<PAGE> 1
[COVER PHOTO APPEARS HERE]
AIM INTERMEDIATE
GOVERNMENT FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT JUNE 30, 1996
<PAGE> 2
AIM INTERMEDIATE GOVERNMENT FUND
For shareholders who seek a high level of current income and relative price
stability. The Fund invests in a portfolio of U.S. government securities.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Intermediate Government 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 4.75% 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 The 30-day yield is calculated on the basis of a formula defined by the
SEC. The formula is based on the portfolio's potential earnings from
dividends, interest, yield-to-maturity or yield-to-call of the bonds in the
portfolio, net of all expenses and expressed on an annualized basis.
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.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Fund had an average quality rating of AAAf, the highest such rating
assigned by Standard & Poor's Corporation (S&P), a widely known
credit-rating agency. S&P's ratings are historical and are based on an
annual analysis of the Fund's credit quality, composition, and management.
o Government securities, such as U.S. Treasury bills, notes, and bonds, offer
a high degree of safety and are guaranteed as to the timely payment of
principal and interest if held to maturity. Fund shares are not insured and
their value and yield will vary with market conditions.
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
Dear Fellow Shareholder:
[PHOTO OF During periods of market volatility, I am reminded of a
Charles T. story. When asked what the market was going to do, J.P.
Bauer, Morgan reportedly replied, "It will fluctuate." Fixed-
Chairman of income investors can certainly agree with that statement:
the Board of Bond markets have undergone major shifts in momentum at
the Fund, least twice in the first six months of 1996 as investors
APPEARS HERE] worried first about the possibility of recession and then
about rising inflation.
Those of you who are long-time investors, and those
who are brand-new shareholders in The AIM Family of Funds--Registered
Trademark--, should recognize that periods of falling prices in both the stock
and bond markets are inevitable. Indeed, we can learn important lessons about
investing in periods of market uncertainty.
In our experience, we have observed that the best action to take is to
stay focused--not on the market, but on your own long-term goals. The market
can change from day to day. Those who try to "time" the market, over time, tend
to be less successful than those who continue to follow a disciplined
investment strategy.
Short-term volatility in financial markets may tempt some investors to
liquidate stock and bond investments, regardless of their personal financial
objectives. Remember that time is the best medicine for uncertain markets. The
market's performance in recent months has been driven by concerns about the
possibility of an overheated economy and rising inflation. However, the latest
economic data suggest conditions that prompted 1995's strong market performance
should continue: Corporate earnings are healthy and economic growth is
moderate, without significant inflation.
You may cushion the effects of changing markets and reduce your risk
exposure in any one type of security by diversification--spreading your assets
across several kinds of investments. Prudent investors maintain a balanced
portfolio of stock and bond investments, with due consideration for their
personal financial objectives, risk tolerance, and investment time horizon.
There is one constant you can count on, regardless of changing markets--
AIM's commitment to you, our shareholders. At AIM, we take our responsibility
to you very seriously in managing a well-conceived and significantly
diversified menu of mutual funds. AIM investment management teams provide a
blend of skills, education, experience, and maturity that produces a balanced,
thoughtful approach to decision-making and quality investment products.
Consistent performance, coupled with outstanding customer service and a highly
professional staff, has helped AIM build relationships with 3 million
shareholders over the past 20 years.
Thank you for continuing to rely on AIM Intermediate Government Fund. If
you have any questions or comments 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
-----------------
. . . the best
action to take is
to stay focused--
not on the market,
but on your own
long-term goals.
-----------------
<PAGE> 4
THE MANAGERS' OVERVIEW
MARKET VOLATILITY CHALLENGES
INVESTORS IN 1996
A roundtable discussion with the fund management team for AIM Intermediate
Government Fund about the six-month reporting period ended June 30, 1996.
- --------------------------------------------------------------------------------
Q. HOW DID AIM INTERMEDIATE GOVERNMENT FUND PERFORM DURING THE REPORTING
PERIOD?
A. It was a difficult period for fixed-income investors. The Fund posted total
returns of -1.81% and -2.11% for Class A and Class B shares, respectively.
As of June 30, 1996, the Fund's 30-day yield was 6.00% for Class A shares
and 5.55% for Class B shares, based on maximum offering price. Net assets in
the Fund rose from $238 million to $246 million as of June 30, 1996.
Q. WHAT WERE CONDITIONS LIKE IN THE BOND MARKET THE PAST SIX MONTHS?
A. Uncertainty dominated bond markets as investors became increasingly
concerned about the possibility of rising inflation. The rate of growth of
the gross domestic product shot up to 2.0% in the first quarter of 1996, and
growth in the second quarter had been predicted at 3.5% to 5%.
The foremost concern was that the Federal Reserve Board would nudge
interest rates higher to slow economic growth and forestall inflation, and
that drove most bond yields higher--and prices lower--during most of the
reporting period.
Q. HOW ARE CONDITIONS IN 1996 DIFFERENT FROM 1994, WHEN BONDS ALSO HAD A
DIFFICULT PERIOD?
A. During 1994, the Fed was raising interest rates aggressively to rein in a
spirited surge in economic growth. There also were striking commodity
pressures as well as major structural changes in bond markets due to the
unwinding of derivative positions.
So far in 1996, economic strength has been stronger than expected, but
with little threat of inflation. The Fed has elected to leave interest rates
unchanged. Despite mounting evidence that the economy is growing at a
reasonable pace without inflation, investor concern over inflation continued
to fuel market volatility and drive interest rates higher.
Q. HOW DID THE FUND TAKE ADVANTAGE OF THE CHANGING MARKET ENVIRONMENT?
A. The Fund increased weighting in mortgage securities to capitalize on
improving conditions in the mortgage sector. As mortgage interest rates
topped 8%, homeowners were discouraged from refinancing and the rate of
mortgage prepayments slowed appreciably. Long-term mortgage rates as
measured by the Federal National Mortgage Association (FNMA) 30-year
================================================================================
MARKETS AT A GLANCE--SIX-MONTH YIELD COMPARISONS
AS OF 6/30/96
<TABLE>
<CAPTION>
====================================================================================
MORTGAGE MARKETS U.S. TREASURY MARKETS
6/96 12/95 6/96 12/95
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FREDDIE MAC HOME LOAN
30-YEAR FIXED 8.23% 7.25% 1-YEAR TREASURY BILLS 5.67% 5.13%
1-YEAR ADJUSTABLE 5.38 5.38 2-YEAR TREASURY NOTES 6.11 5.15
3-YEAR TREASURY NOTES 6.27 5.21
FANNIE MAE HOME LOAN 5-YEAR TREASURY NOTES 6.46 5.37
30-YEAR FIXED 8.19% 7.22%
1-YEAR ADJUSTABLE 6.85 6.15 Sources: Barron's and Bloomberg
FREDDIE MAC REFERS TO FEDERAL HOME LOAN
MORTGAGE CORPORATION (FHLMC). FANNIE
MAE REFERS TO FEDERAL NATIONAL MORTGAGE
ASSOCIATION (FNMA).
====================================================================================
</TABLE>
========================================
CURRENT YIELDS
30-DAY YIELDS AS OF 6/30/96
6-MONTH AIM INTERMEDIATE
CDS* GOVERNMENT FUND
CLASS A SHARES
4.43% 6.00%
5.55% was the 30-day yield for
the Fund's Class B shares as of
June 30, 1996.
*Bank certificates of deposit,
which are insured by the FDIC
for up to $100,000, are
short-term investments that pay
fixed principal and interest, but
are subject to fluctuating rollover
rates and early withdrawal penalties.
CD income is calculated using the
six-month annualized average monthly
CD rate reported by the Bank Rate
Monitor. Fund shares are not insured
and their value and yield will vary
with market conditions.
========================================
2
<PAGE> 5
commitment rate started the period at 7.12% and ended the period at 8.20%.
The Fund benefited from increased investment in the mortgage sector as
lower new issuance improved the supply/demand profile in the market for
mortgage investments. Improved relative value triggered renewed investor
interest in the mortgage sector compared to the corporate bond market. The
incremental yield that 30-year mortgages provided over the 10-year U.S.
Treasury note averaged 110 basis points. (A basis point is 1/100 of a
percentage point.)
Q. HAVE THERE BEEN ANY OTHER CHANGES IN THE FUND?
A. The Fund also increased cash positions, and shortened weighted average
maturity and duration. Weighted average maturity was shortened to just under
seven years, and duration to almost four years. On June 30, 1996, the Fund
had approximately 63% of its assets in mortgage-backed securities, 15% in
U.S. Treasury securities, and 10% in U.S. agency securities. The remaining
assets were invested in cash and cash-equivalent securities. Should interest
rates increase during the balance of 1996, the Fund would anticipate
increased weighting across the U.S. Treasury sector.
=====================================================================
PORTFOLIO COMPOSITION
AS OF 6/30/96, AS A PERCENTAGE
OF TOTAL INVESTMENTS.
=====================================================================
MORTGAGE U.S TREASURY U.S. AGENCY CASH
OBLIGATIONS OBLIGATIONS OBLIGATIONS OBLIGATIONS
- ---------------------------------------------------------------------
63.3% 15.4% 9.6% 11.7%
=====================================================================
MORTGAGE OBLIGATIONS
- ---------------------------------------------------------------------
Federal National Mortgage Assn. 49.6%
Federal Home Loan Mortgage Corp. 38.5
Government National Mortgage Assn. 11.9
=====================================================================
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.
Q. WHAT DO YOU THINK ABOUT THE NEW "INFLATION-INDEXED" BONDS?
A. Inflation-indexed bonds are a new kind of security to be issued by the U.S.
Treasury. The inflation-indexed bond pays a variable coupon at a fixed
spread above an inflation index like the Consumer Price Index or Employment
Cost Index. The main attraction for these bonds is the opportunity for
investors to earn guaranteed returns in excess of inflation.
The timing of when the U.S. bonds will be brought to market remains
uncertain--the Treasury estimates that issuance may begin as early as
December 1996. We can't know until then how well the bonds will be received
in the U.S. Similar bonds are actively traded in Canada and the United
Kingdom and have been popular with individual investors since their
introduction.
Q. WHAT IS YOUR MARKET OUTLOOK FOR THE NEXT FEW MONTHS?
A. We will continue to manage the Fund to optimize stability in a volatile
environment. The specter of possible inflation continues to concern
investors, despite mounting evidence that the U.S. economy is growing
reasonably and that inflationary pressures remain modest. At its July
meeting, the Fed elected to leave monetary policy unchanged; the outlook for
the rest of 1996 is less certain.
The continued pace of economic growth is the key. Reports of
accelerating economic growth during the first half of 1996, and possibly in
the third quarter as well, have prompted some analysts to predict that the
Fed will raise short-term interest rates in the coming months. Others have
suggested that market interest rates that have been rising for most of the
year may have forestalled any inflation threat, precluding the necessity for
Fed intervention. The Fed expects economic growth will slow during the
second half of the year, and that would lessen the likelihood that monetary
policy would be tightened.
----------------------
The Fed expects
economic growth
will slow
during the second half
of the year,
and that would lessen
the likelihood that
monetary policy
would be tightened.
----------------------
3
<PAGE> 6
Financials
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
<S> <C> <C>
U.S. GOVERNMENT AGENCIES-81.14%
FEDERAL HOME LOAN BANK-3.92%
Medium term notes
$ 4,000,000 7.31%, 07/06/01 $ 4,118,600
- ---------------------------------------------------------------------------------------------
2,500,000 7.78%, 10/19/01 2,627,950
- ---------------------------------------------------------------------------------------------
2,800,000 7.36%, 07/01/04 2,876,440
- ---------------------------------------------------------------------------------------------
9,622,990
- ---------------------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP.-27.16%
Pass through certificates
8,382,611 9.00%, 12/01/05 to 09/01/20 8,764,425
- ---------------------------------------------------------------------------------------------
4,828,085 8.00%, 07/01/06 to 06/01/10 4,930,777
- ---------------------------------------------------------------------------------------------
2,491,018 8.50%, 07/01/07 to 04/01/25 2,561,429
- ---------------------------------------------------------------------------------------------
4,166,100 10.50%, 09/01/09 to 01/01/21 4,538,286
- ---------------------------------------------------------------------------------------------
15,048,203 7.00%, 11/01/10 to 06/01/24 14,673,420
- ---------------------------------------------------------------------------------------------
55,402 10.00%, 11/01/11 to 02/01/16 58,973
- ---------------------------------------------------------------------------------------------
34,218 12.00%, 02/01/13 38,462
- ---------------------------------------------------------------------------------------------
10,290,216 9.50%, 04/01/25 10,966,570
- ---------------------------------------------------------------------------------------------
20,000,000 8.00%, 07/15/26 TBA(a) 20,206,250
- ---------------------------------------------------------------------------------------------
66,738,592
- ---------------------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-41.71%
Debentures
3,500,000 8.625%, 11/10/04 3,665,550
- ---------------------------------------------------------------------------------------------
4,500,000 8.50%, 02/01/05 4,701,060
- ---------------------------------------------------------------------------------------------
3,000,000 7.875%, 02/24/05 3,175,470
- ---------------------------------------------------------------------------------------------
Medium term notes
5,000,000 6.59%, 05/24/01 4,995,500
- ---------------------------------------------------------------------------------------------
Pass through certificates
48,512 8.50%, 01/01/07 to 03/01/07 50,224
- ---------------------------------------------------------------------------------------------
24,961,980 7.50%, 06/01/10 to 08/01/25 24,868,676
- ---------------------------------------------------------------------------------------------
4,784,510 6.50%, 08/01/10 4,639,252
- ---------------------------------------------------------------------------------------------
10,826,335 7.00%, 05/01/11 to 12/01/25 10,540,522
- ---------------------------------------------------------------------------------------------
10,000,000 7.50%, 07/17/11 TBA(a) 10,056,250
- ---------------------------------------------------------------------------------------------
1,955,655 10.50%, 03/01/14 to 07/01/19 2,151,201
- ---------------------------------------------------------------------------------------------
4,126,724 9.50%, 07/01/16 to 08/01/22 4,445,303
- ---------------------------------------------------------------------------------------------
10,941,204 10.00%, 07/01/20 to 08/01/20 11,877,880
- ---------------------------------------------------------------------------------------------
3,143,215 9.00%, 04/01/25 to 05/01/25 3,283,653
- ---------------------------------------------------------------------------------------------
13,905,388 8.00%, 04/01/25 to 06/01/26 14,018,830
- ---------------------------------------------------------------------------------------------
102,469,371
- ---------------------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-8.35%
Pass through certificates
1,316,625 9.00%, 10/15/08 to 11/15/21 1,390,841
- ---------------------------------------------------------------------------------------------
2,769,725 9.50%, 06/15/09 to 12/15/20 2,980,562
- ---------------------------------------------------------------------------------------------
8,093,340 10.00%, 11/15/09 to 07/15/24 8,855,139
- ---------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 7
Financials
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
<S> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-continued
$ 274,763 11.00%, 12/15/09 to 12/15/15 $ 305,854
- ---------------------------------------------------------------------------------------------
540,873 13.50%, 07/15/10 to 04/15/15 629,267
- ---------------------------------------------------------------------------------------------
287,659 12.50%, 11/15/10 331,435
- ---------------------------------------------------------------------------------------------
582,667 13.00%, 01/15/11 to 05/15/15 674,792
- ---------------------------------------------------------------------------------------------
1,006,298 12.00%, 01/15/13 to 07/15/15 1,149,180
- ---------------------------------------------------------------------------------------------
2,314,589 10.50%, 07/15/13 to 10/15/21 2,551,811
- ---------------------------------------------------------------------------------------------
1,634,771 8.00%, 03/15/23 1,658,247
- ---------------------------------------------------------------------------------------------
20,527,128
- ---------------------------------------------------------------------------------------------
Total U.S. Government Agencies 199,358,081
- ---------------------------------------------------------------------------------------------
U.S. TREASURY SECURITIES-17.16%
U.S. TREASURY NOTES & BONDS-17.08%
1,960,000 6.375%, 05/15/99 1,964,900
- ---------------------------------------------------------------------------------------------
3,000,000 7.75%, 11/30/99 3,125,460
- ---------------------------------------------------------------------------------------------
4,000,000 5.875%, 06/30/00 3,924,840
- ---------------------------------------------------------------------------------------------
2,000,000 5.75%, 10/31/00 1,948,640
- ---------------------------------------------------------------------------------------------
2,000,000 5.50%, 12/31/00 1,927,820
- ---------------------------------------------------------------------------------------------
8,000,000 6.25%, 04/30/01 7,926,960
- ---------------------------------------------------------------------------------------------
7,500,000 7.25%, 05/15/16 7,683,150
- ---------------------------------------------------------------------------------------------
8,500,000 7.50%, 11/15/16 to 11/15/24 8,957,825
- ---------------------------------------------------------------------------------------------
4,000,000 8.125%, 08/15/19 4,489,080
- ---------------------------------------------------------------------------------------------
41,948,675
- ---------------------------------------------------------------------------------------------
U.S. TREASURY STRIPS-0.08%(b)
1,000,000 6.80%, 11/15/18 203,650
- ---------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 42,152,325
- ---------------------------------------------------------------------------------------------
Total Investments (excluding Repurchase Agreements) 241,510,406
- ---------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT-13.07%(c)
32,111,817 Daiwa Securities America Inc.
5.50%, 07/01/96(d) 32,111,817
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-111.37% 273,622,223
- ---------------------------------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-(11.37%) (27,933,849)
- ---------------------------------------------------------------------------------------------
NET ASSETS-100.00% $245,688,374
=============================================================================================
</TABLE>
Notes to Schedule of Investments:
(a) At 06/30/96, cost of securities purchased on a when-issued basis totaled
$29,979,688. These securities are also subject to dollar roll transactions.
See Note 1, Section C of Notes to Financial Statements.
(b) U.S. Treasury STRIPS 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) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(d) 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.
Abbreviation:
TBA-To Be Announced
See Notes to Financial Statements.
5
<PAGE> 8
Financials
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $239,195,887) $241,510,406
- -----------------------------------------------------------------------------------------
Repurchase agreements (cost $32,111,817) 32,111,817
- -----------------------------------------------------------------------------------------
Receivables for:
Fund shares sold 655,612
- -----------------------------------------------------------------------------------------
Interest 2,321,280
- -----------------------------------------------------------------------------------------
Investment for deferred compensation plan 16,848
- -----------------------------------------------------------------------------------------
Other assets 36,203
- -----------------------------------------------------------------------------------------
Total assets 276,652,166
- -----------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 29,979,688
- -----------------------------------------------------------------------------------------
Fund shares redeemed 264,828
- -----------------------------------------------------------------------------------------
Dividends 343,199
- -----------------------------------------------------------------------------------------
Deferred compensation plan 16,848
- -----------------------------------------------------------------------------------------
Accrued advisory fees 96,327
- -----------------------------------------------------------------------------------------
Accrued administrative service fees 5,086
- -----------------------------------------------------------------------------------------
Accrued distribution fees 178,720
- -----------------------------------------------------------------------------------------
Accrued transfer agent fees 39,212
- -----------------------------------------------------------------------------------------
Accrued operating expenses 39,884
- -----------------------------------------------------------------------------------------
Total liabilities 30,963,792
- -----------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $245,688,374
=========================================================================================
NET ASSETS:
Class A $173,572,357
=========================================================================================
Class B $ 72,116,017
=========================================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 18,838,546
=========================================================================================
Class B 7,831,025
=========================================================================================
Class A:
Net asset value and redemption price per share $ 9.21
- -----------------------------------------------------------------------------------------
Offering price per share:
(Net asset value of $9.21 divided by 95.25%) $ 9.67
=========================================================================================
Class B:
Net asset value and offering price per share $ 9.21
=========================================================================================
</TABLE>
See Notes to Financial Statements.
6
<PAGE> 9
Financials
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
INVESTMENT INCOME:
<S> <C>
Interest $ 9,445,862
- -----------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 580,310
- -----------------------------------------------------------------------------------------
Custodian fees 24,319
- -----------------------------------------------------------------------------------------
Distribution fees -- Class A 216,439
- -----------------------------------------------------------------------------------------
Distribution fees -- Class B 337,074
- -----------------------------------------------------------------------------------------
Administrative service fees 33,617
- -----------------------------------------------------------------------------------------
Interest 94,255
- -----------------------------------------------------------------------------------------
Transfer agent fees -- Class A 128,950
- -----------------------------------------------------------------------------------------
Transfer agent fees -- Class B 51,917
- -----------------------------------------------------------------------------------------
Trustees' fees 4,316
- -----------------------------------------------------------------------------------------
Other 72,038
- -----------------------------------------------------------------------------------------
Total expenses 1,543,235
- -----------------------------------------------------------------------------------------
Net investment income 7,902,627
- -----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES:
Net realized gain (loss) on sales of investment securities (3,960,110)
- -----------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment securities (8,651,320)
- -----------------------------------------------------------------------------------------
Net gain (loss) on investment securities (12,611,430)
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ (4,708,803)
=========================================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
Financials
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1996 and year ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
<S> <C> <C>
OPERATIONS:
Net investment income $ 7,902,627 $14,368,900
- ------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment
securities (3,960,110) (1,382,949)
- ------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities (8,651,320) 16,712,997
- ------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (4,708,803) 29,698,948
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (5,852,130) (11,460,957)
- ------------------------------------------------------------------------------------------
Class B (1,996,002) (2,319,847)
- ------------------------------------------------------------------------------------------
Return of capital:
Class A -- (693,899)
- ------------------------------------------------------------------------------------------
Class B -- (162,343)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A 6,363,951 5,708,304
- ------------------------------------------------------------------------------------------
Class B 14,263,653 35,091,651
- ------------------------------------------------------------------------------------------
Net increase in net assets 8,070,669 55,861,857
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 237,617,705 181,755,848
- ------------------------------------------------------------------------------------------
End of period $245,688,374 $237,617,705
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $260,060,698 $239,433,094
- ------------------------------------------------------------------------------------------
Undistributed net investment income 41,717 (12,778)
- ------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of
investment securities (16,728,560) (12,768,450)
- ------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 2,314,519 10,965,839
- ------------------------------------------------------------------------------------------
$245,688,374 $237,617,705
==========================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
Financials
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Intermediate Government 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. The Fund's investment objective
is to seek to achieve a high level of current income consistent with reasonable
concern for safety of principal by investing in debt securities issued,
guaranteed or otherwise backed by the United States Government. Information
presented in these financial statements pertains only to the Fund.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations - Debt obligations that are issued or guaranteed by the
U.S. Government, its agencies, authorities, and instrumentalities 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, maturity and seasoning differential. Securities for which
market prices are not provided by the pricing service are valued at the mean
between the last bid and asked prices based upon quotes furnished by
independent sources. Securities for which market quotations are either 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.
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. Dividends to shareholders are declared
daily and are paid monthly.
C. Reverse Repurchase Agreements and Dollar Roll Transactions - A reverse
repurchase agreement involves the sale of securities held by the Fund, with
an agreement that the Fund will repurchase such securities at an agreed-upon
price and date. Proceeds from reverse repurchase agreements are treated as
borrowings. The agreements are collateralized by the underlying securities
and are carried at the amount at which the securities will subsequently be
repurchased as specified in the agreements.
The Fund may also engage in dollar roll transactions with respect to
mortgage securities issued by GNMA, FNMA and FHLMC. In a dollar roll
transaction, the Fund sells a mortgage security held in the portfolio to a
financial institution such as a bank or broker-dealer, and simultaneously
agrees to repurchase a substantially similar security (same type, coupon and
maturity) from the institution at a later date at an agreed upon price. The
mortgage securities that are repurchased will bear the same interest rate as
those sold, but generally will be collateralized by different pools of
mortgages with different prepayment histories. During the period between the
sale and repurchase, the Fund will not be entitled to receive interest and
principal payments on the securities sold. Proceeds of the sale will be
invested in short-term instruments, and the income from these investments,
together with any additional fee income received on the sale, could generate
income for the Fund exceeding the yield on the security sold.
Dollar roll transactions involve the risk that the market value of the
securities retained by the Fund may decline below the price of the securities
that the Fund has sold but is obligated to repurchase under the agreement. In
the event the buyer of securities in a dollar roll transaction files for
bankruptcy or becomes
9
<PAGE> 12
Financials
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES-continued
insolvent, the Fund's use of the proceeds from the sale of the securities may
be restricted pending a determination by the other party, or its trustee or
receiver, whether to enforce the Fund's obligation to repurchase the
securities. The Fund will limit its borrowings from banks, reverse repurchase
agreements and dollar roll transactions to an aggregate of 33-1/3% of its
total assets at the time of investment. The Fund will not purchase additional
securities when any borrowings from banks exceed 5% of the Fund's total
assets.
D. Federal Income Taxes - The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements. The Fund has a capital loss
carryforward of $12,521,212 (which may be carried forward to offset future
taxable capital gains, if any) which expires, if not previously utilized,
through the year 2003. The Fund cannot distribute capital gains to
shareholders until the tax loss carryforwards have been utilized.
E. Expenses - Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to both
classes, e.g. advisory fees, are allocated between them.
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays AIM an advisory fee at an annual rate of 0.50% of the
first $200 million of the Fund's average daily net assets, plus 0.40% of the
Fund's average daily net assets in excess of $200 million to and including $500
million, plus 0.35% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.30% of the Fund's average daily net
assets in excess of $1 billion. This agreement requires AIM to reduce its fees
or, if necessary, make payments to the Fund to the extent required to satisfy
any expense limitations imposed by the securities laws or regulations thereunder
of any state in which the Fund's shares are qualified for sale.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the six months ended June 30, 1996, AIM
was reimbursed $33,617 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, the
Fund paid AFS $103,774 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 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 periodic payments to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own Class A shares of the Fund. The Fund, pursuant to
the Class B Plan, pays AIM Distributors compensation at an annual rate of 1.00%
of the average daily net assets attributable to the Class B shares. Of this
amount, the Fund may pay a service fee of 0.25% of the average daily net assets
of the Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee under such
Plans would constitute an asset-based sales charge. The Plans also impose a cap
on the total sales charges, including asset-based sales charges, that may be
paid by the respective classes. AIM Distributors may, from time to time, assign,
transfer or pledge to one or more designees, 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 received by
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
$216,439 and $337,074, respectively, as compensation under the Plans.
AIM Distributors received commissions of $134,184 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
10
<PAGE> 13
Financials
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES-continued
not included in, the proceeds from sales of Class A shares. During the six
months ended June 30, 1996, AIM Distributors received $34,567 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 $1,536
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 $3,200,000 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 commitment 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
$163,900,301 and $146,616,828, 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 $ 3,466,035
- -----------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (1,151,516)
- -----------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $ 2,314,519
===================================================================================
</TABLE>
Cost of investments for tax purposes is $271,307,704.
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 4,263,408 $40,200,366 5,766,866 $54,292,965
- ---------------------------------- ---------------------------------------------------------
Class B 2,709,541 25,552,592 4,740,977 44,702,493
- ---------------------------------- ---------------------------------------------------------
Issued as reinvestment of
dividends:
Class A 503,197 4,710,649 993,993 9,337,931
- ---------------------------------- ---------------------------------------------------------
Class B 146,823 1,372,437 172,523 1,627,255
- ---------------------------------- ---------------------------------------------------------
Reacquired:
Class A (4,102,860) (38,547,064) (6,189,567) (57,922,592)
- ---------------------------------- ---------------------------------------------------------
Class B (1,350,016) (12,661,376) (1,194,246) (11,238,097)
================================== =========================================================
2,170,093 $20,627,604 4,290,546 $40,799,955
================================== =========================================================
</TABLE>
11
<PAGE> 14
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
eight-year period ended December 31, 1995 and the period April 28, 1987 (date
operations commenced) through December 31, 1987 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 7, 1993 (date
sales commenced) through December 31, 1993.
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, ------------------------------------------------------------
CLASS A: 1996 1995 1994 1993 1992(a) 1991
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.70 $ 8.99 $ 10.05 $ 10.19 $ 10.34 $ 9.95
- ----------------------------------------------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.32 0.69 0.68 0.74 0.77 0.82
- ----------------------------------------------- -------- -------- -------- -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) (0.49) 0.73 (1.02) (0.04) (0.15) 0.41
- ----------------------------------------------- -------- -------- -------- -------- -------- --------
Total from investment operations (0.17) 1.42 (0.34) 0.70 0.62 1.23
- ----------------------------------------------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.32) (0.67) (0.58) (0.70) (0.74) (0.84)
- ----------------------------------------------- -------- -------- -------- -------- -------- --------
Distributions from net realized capital gains -- -- (0.04) (0.14) (0.03) --
- ----------------------------------------------- -------- -------- -------- -------- -------- --------
Distributions from capital -- (0.04) (0.10) -- -- --
- ----------------------------------------------- -------- -------- -------- -------- -------- --------
Total distributions (0.32) (0.71) (0.72) (0.84) (0.77) (0.84)
- ----------------------------------------------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 9.21 $ 9.70 $ 8.99 $ 10.05 $ 10.19 $ 10.34
=============================================== ======== ======== ======== ======== ======== ========
Total return(b) (1.81)% 16.28% (3.44)% 7.07% 6.26% 12.98%
=============================================== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $173,572 $176,318 $158,341 $139,586 $123,484 $101,409
=============================================== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets
(exclusive of interest expense)(c) 1.07%(d) 1.08% 1.04% 1.00% 0.98% 1.00%
=============================================== ======== ======== ======== ======== ======== ========
Ratio of net investment income to average net
assets(e) 6.76%(d) 7.36% 7.34% 7.08% 7.53% 8.15%
=============================================== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 68% 140% 109% 110% 42% 26%
=============================================== ======== ======== ======== ======== ======== ========
<CAPTION>
DECEMBER 31,
-------------------------------------------
CLASS A: 1990 1989 1988 1987
------- ------- ------- -------
<S> <<C> <C> <C> <C>
Net asset value, beginning of period $ 9.91 $ 9.70 $ 9.92 $ 10.00
- ----------------------------------------------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.87 0.90 0.89 0.55
- ----------------------------------------------- ------- ------- ------- -------
Net gains (losses) on securities (both
realized and unrealized) 0.01 0.15 (0.27) (0.14)
- ----------------------------------------------- ------- ------- ------- -------
Total from investment operations 0.88 1.05 0.62 0.41
- ----------------------------------------------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.84) (0.84) (0.84) (0.49)
- ----------------------------------------------- ------- ------- ------- -------
Distributions from net realized capital gains -- -- -- --
- ----------------------------------------------- ------- ------- ------- -------
Distributions from capital -- -- -- --
- ----------------------------------------------- ------- ------- ------- -------
Total distributions (0.84) (0.84) (0.84) (0.49)
- ----------------------------------------------- ------- ------- ------- -------
Net asset value, end of period $ 9.95 $ 9.91 $ 9.70 $ 9.92
=============================================== ======= ======= ======= =======
Total return(b) 9.39% 11.28% 6.43% 4.18%
=============================================== ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $61,463 $57,077 $48,372 $28,052
=============================================== ======= ======= ======= =======
Ratio of expenses to average net assets
(exclusive of interest expense)(c) 1.00% 1.00% 1.00% 1.20%(f)
=============================================== ======= ======= ======= =======
Ratio of net investment income to average net
assets(e) 8.85% 9.10% 9.11% 8.64%(f)
=============================================== ======= ======= ======= =======
Portfolio turnover rate 16% 15% 15% 35%
=============================================== ======= ======= ======= =======
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Does not deduct sales charges and is not annualized for periods less than
one year.
(c) Ratios of expenses to average net assets prior to reduction of advisory fee
and expense reimbursement were 1.05%, 1.04%, 1.04%, 1.10%, 1.13%, 1.08% and
1.08% for 1994-88, respectively.
(d) Ratios are annualized and based on average net assets of $174,586,206.
(e) Ratios of net investment income to average net assets prior to reduction of
advisory fee and expense reimbursement were 7.32%, 7.04%, 7.48%, 8.05%,
8.72%, 9.03% and 9.03% for 1994-88, respectively.
(f) Annualized.
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30. ---------------------------------
CLASS B: 1996 1995 1994 1993
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.69 $ 8.99 $ 10.04 $ 10.44
- ------------------------------------------------------------------------------ ------- ------- ------- -------
Income from investment operations:
Net investment income 0.28 0.63 0.61 0.21
- ------------------------------------------------------------------------------ ------- ------- ------- -------
Net gains (losses) on securities (both realized and unrealized) (0.48) 0.70 (1.02) (0.27)
- ------------------------------------------------------------------------------ ------- ------- ------- -------
Total from investment operations (0.20) 1.33 (0.41) (0.06)
- ------------------------------------------------------------------------------ ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.28) (0.59) (0.50) (0.20)
- ------------------------------------------------------------------------------ ------- ------- ------- -------
Distributions from net realized capital gains -- -- (0.04) (0.14)
- ------------------------------------------------------------------------------ ------- ------- ------- -------
Distributions from capital -- (0.04) (0.10) --
- ------------------------------------------------------------------------------ ------- ------- ------- -------
Total distributions (0.28) (0.63) (0.64) (0.34)
- ------------------------------------------------------------------------------ ------- ------- ------- -------
Net asset value, end of period $ 9.21 $ 9.69 $ 8.99 $ 10.04
============================================================================== ======= ======= ======= =======
Total return(a) (2.11)% 15.22% (4.13)% (0.52)%
============================================================================== ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $72,116 $61,300 $23,415 $ 6,160
============================================================================== ======= ======= ======= =======
Ratio of expenses to average net assets (exclusive of interest expense)(b) 1.81%(c) 1.86% 1.82% 1.71%(e)
============================================================================== ======= ======= ======= =======
Ratio of net investment income to average net assets(d) 6.02%(c) 6.58% 6.56% 6.37%(e)
============================================================================== ======= ======= ======= =======
Portfolio turnover rate 68% 140% 109% 110%
============================================================================== ======= ======= ======= =======
</TABLE>
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratio of expenses to average net assets prior to reduction of advisory fee
and expense reimbursement for the year ended December 31, 1994 and the
period ended December 31, 1993 were 1.87% and 2.18% (annualized),
respectively.
(c) Ratios are annualized and based on average net assets of $67,973,451.
(d) Ratio of net investment income to average net assets prior to reduction of
advisory fee and expense reimbursement for the year ended December 31, 1994
and the period ended December 31, 1993 were 6.50% and 5.90% (annualized),
respectively.
(e) Annualized.
12
<PAGE> 15
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
Executive Officer John J. Arthur A I M Advisors, Inc.
COMSAT Corporation Senior Vice President and Treasurer 11 Greenway Plaza
Suite 1919
Owen Daly II Gary T. Crum Houston, TX 77046
Director Senior Vice President
Cortland Trust Inc. TRANSFER AGENT
Scott G. Lucas
Carl Frischling Senior Vice President A I M Fund Services, Inc.
Partner P.O. Box 4739
Kramer, Levin, Naftalis & Frankel Carol F. Relihan Houston, TX 77210-4739
Senior Vice President and Secretary
Robert H. Graham CUSTODIAN
President and Chief Operating Officer Robert G. Alley
A I M Management Group Inc. Vice President State Street Bank & Trust Company
225 Franklin Street
John F. Kroeger Stuart W. Coco Boston, MA 02110
Formerly Consultant Vice President
Wendell & Stockel Associates, Inc. COUNSEL TO THE FUND
Melville B. Cox
Lewis F. Pennock Vice President Ballard Spahr
Attorney Andrews & Ingersoll
Karen Dunn Kelley 1735 Market Street
Ian W. Robinson Vice President Philadelphia, PA 19103
Consultant; Formerly Executive
Vice President and Jonathan C. Schoolar COUNSEL TO THE TRUSTEES
Chief Financial Officer Vice President
Bell Atlantic Management Kramer, Levin, Naftalis & Frankel
Services, Inc. Dana R. Sutton 919 Third Avenue
Vice President and Assistant Treasurer New York, NY 10022
Louis S. Sklar
Executive Vice President P. Michelle Grace DISTRIBUTOR
Hines Interests Assistant Secretary
Limited Partnership A I M Distributors, Inc.
David L. Kite 11 Greenway Plaza
Assistant Secretary Suite 1919
Houston, TX 77046
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> 16
<TABLE>
<S> <C>
[PHOTO OF 11 GREENWAY PLAZA APPEARS HERE] THE AIM FAMILY OF FUNDS--Registered Trademark--
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 industry closed to new investors on July 18,
since 1976 and currently manages 1995. **On September 25, 1995, AIM
approximately $55 billion in assets Government Securities Fund became
for more than 3 million shareholders, AIM Intermediate Government Fund.
including individual investors, For more complete information about
corporate clients, and financial any AIM Fund(s), including sales
institutions. The AIM Family of charges and expenses, ask your
Funds--Registered Trademark-- is financial consultant or securities
distributed nationwide, dealer for a free prospectus(es).
and AIM today ranks among the Please read the prospectus(es)
nation's top 15 mutual fund companies carefully before you invest or send
in assets under management, according money.
to Lipper Analytical Services, Inc.
---------------
[AIM LOGO APPEARS HERE] BULK RATE
U.S. POSTAGE
A I M Distributors, Inc. PAID
11 Greenway Plaza, Suite 1919 HOUSTON, TX
Houston, TX 77046 Permit No. 1919
---------------
</TABLE>
