<PAGE> 1
[PHOTO OF ANTIGUE MAP AND LAMP.]
AIM GLOBAL
UTILITIES FUND
[AIM LOGO
APPEARS HERE] SEMIANNUAL REPORT JUNE 30, 1996
<PAGE> 2
AIM GLOBAL UTILITIES FUND
For shareholders who seek high current income and capital appreciation through
a portfolio primarily of common and preferred stocks of public utility
companies.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Global Utilities 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 at net asset value
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%
beginning at the time of purchase 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 due to differences in sales charge structure and Fund
expenses.
o During the six months ended 6/30/96, the Fund paid distributions for Class
A and Class B shares of $0.24 and $0.186 per share, respectively.
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 particular security.
o Past performance cannot guarantee comparable future results.
o International investing presents certain risks not associated with
investing solely in the U.S. These include risks relating to fluctuations
in the value of the U.S. dollar relative to the value of other currencies,
the custody arrangements made for the Fund's foreign holdings, differences
in accounting, political risks, and the lesser degree of public information
required to be provided by non-U.S. companies.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Standard & Poor's 40 Utilities Index (S&P 40) is an unmanaged index
comprising common stocks of 40 utility companies.
o The Dow Jones Average of 15 Utilities is a weighted average of the
performance of 15 large publicly traded utility stocks.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
MUTUAL FUNDS, ANNUITIES, AND OTHER INVESTMENTS ARE NOT INSURED BY THE FDIC OR
ANY OTHER GOVERNMENT AGENCY; ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR
GUARANTEED BY, ANY BANK OR ANY AFFILIATE; AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE> 3
The Chairman's Letter
- ------------------------
At $3 trillion
in assets, the industry
has grown
1,500 times
over the past 50 years.
If we are to sustain
that growth,
we must have
the public's confidence.
- ------------------------
Dear Fellow Shareholder:
"Past performance cannot guarantee comparable future
[PHOTO OF results." As a mutual fund investor, you've seen this
Charles T. Bauer, disclaimer on every piece of mail you've ever received about
Chairman of your fund. You've seen it so often that you probably don't
the Board of even think about it or question what it means. But you
the Fund should.
APPEARS HERE] That sentence about past performance is true now more
than ever. These days it bluntly means, "Don't expect the
25% to 35% returns you received last year." Don't
automatically expect the 15% to 20% returns of the past decade, either. History
shows that the average annual return on stocks is about 9% to 10%. If you're
investing in mutual funds with expectations of double-digit returns every year,
you will be disappointed. Maybe not today, but sometime in the future.
What is a realistic expectation for 1996? In this uncertain market, it is
easier to discuss what is unrealistic. Last year's performance was an
anomaly--the equivalent of euphoria. To expect a repeat is unrealistic.
I realize I am sounding a warning bell during the mutual fund industry's
best year ever. Investors like you poured $122.1 billion into stock mutual
funds during the first six months of 1996--the highest inflows on record. At
$3 trillion in assets, the industry has grown 1,500 times over the past
50 years. If we are to sustain that growth, we must have the public's
confidence. Our industry has a long-standing reputation for honesty and
integrity. To maintain that reputation as our assets swell into the trillions
of dollars, we must make sure that we don't promise anything we can't produce.
The industry's concern about investors' expectations goes beyond stamping
all our advertising with a standard disclaimer about performance. Mutual fund
leaders recently met for a conference in New York, and foremost on our minds
was educating investors about market volatility.
A whole generation of investors has seen nothing but a bull market, which
started in 1982. Except for the 1987 market crash, they've enjoyed a heady
rise. They may expect the same throughout this decade. I've been in the mutual
fund industry for more than 25 years, and I have seen a 5% to 10% market
correction about every five years. The last major correction was in 1990. If
history is any kind of teacher, we are overdue. Indeed, the bellwether Dow
Jones Industrial Average was off more than 4% from its peak in May to July 15,
1996.
The challenge for investors is not to panic when the market takes a
downturn. We have another saying in the industry: "Focus on time, not timing."
Over time, the stock market has proven to be the only investment that
consistently beats inflation. But investing in it takes a long-term view.
Market timing --trying to play the market and "rescue" your money in a
downturn--has proven to be an inefficient strategy for most investors.
The challenge for the mutual fund industry is to keep your trust during a
bear market. The industry has survived and thrived because of its built-in
integrity: By law, we must operate in the best interests of our shareholders.
The Investment Company Act of 1940, which governs our industry, protects
share-holders against self-dealing, conflicts of interest, misappropriation of
funds, and other fraudulent activities. At AIM we have an exhaustive Code of
Ethics that governs each of our 1,200 employees.
On a very basic level, it boils down to this: We are dealing with your
money, and if we lose your trust, we lose our business. We are vulnerable to
even the hint of impropriety. That's why the mutual fund industry is set up to
avoid even the appearance of self-dealing. Fund managers succeed to the extent
that they attract and keep investors. If they lose your faith, managers
ultimately will fail.
Mutual funds are highly liquid investments. Any time you choose, you can
pull out of a fund and receive a redemption price reflective of the market that
day. If you become dissatisfied with a fund manager, it's easy to leave and go
elsewhere. With more than 7,000 funds available, it's a buyers' market.
The next time you read, "Past performance cannot guarantee comparable future
results," think about your own expectations as an investor. We cannot promise
you another year like 1995. But we can promise to manage your money with
honesty and integrity.
Respectfully submitted,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE> 4
---------------------------
. . . good performance
by our overseas holdings
helps explain why
we outperformed
the purely domestic
Dow Jones Utilities Average
and the
Standard & Poor's
Utilities Index.
---------------------------
The Managers' Overview
UTILITIES INDUSTRY IN
TRANSITION WORLDWIDE
A roundtable discussion with the Fund management team for AIM Global Utilities
Fund about the six-month reporting period ended June 30, 1996.
- --------------------------------------------------------------------------------
Q: HOW DID AIM GLOBAL UTILITIES FUND PERFORM DURING THE SIX MONTHS ENDED
JUNE 30?
A: The Fund finished the six-month reporting period with total returns of 4.64%
for Class A shares and 4.18% for Class B shares. The Fund continued paying
regular monthly dividends, fulfilling its purpose as an income and growth
fund.
Q: HOW DOES THAT COMPARE WITH THE FUND'S COMPARATIVE INDEXES?
A: Very well. The Dow Jones Utilities Average rose just 0.57% over the same
period, for example, and the Standard & Poor's 40 Utilities Index was
virtually flat, rising only 0.05%.
Q: CAN YOU COMMENT ON THE PERFORMANCE OF THE UTILITIES SECTOR OVERALL?
A: Utilities are capital intensive and large borrowers, so they are sensitive
to interest rate changes. Rising rates during the reporting period were not
kind to utilities.
Investors began to worry about inflation intensifying as economic growth
became more vigorous. The rate of economic growth in the U.S. improved from
0.5% in the last quarter of 1995 to 2.0% during the first quarter of 1996.
During the second quarter of 1996, the economy grew at an annualized 4.2%
rate, first reports on growth showed. Interest rates started to climb as
fixed-income investors demanded better yield to protect them from possible
inflation.
However, toward the end of the six-month reporting period, many market
participants began to think interest rates had peaked. The prospect of
stable interest rates was good for utilities, and their stocks gained later
in the period covered by this report.
Q: ASIDE FROM INTEREST RATES, WERE THERE ANY OTHER TRENDS THAT AFFECTED THE
FUND?
A: Deregulation continues to be the dominant theme in domestic utilities. More
than half of all state regulatory commissions in the U.S. have some sort of
restructuring plan in the works, chiefly aimed at making electric utilities
compete for market share as other businesses do.
Additionally, domestic electric utilities are in the middle of an
unprecedented merger wave, largely as a result of this deregulation. These
trends should make the industry more efficient and therefore more
profitable. Three of the Fund's holdings--Duke Power Co., FPL Group Inc.,
and The Southern Co.--are, we believe, well positioned for this long-term
change.
Q: WILL THE TELECOMMUNICATIONS BILL PASSED EARLIER THIS YEAR AFFECT THE
INDUSTRY AND THE FUND?
A: That bill loosened limits on ownership of broadcasting stations, and it
opened local phone markets to more competition. Much of this reflects
blurring boundaries among services and industries that used to be considered
distinct. Consider two companies whose stock the Fund owns.
Cincinnati Bell, Inc., as its name suggests, used to be a local phone
company. But so far it has learned to thrive in the new utilities
atmosphere. For example, Cincinnati Bell furnishes data processing,
consulting, and software development services to AT&T Corp., which is
planning to enter the local phone service business.
Another former local phone company that appears adept in the new world is
Frontier Corp., formerly Rochester Tele-
2
<PAGE> 5
phone Corporation. The company now offers integrated telecommunications in
certain markets--one-stop shopping for long-distance, voice mail, toll-free
numbers, cellular services, paging, and local phone service.
Our telecommunications holdings grew during the reporting period as we
found attractive opportunities.
Q: IS DEREGULATION JUST A DOMESTIC U.S. PHENOMENON?
A: Not at all. It is global in scope. In fact, good performance by our overseas
holdings helps explain why we outperformed the purely domestic Dow Jones
Utilities Average and the Standard & Poor's Utilities Index.
Outside the U.S., privatization is a major theme. Many countries are
selling their state-owned monopolies to private investors. The British have
made considerable progress in privatizing electric utilities, and as of
June 30, we continued to hold London Electricity PLC, Scottish Power PLC,
and Yorkshire Electricity PLC, among others.
As in the U.S., the telecommunications industry abroad is changing
rapidly with new technology. For example, earlier this year, IBM Corp.
entered a joint marketing agreement with the Spanish phone company
Telefonica de Espana S.A. aimed at enhancing market share for both
companies' on-line services providing Internet access. Initially applicable
only in Spain, the agreement is expected to be expanded to Latin America,
where Telefonica de Espana operates in several countries. We increased our
holdings of Telefonica de Espana during the reporting period.
Taking advantage of this worldwide trend, close to 30% of the Fund's
holdings were overseas at the end of the reporting period, up from
approximately 23% at the close of the last reporting period.
Q: WHAT DO YOU FORESEE FOR THE FUND IN THE NEAR FUTURE?
A: The Federal Reserve decided not to raise short-term interest rates at its
meeting in early July. The prospects for moderate economic growth and
minimal inflation seem good here and abroad. In both Europe and Japan,
central banks have been keeping interest rates low to spur economic growth.
This is good for the utilities industry in general, and also for the
fixed-income portion of the portfolio. Since income is one of the Fund's
major investment objectives, the Fund usually maintains a significant
portion of its holdings in fixed-income securities. As the reporting period
closed, about 16% of the portfolio consisted of such securities.
In foreign markets, growth potential continues to make utilities
investments promising. Consider that in the U.S. there is one phone in use
for every 1.3 persons. In Spain, that figure is one per 2.5 persons, and in
Brazil, the proportion falls to one per 11. That adds up to a world of
opportunity. As countries continue to develop, their citizens demand higher
standards of living, including improved water, gas, and electricity services
as well as more phones--all of which translates into the potential for very
attractive growth.
<TABLE>
<CAPTION>
================================================================================
PORTFOLIO COMPOSITION
================================================================================
AS OF 6/30/96
<S> <C>
Top 10 Equity Holdings Top 10 Countries
1. Ameritech Corp. 1. United States
2. El Paso Natural Gas Co. 2. United Kingdom
3. Cincinnati Bell, Inc. 3. Canada
4. BellSouth Corp. 4. Spain
5. Williams Companies, Inc. (The) 5. New Zealand
6. Duke Power Co. 6. Chile
7. Texas Utilities Co. 7. Argentina
8. General Public Utilities Corp. 8. Italy
9. Pinnacle West Capital Corp. 9. Germany
10. FPL Group, Inc. 10. Netherlands
Keep in mind, the Fund's portfolio composition may change and there is no
assurance the Fund will continue to hold any particular security.
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Growth of a
$10,000 Investment
Inception (1/10/88) - 6/30/96
including sales charges. Past
performance cannot guarantee
comparable future results.
AIM Utilities Fund
A Shares $25,874
Dow Jones Average
of 15 Utilities $20,389
Source: Towers Data Systems HYPO--Registered Trademark--
Average Annual
Total Returns
For periods ended 6/30/96.
Including sales charges.
Class A Shares
1 Year 12.64%
5 Years 10.32
Inception (1/19/88) 11.91
Class B Shares
1 Year 13.32%
Inception (9/1/93) 2.40
- --------------------------------------------------------------------------------
3
<PAGE> 6
Financials
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-56.52%
COMPUTER NETWORKING-0.90%
34,600 Ascend Communications, Inc.(a) $ 1,946,250
- ---------------------------------------------------------------------------------------------
16,300 Digital Systems International, Inc.(a) 246,538
- ---------------------------------------------------------------------------------------------
2,192,788
- ---------------------------------------------------------------------------------------------
COMPUTER PERIPHERALS-0.14%
4,000 U.S. Robotics Corp.(a) 342,000
- ---------------------------------------------------------------------------------------------
ELECTRIC SERVICES-23.67%
162,100 Allegheny Power System, Inc. 5,004,838
- ---------------------------------------------------------------------------------------------
70,000 Carolina Power & Light Co. 2,660,000
- ---------------------------------------------------------------------------------------------
129,500 DQE, Inc. 3,561,250
- ---------------------------------------------------------------------------------------------
106,400 Duke Power Co. 5,453,000
- ---------------------------------------------------------------------------------------------
109,100 FPL Group, Inc. 5,018,600
- ---------------------------------------------------------------------------------------------
151,000 General Public Utilities Corp. 5,322,750
- ---------------------------------------------------------------------------------------------
110,000 Houston Industries, Inc. 2,708,750
- ---------------------------------------------------------------------------------------------
163,500 Illinova Corp. 4,700,625
- ---------------------------------------------------------------------------------------------
100,000 NIPSCO Industries, Inc. 4,025,000
- ---------------------------------------------------------------------------------------------
50,000 Northern States Power Co. 2,468,750
- ---------------------------------------------------------------------------------------------
47,000 NYNEX Corp. 2,232,500
- ---------------------------------------------------------------------------------------------
175,000 Pinnacle West Capital Corp. 5,315,625
- ---------------------------------------------------------------------------------------------
150,000 Southern Co. (The) 3,693,750
- ---------------------------------------------------------------------------------------------
125,000 Texas Utilities Co. 5,343,750
- ---------------------------------------------------------------------------------------------
57,509,188
- ---------------------------------------------------------------------------------------------
ENERGY (ALTERNATE SOURCES)-0.99%
95,000 Teco Energy, Inc. 2,398,750
- ---------------------------------------------------------------------------------------------
GAS DISTRIBUTION-1.42%
31,600 KN Energy, Inc. 1,058,600
- ---------------------------------------------------------------------------------------------
65,200 Public Service Co. of Colorado 2,396,100
- ---------------------------------------------------------------------------------------------
3,454,700
- ---------------------------------------------------------------------------------------------
NATURAL GAS PIPELINE-10.25%
36,000 Columbia Gas System, Inc. 1,876,500
- ---------------------------------------------------------------------------------------------
174,000 El Paso Natural Gas Co. 6,699,000
- ---------------------------------------------------------------------------------------------
100,000 Enron Corp. 4,087,500
- ---------------------------------------------------------------------------------------------
76,200 PanEnergy Corp. 2,505,075
- ---------------------------------------------------------------------------------------------
94,300 Sonat Inc. 4,243,500
- ---------------------------------------------------------------------------------------------
111,000 Williams Companies Inc. (The) 5,494,500
- ---------------------------------------------------------------------------------------------
24,906,075
- ---------------------------------------------------------------------------------------------
OIL & GAS (SERVICES)-0.15%
50,000 TPC Corp.(a) 362,500
- ---------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 7
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
REAL ESTATE INVESTMENT TRUSTS-1.61%
24,400 Meditrust $ 814,350
- ---------------------------------------------------------------------------------------------
18,500 National Health Investors, Inc. 605,875
- ---------------------------------------------------------------------------------------------
32,000 OMEGA Healthcare Investors, Inc. 884,000
- ---------------------------------------------------------------------------------------------
32,000 Patriot American Hospitality, Inc. 948,000
- ---------------------------------------------------------------------------------------------
32,000 Public Storage, Inc. 660,000
- ---------------------------------------------------------------------------------------------
3,912,225
- ---------------------------------------------------------------------------------------------
SEMICONDUCTORS-0.16%
6,000 Motorola, Inc. 377,250
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-4.33%
59,600 A T & T Corp. 3,695,200
- ---------------------------------------------------------------------------------------------
20,000 ADC Telecommunications(a) 900,000
- ---------------------------------------------------------------------------------------------
70,000 American Portable Telecom, Inc.(a) 752,500
- ---------------------------------------------------------------------------------------------
120,000 Frontier Corp. 3,675,000
- ---------------------------------------------------------------------------------------------
17,100 Lucent Technologies, Inc. 647,663
- ---------------------------------------------------------------------------------------------
34,800 McLeod, Inc.(a) 835,200
- ---------------------------------------------------------------------------------------------
471 MFS Communications Co. Inc.(a) 17,721
- ---------------------------------------------------------------------------------------------
10,523,284
- ---------------------------------------------------------------------------------------------
TELEPHONE-12.90%
135,700 Ameritech Corp. 8,057,188
- ---------------------------------------------------------------------------------------------
18,700 Bell Atlantic Corp. 1,192,125
- ---------------------------------------------------------------------------------------------
141,800 BellSouth Corp. 6,008,775
- ---------------------------------------------------------------------------------------------
75,700 Century Telephone Enterprises, Inc. 2,412,938
- ---------------------------------------------------------------------------------------------
117,000 Cincinnati Bell, Inc. 6,098,625
- ---------------------------------------------------------------------------------------------
40,000 GTE Corp. 1,790,000
- ---------------------------------------------------------------------------------------------
91,400 SBC Communications, Inc. 4,501,450
- ---------------------------------------------------------------------------------------------
30,000 Southern New England Telecommunications Corp. 1,260,000
- ---------------------------------------------------------------------------------------------
31,321,101
- ---------------------------------------------------------------------------------------------
Total Domestic Common Stocks 137,299,861
- ---------------------------------------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED STOCKS-2.42%
ADVERTISING/BROADCASTING-0.30%
750 Time Warner Inc.-Series K, 10.25% Conv. PIK Pfd.(b)
(Acquired 04/03/96; Cost $750,000) 724,687
- ---------------------------------------------------------------------------------------------
ELECTRIC SERVICES-0.48%
24,400 Citizens Utilities Co.-$2.50 Conv. Pfd. 1,177,300
- ---------------------------------------------------------------------------------------------
GAS UTILITY-0.60%
57,000 MCN Corp.-$2.01 Conv. Pfd. PRIDES 1,453,500
- ---------------------------------------------------------------------------------------------
OIL & GAS (SERVICES)-0.43%
40,000 Enron Corp.-$1.36 Conv. Pfd. 1,035,000
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-0.61%
23,500 MFS Communications Co., Inc.-$2.68 Conv. Pfd. 1,492,250
- ---------------------------------------------------------------------------------------------
Total Domestic Convertible Preferred Stocks 5,882,737
- ---------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 8
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY INTERESTS-23.82%
ARGENTINA-1.27%
475,200 Central Costanera S.A.-Class B (Electric Services) $ 1,749,435
- ---------------------------------------------------------------------------------------------
44,600 Telefonica de Argentina-ADR (Telephone) 1,321,275
- ---------------------------------------------------------------------------------------------
3,070,710
- ---------------------------------------------------------------------------------------------
AUSTRIA-0.39%
12,500 Oesterreichisch Elektrizitatswirtschafts-AG
(Verbundgesellschaft) Class A (Electric Services) 957,541
- ---------------------------------------------------------------------------------------------
BRAZIL-0.72%
25,000 Telecomunicacois Brasileiras S/A Telebras-ADR
(Telecommunications) 1,740,625
- ---------------------------------------------------------------------------------------------
CANADA-1.07%
95,000 TELUS Corp. (Telecommunications) 1,280,305
- ---------------------------------------------------------------------------------------------
87,800 Westcoast Energy, Inc. (Natural Gas Pipeline) 1,317,000
- ---------------------------------------------------------------------------------------------
2,597,305
- ---------------------------------------------------------------------------------------------
CHILE-1.34%
15,000 Compania de Telecomunicaciones de Chile S.A.-ADR
(Telecommunications) 1,471,875
- ---------------------------------------------------------------------------------------------
57,800 Enersis S.A.-ADR (Electric Services) 1,791,800
- ---------------------------------------------------------------------------------------------
3,263,675
- ---------------------------------------------------------------------------------------------
GERMANY-1.02%
46,500 Veba A.G. (Electric Services) 2,473,170
- ---------------------------------------------------------------------------------------------
HONG KONG-0.41%
18,200 Asia Satellite Telecommunications Holdings Ltd.(a)
(Telecommunications) 541,450
- ---------------------------------------------------------------------------------------------
25,500 Hong Kong Telecom Ltd.-ADR (Telephone) 459,000
- ---------------------------------------------------------------------------------------------
1,000,450
- ---------------------------------------------------------------------------------------------
INDONESIA-0.38%
27,700 PT Indosat-ADR(a) (Telephone) 927,950
- ---------------------------------------------------------------------------------------------
ISRAEL-0.58%
33,200 ECI Telecommunications Ltd. (Telecommunications) 771,900
- ---------------------------------------------------------------------------------------------
40,000 Tadiran Telecommunications Ltd.(a) (Telecommunications) 640,000
- ---------------------------------------------------------------------------------------------
1,411,900
- ---------------------------------------------------------------------------------------------
ITALY-1.17%
578,300 Telecom Italia Mobile S.p.A.(Telephone) 1,296,903
- ---------------------------------------------------------------------------------------------
717,000 Telecom Italia S.p.A.(Telephone) 1,543,803
- ---------------------------------------------------------------------------------------------
2,840,706
- ---------------------------------------------------------------------------------------------
KOREA-0.50%
49,500 Korea Electric Power Corp.-ADR (Electric Services) 1,200,375
- ---------------------------------------------------------------------------------------------
NETHERLANDS-0.84%
54,170 Royal PTT Nederland N.V.-ADR (Telecommunications) 2,044,918
- ---------------------------------------------------------------------------------------------
NEW ZEALAND-1.39%
50,600 Telecom Corp. of New Zealand Ltd.-ADR (Telephone) 3,377,550
- ---------------------------------------------------------------------------------------------
NORWAY-0.59%
45,000 Nera AS-ADR (Telecommunications) 1,428,750
- ---------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
PORTUGAL-0.71%
65,700 Portugal Telecom S.A.-ADR(a) (Telecommunications) $ 1,724,625
- ---------------------------------------------------------------------------------------------
SPAIN-4.02%
77,000 Autopistas Concesionaria Espanola S.A.
(Engineering & Construction) 896,293
- ---------------------------------------------------------------------------------------------
30,000 Empresa Nacional de Electricidad S.A. (Electric Services) 1,878,750
- ---------------------------------------------------------------------------------------------
29,800 Empresa Nacional de Electricidad S.A.-ADR (Electric Services) 640,700
- ---------------------------------------------------------------------------------------------
11,000 Gas Natural SDG-E S.A. (Natural Gas Pipeline) 2,311,628
- ---------------------------------------------------------------------------------------------
233,000 Iberdrola S.A. (Electric Services) 2,393,617
- ---------------------------------------------------------------------------------------------
30,000 Telefonica de Espana, S.A. (Telecommunications) 1,653,750
- ---------------------------------------------------------------------------------------------
9,774,738
- ---------------------------------------------------------------------------------------------
SWEDEN-0.37%
42,000 Telefonaktiebolaget L.M. Ericsson (Telecommunications) 903,000
- ---------------------------------------------------------------------------------------------
UNITED KINGDOM-7.05%
10,000 British Sky Broadcasting Group PLC-ADR
(Advertising/Broadcasting) 406,250
- ---------------------------------------------------------------------------------------------
53,955 Hyder PLC (Water Supply) 597,871
- ---------------------------------------------------------------------------------------------
137,057 London Electricity PLC (Electric Services) 1,331,405
- ---------------------------------------------------------------------------------------------
205,074 National Grid Group PLC (Electric Services) 543,021
- ---------------------------------------------------------------------------------------------
175,000 National Power PLC (Electric Services) 1,413,263
- ---------------------------------------------------------------------------------------------
40,000 National Power PLC-ADR (Electric Services) 975,000
- ---------------------------------------------------------------------------------------------
45,500 NYNEX CableComms Group(a) (Telecommunications) 739,375
- ---------------------------------------------------------------------------------------------
50,000 Orange PLC(a) (Telecommunications) 875,000
- ---------------------------------------------------------------------------------------------
209,500 PowerGen PLC (Electric Services) 1,525,943
- ---------------------------------------------------------------------------------------------
40,900 PowerGen PLC-ADR (Electric Services) 848,675
- ---------------------------------------------------------------------------------------------
201,550 Scottish Power PLC ( Electric Services) 951,564
- ---------------------------------------------------------------------------------------------
67,200 Southern Electric PLC (Electric Services) 744,637
- ---------------------------------------------------------------------------------------------
197,100 United Utilities PLC (Water Supply) 1,657,550
- ---------------------------------------------------------------------------------------------
10,000 Vodafone Group PLC-ADR (Telecommunications) 368,750
- ---------------------------------------------------------------------------------------------
169,750 Wessex Water PLC (Water Supply) 941,152
- ---------------------------------------------------------------------------------------------
88,500 Wessex Water PLC Preference Shares (Water Supply) 71,470
- ---------------------------------------------------------------------------------------------
144,941 Yorkshire Electricity PLC (Electric Services) 1,627,463
- ---------------------------------------------------------------------------------------------
145,800 Yorkshire Water PLC (Water Supply) 1,494,457
- ---------------------------------------------------------------------------------------------
17,112,846
- ---------------------------------------------------------------------------------------------
Total Foreign Stocks & Other Equity Interests 57,850,834
- ---------------------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
AMOUNT
DOMESTIC CONVERTIBLE BONDS-3.21%
ADVERTISING/BROADCASTING-0.44%
$ 1,250,000 Tele-Communications, Inc., Conv. Sub. Deb.,
4.50%, 02/15/06 1,087,500
- ---------------------------------------------------------------------------------------------
CABLE TELEVISION-0.61%
1,500,000 International Cabletel Inc., Conv. Sub. Deb.,
7.00%, 06/15/08(b) (Acquired 06/07/96; Cost $1,500,000) 1,479,375
- ---------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 10
Financials
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
<S> <C> <C>
ENERGY (ALTERNATE SOURCES)-0.52%
$ 1,100,000 California Energy Co., Conv. Sub. Deb.,
5.00%, 07/31/00(b) (Acquired 04/26/95; Cost $988,625) $ 1,263,625
- ---------------------------------------------------------------------------------------------
SEMICONDUCTORS-0.35%
750,000 Analog Devices, Conv. Sub. Notes,
3.50%, 12/01/00 849,375
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-1.29%
800,000 Broadband Technologies, Conv. Sub. Notes,
5.00%, 05/15/01(b) (Acquired 05/17/96-05/22/96; Cost $804,570) 796,000
- ---------------------------------------------------------------------------------------------
2,620,000 United States Cellular Corp., Conv. Liquid Yield Option Notes,
6.00%, 06/15/15(c) 869,512
- ---------------------------------------------------------------------------------------------
1,000,000 World Communications Inc., Conv. Sub. Notes,
5.00%, 08/15/03 1,460,807
- ---------------------------------------------------------------------------------------------
3,126,319
- ---------------------------------------------------------------------------------------------
Total Domestic Convertible Bonds 7,806,194
- ---------------------------------------------------------------------------------------------
DOMESTIC NON-CONVERTIBLE BONDS-8.17%
ADVERTISING/BROADCASTING-1.22%
900,000 Comcast Corp., Sr. Sub. Deb.,
9.50%, 01/15/08 868,500
- ---------------------------------------------------------------------------------------------
1,000,000 Time Warner Inc., Deb.,
6.85%, 01/15/26 957,870
- ---------------------------------------------------------------------------------------------
1,150,000 Time Warner Inc., Notes,
8.18%, 08/15/07 1,145,688
- ---------------------------------------------------------------------------------------------
2,972,058
- ---------------------------------------------------------------------------------------------
ELECTRIC SERVICES-2.40%
925,000 AES Corp., Sr. Sub. Notes,
10.25%, 07/15/06 930,203
- ---------------------------------------------------------------------------------------------
1,425,000 El Paso Electric Co., First Mortgage Bonds,
8.25%, 02/01/03 1,382,250
- ---------------------------------------------------------------------------------------------
3,021,945 Indiana Michigan Power Co., Deb.,
9.82%, 12/07/22 3,508,237
- ---------------------------------------------------------------------------------------------
5,820,690
- ---------------------------------------------------------------------------------------------
ENERGY ALTERNATE SOURCES-0.55%
1,400,000 California Energy Co., Disc. Notes,
10.25%, 01/15/04(d) 1,344,000
- ---------------------------------------------------------------------------------------------
GAS DISTRIBUTION-0.40%
1,000,000 Ferrellgas Partners Inc., Sr. Notes,
9.375%, 06/15/06(b) (Acquired 04/23/96; Cost $1,000,000) 972,500
- ---------------------------------------------------------------------------------------------
NATURAL GAS PIPELINE-2.40%
3,750,000 Enron Corp., Sr. Sub. Deb.,
6.75%, 07/01/05 3,559,462
- ---------------------------------------------------------------------------------------------
2,205,000 Panenergy Corp., Notes,
7.875%, 08/15/04 2,267,379
- ---------------------------------------------------------------------------------------------
5,826,841
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-1.20%
1,850,000 AT&T Corp., Sr. Notes,
7.75%, 03/01/07 1,926,238
- ---------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
Financials
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
<S> <C> <C>
TELECOMMUNICATIONS (continued)
$ 1,000,000 TCI Communications Inc., Sr. Notes,
8.00%, 08/01/05 $ 977,430
- ---------------------------------------------------------------------------------------------
2,903,668
- ---------------------------------------------------------------------------------------------
Total Domestic Non-Convertible Bonds 19,839,757
- ---------------------------------------------------------------------------------------------
FOREIGN NON-CONVERTIBLE BONDS-4.45%
CANADA-4.45%(e)
CAD 950,000 Bell Canada, Deb. Series EW (Telecommunications)
8.80%, 08/17/05 727,130
- ---------------------------------------------------------------------------------------------
CAD1,800,000 Bell Canada, Deb. (Telecommunications)
10.875%, 10/11/04 1,525,247
- ---------------------------------------------------------------------------------------------
CAD1,750,000 Canada Oil Debco Inc., Deb. (Oil & Gas-Services)
11.00%, 10/31/00 1,436,223
- ---------------------------------------------------------------------------------------------
CAD2,500,000 Ontario Hydro, Global Bonds (Electric Power)
9.00%, 06/24/02 1,982,257
- ---------------------------------------------------------------------------------------------
CAD2,400,000 Teleglobe Canada Inc., Deb. (Telecommunications)
8.35%, 6/20/03 1,807,427
- ---------------------------------------------------------------------------------------------
CAD2,150,000 Trans Canada Pipeline, Notes (Oil & Gas Services)
8.55%, 02/01/06 1,618,445
- ---------------------------------------------------------------------------------------------
CAD2,250,000 Transalta Utilities Corp., Deb. (Electric Power)
8.35%, 12/15/03 1,708,800
- ---------------------------------------------------------------------------------------------
Total Foreign Non-Convertible Bonds 10,805,529
- ---------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT-0.24%(f)
$ 593,672 Daiwa Securities America Inc.,
5.50%, 07/01/96(g) 593,672
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENT SECURITIES-98.83% 240,078,584
- ---------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.17% 2,841,929
- ---------------------------------------------------------------------------------------------
NET ASSETS-100.00% $242,920,513
=============================================================================================
</TABLE>
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with provisions of Rule 144A under the Securities Act of 1933, as
amended. The valuation of these securities has been determined in accordance
with procedures established by the Board of Trustees. The aggregate market
value of these securities at 06/30/96 was $5,236,187, which represents 2.16%
of net assets.
(c) Zero coupon bond. The interest rate shown represents the rate of the
original issue discount.
(d) Discounted bond at purchase. Interest rate shown represents coupon rate at
which the bond will accrue at a specified future date.
(e) Foreign denominated security. Par value and coupon are denominated in
Canadian dollars.
(f) Collateral on repurchase agreement, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(g) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$270,069,404. Collateralized by $258,303,000 U.S. Treasury obligations,
7.875% due 11/15/07.
Abbreviations:
ADR -American Depository Receipt
CAD -Canadian dollars
Conv. -Convertible
Deb. -Debentures
Pfd. -Preferred
PIK -Payment in Kind
PRIDES -Preferred Redeemable Increased Dividend Equity Securities
Sr. -Senior
Sub. -Subordinated
See Notes to Financial Statements.
9
<PAGE> 12
Financials
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $200,246,789) $240,078,584
- -----------------------------------------------------------------------------------------
Foreign currencies, at market value (cost $171,556) 171,034
- -----------------------------------------------------------------------------------------
Receivables for:
Investments sold 2,330,886
- -----------------------------------------------------------------------------------------
Fund shares sold 498,700
- -----------------------------------------------------------------------------------------
Dividends and interest 1,571,368
- -----------------------------------------------------------------------------------------
Investment for deferred compensation plan 11,954
- -----------------------------------------------------------------------------------------
Other assets 32,277
- -----------------------------------------------------------------------------------------
Total assets 244,694,803
- -----------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 978,129
- -----------------------------------------------------------------------------------------
Fund shares reacquired 291,845
- -----------------------------------------------------------------------------------------
Dividends 98,156
- -----------------------------------------------------------------------------------------
Deferred compensation 11,954
- -----------------------------------------------------------------------------------------
Accrued advisory fees 114,225
- -----------------------------------------------------------------------------------------
Accrued administrative service fees 6,324
- -----------------------------------------------------------------------------------------
Accrued distribution fees 189,924
- -----------------------------------------------------------------------------------------
Accrued trustees' fees 1,837
- -----------------------------------------------------------------------------------------
Accrued transfer agent fees 39,834
- -----------------------------------------------------------------------------------------
Accrued operating expenses 42,062
- -----------------------------------------------------------------------------------------
Total liabilities 1,774,290
- -----------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $242,920,513
=========================================================================================
NET ASSETS:
Class A $165,373,177
=========================================================================================
Class B $ 77,547,336
=========================================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 11,013,863
=========================================================================================
Class B 5,162,176
=========================================================================================
Class A:
Net asset value and redemption price per share $ 15.02
=========================================================================================
Offering price per share:
(Net asset value of $15.02 divided by 94.50%) $ 15.89
=========================================================================================
Class B:
Net asset value and offering price per share $ 15.02
=========================================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
Financials
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $225,727 foreign withholding tax) $ 4,381,862
- ----------------------------------------------------------------------------------------
Interest 1,423,173
- ----------------------------------------------------------------------------------------
Total investment income 5,805,035
- ----------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 702,465
- ----------------------------------------------------------------------------------------
Administrative service fees 37,944
- ----------------------------------------------------------------------------------------
Custodian fees 40,563
- ----------------------------------------------------------------------------------------
Trustees' fees 3,941
- ----------------------------------------------------------------------------------------
Distribution fees -- Class A 208,801
- ----------------------------------------------------------------------------------------
Distribution fees -- Class B 371,580
- ----------------------------------------------------------------------------------------
Transfer agent fees -- Class A 155,985
- ----------------------------------------------------------------------------------------
Transfer agent fees -- Class B 75,490
- ----------------------------------------------------------------------------------------
Other 61,327
- ----------------------------------------------------------------------------------------
Total expenses 1,658,096
- ----------------------------------------------------------------------------------------
Net investment income 4,146,939
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM INVESTMENT SECURITIES AND FOREIGN
CURRENCY TRANSACTIONS:
NET REALIZED GAIN FROM:
Investment securities 5,305,105
- ----------------------------------------------------------------------------------------
Foreign currency transactions 47,357
- ----------------------------------------------------------------------------------------
5,352,462
- ----------------------------------------------------------------------------------------
UNREALIZED APPRECIATION OF:
Investment securities 962,235
- ----------------------------------------------------------------------------------------
Foreign currencies 16,087
- ----------------------------------------------------------------------------------------
978,322
- ----------------------------------------------------------------------------------------
Net gain from investment securities and foreign currencies 6,330,784
- ----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $10,477,723
========================================================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
Financials
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 and the year ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
<S> <C> <C>
OPERATIONS:
Net investment income $ 4,146,939 $ 8,470,013
- ------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities and
foreign currencies 5,352,462 937,755
- ------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 978,322 42,939,910
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 10,477,723 52,347,678
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (2,758,069) (6,295,577)
- ------------------------------------------------------------------------------------------
Class B (948,679) (1,690,557)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A (9,877,384) (12,765,899)
- ------------------------------------------------------------------------------------------
Class B 4,709,237 16,638,939
- ------------------------------------------------------------------------------------------
Net increase in net assets 1,602,828 48,234,584
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 241,317,685 193,083,101
- ------------------------------------------------------------------------------------------
End of period $242,920,513 $241,317,685
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $216,355,328 $221,523,475
- ------------------------------------------------------------------------------------------
Undistributed net investment income 844,707 404,516
- ------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of
investment securities and foreign currencies (14,125,076) (19,477,538)
- ------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 39,845,554 38,867,232
- ------------------------------------------------------------------------------------------
$242,920,513 $241,317,685
==========================================================================================
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 15
Financials
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Global Utilities Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of nine separate series
portfolios, each having an unlimited number of shares of beneficial interest.
The Fund currently offers two different classes of shares: the Class A shares
and the Class B shares. Class A shares are sold with a front-end sales charge.
Class B shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's objective is to
achieve a high level of current income, and as a secondary objective the Fund
seeks to achieve capital appreciation, by investing primarily in the common and
preferred stocks of public utility companies.
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 - Equity securities listed or traded on an exchange are
valued at the 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. 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. Exchange listed convertible bonds
are valued at the mean between the closing bid and asked prices obtained from
a broker-dealer. 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. 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. Non-
convertible bonds and notes are valued on the basis of prices provided by an
independent pricing service. Prices provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as institution-size trading in similar groups of
securities, developments related to special securities, yield, quality,
coupon rate, maturity, type of issue, individual trading characteristics and
other market data. 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 the 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 is recorded on the
ex-dividend date. It is the policy of the Fund to declare daily dividends
from net investment income. Such dividends are paid monthly. Distributions
from net realized capital gains, if any, are recorded on ex-dividend date and
are paid annually.
C. Foreign Currency Translations - Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions.
13
<PAGE> 16
Financials
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued)
D. Foreign Currency Contracts - A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a forward contract to attempt to minimize the
risk to the Fund from adverse changes in the relationship between currencies.
The Fund may also enter into a forward contract for the purchase or sale of a
security denominated in a foreign currency in order to "lock in" the U.S.
dollar price of that security. The Fund could be exposed to risk if
counterparties to the contracts are unable to meet the terms of their
contracts or if the value of the foreign currency changes unfavorably.
E. Federal Income Taxes - The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements. The Fund has a capital loss
carryforward of $19,221,729 (which may be carried forward to offset future
taxable capital gains, if any) which expires, if not previously utilized, in
the year 2002. The Fund cannot distribute capital gains to shareholders until
the tax loss carryforwards have been utilized.
F. Expenses - Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to both
classes, e.g. advisory fees, are allocated between them.
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.60% of
the first $200 million of the Fund's average daily net assets, plus 0.50% of the
Fund's average daily net assets in excess of $200 million to and including $500
million, plus 0.40% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.30% of the Fund's average daily net
assets in excess of $1 billion. This agreement requires AIM to reduce its fees
or, if necessary, make payments to the Fund to the extent required to satisfy
any expense limitations imposed by the securities laws or regulations thereunder
of any state in which the Fund's shares are qualified for sale.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the six months ended June 30, 1996, AIM
was reimbursed $37,944 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the six months ended June 30, 1996, AFS
was paid $162,736 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 designated
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 the Class B Plan) and (b) any contingent deferred sales charges payable to
AIM Distributors related to the Class B shares. During the six months ended
June 30, 1996, the Class A shares and the Class B shares paid AIM Distributors
$208,801 and $371,580, respectively, as compensation under the Plans.
14
<PAGE> 17
Financials
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES (continued)
AIM Distributors received commissions of $65,012 from sales of the Class A
shares of the Fund during the six months ended June 30, 1996. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended June 30,
1996, AIM Distributors received $63,863 in contingent deferred sales charges
imposed on redemptions of Fund shares. Certain officers and trustees of the
Trust are officers and directors of AIM, AIM Distributors and AFS.
During the six months ended June 30, 1996, the Fund paid legal fees of $1,540
for services rendered by Kramer, Levin, Naftalis & 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 $3,600,000 committed line of credit with a syndicate administered
by The Chase Manhattan Bank d/b/a Chemical Bank. Interest on borrowings under
the line of credit is payable on maturity or prepayment date. During the six
months ended June 30, 1996, 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.
Effective July 19, 1996, the Fund may borrow up to the lesser of
i) $325,000,000 or ii) the limits set by its prospectus for borrowings, under
the line of credit administered by The Chase Manhattan Bank d/b/a Chemical
Bank. The Fund and other funds advised by AIM which are parties to the line
of credit may borrow on a first come, first serve basis.
NOTE 5 - INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 1996 was
$81,281,479 and $82,374,888, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of June 30, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $43,558,746
- -----------------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (3,892,389)
- -----------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $39,666,357
===========================================================================================================
</TABLE>
Cost of investments for tax purposes is $200,412,227.
NOTE 6 - SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 1996 and
the year ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
----------------------- -----------------------
Shares Value Shares Value
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Sold:
Class A 1,576,964 $23,138,223 3,040,993 $39,908,471
- ------------------------------------------------------------------------------------------------------------
Class B 951,547 13,837,126 2,223,714 29,286,592
- ------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 162,589 2,410,495 417,851 5,505,279
- ------------------------------------------------------------------------------------------------------------
Class B 45,261 800,050 106,557 1,413,598
- ------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (2,418,348) (35,426,102) (4,470,353) (58,179,649)
- ------------------------------------------------------------------------------------------------------------
Class B (676,136) (9,927,939) (1,083,006) (14,061,251)
- ------------------------------------------------------------------------------------------------------------
(358,123) $(5,168,147) 235,756 $3,873,040
============================================================================================================
</TABLE>
15
<PAGE> 18
Financials
NOTE 7 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a Class A share
outstanding during the six months ended June 30, 1996, each of the years in the
seven-year period ended December 31, 1995 and the period January 18, 1988 (date
operations commenced) through December 31, 1988 and for a Class B share
outstanding during the six months ended June 30, 1996, 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>
Class A Shares
-------------------------------------------------------------------------------------------------------
December 31,
June 30, ------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992(a) 1991 1990 1989 1988
-------- -------- -------- -------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 14.59 $ 11.85 $ 14.09 $ 13.31 $ 13.75 $ 12.45 $ 13.73 $ 10.99 $ 10.00
- ------------------ -------- -------- -------- -------- -------- ------- ------- ------- -------
Income from
investment
operations:
Net investment
income 0.27 0.55 0.59 0.60 0.67 0.70 0.66 0.77 0.82
- ------------------ -------- -------- -------- -------- -------- ------- ------- ------- -------
Net gains
(losses) on
securities
(both realized
and unrealized) 0.40 2.71 (2.20) 1.02 0.36 2.12 (1.10) 3.06 0.83
- ------------------ -------- -------- -------- -------- -------- ------- ------- ------- -------
Total from
investment
operations 0.67 3.26 (1.61) 1.62 1.03 2.82 (0.44) 3.83 1.65
- ------------------ -------- -------- -------- -------- -------- ------- ------- ------- -------
Less
distributions:
Dividends from
net investment
income (0.24) (0.52) (0.60) (0.61) (0.68) (0.66) (0.70) (0.69) (0.66)
- ------------------ -------- -------- -------- -------- -------- ------- ------- ------- -------
Distributions
from net
realized
capital gains -- -- -- (0.23) (0.79) (0.86) (0.14) (0.40) --
- ------------------ -------- -------- -------- -------- -------- ------- ------- ------- -------
Returns of
capital -- -- (0.03) -- -- -- -- -- --
- ------------------ -------- -------- -------- -------- -------- ------- ------- ------- -------
Total
distributions (0.24) (0.52) (0.63) (0.84) (1.47) (1.52) (0.84) (1.09) (0.66)
- ------------------ -------- -------- -------- -------- -------- ------- ------- ------- -------
Net asset value,
end of period $ 15.02 $ 14.59 $ 11.85 $ 14.09 $ 13.31 $ 13.75 $ 12.45 $ 13.73 $ 10.99
================== ======== ======== ======== ======== ======== ======= ======= ======= =======
Total return(b) 4.64% 28.07% (11.57)% 12.32% 7.92% 23.65% (2.98)% 36.11% 17.03%
================== ======== ======== ======== ======== ======== ======= ======= ======= =======
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $165,373 $170,624 $150,515 $200,016 $111,771 $91,939 $69,541 $58,307 $20,104
================== ======== ======== ======== ======== ======== ======= ======= ======= =======
Ratio of expenses
to average net
assets 1.14% (c) 1.21% 1.18% 1.16% 1.17% 1.23% 1.21%(d) 1.05%(d) 1.22%(d)(f)
================== ======== ======== ======== ======== ======== ======= ======= ======= =======
Ratio of net
investment income
to average
net assets 3.68% (c) 4.20% 4.67% 4.21% 4.96% 5.36% 5.21%(e) 6.13%(e) 7.63%(e)(f)
================== ======== ======== ======== ======== ======== ======= ======= ======= =======
Portfolio turnover
rate 34% 88% 101% 76% 148% 169% 123% 115% 87%
================== ======== ======== ======== ======== ======== ======= ======= ======= =======
<CAPTION>
Class B Shares
-----------------------------------------
December 31,
June 30, -----------------------------
1996 1995 1994 1993
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value,
beginning of
period $ 14.60 $ 11.84 $ 14.08 $ 15.30
- ------------------ ------- ------- ------- -------
Income from
investment
operations:
Net investment
income 0.20 0.44 0.47 0.17
- ------------------ ------- ------- ------- -------
Net gains
(losses) on
securities
(both realized
and unrealized) 0.41 2.73 (2.19) (0.98)
- ------------------ ------- ------- ------- -------
Total from
investment
operations 0.61 3.17 (1.72) (0.81)
- ------------------ ------- ------- ------- -------
Less
distributions:
Dividends from
net investment
income (0.19) (0.41) (0.49) (0.17)
- ------------------ ------- ------- ------- -------
Distributions
from net
realized
capital gains -- -- -- (0.24)
- ------------------ ------- ------- ------- -------
Returns of
capital -- -- (0.03) --
- ------------------ ------- ------- ------- -------
Total
distributions (0.19) (0.41) (0.52) (0.41)
- ------------------ ------- ------- ------- -------
Net asset value,
end of period $ 15.02 $ 14.60 $ 11.84 $ 14.08
================== ======= ======= ======= =======
Total return(b) 4.18% 27.16% (12.35)% (5.32)%
================== ======= ======= ======= =======
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $77,547 $70,693 $42,568 $23,892
================== ======= ======= ======= =======
Ratio of expenses
to average net
assets 1.91% (c) 1.97% 2.07% 1.99%(f)
================== ======= ======= ======= =======
Ratio of net
investment income
to average
net assets 2.91% (c) 3.44% 3.78% 3.38%(f)
================== ======= ======= ======= =======
Portfolio turnover
rate 34% 88% 101% 76%
================== ======= ======= ======= =======
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Total returns do not deduct sales charges and for periods less than one year
are not annualized.
(c) Ratios for Class A are annualized and based on average daily net assets of
$167,524,887. Ratios for Class B are annualized and based on average daily
net assets of $74,515,644.
(d) Ratios of expenses to average net assets prior to reduction of advisory fees
were 1.22%, 1.11% and 1.69% (annualized) for 1990-88, respectively.
(e) Ratios of net investment income to average net assets prior to reduction of
advisory fees were 5.20%, 6.07% and 7.16% (annualized) for 1990-88,
respectively.
(f) Annualized.
16
<PAGE> 19
Trustees &
Officers
<TABLE>
<S> <C> <C>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman and Chief Executive Officer Chairman Suite 1919
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Formerly Director, President, and Chief A I M Advisors, Inc.
Executive Officer John J. Arthur 11 Greenway Plaza
COMSAT Corporation Senior Vice President and Treasurer Suite 1919
Houston, TX 77046
Owen Daly II Gary T. Crum
Director Senior Vice President TRANSFER AGENT
Cortland Trust Inc. A I M Fund Services, Inc.
Scott G. Lucas P.O. Box 4739
Carl Frischling Senior Vice President Houston, TX 77210-4739
Partner
Kramer, Levin, Naftalis & Frankel Carol F. Relihan CUSTODIAN
Senior Vice President and Secretary State Street Bank & Trust Company
Robert H. Graham 225 Franklin Street
President and Chief Operating Officer Robert G. Alley Boston, MA 02110
A I M Management Group Inc. Vice President
COUNSEL TO THE FUND
John F. Kroeger Stuart W. Coco Ballard Spahr
Formerly Consultant Vice President Andrews & Ingersoll
Wendell & Stockel Associates, Inc. 1735 Market Street
Melville B. Cox Philadelphia, PA 19103
Lewis F. Pennock Vice President
Attorney COUNSEL TO THE TRUSTEES
Karen Dunn Kelley Kramer, Levin, Naftalis & Frankel
Ian W. Robinson Vice President 919 Third Avenue
Consultant; Formerly Executive New York, NY 10022
Vice President and Jonathan C. Schoolar
Chief Financial Officer Vice President DISTRIBUTOR
Bell Atlantic Management A I M Distributors, Inc.
Services, Inc. Dana R. Sutton 11 Greenway Plaza
Vice President and Assistant Treasurer Suite 1919
Louis S. Sklar Houston, TX 77046
Executive Vice President P. Michelle Grace
Hines Interests Assistant Secretary
Limited Partnership
David L. Kite
Assistant Secretary
Nancy L. Martin
Assistant Secretary
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>
<PAGE> 20
<TABLE>
<S> <C>
[PHOTO OF 11 GREENWAY PLAZA THE AIM FAMILY OF FUNDS--Registered Trademark--
APPEARS HERE]
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Capital Development Fund
AIM Constellation Fund
AIM Global Aggressive Growth Fund
GROWTH
AIM Blue Chip Fund
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 Management Group has provided *AIM Aggressive Growth Fund was
leadership in the mutual fund closed to new investors on July 18,
industry since 1976 and currently 1995. **On September 25, 1995, AIM
manages approximately $55 billion Government Securities Fund became
in assets for more than 3 million AIM Intermediate Government Fund.
shareholders, including individual For more complete information about
investors, corporate clients, and any AIM Fund(s), including sales
financial institutions. The AIM charges and expenses, ask your
Family of Funds--Registered financial consultant or securities
Trademark-- is distributed dealer for a free prospectus(es).
nationwide, and AIM today ranks Please read the prospectus(es)
among the nation's top 15 mutual carefully before you invest or send
fund companies in assets under money.
management, according to Lipper
Analytical Services, Inc.
[AIM LOGO APPEARS HERE]
-----------------
A I M Distributors, Inc. BULK RATE
11 Greenway Plaza, Suite 1919 U.S. POSTAGE
Houston, TX 77046 PAID
HOUSTON, TX
Permit No. 1919
-----------------
</TABLE>
