<PAGE> 1
[AIM LOGO APPEARS HERE]
[GRAPHIC COLLAGE APPEARS HERE]
AIM GROWTH FUND
ANNUAL REPORT
DECEMBER 31, 1995
<PAGE> 2
AIM GROWTH FUND
For shareholders who seek long-term growth of capital. The Fund invests
primarily in the common stocks of established medium- to large-size companies
with prospects for above-average, long-term earnings growth.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Growth Fund's performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value. Unless
otherwise indicated, the Fund's performance is computed without a sales
charge.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B share
performance reflects the applicable contingent deferred sales charge (CDSC)
for the period involved. The CDSC on Class B shares declines from 5% to 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.
o In 1995, the Fund paid distributions for both Class A and Class B shares of
$0.793 per share.
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 The Fund's portfolio composition is subject to change and there is no
assurance the Fund will continue to hold any one particular security.
o Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o Standard & Poor's Corporation (S&P) is a credit-rating agency. The
unmanaged Standard & Poor's Composite Index of 500 Stocks is widely
regarded by investors as representative of the stock market in general.
o The Dow Jones Industrial Average (DJIA) is an unmanaged composite of the
performance of 30 large-company stocks.
o Lipper Analytical Services, Inc., is an independent mutual fund performance
monitor. The unmanaged Lipper Growth Fund Index represents an average of
the performance of the 30 largest growth funds.
o An investment cannot be made in any indexes listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE> 3
A Message from
the Chairman
Dear Fellow Shareholder:
In one of the best years for stocks on record, AIM Growth
Fund delivered one of its strongest performances since
inception in 1967. We are pleased to report the Fund logged
total returns for Class A and Class B shares of 34.31% and
33.00%, respectively, for the 12 months ended December 31,
[Photo of 1995. Such performance was enough to handily outperform the
Charles T. 31.48% return logged for the average stock fund, as measured
Bauer, by the Lipper Growth Fund Index.
Chairman of The Fund managed its strong showing in a record-breaking
the Board of market that, for much of 1995, favored large-capitalization
the Fund, companies in which the Fund invests over small-capitalization
APPEARS HERE] companies. The keys to the Fund's performance were disciplined
stock selection and a diversified portfolio of approximately
300 stocks. A complete discussion of market conditions during
the reporting period and the Fund's investment strategy
appears on page 2 of this report.
Net assets in the Fund increased dramatically during the year to $306.3
million as of December 31, 1995. While the Fund's favorable market performance
was largely responsible, significant credit for this increase goes to our
shareholders who paid AIM the highest compliment with their continued support.
Although it has been a good year for AIM Growth Fund, it is but one year.
From a historic perspective, a repeat of the year's blockbuster performance is
unlikely. Chicago-based Ibbotson Associates has reported that returns for
large-company stocks have averaged 10.5% per year since January 1926. The
annual average for the Dow Jones Industrial Average over the last 50 years has
been 11.56%.
Therefore, even as we relish the success of a good year, we are already
looking ahead. AIM's disciplined, earnings-driven strategy is an ongoing
evaluation of market opportunity. With the market's dramatic climb, our job
becomes more challenging.
On a personal level, 1996 has important investment implications for all of
us. Clouds on the horizon in the form of the budget debate over retirement
benefits such as Medicare and Social Security programs accentuate the need to
build your own retirement nest egg, independent of any benefits which may-or
may not-be available to you when the time comes. For many in the baby boomer
generation, that's just 10 years away.
Thank you for continuing to rely on AIM Growth Fund to help build your
financial future. We are ready to respond to any questions or comments you may
have about this report. Please call Client Services at 800-959-4246 during
normal business hours. For automated account information 24 hours a day, call
the AIM Investor Line toll-free at 800-246-5463.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
AIM GROWTH FUND
OUTPERFORMED THE
AVERAGE STOCK FUND
IN 1995
AIM GROWTH FUND
CLASS A SHARES
34.31%
AIM GROWTH FUND
CLASS B SHARES
33.00%
LIPPER GROWTH
FUND INDEX
31.48%
Fund total return performance is
compared to the performance of the
30 largest growth funds tracked by
Lipper, excluding all sales charges,
and including fees and expenses.
<PAGE> 4
Management's
Discussion & Analysis
- ----------------
Rising corporate
earnings were
the most visible
catalyst driving
markets during
the year.
- ----------------
STOCKS PROVE RECORDS ARE MADE
TO BE BROKEN IN 1995
Healthy corporate profits, mild inflation, and moderate growth in the economy
mixed the powerful recipe that launched the strongest rally in stocks in two
decades. The strength was broad-based, resuscitating large-capitalization
stocks that had been out of favor for three years.
The popular Dow Jones Industrial Average (DJIA) breached two
milestones-sailing past 4000 in February and 5000 in November--shattering 69
record levels in its wake by year-end. Not to be outdone, the S&P 500 sprinted
ahead of the DJIA to deliver its best one-year performance since 1958.
The record advance also netted only modest relative volatility--the largest
correction in the DJIA has been no more than 3.3% since its trough in
1990--thanks to more frequent group rotations within the market. Evolving market
leadership carried various sectors into and out of favor, yet left the major
averages virtually unscathed.
Technology stocks were the best example of the year-long trend. In the
first six months of 1995, the technology sector was the star propelling market
averages skyward, particularly semiconductor stocks, which were up an
astonishing 94% through June.
During the last two quarters, earnings slipped for a number of such big
names as Intel, Microsoft, Nokia, and IBM, which prompted investors to favor
defensive sectors such as consumer non-cyclicals, energy and utilities, and
such beneficiaries of stable interest rates as banks and thrifts. While
semiconductor stocks finished the year with a gain of 64%, they were surpassed
by biotechnology, oil drilling, and aerospace stocks.
CORPORATE EARNINGS EXCEED EXPECTATIONS
Rising corporate earnings were the most visible catalyst driving markets during
the year. With fourth quarter earnings just coming in as of this writing,
Barron's estimated that corporate earnings were up 20% overall for the year,
thanks in particular to upside earnings surprises. Of the companies reporting
earnings in the third quarter of 1995, I/B/E/S International Inc. reported in
The Wall Street Journal that 55% were higher than analysts' expectations, with
14% on target, and 31% below expectations. These results compared favorably
with second-quarter reports, of which 57% exceeded expectations and 30% were
below target.
In December, end-of-year profit taking and seasonal tax-selling slowed the
market's remarkable advance, and most major averages peaked for the year. Focus
turned from corporate earnings to the growing gridlock in Congress over
proposals to balance the burgeoning budget, and yet another shutdown of the
federal government. However, 1995 ended triumphantly for investors with stocks
at historic highs, bond yields the lowest since 1993, and the U.S. dollar on
solid ground.
YOUR INVESTMENT PORTFOLIO
A glance at the Fund's top 10 equity holdings confirms a successful theme for
AIM Growth Fund during the reporting period--eight of the top 10 were new to the
list. The Fund's portfolio was dynamic and broadly diversified during the
reporting period. A sharply advancing market calls for persistent diligence in
stock selection. Remember to keep in mind, the Fund's portfolio composition is
subject to change and there is no guarantee the Fund will continue to hold any
particular security mentioned in this report.
See important Fund disclosure on inside front cover.
2
<PAGE> 5
Management's
Discussion & Analysis
TECHNOLOGY STOCKS POSTED STRONG GAINS
1995 was the strongest year in recent memory for the technology sector.
Semiconductor stocks led the group for much of the year, thanks to surging
demand for PCs from consumer and business systems markets. The Fund benefited
from its positions in such market leaders as Intel, Applied Materials, and
Altera Corporation, which reported record revenues during the year. While the
group retreated late in the year, the Fund maintained a core position in a
number of issues which appeared to offer solid value over the longer term.
Worldwide revenues from the semiconductor market are expected to grow by
approximately 20% in 1996.
The phenomenal rise in Internet-related companies later in the year boosted
prices for computer networking stocks, including Bay Networks, 3Com Corp.,
Cisco, and Sun Microsystems. PC makers like COMPAQ, Hewlett Packard, and Dell
profited from the surge in demand for new computers.
Software publishers also reported record profits in 1995. Microsoft Corp.
benefited from the successful summer launch of Windows 95 and from upgrade
sales from its word processors, spreadsheets, and games for Windows 95.
Computer Associates International Inc. anticipated earnings to rise by 22% in
its most recent quarter. BMC Software had the advantage of strong market
presence in mainframe-based software and its successful expansion into the
client server/distributor computing arena.
HEALTH-CARE AND FINANCIAL SERVICES STOCKS COMPLEMENT A SOLID PORTFOLIO
Approximately 15% of the Fund's portfolio was invested in the health-care
sector. The continuing profit drivers for the health-care sector are three: an
aging baby boomer population, improving cost containment, and anticipation of
universal coverage for all.
The Fund chose to address these themes by emphasizing those companies most
likely to benefit. For example, diversification, improving margins and expanded
customer services drove up shares of Cardinal Health and St. Jude. Other
companies experienced strong profit growth. Abbott Laboratories reported higher
net income on strong drug sales. Boston Scientific reported robust overseas
sales.
Financial services companies thrived in the favorable interest rate
environment and
(continued on page 4)
- -------------------------------------------------------------------------------
THE PASSING OF MILLENNIA ON THE DOW
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
It took 15 years, from 1972 to 1987, for
the DJIA to climb to its next 1000 mark.
It took only nine months in 1995. DJIA Rise
11/14/72 1000
1/8/87 2000
After breaking 5000, the DJIA sailed 4/17/91 3000
past 5100 and then 5200 before 2/23/95 4000
year-end, logging its largest one-year 11/21/95 5000
point gain ever: 1282.68.
</TABLE>
Source: Barron's
- -------------------------------------------------------------------------------
TOP 10 EQUITY HOLDINGS
(As of 12/31/95)
1. Cisco Systems, Inc.
2. Philip Morris Companies, Inc.
3. Healthsouth Corp.
4. MBNA Corp.
5. Bay Networks, Inc.
6. 3Com Corp.
7. Applied Materials, Inc.
8. Dell Computer Corp.
9. Telefonaktiebolaget L.M.
Ericsson-ADR
10. Teradyne, Inc.
See important Fund disclosure on inside front cover.
3
<PAGE> 6
Management's
Discussion & Analysis
after years of restructuring. After four consecutive years of record profits,
bank stocks were among the best performers in 1995. BankAmerica and Norwest
Corp. dominated large shares of their respective markets. Chase Manhattan
generated strong revenues from corporate banking and international businesses.
Shares of Federal Home Loan Mortgage Corp. reported strong earnings thanks to
45% growth in its retained loan portfolio.
OUTLOOK FOR THE FUTURE
Most analysts and market watchers agree: 1995 will be a hard act to follow. Yet
some maintain that this aging bull market--the Dow has gone more than five years
without experiencing a 10% correction--may have plenty of steam left. Barron's
recently reported analysts' estimates that projected the Dow well past 5500
during the coming year. Of course, a significant complement of market
strategists also believe a correction is due.
The two strongest factors in the year's exceptional progress--soaring
corporate earnings and falling interest rates--have by most accounts run their
course, at least for the near term. Still, certain positives remain. By pouring
more than $102 billion into stock funds during the year ended in November,
investors have demonstrated phenomenal demand for stocks via personal
investment programs and corporate retirement plans. Further, many of the
drivers of corporate earnings growth still figure in the long-term outlook.
Rather than make any projections of future market performance, AIM Growth
Fund remains committed to its disciplined investment strategy that helps us
determine, on a company-by-company basis, which stocks to own and which to
sell--without the guesswork of market timing. We believe our commitment to this
time-tested, earnings-driven strategy will provide the best opportunity for
growth for our shareholders over the long term.
AVERAGE ANNUAL TOTAL RETURNS
For periods ended December 31, 1995
<TABLE>
<CAPTION>
WITH WITHOUT
SALES CHARGE SALES CHARGE
<S> <C> <C>
CLASS A SHARES
1 Year 26.93% 34.31%
5 Years 11.40 12.67
10 Years 10.46 11.09
CLASS B SHARES
1 Year 28.00% 33.00%
Inception (9/1/93) 8.54 9.68
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- ---------------------------------------------------------------------------------------------------
AIM Growth Fund Class AIM Growth Fund Class Lipper Growth
A Shares (w/o sales charge) A Shares (w/sales charge) S&P 500 Fund Index
<S> <C> <C> <C> <C>
12/85 $10,000 $9,450 $10,000 $10,000
12/86 $11,284 $10,664 $11,862 $11,560
12/87 $11,692 $11,049 $12,476 $11,931
12/88 $12,877 $12,169 $14,534 $13,619
12/89 $16,595 $15,683 $19,125 $17,363
12/90 $15,759 $14,893 $18,530 $16,423
12/91 $21,598 $20,410 $24,151 $22,271
12/92 $21,638 $20,448 $25,988 $23,971
12/93 $22,424 $21,191 $28,596 $26,842
12/94 $21,305 $20,133 $28,984 $26,420
12/95 $28,613 $27,040 $39,837 $34,737
Past performance cannot guarantee comparable future results.
- ---------------------------------------------------------------------------------------------------
</TABLE>
An investment cannot be made in any indexes listed. Unless otherwise indicated,
index results include reinvested dividends and do not reflect sales charges.
Source: Towers Data Systems HYPO(R).
The performance of Class B shares will differ from that of Class A shares
due to differing fees and expenses. For Fund performance calculations and
descriptions of indexes cited on this page, please refer to the inside front
cover of this report.
4
<PAGE> 7
LONG-TERM INCOME TAX DEFERRAL:
A BIG BOOST TO RETURNS ON AN IRA
Although the rules regarding deductibility of Individual Retirement Account
(IRA) contributions have been tightened, the important thing about an IRA is
not the tax deduction but the tax-deferred compounding of the earnings on your
investment. Over time, tax-deferred compounding can be a very powerful
investment tool.
In the example shown in the table, an investor puts $2,000 per year into
two accounts, each averaging 7.5% total return per year. In one, the earnings
are taxed; in the other, an IRA, the earnings are untaxed. At the end of year
one, the difference between the two accounts is only $42. But after 20 years,
the difference is $20,381.
Of course, eventually you will be taxed on the money you withdraw from your
retirement account. But if you leave your IRA investments alone until you
retire and then withdraw only the amount of income you need, the paid-out
amount will be subject to the applicable ordinary income tax while the balance
of your retirement account remains tax deferred. Also, if you wait until
retirement to begin making withdrawals, by then you may qualify for a lower tax
bracket.
Money withdrawn early from an IRA (before age 59-1/2) is usually subject to a
10% tax penalty.
At age 70-1/2 you are required to begin making withdrawals from your IRA.
Failure to do so has significant tax penalties. The IRS has established minimum
required withdrawals.
THE IMPACT OF TAX DEFERRAL ON AN INVESTMENT PLAN
$2,000 per year at 7.5% annual total return, all earnings reinvested
- --------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AT END OF: TAXED AT 28% TAX-DEFERRED
<S> <C> <C>
1 YEAR $2,108 $2,150
3 YEARS $6,672 $6,946
5 YEARS $11,742 $12,488
10 YEARS $27,015 $30,416
15 YEARS $46,881 $56,155
20 YEARS $72,724 $93,105
</TABLE>
- --------------------------------------------------------------------------------
The 7.5% rate of return is a conservative assumption. During the 20 years ended
12/31/95, for example, the unmanaged Standard & Poor's Composite Index of 500
Stocks (S&P 500) delivered total average annual return of 14.55%. The 28% tax
bracket is a standard tax bracket per the IRS, 1995. This example is
hypothetical and is not intended to represent the performance of any AIM fund.
CHANGING JOBS OR RETIRING SOON?
If you receive a lump-sum distribution, you can keep your money working tax
deferred and avoid a mandatory 20% withholding tax by transferring your assets
directly into an AIM IRA. You need simply to complete AIM's IRA transfer form.
WANT TO START AN AIM IRA?
Contact your financial consultant or AIM for the AIM IRA kit. It includes the
information and forms you need to get started.
WANT TO ADD TO YOUR EXISTING AIM IRA?
Simply mail your check payable to the AIM fund in which you have your IRA and
include your account number on the check. Mail it to A I M Fund Services,
Inc., Box 4739, Houston, TX 77210-4739.
The information presented here does not constitute tax advice.
5
<PAGE> 8
Financials
SCHEDULE OF INVESTMENTS
December 31, 1995
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
COMMON STOCKS - 80.81%
ADVERTISING/BROADCASTING-0.14%
11,400 Infinity Broadcasting Corp.-Class A(a) $ 424,659
- -------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE-0.41%
10,000 Boeing Co. 783,750
- -------------------------------------------------------------------------------------------
5,000 United Technologies Corp. 474,375
- -------------------------------------------------------------------------------------------
1,258,125
- -------------------------------------------------------------------------------------------
APPLIANCES-0.34%
25,000 Newell Co. 646,875
- -------------------------------------------------------------------------------------------
8,000 Premark International Inc. 405,000
- -------------------------------------------------------------------------------------------
1,051,875
- -------------------------------------------------------------------------------------------
AUTOMOBILE/TRUCK PARTS & TIRES-0.46%
22,400 Echlin Inc. 817,600
- -------------------------------------------------------------------------------------------
30,000 Mark IV Industries, Inc. 592,500
- -------------------------------------------------------------------------------------------
1,410,100
- -------------------------------------------------------------------------------------------
AUTOMOBILE (MANUFACTURERS)-0.15%
8,500 Chrysler Corp. 470,687
- -------------------------------------------------------------------------------------------
BANKING-0.60%
12,000 Corestates Financial Corp. 454,500
- -------------------------------------------------------------------------------------------
22,000 Norwest Bank Corp. 726,000
- -------------------------------------------------------------------------------------------
24,600 Southern National Corp. 645,750
- -------------------------------------------------------------------------------------------
1,826,250
- -------------------------------------------------------------------------------------------
BANKING (MONEY CENTER)-0.72%
13,000 BankAmerica Corp. 841,750
- -------------------------------------------------------------------------------------------
22,700 Chase Manhattan Corp. 1,376,187
- -------------------------------------------------------------------------------------------
2,217,937
- -------------------------------------------------------------------------------------------
BEVERAGES (ALCOHOLIC)-0.10%
9,600 Canandaigua Wine Co., Inc.-Class A(a) 313,200
- -------------------------------------------------------------------------------------------
BEVERAGES (SOFT DRINKS)-0.46%
25,000 PepsiCo Inc. 1,396,875
- -------------------------------------------------------------------------------------------
BIOTECHNOLOGY-0.03%
2,300 Guidant Corp. 97,175
- -------------------------------------------------------------------------------------------
BUSINESS SERVICES-1.02%
21,400 Equifax Inc. 457,425
- -------------------------------------------------------------------------------------------
23,100 Healthcare COMPARE Corp.(a) 1,004,850
- -------------------------------------------------------------------------------------------
15,000 Manpower Inc. 421,875
- -------------------------------------------------------------------------------------------
26,000 Olsten Corp. 1,027,000
- -------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
BUSINESS SERVICES (continued)
8,225 Value Health, Inc.(a) $ 226,187
- -------------------------------------------------------------------------------------------
3,137,337
- -------------------------------------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.35%
18,600 Airgas Inc.(a) 618,450
- -------------------------------------------------------------------------------------------
7,800 W.R. Grace & Co. 461,175
- -------------------------------------------------------------------------------------------
1,079,625
- -------------------------------------------------------------------------------------------
COMPUTER MINI/PCS-2.94%
9,200 CDW Computer Centers, Inc.(a) 372,600
- -------------------------------------------------------------------------------------------
50,000 COMPAQ Computer Corp.(a) 2,400,000
- -------------------------------------------------------------------------------------------
78,400 Dell Computer Corp.(a) 2,714,600
- -------------------------------------------------------------------------------------------
12,000 Digital Equipment Corp.(a) 769,500
- -------------------------------------------------------------------------------------------
12,100 Hewlett-Packard Co. 1,013,375
- -------------------------------------------------------------------------------------------
38,000 Sun Microsystems Inc.(a) 1,733,750
- -------------------------------------------------------------------------------------------
9,003,825
- -------------------------------------------------------------------------------------------
COMPUTER NETWORKING-6.16%
13,300 ALANTEC Corp.(a) 774,725
- -------------------------------------------------------------------------------------------
11,400 Ascend Communications, Inc.(a) 924,825
- -------------------------------------------------------------------------------------------
68,550 Bay Networks, Inc.(a) 2,819,118
- -------------------------------------------------------------------------------------------
20,000 Cabletron Systems, Inc.(a) 1,620,000
- -------------------------------------------------------------------------------------------
10,600 Cascade Communications Corp. 903,650
- -------------------------------------------------------------------------------------------
33,000 Cheyenne Software, Inc.(a) 862,125
- -------------------------------------------------------------------------------------------
46,900 Cisco Systems, Inc.(a) 3,499,913
- -------------------------------------------------------------------------------------------
34,000 FORE Systems, Inc.(a) 2,023,000
- -------------------------------------------------------------------------------------------
29,140 Madge N.V.(a) 1,304,015
- -------------------------------------------------------------------------------------------
12,200 Network Equipment Technologies, Inc.(a) 333,975
- -------------------------------------------------------------------------------------------
9,800 Newbridge Networks Corp. 405,475
- -------------------------------------------------------------------------------------------
10,200 Optical Data Systems, Inc.(a) 257,550
- -------------------------------------------------------------------------------------------
7,700 Sync Research, Inc.(a) 348,425
- -------------------------------------------------------------------------------------------
59,800 3Com Corp.(a) 2,788,175
- -------------------------------------------------------------------------------------------
18,864,971
- -------------------------------------------------------------------------------------------
COMPUTER PERIPHERALS-2.99%
30,000 Adaptec, Inc.(a) 1,230,000
- -------------------------------------------------------------------------------------------
25,275 Alliance Semiconductor Corp.(a) 293,822
- -------------------------------------------------------------------------------------------
15,700 Cerner Corp. 321,850
- -------------------------------------------------------------------------------------------
12,300 Digi International, Inc.(a) 233,700
- -------------------------------------------------------------------------------------------
53,000 EMC Corp.(a) 814,875
- -------------------------------------------------------------------------------------------
5,100 Komag, Inc.(a) 235,237
- -------------------------------------------------------------------------------------------
20,300 Microchip Technology, Inc.(a) 740,950
- -------------------------------------------------------------------------------------------
6,400 Oak Technology, Inc.(a) 270,400
- -------------------------------------------------------------------------------------------
35,800 Oracle Systems Corp.(a) 1,517,025
- -------------------------------------------------------------------------------------------
16,000 Read Rite Corp.(a) 372,000
- -------------------------------------------------------------------------------------------
36,000 Seagate Technology Inc.(a) 1,710,000
- -------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 10
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
COMPUTER PERIPHERALS (continued)
16,000 U.S. Robotics Corp.(a) $ 1,404,000
- -------------------------------------------------------------------------------------------
9,143,859
- -------------------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES-8.02%
20,700 Adobe Systems, Inc. 1,283,400
- -------------------------------------------------------------------------------------------
36,800 BMC Software, Inc.(a) 1,573,200
- -------------------------------------------------------------------------------------------
15,100 Broderbund Software, Inc.(a) 917,325
- -------------------------------------------------------------------------------------------
52,200 Cadence Design Systems, Inc.(a) 2,192,400
- -------------------------------------------------------------------------------------------
15,000 Ceridian Corp.(a) 618,750
- -------------------------------------------------------------------------------------------
40,800 Computer Associates International, Inc. 2,320,500
- -------------------------------------------------------------------------------------------
40,000 Computervision Corp.(a) 615,000
- -------------------------------------------------------------------------------------------
15,300 Corel Corp.(a) 198,900
- -------------------------------------------------------------------------------------------
19,500 DST Systems Inc.(a) 555,750
- -------------------------------------------------------------------------------------------
22,800 Electronic Arts, Inc.(a) 595,650
- -------------------------------------------------------------------------------------------
12,000 Fiserv, Inc.(a) 360,000
- -------------------------------------------------------------------------------------------
18,800 FTP Software, Inc.(a) 545,200
- -------------------------------------------------------------------------------------------
13,400 HBO & Co. 1,026,775
- -------------------------------------------------------------------------------------------
28,500 Informix Corp.(a) 855,000
- -------------------------------------------------------------------------------------------
10,000 Intuit, Inc.(a) 780,000
- -------------------------------------------------------------------------------------------
16,500 Mentor Graphics Corp.(a) 301,125
- -------------------------------------------------------------------------------------------
22,500 Microsoft Corp.(a) 1,974,375
- -------------------------------------------------------------------------------------------
10,400 Network General Corp.(a) 347,100
- -------------------------------------------------------------------------------------------
13,800 Pairgain Technologies, Inc.(a) 755,550
- -------------------------------------------------------------------------------------------
20,000 Parametric Technology Corp.(a) 1,330,000
- -------------------------------------------------------------------------------------------
13,500 Policy Management Systems Corp.(a) 642,937
- -------------------------------------------------------------------------------------------
10,100 Rational Software Corp.(a) 225,988
- -------------------------------------------------------------------------------------------
10,000 S3, Inc.(a) 176,250
- -------------------------------------------------------------------------------------------
38,400 SoftKey International Inc.(a) 888,000
- -------------------------------------------------------------------------------------------
17,200 Sterling Software, Inc.(a) 1,072,850
- -------------------------------------------------------------------------------------------
60,000 Symantec Corp.(a) 1,395,000
- -------------------------------------------------------------------------------------------
26,700 Synopsys, Inc.(a) 1,014,600
- -------------------------------------------------------------------------------------------
24,561,625
- -------------------------------------------------------------------------------------------
CONGLOMERATES-0.76%
20,000 Loews Corp. 1,567,500
- -------------------------------------------------------------------------------------------
21,000 Tyco International Ltd. 748,125
- -------------------------------------------------------------------------------------------
2,315,625
- -------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES-0.07%
5,200 Department 56, Inc.(a) 199,550
- -------------------------------------------------------------------------------------------
CONTAINERS-0.15%
16,700 Ball Corp. 459,250
- -------------------------------------------------------------------------------------------
COSMETICS & TOILETRIES-0.53%
6,600 Alberto-Culver Co.-Class A 201,300
- -------------------------------------------------------------------------------------------
30,400 General Nutrition, Inc.(a) 699,200
- -------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
COSMETICS & TOILETRIES (continued)
6,000 Gillette Co. (The) $ 312,750
- -------------------------------------------------------------------------------------------
5,000 Procter & Gamble Co. 415,000
- -------------------------------------------------------------------------------------------
1,628,250
- -------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-1.69%
12,500 Amphenol Corp.(a) 303,125
- -------------------------------------------------------------------------------------------
37,100 Anixter International Inc.(a) 690,988
- -------------------------------------------------------------------------------------------
2,800 AVX Corp. 74,200
- -------------------------------------------------------------------------------------------
4,687 Molex, Inc. 148,812
- -------------------------------------------------------------------------------------------
4,950 Parker-Hannifin Corp. 169,537
- -------------------------------------------------------------------------------------------
10,600 Symbol Technologies, Inc.(a) 418,700
- -------------------------------------------------------------------------------------------
17,900 Tektronix, Inc. 879,337
- -------------------------------------------------------------------------------------------
100,000 Teradyne, Inc.(a) 2,500,000
- -------------------------------------------------------------------------------------------
5,184,699
- -------------------------------------------------------------------------------------------
ELECTRONIC/DEFENSE-0.23%
10,000 Sundstrand Corp. 703,750
- -------------------------------------------------------------------------------------------
ELECTRONIC/PC DISTRIBUTERS-1.19%
36,600 Arrow Electronics, Inc.(a) 1,578,375
- -------------------------------------------------------------------------------------------
46,200 Avnet, Inc. 2,067,450
- -------------------------------------------------------------------------------------------
3,645,825
- -------------------------------------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-0.53%
40,000 Bear Stearns Companies, Inc. (The) 795,000
- -------------------------------------------------------------------------------------------
17,200 Finova Group, Inc. 829,900
- -------------------------------------------------------------------------------------------
1,624,900
- -------------------------------------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-5.26%
17,000 ADVANTA Corp.-Class A 618,375
- -------------------------------------------------------------------------------------------
6,700 ADVANTA Corp.-Class B 256,275
- -------------------------------------------------------------------------------------------
40,000 Countrywide Credit Industries, Inc. 870,000
- -------------------------------------------------------------------------------------------
26,500 Credit Acceptance Corp.(a) 549,875
- -------------------------------------------------------------------------------------------
20,000 Dean Witter Discover and Co. 940,000
- -------------------------------------------------------------------------------------------
21,000 Federal Home Loan Mortgage Corp. 1,753,500
- -------------------------------------------------------------------------------------------
3,000 Federal National Mortgage Association 372,375
- -------------------------------------------------------------------------------------------
30,000 First USA, Inc. 1,331,250
- -------------------------------------------------------------------------------------------
57,400 Green Tree Acceptance, Inc. 1,513,925
- -------------------------------------------------------------------------------------------
20,300 Household International, Inc. 1,200,238
- -------------------------------------------------------------------------------------------
82,000 MBNA Corp. 3,023,750
- -------------------------------------------------------------------------------------------
25,300 Medaphis Corp.(a) 936,100
- -------------------------------------------------------------------------------------------
112,200 Mercury Finance Co. 1,486,650
- -------------------------------------------------------------------------------------------
14,000 PMI Group, Inc. (The) 633,500
- -------------------------------------------------------------------------------------------
9,500 Student Loan Marketing Association 625,812
- -------------------------------------------------------------------------------------------
16,111,625
- -------------------------------------------------------------------------------------------
FINANCE (SAVINGS & LOAN)-0.22%
25,000 Greenpoint Financial Corp. 668,750
- -------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 12
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
FOOD PROCESSING-0.27%
9,500 ConAgra, Inc. $ 391,875
- -------------------------------------------------------------------------------------------
11,400 Lancaster Colony Corp. 424,650
- -------------------------------------------------------------------------------------------
816,525
- -------------------------------------------------------------------------------------------
FUNERAL SERVICES-0.76%
20,100 Loewen Group, Inc. 508,781
- -------------------------------------------------------------------------------------------
36,800 Service Corp. International 1,619,200
- -------------------------------------------------------------------------------------------
5,100 Stewart Enterprises, Inc. 188,700
- -------------------------------------------------------------------------------------------
2,316,681
- -------------------------------------------------------------------------------------------
GAMING-0.26%
17,000 Mirage Resorts, Inc.(a) 586,500
- -------------------------------------------------------------------------------------------
20,800 Players International, Inc.(a) 222,300
- -------------------------------------------------------------------------------------------
808,800
- -------------------------------------------------------------------------------------------
HOMEBUILDING-0.29%
36,250 Clayton Homes, Inc. 774,843
- -------------------------------------------------------------------------------------------
3,000 Oakwood Homes Corp. 115,125
- -------------------------------------------------------------------------------------------
889,968
- -------------------------------------------------------------------------------------------
HOTELS/MOTELS-0.84%
3,100 Doubletree Corp.(a) 81,375
- -------------------------------------------------------------------------------------------
14,000 Hospitality Franchise Systems, Inc.(a) 1,144,500
- -------------------------------------------------------------------------------------------
45,500 La Quinta Inns, Inc. 1,245,562
- -------------------------------------------------------------------------------------------
4,000 Promus Hotel Corp.(a) 89,000
- -------------------------------------------------------------------------------------------
2,560,437
- -------------------------------------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-0.11%
13,000 United Companies Financial Corp. 342,875
- -------------------------------------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY)-0.84%
29,400 Ace, Ltd. 1,168,650
- -------------------------------------------------------------------------------------------
7,000 CIGNA Corp. 722,750
- -------------------------------------------------------------------------------------------
1,900 General Re Corp. 294,500
- -------------------------------------------------------------------------------------------
16,900 Prudential Reinsurance Holdings, Inc. 395,037
- -------------------------------------------------------------------------------------------
2,580,937
- -------------------------------------------------------------------------------------------
LEISURE & RECREATION-0.47%
29,200 Carnival Cruise Lines, Inc.-Class A 711,750
- -------------------------------------------------------------------------------------------
23,150 Mattel, Inc. 711,862
- -------------------------------------------------------------------------------------------
1,423,612
- -------------------------------------------------------------------------------------------
MACHINE TOOLS-0.09%
7,700 Kennametal Inc. 244,475
- -------------------------------------------------------------------------------------------
MACHINERY (HEAVY)-0.34%
3,000 AGCO Corp. 153,000
- -------------------------------------------------------------------------------------------
25,000 Deere & Co. 881,250
- -------------------------------------------------------------------------------------------
1,034,250
- -------------------------------------------------------------------------------------------
MACHINERY (MISCELLANEOUS)-0.94%
50,000 American Standard Companies(a) 1,400,000
- -------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 13
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
MACHINERY (MISCELLANEOUS) (continued)
28,500 Thermo Electron Corp.(a) $ 1,482,000
- -------------------------------------------------------------------------------------------
2,882,000
- -------------------------------------------------------------------------------------------
MEDICAL (DRUGS)-5.38%
49,600 Abbott Laboratories 2,070,800
- -------------------------------------------------------------------------------------------
12,500 American Home Products Corp. 1,212,500
- -------------------------------------------------------------------------------------------
12,000 AmeriSource Health Corp.(a) 396,000
- -------------------------------------------------------------------------------------------
41,200 Astra AB-A Shares 1,644,351
- -------------------------------------------------------------------------------------------
40,900 Cardinal Health, Inc. 2,239,275
- -------------------------------------------------------------------------------------------
8,000 Elan Corp. PLC-ADR(a) 389,000
- -------------------------------------------------------------------------------------------
8,000 Johnson & Johnson 685,000
- -------------------------------------------------------------------------------------------
13,000 Merck & Co., Inc. 854,750
- -------------------------------------------------------------------------------------------
39,250 Mylan Laboratories, Inc. 922,375
- -------------------------------------------------------------------------------------------
11,400 Pfizer Inc. 718,200
- -------------------------------------------------------------------------------------------
40,000 Pharmacia & Upjohn, Inc. 1,550,000
- -------------------------------------------------------------------------------------------
40,400 Schering-Plough Corp. 2,211,900
- -------------------------------------------------------------------------------------------
18,500 Teva Pharmaceutical Industries Ltd.-ADR 857,937
- -------------------------------------------------------------------------------------------
15,000 Watson Pharmaceuticals, Inc.(a) 735,000
- -------------------------------------------------------------------------------------------
16,487,088
- -------------------------------------------------------------------------------------------
MEDICAL (INSTRUMENTS/PRODUCTS)-2.59%
9,300 Baxter International Inc. 389,437
- -------------------------------------------------------------------------------------------
6,200 Becton, Dickinson & Co. 465,000
- -------------------------------------------------------------------------------------------
41,400 Biomet, Inc.(a) 740,025
- -------------------------------------------------------------------------------------------
36,700 Boston Scientific Corp.(a) 1,798,300
- -------------------------------------------------------------------------------------------
16,800 Heart Technology, Inc.(a) 552,300
- -------------------------------------------------------------------------------------------
7,600 Idexx Laboratories, Inc.(a) 357,200
- -------------------------------------------------------------------------------------------
14,600 Invacare Corp. 368,650
- -------------------------------------------------------------------------------------------
13,000 Medtronic, Inc. 726,375
- -------------------------------------------------------------------------------------------
10,200 Nellcor, Inc.(a) 591,600
- -------------------------------------------------------------------------------------------
40,450 St. Jude Medical, Inc.(a) 1,739,350
- -------------------------------------------------------------------------------------------
4,000 Stryker Corp. 210,000
- -------------------------------------------------------------------------------------------
7,938,237
- -------------------------------------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-7.27%
51,000 Apria Heathcare Group, Inc.(a) 1,440,750
- -------------------------------------------------------------------------------------------
23,320 Columbia/HCA Healthcare Corp. 1,183,490
- -------------------------------------------------------------------------------------------
14,200 Community Health Systems, Inc.(a) 505,875
- -------------------------------------------------------------------------------------------
36,000 Foundation Health Corp.(a) 1,548,000
- -------------------------------------------------------------------------------------------
14,500 Genesis Health Ventures, Inc.(a) 529,250
- -------------------------------------------------------------------------------------------
30,900 Health Care & Retirement Corp.(a) 1,081,500
- -------------------------------------------------------------------------------------------
61,950 Health Management Associates, Inc.(a) 1,618,444
- -------------------------------------------------------------------------------------------
58,800 Healthsource, Inc.(a) 2,116,800
- -------------------------------------------------------------------------------------------
105,000 Healthsouth Corp.(a) 3,058,125
- -------------------------------------------------------------------------------------------
25,700 Horizon Healthcare Corp.(a) 648,925
- -------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 14
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
MEDICAL (PATIENT SERVICES) (continued)
17,300 Integrated Health Services, Inc.(a) $ 432,500
- -------------------------------------------------------------------------------------------
37,000 Lincare Holdings, Inc.(a) 925,000
- -------------------------------------------------------------------------------------------
12,000 Living Centers Of America, Inc.(a) 420,000
- -------------------------------------------------------------------------------------------
20,500 Manor Care, Inc. 717,500
- -------------------------------------------------------------------------------------------
10,000 Omnicare, Inc. 447,500
- -------------------------------------------------------------------------------------------
27,500 OrNda Healthcorp(a) 639,375
- -------------------------------------------------------------------------------------------
10,300 Oxford Health Plans, Inc.(a) 760,912
- -------------------------------------------------------------------------------------------
3,700 Pacificare Health Systems, Inc.-Class A(a) 321,900
- -------------------------------------------------------------------------------------------
3,400 Pacificare Health Systems, Inc.-Class B(a) 295,800
- -------------------------------------------------------------------------------------------
11,000 Quorum Health Group, Inc.(a) 242,000
- -------------------------------------------------------------------------------------------
64,200 Sybron International Corp.(a) 1,524,750
- -------------------------------------------------------------------------------------------
6,700 Theratx, Inc.(a) 80,400
- -------------------------------------------------------------------------------------------
52,800 Vencor, Inc.(a) 1,716,000
- -------------------------------------------------------------------------------------------
22,254,796
- -------------------------------------------------------------------------------------------
OFFICE AUTOMATION-0.98%
44,000 Danka Business Systems PLC-ADR 1,628,000
- -------------------------------------------------------------------------------------------
10,000 Xerox Corp. 1,370,000
- -------------------------------------------------------------------------------------------
2,998,000
- -------------------------------------------------------------------------------------------
OFFICE PRODUCTS-0.45%
12,100 Avery Dennison Corp. 606,512
- -------------------------------------------------------------------------------------------
19,800 Reynolds & Reynolds Co.-Class A 769,725
- -------------------------------------------------------------------------------------------
1,376,237
- -------------------------------------------------------------------------------------------
OIL EQUIPMENT & SUPPLIES-0.06%
8,100 Smith International, Inc.(a) 190,350
- -------------------------------------------------------------------------------------------
POLLUTION CONTROL-0.06%
5,100 Asyst Technologies, Inc.(a) 179,775
- -------------------------------------------------------------------------------------------
RESTAURANTS-0.63%
16,600 Applebee's International, Inc. 377,650
- -------------------------------------------------------------------------------------------
10,700 Lone Star Steakhouse & Saloon(a) 410,612
- -------------------------------------------------------------------------------------------
23,700 Outback Steakhouse, Inc.(a) 850,238
- -------------------------------------------------------------------------------------------
14,300 Wendy's International, Inc. 303,875
- -------------------------------------------------------------------------------------------
1,942,375
- -------------------------------------------------------------------------------------------
RETAIL (FOOD & DRUGS)-1.48%
6,000 Casey's General Stores, Inc. 131,250
- -------------------------------------------------------------------------------------------
18,900 Eckerd (Jack) Corp.(a) 843,412
- -------------------------------------------------------------------------------------------
17,000 Hannaford Bros. Co. 418,625
- -------------------------------------------------------------------------------------------
39,300 Kroger Co. (The)(a) 1,473,750
- -------------------------------------------------------------------------------------------
32,400 Safeway Inc.(a) 1,668,600
- -------------------------------------------------------------------------------------------
4,535,637
- -------------------------------------------------------------------------------------------
RETAIL (STORES)-4.75%
29,900 AutoZone, Inc.(a) 863,362
- -------------------------------------------------------------------------------------------
6,600 Baby Superstore, Inc.(a) 376,200
- -------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 15
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
RETAIL (STORES) (continued)
19,600 Bed Bath & Beyond, Inc.(a) $ 760,725
- -------------------------------------------------------------------------------------------
4,300 Boise Cascade Office Products Corp.(a) 183,825
- -------------------------------------------------------------------------------------------
16,000 Circuit City Stores, Inc. 442,000
- -------------------------------------------------------------------------------------------
49,000 Consolidated Stores Corp.(a) 1,065,750
- -------------------------------------------------------------------------------------------
28,100 Dollar General Corp. 583,075
- -------------------------------------------------------------------------------------------
17,000 Gap, Inc. (The) 714,000
- -------------------------------------------------------------------------------------------
22,300 Gymboree Corp.(a) 459,938
- -------------------------------------------------------------------------------------------
7,000 Kohl's Corp.(a) 367,500
- -------------------------------------------------------------------------------------------
9,000 Men's Wearhouse, Inc. (The)(a) 231,750
- -------------------------------------------------------------------------------------------
16,700 Micro Warehouse, Inc.(a) 722,275
- -------------------------------------------------------------------------------------------
5,200 Oakley, Inc.(a) 176,800
- -------------------------------------------------------------------------------------------
60,700 Office Depot, Inc.(a) 1,198,825
- -------------------------------------------------------------------------------------------
12,300 PetSmart, Inc.(a) 381,300
- -------------------------------------------------------------------------------------------
25,600 Sports Authority, Inc. (The)(a) 521,600
- -------------------------------------------------------------------------------------------
59,500 Staples, Inc.(a) 1,450,312
- -------------------------------------------------------------------------------------------
36,300 Sunglass Hut International, Inc.(a) 862,125
- -------------------------------------------------------------------------------------------
16,400 Talbots, Inc. 471,500
- -------------------------------------------------------------------------------------------
8,700 Tandy Corp. 361,050
- -------------------------------------------------------------------------------------------
10,500 Tech Data Corp. 157,500
- -------------------------------------------------------------------------------------------
47,000 Viking Office Products Inc.(a) 2,185,500
- -------------------------------------------------------------------------------------------
14,536,912
- -------------------------------------------------------------------------------------------
SCIENTIFIC INSTRUMENTS-0.77%
19,000 Millipore Corp. 781,375
- -------------------------------------------------------------------------------------------
33,000 Varian Associates, Inc. 1,575,750
- -------------------------------------------------------------------------------------------
2,357,125
- -------------------------------------------------------------------------------------------
SEMICONDUCTORS-9.63%
34,000 Altera Corp.(a) 1,691,500
- -------------------------------------------------------------------------------------------
62,100 Analog Devices, Inc.(a) 2,196,788
- -------------------------------------------------------------------------------------------
70,000 Applied Materials, Inc.(a) 2,756,250
- -------------------------------------------------------------------------------------------
8,200 ASM Lithography Holding(a) 272,650
- -------------------------------------------------------------------------------------------
85,000 Atmel Corp.(a) 1,901,875
- -------------------------------------------------------------------------------------------
64,100 Cypress Semiconductor Corp.(a) 817,275
- -------------------------------------------------------------------------------------------
12,600 Electroglas, Inc.(a) 308,700
- -------------------------------------------------------------------------------------------
67,100 Integrated Device Technology, Inc.(a) 863,913
- -------------------------------------------------------------------------------------------
23,000 Intel Corp. 1,305,250
- -------------------------------------------------------------------------------------------
39,600 International Rectifier Corp.(a) 990,000
- -------------------------------------------------------------------------------------------
41,000 KLA Instruments Corp.(a) 1,068,562
- -------------------------------------------------------------------------------------------
41,900 LAM Research Corp.(a) 1,916,925
- -------------------------------------------------------------------------------------------
20,900 Lattice Semiconductor Corp.(a) 681,862
- -------------------------------------------------------------------------------------------
44,200 Linear Technology Corp. 1,734,850
- -------------------------------------------------------------------------------------------
60,000 LSI Logic Corp.(a) 1,965,000
- -------------------------------------------------------------------------------------------
18,900 Maxim Integrated Products, Inc.(a) 727,650
- -------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 16
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
SEMICONDUCTORS (continued)
20,000 MEMC Electronic Materials, Inc.(a) $ 652,500
- -------------------------------------------------------------------------------------------
19,000 Novellus Systems, Inc.(a) 1,026,000
- -------------------------------------------------------------------------------------------
10,000 SCI Systems, Inc.(a) 310,000
- -------------------------------------------------------------------------------------------
26,200 Sierra Semiconductor Corp.(a) 363,525
- -------------------------------------------------------------------------------------------
8,100 Silicon Valley Group, Inc.(a) 204,525
- -------------------------------------------------------------------------------------------
37,800 Solectron Corp.(a) 1,667,925
- -------------------------------------------------------------------------------------------
7,400 Tencor Instruments(a) 180,375
- -------------------------------------------------------------------------------------------
23,000 Texas Instruments Inc. 1,190,250
- -------------------------------------------------------------------------------------------
12,300 Ultratech Stepper, Inc.(a) 316,725
- -------------------------------------------------------------------------------------------
30,400 Vishay Intertechnology, Inc.(a) 957,600
- -------------------------------------------------------------------------------------------
25,000 VLSI Technology, Inc.(a) 453,125
- -------------------------------------------------------------------------------------------
32,000 Xilinx, Inc.(a) 976,000
- -------------------------------------------------------------------------------------------
29,497,600
- -------------------------------------------------------------------------------------------
SHOES & RELATED APPAREL-0.21%
11,000 Nine West Group, Inc.(a) 412,500
- -------------------------------------------------------------------------------------------
7,500 Wolverine World Wide, Inc. 236,250
- -------------------------------------------------------------------------------------------
648,750
- -------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-4.62%
25,000 A T & T Corp. 1,618,750
- -------------------------------------------------------------------------------------------
10,000 ADC Telecommunications, Inc.(a) 365,000
- -------------------------------------------------------------------------------------------
16,000 Allen Group, Inc. 358,000
- -------------------------------------------------------------------------------------------
19,600 Andrew Corp.(a) 749,700
- -------------------------------------------------------------------------------------------
13,700 Aspect Telecommunications Corp.(a) 458,950
- -------------------------------------------------------------------------------------------
22,000 Glenayre Technologies, Inc.(a) 1,369,500
- -------------------------------------------------------------------------------------------
8,000 Nokia Corp.-ADR 311,000
- -------------------------------------------------------------------------------------------
20,400 Northern Telecom Ltd. 877,200
- -------------------------------------------------------------------------------------------
10,300 Octel Communications Corp.(a) 332,175
- -------------------------------------------------------------------------------------------
18,000 Premisys Communications, Inc.(a) 1,008,000
- -------------------------------------------------------------------------------------------
16,000 Scientific-Atlanta, Inc. 240,000
- -------------------------------------------------------------------------------------------
20,000 Sprint Corp. 797,500
- -------------------------------------------------------------------------------------------
12,100 StrataCom, Inc.(a) 889,350
- -------------------------------------------------------------------------------------------
130,840 Telefonaktiebolaget L.M. Ericsson-ADR 2,551,380
- -------------------------------------------------------------------------------------------
37,000 Tellabs, Inc.(a) 1,369,000
- -------------------------------------------------------------------------------------------
2,350 TransPro, Inc. 24,968
- -------------------------------------------------------------------------------------------
8,400 U.S. Long Distance Corp.(a) 117,600
- -------------------------------------------------------------------------------------------
20,000 WorldCom, Inc.(a) 705,000
- -------------------------------------------------------------------------------------------
14,143,073
- -------------------------------------------------------------------------------------------
TELEPHONE-0.02%
2,300 Century Telephone Enterprises, Inc. 73,025
- -------------------------------------------------------------------------------------------
TOBACCO-1.12%
38,000 Philip Morris Companies, Inc. 3,439,000
- -------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 17
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
TRUCKING-0.06%
8,600 TNT Freightways Corp. $ 173,075
- -------------------------------------------------------------------------------------------
Total Common Stocks 247,471,964
- -------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK-0.12%
FINANCE (CONSUMER CREDIT)-0.12%
6,000 SunAmerica Inc.-Series E, $3.10 Conv. Pfd. 393,000
- -------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. TREASURY SECURITIES-15.80%
U.S. Treasury Bills-15.46%(b)
$19,500,000(c) 5.38%, 04/04/96 19,252,935
- -------------------------------------------------------------------------------------------
8,700,000 5.32%, 04/11/96 8,582,811
- -------------------------------------------------------------------------------------------
20,000,000(c) 5.22%, 06/27/96 19,518,800
- -------------------------------------------------------------------------------------------
47,354,546
- -------------------------------------------------------------------------------------------
U.S. Treasury Notes-0.34%
1,030,000 4.625%, 02/29/96 1,029,454
- -------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 48,384,000
- -------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT-4.05%(d)
12,394,572 Daiwa Securities America Inc.
5.92%, 01/02/96(e) 12,394,572
- -------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-100.78% 308,643,536
- -------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-(0.78%) (2,393,472)
- -------------------------------------------------------------------------------------------
NET ASSETS-100.00% $306,250,064
- -------------------------------------------------------------------------------------------
</TABLE>
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(c) A portion of the principal balance was pledged as collateral to cover margin
requirements for open futures contracts. See Note 7.
(d) 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 percent 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.
(e) Joint repurchase agreement entered into on 12/29/95 with a maturing value of
$646,679,181. Collateralized by $537,995,000 U.S. Treasury obligations,
7.875% to 11.25% due 11/15/07 to 02/15/15.
Abbreviations:
ADR-American Depositary Receipts
Conv.-Convertible
Pfd.-Preferred
See Notes to Financial Statements.
15
<PAGE> 18
Financials
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $261,339,114) $308,643,536
- -----------------------------------------------------------------------------------------
Foreign currencies, at market value (cost $102,582) 102,632
- -----------------------------------------------------------------------------------------
Receivables for:
Investments sold 756,045
- -----------------------------------------------------------------------------------------
Fund shares sold 1,565,892
- -----------------------------------------------------------------------------------------
Dividends and interest 199,305
- -----------------------------------------------------------------------------------------
Variation margin 55,300
- -----------------------------------------------------------------------------------------
Investment for deferred compensation plan 64,800
- -----------------------------------------------------------------------------------------
Other assets 19,202
- -----------------------------------------------------------------------------------------
Total assets 311,406,712
- -----------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 955,719
- -----------------------------------------------------------------------------------------
Fund shares reacquired 3,558,798
- -----------------------------------------------------------------------------------------
Deferred compensation plan 64,800
- -----------------------------------------------------------------------------------------
Accrued advisory fees 183,093
- -----------------------------------------------------------------------------------------
Accrued administrative service fees 5,437
- -----------------------------------------------------------------------------------------
Accrued distribution fees 239,251
- -----------------------------------------------------------------------------------------
Accrued trustees' fees 2,041
- -----------------------------------------------------------------------------------------
Accrued transfer agent fees 65,793
- -----------------------------------------------------------------------------------------
Accrued operating expenses 81,716
- -----------------------------------------------------------------------------------------
Total liabilities 5,156,648
- -----------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $306,250,064
=========================================================================================
NET ASSETS:
Class A $168,216,501
=========================================================================================
Class B $138,033,563
=========================================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 12,890,025
=========================================================================================
Class B 10,805,746
=========================================================================================
Class A:
Net asset value and redemption price per share $ 13.05
=========================================================================================
Offering price per share:
(Net asset value of $13.05 divided by 94.50%) $ 13.81
=========================================================================================
Class B:
Net asset value and offering price per share $ 12.77
=========================================================================================
</TABLE>
See Notes to Financial Statements.
16
<PAGE> 19
Financials
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $1,763 foreign withholding tax) $ 1,135,898
- ----------------------------------------------------------------------------------------
Interest 2,307,909
- ----------------------------------------------------------------------------------------
Total investment income 3,443,807
- ----------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 1,715,406
- ----------------------------------------------------------------------------------------
Custodian fees 77,724
- ----------------------------------------------------------------------------------------
Transfer agent fees-Class A 225,613
- ----------------------------------------------------------------------------------------
Transfer agent fees-Class B 225,786
- ----------------------------------------------------------------------------------------
Administrative service fees 67,618
- ----------------------------------------------------------------------------------------
Trustees' fees 6,928
- ----------------------------------------------------------------------------------------
Distribution fees-Class A 374,107
- ----------------------------------------------------------------------------------------
Distribution fees-Class B 828,223
- ----------------------------------------------------------------------------------------
Other 167,548
- ----------------------------------------------------------------------------------------
Total expenses 3,688,953
- ----------------------------------------------------------------------------------------
Net investment income (loss) (245,146)
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FUTURES AND OPTIONS CONTRACTS:
Net realized gain (loss) from:
Investment securities 16,472,814
- ----------------------------------------------------------------------------------------
Foreign currencies (1,357)
- ----------------------------------------------------------------------------------------
Futures contracts 6,650,615
- ----------------------------------------------------------------------------------------
Options contracts 51,299
- ----------------------------------------------------------------------------------------
23,173,371
- ----------------------------------------------------------------------------------------
Unrealized appreciation of:
Investment securities 36,431,825
- ----------------------------------------------------------------------------------------
Futures contracts 309,690
- ----------------------------------------------------------------------------------------
Foreign currencies 50
- ----------------------------------------------------------------------------------------
36,741,565
- ----------------------------------------------------------------------------------------
Net gain from investment securities, foreign currencies, futures and
options contracts 59,914,936
- ----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $59,669,790
========================================================================================
</TABLE>
See Notes to Financial Statements.
17
<PAGE> 20
Financials
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (245,146) $ (212,386)
- ---------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures and options contracts 23,173,371 2,769,880
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment
securities, foreign currencies and futures contracts 36,741,565 (10,397,965)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 59,669,790 (7,840,471)
- ---------------------------------------------------------------------------------------------
Distributions to shareholders from net investment
income -- Class A -- (1,847)
- ---------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities, foreign currencies, futures and
options contracts:
Class A (9,550,061) (4,927,563)
- ---------------------------------------------------------------------------------------------
Class B (7,736,264) (1,473,126)
- ---------------------------------------------------------------------------------------------
Share transactions-net:
Class A 13,074,357 (12,166,631)
- ---------------------------------------------------------------------------------------------
Class B 89,072,917 30,353,095
- ---------------------------------------------------------------------------------------------
Net increase in net assets 144,530,739 3,943,457
- ---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 161,719,325 157,775,868
- ---------------------------------------------------------------------------------------------
End of period $306,250,064 $161,719,325
=============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $254,963,289 $152,816,015
- ---------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (58,438) (54,924)
- ---------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, futures and options
contracts 3,607,551 (2,037,863)
- ---------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and futures contracts 47,737,662 10,996,097
- ---------------------------------------------------------------------------------------------
$306,250,064 $161,719,325
=============================================================================================
</TABLE>
See Notes to Financial Statements.
18
<PAGE> 21
Financials
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Growth 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 are 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 objective is to achieve long-term growth
of capital by investing primarily in the common stocks of established medium- to
large-size companies with prospects for above-average, long-term earnings
growth. Realization of current income is an incidental consideration.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. Security Valuations - A security listed or traded on an exchange is valued at
its last sales price on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the mean between the closing bid and asked prices on that day. Each security
traded in the over-the-counter market (but not including securities reported
on the NASDAQ National Market System) is valued at the mean between the last
bid and asked prices based upon quotes furnished by market makers for such
securities. If a mean is not available, as is the case in some foreign
markets, the closing bid will be used absent a last sales price. Each
security reported on the NASDAQ National Market System is valued at the last
sales price on the valuation date or absent a last sales price, at the
closing bid and asked prices. Debt obligations that are issued or guaranteed
by the U.S. Treasury 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 at the mean between last bid and asked prices based upon
quotes furnished by independent sources. Securities for which market
quotations either 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. 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. 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 and distributions to
shareholders are recorded on the ex-dividend date. On December 31, 1995,
undistributed net investment income (loss) was increased and undistributed
net realized gains reduced by $241,632 in order to comply with the
requirements of the American Institute of Certified Public Accountants of
Position 93-2. Net assets of the Fund were unaffected by the reclassification
discussed above.
19
<PAGE> 22
Financials
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued)
C. 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.
D. 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.
E. Stock Index Futures Contracts - The Fund may purchase or sell stock index
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 or cash 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 the change in the value of the contracts may not correlate with changes
in the value of the securities being hedged.
F. Covered Call Options - The Fund may write call options, but only on a covered
basis; that is, the Fund will own the underlying security. Options written by
the Fund normally will have expiration dates between three and nine months
from the date written. The exercise price of a call option may be below,
equal to, or above the current market value of the underlying security at the
time the option is written. When the Fund writes a covered call option, an
amount equal to the premium received by the Fund is recorded as an asset and
an equivalent liability. The amount of the liability is subsequently
"marked-to-market" to reflect the current market value of the option written.
The current market value of a written option is the last sale price, or in
the absence of a sale, 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. The Fund will
not write a covered call option if, immediately thereafter, the aggregate
value of the securities underlying all such options, determined as of the
dates such options were written, would exceed 5% of the net assets of the
Fund.
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.80% of
the first $150 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $150 million. 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.
20
<PAGE> 23
Financials
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES (continued)
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 year ended December 31, 1995, AIM
was reimbursed $67,618 for such services.
The Fund, pursuant to a transfer agency and shareholder 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. During the year ended December 31,
1995, AFS was paid $260,147 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 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 provides for 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. AIM Distributors may, from time to time, assign,
transfer or pledge to one or more assignees, its rights to all or a portion of
(a) compensation received by AIM Distributors from the Fund pursuant to the
Class B Plan (but not AIM Distributors' duties and obligations pursuant to Class
B Plan) and (b) any contingent deferred sales charges payable to AIM
Distributors related to Class B shares. During the year ended December 31, 1995,
the Class A shares and the Class B shares paid AIM Distributors $374,107 and
$828,223, respectively, as compensation under the Plans.
AIM Distributors received commissions of $146,533 from sales of the Class A
shares of the Fund during the year ended December 31, 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 year ended December 31, 1995,
AIM Distributors received $169,092 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 year ended December 31, 1995, the Fund paid legal fees of $3,215
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 AIM. 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 - BANK BORROWINGS
The Fund has a $3,400,000 committed line of credit with a financial institution
syndicate with Chemical Bank of New York as the administrative agent. Interest
on borrowings under the line of credit is payable on maturity or prepayment
date. During the period July 20, 1995 (effective date of line of credit
agreement) through December 31, 1995, the Fund did not borrow under the line of
credit agreement. The Fund is charged a commitment fee, payable quarterly, at
the rate of 1/10 of 1% per annum on the unused balance of the Fund's committed
line.
NOTE 5 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1995 was
$232,913,422 and $167,303,618, respectively.
21
<PAGE> 24
Financials
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of December 31, 1995 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $54,056,194
- ----------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (7,076,101)
- ----------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $46,980,093
========================================================================================
Cost of investments for tax purposes is $261,663,443.
</TABLE>
NOTE 6 - SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1995 and 1994
were as follows:
<TABLE>
<CAPTION>
1995 1994
------------------------------ ----------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 11,797,896 $ 152,090,445 4,669,279 $ 49,954,762
- -----------------------------------------------------------------------------------------------------
Class B 7,675,619 97,224,008 3,113,829 33,848,039
- -----------------------------------------------------------------------------------------------------
Issued as reinvestment of
dividends:
Class A 714,727 9,127,169 467,584 4,717,930
- -----------------------------------------------------------------------------------------------------
Class B 577,277 7,221,770 135,261 1,349,902
- -----------------------------------------------------------------------------------------------------
Reacquired:
Class A (11,562,734) (148,143,257) (6,154,491) (66,839,323)
- -----------------------------------------------------------------------------------------------------
Class B (1,213,971) (15,372,861) (459,392) (4,844,846)
- -----------------------------------------------------------------------------------------------------
7,988,814 $ 102,147,274 1,772,070 $ 18,186,464
=====================================================================================================
</TABLE>
NOTE 7 - OPEN FUTURES CONTRACTS
On December 31, 1995, $1,757,000 principal amount of U.S. Treasury bills were
pledged as collateral to cover margin requirements for open futures contracts.
Open futures contracts at December 31, 1995 were as follows:
<TABLE>
<CAPTION>
NO. OF UNREALIZED
CONTRACT CONTRACTS/MONTH/COMMITMENT APPRECIATION
<S> <C> <C>
S&P 500 Index 158 contracts/Mar. 96/Buy $433,190
=============================================================================================
</TABLE>
NOTE 8 - OPTION CONTRACTS WRITTEN
Transactions in call options written during the year ended December 31, 1995 are
summarized as follows:
<TABLE>
<CAPTION>
OPTION CONTRACTS
-----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- --------
<S> <C> <C>
Beginning of period 551 $127,014
- -----------------------------------------------------------------------------------------
Written 101 19,750
- -----------------------------------------------------------------------------------------
Closed (297) (76,789)
- -----------------------------------------------------------------------------------------
Exercised (81) (12,894)
- -----------------------------------------------------------------------------------------
Expired (274) (57,081)
- -----------------------------------------------------------------------------------------
End of period 0 $ 0
=========================================================================================
</TABLE>
22
<PAGE> 25
Financials
NOTE 9 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a Class A share
outstanding during each of the years in the ten-year period ended December 31,
1995 and for a Class B share outstanding during each of the years in the
two-year period ended December 31, 1995 and the period September 1, 1993 (date
sales commenced) through December 31, 1993.
<TABLE>
<CAPTION>
1995 1994 1993 1992(a) 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A:
Net asset value, beginning of period $ 10.32 $ 11.32 $ 12.28 $ 14.73 $ 12.35 $ 13.92 $ 11.93
- ------------------------------------------ -------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.02 -- -- 0.06 0.11 0.21 0.25
- ------------------------------------------ -------- -------- -------- -------- -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) 3.50 (0.57) 0.41 (0.04) 4.33 (0.91) 3.16
- ------------------------------------------ -------- -------- -------- -------- -------- -------- --------
Total from investment operations 3.52 (0.57) 0.41 0.02 4.44 (0.70) 3.41
- ------------------------------------------ -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income -- -- -- (0.06) (0.13) (0.20) (0.27)
- ------------------------------------------ -------- -------- -------- -------- -------- -------- --------
Distributions from capital gains (0.79) (0.43) (1.37) (2.41) (1.93) (0.67) (1.15)
- ------------------------------------------ -------- -------- -------- -------- -------- -------- --------
Total distributions (0.79) (0.43) (1.37) (2.47) (2.06) (0.87) (1.42)
- ------------------------------------------ -------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 13.05 $ 10.32 $ 11.32 $ 12.28 $ 14.73 $ 12.35 $ 13.92
========================================== ======== ======== ======== ======== ======== ======== ========
Total return(b) 34.31% (4.99)% 3.64% 0.19% 37.05% (5.04)% 28.87%
========================================== ======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $168,217 $123,271 $146,723 $168,395 $185,461 $153,245 $187,805
========================================== ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.28%(c) 1.22% 1.17% 1.17% 1.21% 1.16% 1.00%
========================================== ======== ======== ======== ======== ======== ======== ========
Ratio of net investment income to average
net assets 0.20%(c) 0.02% 0.02% 0.42% 0.73% 1.41% 1.62%
========================================== ======== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 87% 201% 192% 133% 73% 61% 53%
========================================== ======== ======== ======== ======== ======== ======== ========
<CAPTION>
1988 1987 1986
-------- -------- --------
<S> <C> <C> <C>
CLASS A:
Net asset value, beginning of period $ 11.04 $ 12.91 $ 14.95
- ------------------------------------------ -------- -------- --------
Income from investment operations:
Net investment income 0.23 0.24 0.26
- ------------------------------------------ -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) 0.89 0.30 1.57
- ------------------------------------------ -------- -------- --------
Total from investment operations 1.12 0.54 1.83
- ------------------------------------------ -------- -------- --------
Less distributions:
Dividends from net investment income (0.23) (0.31) (0.35)
- ------------------------------------------ -------- -------- --------
Distributions from capital gains -- (2.10) (3.52)
- ------------------------------------------ -------- -------- --------
Total distributions (0.23) (2.41) (3.87)
- ------------------------------------------ -------- -------- --------
Net asset value, end of period $ 11.93 $ 11.04 $ 12.91
========================================== ======== ======== ========
Total return(b) 10.13% 3.62% 12.85%
========================================== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $180,793 $203,329 $213,346
========================================== ======== ======== ========
Ratio of expenses to average net assets 0.98% 0.84% 0.85%
========================================== ======== ======== ========
Ratio of net investment income to average
net assets 1.73% 1.51% 1.82%
========================================== ======== ======== ========
Portfolio turnover rate 38% 78% 66%
========================================== ======== ======== ========
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Total returns do not deduct sales charges.
(c) Ratios are based on average net assets of $149,642,693.
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
CLASS B:
Net asset value, beginning of period $ 10.21 $ 11.31 $ 12.83
- ------------------------------------------------------------------------------------------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (0.08)(a) (0.06) (0.01)
- ------------------------------------------------------------------------------------------- ------- ------- -------
Net gains (losses) on securities (both realized and unrealized) 3.43(a) (0.61) (0.14)
- ------------------------------------------------------------------------------------------- ------- ------- -------
Total from investment operations 3.35 (0.67) (0.15)
- ------------------------------------------------------------------------------------------- ------- ------- -------
Less distributions:
Distributions from capital gains (0.79) (0.43) (1.37)
- ------------------------------------------------------------------------------------------- ------- ------- -------
Total distributions (0.79) (0.43) (1.37)
- ------------------------------------------------------------------------------------------- ------- ------- -------
Net asset value, end of period $ 12.77 $ 10.21 $ 11.31
=========================================================================================== ======= ======= =======
Total return(b) 33.00% (5.88)% (0.92)%
=========================================================================================== ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $138,034 $38,448 $11,053
=========================================================================================== ======= ======= =======
Ratio of expenses to average net assets 2.13%(c) 2.18% 1.91%(d)
=========================================================================================== ======= ======= =======
Ratio of net investment income (loss) to average net assets (0.65)%(c) (0.94)% (0.72)%(d)
=========================================================================================== ======= ======= =======
Portfolio turnover rate 87% 201% 192%
=========================================================================================== ======= ======= =======
</TABLE>
(a) Calculated using average shares outstanding.
(b) Total returns do not reflect deduction of contingent deferred sales charges
and are not annualized for periods less than one year.
(c) Ratios are based on average net assets of $82,822,307.
(d) Annualized.
23
<PAGE> 26
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders of
AIM Growth Fund:
We have audited the accompanying statement of assets and liabilities of AIM
Growth Fund (a portfolio of AIM Funds Group), including the schedule of
investments, as of December 31, 1995, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
years in the two-year period then ended and the financial highlights for each of
the years in the three-year period then ended. These financial statements and
the financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the 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
December 31, 1995, 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 the financial highlights referred
to above present fairly, in all material respects, the financial position of AIM
Growth Fund as of December 31, 1995, the results of its operations for the year
then ended, the statement of changes in net assets for each of the years in the
two-year period then ended and the financial highlights for each of the years in
the three-year period then ended, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
February 7, 1996
24
<PAGE> 27
Trustees &
Officers
<TABLE>
<S> <C> <C>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
11 Greenway Plaza
Charles T. Bauer Charles T. Bauer Suite 1919
Chairman and Chief Executive Officer Chairman Houston, TX 77046
A I M Management Group Inc.
Robert H. Graham INVESTMENT ADVISOR
Bruce L. Crockett President A I M Advisors, Inc.
Director, President, and 11 Greenway Plaza
Chief Executive Officer John J. Arthur Suite 1919
COMSAT Corporation Senior Vice President and Treasurer Houston, TX 77046
Owen Daly II Gary T. Crum TRANSFER AGENT
Director Senior Vice President A I M Fund Services, Inc.
Cortland Trust Inc. P.O. Box 4739
Carol F. Relihan Houston, TX 77210-4739
Carl Frischling Vice President and Secretary
Partner CUSTODIAN
Kramer, Levin, Naftalis, Nessen, Dana R. Sutton State Street Bank & Trust Co.
Kamin & Frankel Vice President and Assistant Treasurer 225 Franklin Street
Boston, MA 02110
Robert H. Graham Robert G. Alley
President and Chief Operating Officer Vice President COUNSEL TO THE FUND
A I M Management Group Inc. Ballard Spahr
Stuart W. Coco Andrews & Ingersoll
John F. Kroeger Vice President 1735 Market Street
Formerly, Consultant Philadelphia, PA 19103
Wendell & Stockel Associates, Inc. Melville B. Cox
Vice President COUNSEL TO THE TRUSTEES
Lewis F. Pennock Kramer, Levin, Naftalis,
Attorney Karen Dunn Kelley Nessen, Kamin & Frankel
Vice President 919 Third Avenue
Ian W. Robinson New York, NY 10022
Consultant; Former Executive Jonathan C. Schoolar
Vice President and Vice President DISTRIBUTOR
Chief Financial Officer A I M Distributors, Inc.
Bell Atlantic Management P. Michelle Grace 11 Greenway Plaza
Services, Inc. Assistant Secretary Suite 1919
Houston, TX 77046
Louis S. Sklar David L. Kite
Executive Vice President Assistant Secretary AUDITORS
Hines Interests KPMG Peat Marwick LLP
Limited Partnership Nancy L. Martin 700 Louisiana
Assistant Secretary NationsBank Bldg.
Houston, TX 77002
Ofelia M. Mayo
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
AIM Growth Fund paid ordinary dividends in the amounts of $0.3805 per share to
shareholders during the Fund's tax year ended December 31, 1995. Of this
amount, 11% is eligible for the dividends received deduction for corporations.
The Fund also distributed long-term capital gains of $0.4125 per share to
shareholders during the Fund's tax year ended December 31, 1995.
<PAGE> 28
<TABLE>
<S> <C>
[PHOTO OF 11 GREENWAY PLAZA] THE AIM FAMILY OF FUNDS(R)
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
AIM Global Utilities Fund**
HIGH CURRENT INCOME
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 CT
AIM Tax-Free Intermediate Shares
CURRENT INCOME AND HIGH DEGREE
OF SAFETY
AIM Intermediate Government 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%
AIM Management Group has provided leadership in the of its total assets to be invested in foreign
mutual fund industry since 1976 and currently manages securities, and was renamed AIM Global Utilities Fund.
approximately $42 billion in assets for more than 2 ***On September 25, 1995, AIM Government Securities
million shareholders, including individual investors, Fund was renamed AIM Intermediate Government Fund. For
corporate clients, and financial institutions. The AIM more complete information about any AIM Fund(s),
Family of Funds(R) is distributed nationwide, and AIM including sales charges and expenses, ask your
today ranks among the nation's top 20 mutual fund financial consultant or securities dealer for a free
companies in assets under management, according to prospectus(es). Please read the prospectus(es)
Lipper Analytical Services, Inc. carefully before you invest or send money.
</TABLE>
---------------
BULK RATE
[AIM LOGO APPEARS HERE] U.S. POSTAGE
PAID
A I M Distributors, Inc. HOUSTON, TX
11 Greenway Plaza, Suite 1919 Permit No. 1919
Houston, TX 77046 ---------------
