-ADR 17,300 211,925
- --------------------------------------------------------------------------------------------------------------------
512,638
- --------------------------------------------------------------------------------------------------------------------
Total Equity Securities 1,550,138
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
MATURITY AMOUNT
<S> <C> <C> <C>
U.S. TREASURY SECURITIES-2.30%
U.S. Treasury Bonds, 7.625% 02/15/25 $ 5,000,000 5,642,550
- --------------------------------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 5,642,550
- --------------------------------------------------------------------------------------------------------------------
Total Investments (excluding Repurchase Agreement) 221,404,144
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 13
FINANCIALS
<TABLE>
<CAPTION>
PRINCIPAL MARKET
MATURITY AMOUNT VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENT-7.12%(e)
Daiwa Securities America Inc., 6.20%(f) 07/03/95 $ 17,426,715 $ 17,426,715
- ------------------------------------------------------------------------------------------------
Total Repurchase Agreements 17,426,715
- ------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 97.58% 238,830,859
- ------------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES -- 2.42% 5,926,731
- ------------------------------------------------------------------------------------------------
NET ASSETS -- 100.00% $244,757,590
================================================================================================
</TABLE>
Notes to Schedule of Investments:
(a) Restricted Securities. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The
aggregate market value of these securities at June 30, 1995 was $8,283,850,
which represented 3.38% of the Fund's net assets.
(b) Discounted bond at purchase. Interest rate represents coupon rate at
which the bond will accrue at a specified future date.
(c) Coupon steps up to 9.00%, effective 10/15/95.
(d) Foreign denominated securities. Par value and coupon are denominated in
currency of country indicated.
(e) Collateral on repurchase agreements, including the Fund's pro-rata
interest in joint repurchase agreements, is taken into possession by the
Fund upon entering into the repurchase agreement. The collateral is marked
to market daily to ensure its market value as being 102% of the sales price
of the repurchase agreement. The investments in some repurchase agreements
are through participation in joint accounts with other mutual funds managed
by the investment advisor.
(f) Joint repurchase agreement entered into 06/30/95 with a maturing value of
$186,890,118. Collateralized by $195,572,000 U.S. Treasury obligations,
0.00% to 8.375% due 06/27/96 to 08/15/08.
Abbreviations:
ADR - American Depositary Receipt BPS - British Pound Sterling
AUD - Australian Dollar Gtd. - Guaranteed
CAD - Canadian Dollar ITL - Italian Lira
Conv. - Convertible Pfd. - Preferred
Deb. - Debentures Sec. - Secured
DEM - German Deutschemark Sr. - Senior
Disc. - Discounted Sub. - Subordinated
Unsub. - Unsubordinated
See Notes to Financial Statements.
11
<PAGE> 14
FINANCIALS
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase agreements, at market value (cost $214,841,582) $221,404,144
- ---------------------------------------------------------------------------------------------------
Repurchase agreement (cost $17,426,715) 17,426,715
- ---------------------------------------------------------------------------------------------------
Foreign currencies, at market value (cost $1,239) 1,258
- ---------------------------------------------------------------------------------------------------
Receivables for:
Investments sold 7,167,911
- ---------------------------------------------------------------------------------------------------
Fund shares sold 500,903
- ---------------------------------------------------------------------------------------------------
Interest 5,205,173
- ---------------------------------------------------------------------------------------------------
Investment for deferred compensation plan 60,559
- ---------------------------------------------------------------------------------------------------
Other assets 40,375
- ---------------------------------------------------------------------------------------------------
Total assets 251,807,038
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Forward contracts 148,053
- ---------------------------------------------------------------------------------------------------
Investments purchased 6,091,951
- ---------------------------------------------------------------------------------------------------
Fund shares reacquired 112,518
- ---------------------------------------------------------------------------------------------------
Dividends 320,630
- ---------------------------------------------------------------------------------------------------
Deferred compensation plan 60,559
- ---------------------------------------------------------------------------------------------------
Accrued advisory fees 95,988
- ---------------------------------------------------------------------------------------------------
Accrued distribution fees 154,468
- ---------------------------------------------------------------------------------------------------
Accrued administrative service fees 2,358
- ---------------------------------------------------------------------------------------------------
Accrued transfer agent fees 12,986
- ---------------------------------------------------------------------------------------------------
Accrued trustees' fees 1,289
- ---------------------------------------------------------------------------------------------------
Accrued operating expenses 48,648
- ---------------------------------------------------------------------------------------------------
Total liabilities 7,049,448
- ---------------------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $244,757,590
===================================================================================================
NET ASSETS:
Class A $222,189,221
===================================================================================================
Class B $ 22,568,369
===================================================================================================
SHARES OUTSTANDING, $.01 PAR VALUE PER SHARE
Class A 28,450,096
===================================================================================================
Class B 2,896,529
===================================================================================================
Class A:
Net asset value and redemption price per share $ 7.81
===================================================================================================
Offering price per share:
(Net asset value of $7.81 divided by 95.25%) $ 8.20
===================================================================================================
Class B:
Net asset value and offering price per share $ 7.79
===================================================================================================
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 15
FINANCIALS
STATEMENT OF OPERATIONS
For the six months ended June 30, 1995
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 9,709,993
- -----------------------------------------------------------------------------------------------
Dividends 46,928
- -----------------------------------------------------------------------------------------------
Total investment income 9,756,921
- -----------------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 547,210
- -----------------------------------------------------------------------------------------------
Custodian fees 28,786
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class A 259,657
- -----------------------------------------------------------------------------------------------
Distribution fees -- Class B 81,452
- -----------------------------------------------------------------------------------------------
Trustees' fees 2,711
- -----------------------------------------------------------------------------------------------
Transfer agent fees -- Class A 112,666
- -----------------------------------------------------------------------------------------------
Transfer agent fees -- Class B 15,238
- -----------------------------------------------------------------------------------------------
Administrative services fees 34,665
- -----------------------------------------------------------------------------------------------
Other 77,494
- -----------------------------------------------------------------------------------------------
Total expenses 1,159,879
- -----------------------------------------------------------------------------------------------
Net investment income 8,597,042
- -----------------------------------------------------------------------------------------------
REALIZED & UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND FORWARD TRANSACTIONS:
Net realized gain (loss) from:
Investment securities 2,532,791
- -----------------------------------------------------------------------------------------------
Foreign currencies 946,509
- -----------------------------------------------------------------------------------------------
Forward contracts (338,838)
- -----------------------------------------------------------------------------------------------
3,140,462
- -----------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of:
Investment securities 15,689,580
- -----------------------------------------------------------------------------------------------
Foreign currencies 54,189
- -----------------------------------------------------------------------------------------------
Forward contracts (112,743)
- -----------------------------------------------------------------------------------------------
15,631,026
- -----------------------------------------------------------------------------------------------
Net realized & unrealized gain from investment securities, foreign currencies
and forward transactions 18,771,488
- -----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $27,368,530
===============================================================================================
</TABLE>
See Notes to Financial Statements.
13
<PAGE> 16
FINANCIALS
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1995 and the year ended December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
<S> <C> <C>
OPERATIONS:
Net investment income $ 8,597,042 $ 17,083,355
- --------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities, foreign currencies
and forward transactions 3,140,462 (18,454,102)
- --------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment securities, foreign
currencies and forward transactions 15,631,026 (18,072,358)
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 27,368,530 (19,443,105)
- --------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (8,045,625) (14,029,228)
- --------------------------------------------------------------------------------------------------------------
Class B (551,417) (478,570)
- --------------------------------------------------------------------------------------------------------------
Distributions in excess of net investment income:
Class A (342,979) --
- --------------------------------------------------------------------------------------------------------------
Class B (23,507) --
- --------------------------------------------------------------------------------------------------------------
Distributions to shareholders from capital:
Class A -- (3,123,648)
- --------------------------------------------------------------------------------------------------------------
Class B -- (122,674)
- --------------------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (360,558)
- --------------------------------------------------------------------------------------------------------------
Class B -- (20,562)
- --------------------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 3,435,585 (6,155,618)
- --------------------------------------------------------------------------------------------------------------
Class B 8,919,284 9,961,208
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 30,759,871 (33,772,755)
- --------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 213,997,719 247,770,474
- --------------------------------------------------------------------------------------------------------------
End of period $244,757,590 $213,997,719
==============================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $251,361,742 $239,006,873
- --------------------------------------------------------------------------------------------------------------
Undistributed net investment income (426,545) (60,059)
- --------------------------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from sales of investment securities,
foreign currencies and forward transactions (12,637,576) (15,778,038)
- --------------------------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment securities, foreign
currencies and forward transactions 6,459,969 (9,171,057)
- --------------------------------------------------------------------------------------------------------------
$244,757,590 $213,997,719
==============================================================================================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 17
FINANCIALS
NOTES TO FINANCIAL STATEMENTS
June 30, 1995
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Income Fund (the "Fund") is a series portfolio of AIM Funds Group (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 nine separate series portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers two different classes of shares: the Class A shares and the
Class B shares. Class A shares are sold with a front-end sales charge. Class B
shares are sold with a contingent deferred sales charge. Matters affecting each
portfolio or class will be voted on exclusively by the shareholders of such
portfolio or class. The assets, liabilities and operations of each portfolio are
accounted for separately. Information presented in these financial statements
pertains only to the Fund. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
A. Security Valuations - Non-convertible bonds and notes 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 institution-size trading
in similar groups of securities, developments related to special securities,
yield, quality, coupon rate, maturity, type of issue, individual trading
characteristics and other market data. Investment securities for which prices
are not provided by the pricing service and which are listed or traded on an
exchange (except convertible bonds) are valued at the last sales price on the
exchange where the security is principally traded or, lacking any sales on a
particular day, at the mean between the closing bid and asked prices on that
day unless the Board of Trustees, or persons designated by the Board of
Trustees, determines that the over-the-counter quotations more closely
reflect the current market value of the security. Exchange listed convertible
bonds are valued based at the mean between the closing bid and asked prices
obtained from a broker-dealer. Securities traded in the over-the-counter
market, except (i) securities priced by the pricing service, (ii) securities
for which representative exchange prices are available, and (iii) securities
reported in the NASDAQ National Market System, are valued at the mean between
representative last bid and asked prices obtained from an electronic
quotation reporting system, if such prices are available, or from established
market makers. Each security reported in the NASDAQ National Market System is
valued at the last sales price on the valuation date. Securities for which
market quotations are not readily available are valued at fair value as
determined in good faith by or under the supervision of the Trust's officers
in accordance with methods which are 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. Generally, trading
in foreign securities is substantially completed each day at various times
prior to the close of the New York Stock Exchange. 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 New York Stock Exchange.
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 New York Stock Exchange which will 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. Foreign Currency Translations - Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions.
C. Foreign Currency Contracts - A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a forward contract to attempt to
15
<PAGE> 18
FINANCIALS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued)
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a forward contract for the
purchase or sale of a security denominated in a foreign currency in order to
"lock-in" the U.S. dollar price of that security. The Fund could be exposed
to risk if counterparties to the contracts are unable to meet the terms of
their contracts or if the value of the foreign currency changes unfavorably.
Outstanding contracts at June 30, 1995 were as follows:
<TABLE>
<CAPTION>
Contract to Unrealized
Settlement ----------------------------- Appreciation
Date Receive Deliver (Depreciation)
---------- -------------- ---------- --------------
<S> <C> <C> <C>
08/08/95 CAD 10,100,000 $7,345,842 $ (27,532)
08/03/95 DEM 4,200,000 $3,041,639 (10,133)
08/15/95 DEM 4,600,000 $3,332,805 (110,388)
---------
$(148,053)
</TABLE>
D. Securities Transactions, Investment Income and Distributions - Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the
accrual basis. Dividend income is recorded on the ex-dividend date. Dividends
to shareholders are declared daily and are paid monthly.
E. Federal Income Taxes - The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements. The Fund has a capital loss
carryforward of $12,957,073 (which may be carried forward to offset future
taxable capital gains, if any) which expires, if not previously utilized,
through the year 2001. The Fund cannot distribute capital gains to
shareholders until the tax loss carryforwards have been utilized.
F. Expenses - Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to both
classes, e.g. advisory fees, are allocated between them.
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 AIM an advisory fee at an annual rate of 0.50% of the
first $200 million of the Fund's average daily net assets, plus 0.40% of the
Fund's average daily net assets in excess of $200 million to and including $500
million, plus 0.35% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.30% of the Fund's average daily net
assets in excess of $1 billion. This agreement requires AIM to reduce its fees
or, if necessary, make payments to the Fund to the extent required to satisfy
any expense limitations imposed by the securities laws or regulations thereunder
of any state in which the Fund's shares are qualified for sale.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the six months ended June 30, 1995, AIM
was reimbursed $34,665 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
services to the Fund. During the six months ended June 30, 1995, the Fund paid
AFS $77,354 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 shares and the Class B 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 (the "Class A Plan") and with respect to the Fund's Class B shares (the
"Class B Plan") (collectively, the "Plans"). The Fund, pursuant to the Class A
Plan, pays AIM Distributors compensation at an annual rate of 0.25% of the
average daily net assets
16
<PAGE> 19
FINANCIALS
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES (continued)
attributable to the Class A shares. The Class A Plan is designed to compensate
AIM Distributors for certain promotional and other sales related costs, and to
implement a program which provides periodic payments to selected dealers and
financial institutions who furnish continuing personal shareholder services to
their customers who purchase and own Class A shares of the Fund. The Fund,
pursuant to the Class B Plan, pays AIM Distributors compensation at an annual
rate of 1.00% of the average daily net assets attributable to the Class B
shares. Of this amount, the Fund may pay a service fee of 0.25% of the average
daily net assets of the Class B shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own Class B shares of the Fund. Any amounts not paid
as a service fee under such Plans would constitute an asset-based sales charge.
The Plans also impose a cap on the total sales charges, including asset-based
sales charges, that may be paid by the respective classes. During the six months
ended June 30, 1995, the Class A shares and the Class B shares paid AIM
Distributors $259,657 and $81,452, respectively, as compensation under the
Plans.
AIM Distributors received commissions of $54,401 from sales of the Class A
shares of the Fund during the six months ended June 30, 1995. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended June 30,
1995, AIM Distributors received $27,547 in contingent deferred sales charges
imposed on redemptions of Fund shares. Certain officers and trustees of the
Trust are officers and directors of AIM, AIM Distributors and AFS.
During the six months ended June 30, 1995 the Fund paid legal fees of $704 for
services rendered by Kramer, Levin, Naftalis, Nessen, Kamin & Frankel as counsel
to the Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3 - TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of the Trust. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 1995 was
$373,864,163 and $357,900,469, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of June 30, 1995 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $ 9,382,883
- -----------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (2,820,321)
- -----------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $ 6,562,562
===================================================================================
</TABLE>
Cost of investments for tax purposes is $232,268,297.
17
<PAGE> 20
FINANCIALS
NOTE 5 - SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 1995 and the
year ended December 31, 1994 were as follows:
<TABLE>
<CAPTION>
JUNE 30, 1995 DECEMBER 31, 1994
---------------------- ----------------------
SHARES VALUE SHARES VALUE
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Sold:
Class A 2,668,812 $ 20,120,257 4,265,341 $ 33,272,800
- ------------------------------------------------------------------------------------ ------------------------
Class B 1,316,662 9,923,523 1,696,358 13,014,930
- ------------------------------------------------------------------------------------ ------------------------
Issued as reinvestment of dividends:
Class A 924,728 6,963,161 1,895,928 14,388,718
- ------------------------------------------------------------------------------------ ------------------------
Class B 46,457 349,288 54,029 403,397
- ------------------------------------------------------------------------------------ ------------------------
Reacquired:
Class A (3,161,872) (23,647,833) (7,025,819) (53,817,136)
- ------------------------------------------------------------------------------------ ------------------------
Class B (181,850) (1,353,527) (462,198) (3,457,119)
- ------------------------------------------------------------------------------------ ------------------------
1,612,937 $ 12,354,869 423,639 $ 3,805,590
==================================================================================== ========================
</TABLE>
NOTE 6 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a Class A share
outstanding for the six months ended June 30, 1995 and each of the years in the
nine-year period ended December 31, 1994 and for a Class B share outstanding
during the six months ended June 30, 1995, the year ended December 31, 1994 and
the period September 7, 1993 (date sales commenced) through December 31, 1993.
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, ------------------------------------------------------------------------------
CLASS A: 1995 1994 1993 1992(a) 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 7.20 $ 8.45 $ 8.03 $ 8.07 $ 7.41 $ 7.80 $ 7.53
- ---------------------------------- -------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.29 0.58 0.60 0.60 0.61 0.65 0.66
- ---------------------------------- -------- -------- -------- -------- -------- -------- --------
Net gains (losses) on securities
(both realized and unrealized) 0.62 (1.22) 0.61 (0.03) 0.66 (0.39) 0.32
- ---------------------------------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations 0.91 (0.64) 1.21 0.57 1.27 0.26 0.98
- ---------------------------------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment
income (0.30) (0.49) (0.60) (0.61) (0.61) (0.65) (0.71)
- ---------------------------------- -------- -------- -------- -------- -------- -------- --------
Distributions from net realized
capital gains -- (0.01) (0.19) -- -- -- --
- ---------------------------------- -------- -------- -------- -------- -------- -------- --------
Distributions from capital -- (0.11) -- -- -- -- --
- ---------------------------------- -------- -------- -------- -------- -------- -------- --------
Total distributions (0.30) (0.61) (0.79) (0.61) (0.61) (0.65) (0.71)
- ---------------------------------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 7.81 $ 7.20 $ 8.45 $ 8.03 $ 8.07 $ 7.41 $ 7.80
================================== ======== ======== ======== ======== ======== ======== ========
Total return(b) 12.87% (7.65)% 15.38% 7.42% 18.00% 3.65% 13.56%
================================== ======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $222,189 $201,677 $244,168 $218,848 $231,798 $215,987 $229,222
================================== ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets 0.97%(c) 0.98% 0.98% 0.99%(d) 1.00%(d) 1.00% 0.96%
================================== ======== ======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets 7.74%(c) 7.53% 7.01% 7.54%(d) 7.97%(d) 8.73% 8.56%
================================== ======== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 172% 185% 99% 82% 67% 106% 222%
================================== ======== ======== ======== ======== ======== ======== ========
<CAPTION>
CLASS A: DECEMBER 31,
------------------------------------
1988 1987 1986
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of
period $ 7.55 $ 8.20 $ 7.53
- ---------------------------------- -------- -------- --------
Income from investment operations:
Net investment income 0.68 0.67 0.71
- ---------------------------------- -------- -------- --------
Net gains (losses) on securities
(both realized and unrealized) (0.02) (0.63) 0.60
- ---------------------------------- -------- -------- --------
Total from investment
operations 0.66 0.04 1.31
- ---------------------------------- -------- -------- --------
Less distributions:
Dividends from net investment
income (0.68) (0.69) (0.64)
- ---------------------------------- -------- -------- --------
Distributions from net realized
capital gains -- -- --
- ---------------------------------- -------- -------- --------
Distributions from capital -- -- --
- ---------------------------------- -------- -------- --------
Total distributions (0.68) (0.69) (0.64)
- ---------------------------------- -------- -------- --------
Net asset value, end of period $ 7.53 $ 7.55 $ 8.20
================================== ======== ======== ========
Total return(b) 9.01% 0.56% 18.04%
================================== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $218,946 $237,466 $273,121
================================== ======== ======== ========
Ratio of expenses to average net
assets 0.95% 0.84% 0.82%
================================== ======== ======== ========
Ratio of net investment income to
average net assets 8.81% 8.64% 8.93%
================================== ======== ======== ========
Portfolio turnover rate 361% 195% 85%
================================== ======== ======== ========
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Does not deduct sales charges and for periods less than one year are not
annualized.
(c) Ratios are annualized and are based on average net assets of $209,447,230.
(d) After waiver of advisory fees and expense reimbursements. Ratios of expenses
to average net assets prior to waiver of advisory fees and expense
reimbursements were 1.00% and 1.03% for 1992-1991, respectively. Ratios of
net investment income to average net assets prior to waiver of advisory fees
and expense reimbursements were 7.53% and 7.94% for 1992-1991, respectively.
18
<PAGE> 21
FINANCIALS
NOTE 6 - FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, -------------------
CLASS B: 1995 1994 1993
-------- ------- ------
<S> <C> <C> <C>
Net asset value, beginning of period $ 7.18 $ 8.43 $ 8.95
- ---------------------------------------------------------------------------------------- ------- ------- ------
Income from investment operations:
Net investment income 0.26 0.52 0.19
- ---------------------------------------------------------------------------------------- ------- ------- ------
Net gains (losses) on securities (both realized and unrealized) 0.62 (1.23) (0.34)
- ---------------------------------------------------------------------------------------- ------- ------- ------
Total from investment operations 0.88 (0.71) (0.15)
- ---------------------------------------------------------------------------------------- ------- ------- ------
Less distributions:
Dividends from net investment income (0.27) (0.42) (0.18)
- ---------------------------------------------------------------------------------------- ------- ------- ------
Distributions from net realized capital gains -- (0.01) (0.19)
- ---------------------------------------------------------------------------------------- ------- ------- ------
Distributions from capital -- (0.11) --
- ---------------------------------------------------------------------------------------- ------- ------- ------
Total distributions (0.27) (0.54) (0.37)
- ---------------------------------------------------------------------------------------- ------- ------- ------
Net asset value, end of period $ 7.79 $ 7.18 $ 8.43
======================================================================================== ======= ======= ======
Total return(a) 12.41% (8.46)% (0.75)%
======================================================================================== ======= ======= ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $22,568 $12,321 $3,602
======================================================================================== ======= ======= ======
Ratio of expenses to average net assets 1.84%(b) 1.83%(c) 1.75(c)(d)
======================================================================================== ======= ======= ======
Ratio of net investment income to average net assets 6.87%(b) 6.69%(c) 6.24(c)(d)
======================================================================================== ======= ======= ======
Portfolio turnover rate 172% 185% 99%
======================================================================================== ======= ======= ======
</TABLE>
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratios are annualized and based on average net assets of $16,425,336.
(c) After expense reimbursements. Ratios of expenses to average net assets prior
to expense reimbursements were 2.04% and 2.50% (annualized) for 1994 and
1993, respectively. Ratios of net investment income to average net assets
prior to expense reimbursements were 6.48% and 5.49% (annualized) for 1994
and 1993, respectively.
(d) Annualized.
19
<PAGE> 22
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20
<PAGE> 23
TRUSTEES & OFFICERS
<TABLE>
<S> <C> <C>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman and Chief Executive Officer Chairman Suite 1919
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director, President, and
Chief Executive Officer John J. Arthur A I M Advisors, Inc.
COMSAT Corporation Senior Vice President and Treasurer 11 Greenway Plaza
Suite 1919
Owen Daly II Gary T. Crum Houston, TX 77046
Director Senior Vice President
Cortland Trust Inc. TRANSFER AGENT
Carol F. Relihan
Carl Frischling Vice President and Secretary A I M Fund Services, Inc.
Partner P.O. Box 4739
Kramer, Levin, Naftalis, Nessen, Dana R. Sutton Houston, TX 77210-4739
Kamin & Frankel Vice President
and Assistant Treasurer CUSTODIAN
Robert H. Graham
President Robert G. Alley State Street Bank & Trust Co.
A I M Management Group Inc. Vice President 225 Franklin Street
Boston, MA 02110
John F. Kroeger Stuart W. Coco
Formerly, Consultant Vice President COUNSEL TO THE FUND
Wendell & Stockel Associates, Inc.
Melville B. Cox Ballard Spahr
Lewis F. Pennock Vice President Andrews & Ingersoll
Attorney 1735 Market Street
Karen Dunn Kelley Philadelphia, PA 19103
Ian W. Robinson Vice President
Consultant; Former Executive COUNSEL TO THE TRUSTEES
Vice President and Jonathan C. Schoolar
Chief Financial Officer Vice President Kramer, Levin, Naftalis,
Bell Atlantic Management Nessen, Kamin & Frankel
Services, Inc. P. Michelle Grace 919 Third Avenue
Assistant Secretary New York, NY 10022
Louis S. Sklar
Executive Vice President Nancy L. Martin DISTRIBUTOR
Hines Interests Assistant Secretary
Limited Partnership A I M Distributors, Inc.
Ofelia M. Mayo 11 Greenway Plaza
Assistant Secretary Suite 1919
Houston, TX 77046
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
This report may be distributed only to current shareholders or to persons who
have received a current prospectus of the Fund.
21
<PAGE> 24
A I M Distributors, Inc. ---------------
[AIM LOGO 11 Greenway Plaza, Suite 1919 BULK RATE
APPEARS HERE] Houston, Texas 77046 U.S. POSTAGE
PAID
Houston, TX
THE AIM FAMILY OF FUNDS(R) Permit No. 2332
---------------
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Constellation Fund
AIM Global Aggressive Growth Fund
GROWTH
AIM Global Growth Fund
AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME
AIM Balanced Fund
AIM Charter Fund
INCOME AND GROWTH [FULL PAGE PHOTO OF
AIM Global Utilities Fund** AIM MANAGEMENT GROUP
HIGH CURRENT INCOME OFFICE BUILDING]
AIM High Yield Fund
CURRENT INCOME
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Conn.
AIM Tax-Free Intermediate Shares
CURRENT INCOME AND HIGH DEGREE OF SAFETY
AIM Government Securities Fund
HIGH DEGREE OF SAFETY AND CURRENT INCOME
AIM Limited Maturity Treasury Shares
STABILITY, LIQUIDITY, AND CURRENT INCOME
AIM Money Market Fund
STABILITY, LIQUIDITY, AND CURRENT TAX-FREE INCOME
AIM Tax-Exempt Cash Fund
*AIM Aggressive Growth Fund was closed to new investors on
July 18, 1995. **On May 1, 1995, AIM Utilities Fund broadened its investment
strategy to permit up to 80% of its total assets to be invested in foreign
securities, and was renamed AIM Global Utilities Fund. For more complete
information about any AIM Fund(s), including sales charges and expenses,
ask your financial consultant or securities dealer for a free prospectus(es).
Please read the prospectus(es) carefully before you invest or send money.
