<PAGE> 1
[COVER PHOTO WITH CLOCK, BOWLS, AND ANTIQUE CARPET.]
AIM VALUE FUND
[AIM LOGO
APPEARS HERE] SEMIANNUAL REPORT JUNE 30, 1996
<PAGE> 2
AIM VALUE FUND
For shareholders who seek long-term growth of capital through a portfolio that
consists primarily of stocks of companies that are undervalued relative to the
stock market as a whole.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Value 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 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 Dow Jones Industrial Average (DJIA) is a price-weighted average of 30
actively traded primarily industrial stocks.
o The Standard & Poor's 500 (S&P 500) is a group of unmanaged securities
widely regarded by investors to be representative of the stock market in
general.
o The Lipper Growth Fund Index represents an average of the performance of
the 30 largest growth funds. It is compiled by Lipper Analytical Services,
Inc., an independent mutual fund performance monitor.
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
results."
[PHOTO OF
Charles T. Bauer, As a mutual fund investor, you've seen this disclaimer on
Chairman of every piece of mail you've ever received about your fund.
the Board of You've seen it so often that you probably don't even think
the Fund, about it or question what it means. But you 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
shareholders 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
- ----------------------------
In a nutshell,
we are a Fund seeking
low price/earnings ratios
in a market with
high price/earnings ratios.
- ----------------------------
The Managers' Overview
BULL MARKET A CHALLENGE
FOR FUND'S INVESTMENT STYLE
A roundtable discussion with the Fund management team for AIM Value Fund about
the six-month reporting period ended June 30, 1996.
- --------------------------------------------------------------------------------
Q: HOW DID AIM VALUE FUND PERFORM DURING THE REPORTING PERIOD?
A: For the six months ended June 30, the Fund's total return was 5.26% for
Class A shares and 4.84% for Class B shares. While the Fund underperformed
the 10.09% return of the S&P 500 during the same period, it is important to
remember that the unmanaged S&P 500 is meant to represent the stock market
in general. The Fund pursues a specific value strategy, looking for stocks
we consider underpriced in the marketplace.
Q: WHY HAS THAT VALUE STRATEGY BEEN A DISADVANTAGE IN THE MARKET RECENTLY?
A: We are AIM's bargain hunters, and because of the prolonged bull market in
equities the past few years, bargains were becoming more and more difficult
to find.
In fact, AIM's philosophy has been demonstrated in the market:
Corporate earnings have been growing in double digits for four years, and
stock prices have followed them upward. As of the close of the period
covered by this report, there hadn't been a significant decline in the stock
market since 1990. As a result, there were almost no cheap stocks left.
In a nutshell, we are a Fund seeking low price/earnings ratios in a
market with high price/earnings ratios.
Q: WOULD YOU EXPLAIN THE FUND'S BARGAIN-HUNTING STRATEGY?
A: We describe it as looking for earnings growth at a discount. Our philosophy
holds that a stock's value ultimately follows the company's earnings growth.
But when researching securities for AIM Value Fund, we also examine such
other indicators as price/earnings ratio, price to sales, and price to book,
to see if the stock's price reflects its earnings quality. To qualify for
the Value portfolio, a stock must be undervalued in the market as well as
having a good earnings growth record.
Q: HOW HAVE YOU MANAGED THE PORTFOLIO IN A MARKET THAT IS INHOSPITABLE TO THIS
VALUE STRATEGY?
A: We've adhered to our discipline by not purchasing securities that don't fit
the value strategy. This has changed the face of the portfolio in some ways.
For example, we have had more net assets than usual in cash during the
reporting period. Keeping cash on hand means that the Fund has had the
liquidity to make investments as soon as attractive possibilities presented
themselves.
=============================================
Portfolio Composition
=============================================
As of 6/30/96
Total Number of Holdings: 232
TOP 10 EQUITY HOLDINGS
1. Ameritech Corp.
2. Federal National Mortgage Association
3. Baxter International, Inc.
4. Unicom Corp.
5. Ciba-Geigy A.G.
6. Canadian Pacific, Ltd.
7. American Electric Power Co.
8. Caremark International, Inc.
9. MFS Communications Co., Inc.
10. BellSouth Corp.
=============================================
Please keep in mind that the Fund's portfolio is subject to change and there is
no assurance the Fund will continue to hold any particular security.
2
<PAGE> 5
- -----------------------------------------------
AVERAGE ANNUAL
TOTAL RETURNS
FOR PERIODS ENDED 6/30/96.
INCLUDING SALES CHARGES.
CLASS A SHARES
Inception (5/1/84) 17.21%
10 Years 16.57
5 Years 18.92
1 Year 9.14*
CLASS B SHARES
Inception (10/18/93) 13.15%
1 Year 9.56*
15.50% and 14.56% were one-year returns
excluding sales charges for Class A and Class B
shares, respectively.
- -----------------------------------------------
In addition, we have increased the proportion of the Fund's overseas
holdings to about 17% from its more usual 5%. There are some very
attractive opportunities in Europe right now, largely because European
companies are just embarking on the kinds of restructurings that have made
American companies so much more profitable.
Ciba-Geigy, for instance, is merging with another European firm,
Sandoz, to form one of the world's largest pharmaceutical houses. Ciba-Geigy
recently received FDA approval for expanded use of a medication that treats
complications of cancers.
Asia--in particular Japan, where the stock market has been depressed
for an extended period--also has offered excellent opportunities.
Q: ARE THERE ANY PARTICULAR INDUSTRIES WHERE YOU HAVE FOUND GOOD INVESTMENT
POSSIBILITIES DURING THIS PERIOD?
A: Yes, including two that might surprise some people: utilities and food
processing. They're not glamour stocks, but stocks that have been
fulfilling expectations lately. Keep in mind that the Fund seeks to find as
much growth as possible at the lowest price. Analysts' earnings expectations
became optimistic during the recent prolonged period of rising earnings, but
we maintain that, strategically, it can be more important to buy a stock
that will deliver on expectations than one that will disappoint.
Q: WHAT DO YOU FORESEE OVER THE SHORT TERM?
A: While AIM anticipates predominantly good second-quarter corporate earnings
reports, we think we may be at the end of this long run-up in corporate
earnings. There were some hints of this late in 1995, and there has been
some deceleration in the pace of earnings growth. We will continue to follow
our value discipline and make investment decisions one security at a time.
The value investing style has served us well over the long term. We
believe it offers shareholders the strategic advantages of a potential
cushion should markets become less bullish and a way to diversify assets to
help manage risk.
================================================================================
GROWTH OF A $10,000 INVESTMENT
================================================================================
IN THOUSANDS. AS OF 6/30/96. INCLUDING SALES CHARGES.
PAST PERFORMANCE CANNOT GUARANTEE COMPARABLE FUTURE RESULTS.
AIM VALUE FUND LIPPER GROWTH
CLASS A SHARES S&P 500 FUND INDEX
5/1/84 $ 9,452 $10,000 $10,000
12/84 10,385 10,714 10,498
12/85 12,744 14,105 13,662
12/86 13,865 16,730 15,792
12/87 14,692 17,597 16,306
12/88 17,719 20,500 18,611
12/89 23,307 26,976 23,723
12/90 23,746 26,136 22,439
12/91 34,064 34,064 30,591
12/92 39,648 36,656 32,926
12/93 47,065 40,334 36,870
12/94 48,606 40,881 36,291
12/95 65,545 56,189 48,140
6/30/96 68,992 61,852 51,985
================================================================================
Source: Lipper Analytical Services and Towers Data Systems HYPO--Registered
Trademark--
3
<PAGE> 6
Financials
SCHEDULE OF INVESTMENTS
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-69.94%
AEROSPACE/DEFENSE-2.40%
950,000 Boeing Co. $ 82,768,750
- ---------------------------------------------------------------------------------------------
250,000 Northrop Grumman Corp. 17,031,250
- ---------------------------------------------------------------------------------------------
1,837,300 Sundstrand Corp. 67,291,112
- ---------------------------------------------------------------------------------------------
300,000 United Technologies Corp. 34,500,000
- ---------------------------------------------------------------------------------------------
201,591,112
- ---------------------------------------------------------------------------------------------
AIRLINES-0.44%
300,000 Delta Air Lines, Inc. 24,900,000
- ---------------------------------------------------------------------------------------------
300,000 Northwest Airlines Corp.-Class A(a) 11,850,000
- ---------------------------------------------------------------------------------------------
36,750,000
- ---------------------------------------------------------------------------------------------
AUTOMOBILE/TRUCK PARTS & TIRES-0.23%
500,000 Borg-Warner Automotive, Inc. 19,750,000
- ---------------------------------------------------------------------------------------------
BANKING (MONEY CENTER)-0.80%
400,000 Chase Manhattan Corp. 28,250,000
- ---------------------------------------------------------------------------------------------
800,000 National City Corp. 28,100,000
- ---------------------------------------------------------------------------------------------
300,000 U.S. Bancorp 10,837,500
- ---------------------------------------------------------------------------------------------
67,187,500
- ---------------------------------------------------------------------------------------------
BEVERAGES (SOFT DRINKS)-0.50%
1,200,000 PepsiCo, Inc. 42,450,000
- ---------------------------------------------------------------------------------------------
BIOTECHNOLOGY-0.29%
500,000 Guidant Corp. 24,625,000
- ---------------------------------------------------------------------------------------------
BUILDING MATERIALS-0.20%
358,800 Snap-On, Inc. 16,998,150
- ---------------------------------------------------------------------------------------------
BUSINESS SERVICES-0.74%
1,000,000 Dun & Bradstreet Corp. 62,500,000
- ---------------------------------------------------------------------------------------------
CABLE TELEVISION-0.26%
1,000,000 Cox Communications, Inc.-Class A(a) 21,625,000
- ---------------------------------------------------------------------------------------------
CHEMICALS (SPECIALTY)-1.51%
368,200 Cabot Corp. 9,020,900
- ---------------------------------------------------------------------------------------------
1,500,000 IMC Global, Inc. 56,437,500
- ---------------------------------------------------------------------------------------------
270,000 OM Group Inc. 10,597,500
- ---------------------------------------------------------------------------------------------
1,200,000 Praxair, Inc. 50,700,000
- ---------------------------------------------------------------------------------------------
126,755,900
- ---------------------------------------------------------------------------------------------
COMPUTER MINI/PCS-0.50%
400,000 Gateway 2000, Inc.(a) 13,600,000
- ---------------------------------------------------------------------------------------------
1,500,000 Wang Laboratories, Inc.(a) 28,312,500
- ---------------------------------------------------------------------------------------------
41,912,500
- ---------------------------------------------------------------------------------------------
COMPUTER NETWORKING-0.82%
446,900 Belden Inc. 13,407,000
- ---------------------------------------------------------------------------------------------
339,500 Cheyenne Software, Inc.(a) 6,535,375
- ---------------------------------------------------------------------------------------------
600,000 Cisco Systems, Inc.(a) 33,975,000
- ---------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 7
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
COMPUTER NETWORKING-(continued)
500,000 Comverse Technology, Inc. $ 15,250,000
- ---------------------------------------------------------------------------------------------
69,167,375
- ---------------------------------------------------------------------------------------------
COMPUTER PERIPHERALS-0.54%
700,000 Adaptec, Inc.(a) 33,162,500
- ---------------------------------------------------------------------------------------------
278,600 Seagate Technology(a) 12,537,000
- ---------------------------------------------------------------------------------------------
45,699,500
- ---------------------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES-1.95%
151,600 American Management Systems, Inc.(a) 4,434,300
- ---------------------------------------------------------------------------------------------
700,000 Computer Associates International, Inc. 49,875,000
- ---------------------------------------------------------------------------------------------
2,000,000 Computervision Corp.(a) 20,000,000
- ---------------------------------------------------------------------------------------------
300,000 National Data Corp. 10,275,000
- ---------------------------------------------------------------------------------------------
800,000 Network General Corp.(a) 17,200,000
- ---------------------------------------------------------------------------------------------
390,400 SoftKey International, Inc.(a) 7,393,200
- ---------------------------------------------------------------------------------------------
111,200 S3, Inc.(a) 1,369,150
- ---------------------------------------------------------------------------------------------
900,000 Wallace Computer Services, Inc. 53,775,000
- ---------------------------------------------------------------------------------------------
164,321,650
- ---------------------------------------------------------------------------------------------
CONGLOMERATES-0.23%
250,000 Loews Corp. 19,718,750
- ---------------------------------------------------------------------------------------------
CONTAINERS-0.32%
1,000,000 First Brands Corp. 27,000,000
- ---------------------------------------------------------------------------------------------
COSMETICS & TOILETRIES-0.51%
232,500 Clorox Co. 20,605,312
- ---------------------------------------------------------------------------------------------
261,600 Colgate-Palmolive Co. 22,170,600
- ---------------------------------------------------------------------------------------------
42,775,912
- ---------------------------------------------------------------------------------------------
ELECTRIC SERVICES-9.13%
2,000,000 Allegheny Power System, Inc. 61,750,000
- ---------------------------------------------------------------------------------------------
2,600,000 American Electric Power Co. 110,825,000
- ---------------------------------------------------------------------------------------------
1,000,000 Baltimore Gas & Electric Co. 28,375,000
- ---------------------------------------------------------------------------------------------
400,000 CINergy Corp. 12,800,000
- ---------------------------------------------------------------------------------------------
2,550,000 Consolidated Edison Co. of New York, Inc. 74,587,500
- ---------------------------------------------------------------------------------------------
500,000 Dominion Resources, Inc. 20,000,000
- ---------------------------------------------------------------------------------------------
500,000 DQE, Inc. 13,750,000
- ---------------------------------------------------------------------------------------------
1,000,000 Duke Power Co. 51,250,000
- ---------------------------------------------------------------------------------------------
1,737,100 Edison International 30,616,387
- ---------------------------------------------------------------------------------------------
1,800,000 Entergy Corp. 51,075,000
- ---------------------------------------------------------------------------------------------
1,000,000 FPL Group, Inc. 46,000,000
- ---------------------------------------------------------------------------------------------
700,000 Houston Industries, Inc. 17,237,500
- ---------------------------------------------------------------------------------------------
1,200,000 Illinova Corp. 34,500,000
- ---------------------------------------------------------------------------------------------
1,000,000 Southern Co. (The) 24,625,000
- ---------------------------------------------------------------------------------------------
1,200,000 Texas Utilities Co. 51,300,000
- ---------------------------------------------------------------------------------------------
5,000,000 Unicom Corp. 139,375,000
- ---------------------------------------------------------------------------------------------
768,066,387
- ---------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS/MISCELLANEOUS-0.17%
162,600 Emerson Electric Co. 14,694,975
- ---------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 8
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
ELECTRONIC/PC DISTRIBUTORS-0.09%
221,200 Wyle Electronics $ 7,327,250
- ---------------------------------------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-1.62%
632,800 Donaldson, Lufkin & Jenrette, Inc. 19,616,800
- ---------------------------------------------------------------------------------------------
300,000 Finova Group Inc. 14,625,000
- ---------------------------------------------------------------------------------------------
2,000,000 Lehman Brothers Holdings, Inc. 49,500,000
- ---------------------------------------------------------------------------------------------
600,000 Merrill Lynch & Co., Inc. 39,075,000
- ---------------------------------------------------------------------------------------------
300,000 Salomon, Inc. 13,200,000
- ---------------------------------------------------------------------------------------------
136,016,800
- ---------------------------------------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-4.30%
220,200 A T & T Capital Corp. 9,633,750
- ---------------------------------------------------------------------------------------------
500,000 Federal Home Loan Mortgage Corp. 42,750,000
- ---------------------------------------------------------------------------------------------
6,200,000 Federal National Mortgage Association 207,700,000
- ---------------------------------------------------------------------------------------------
618,100 MBNA Corp. 17,615,850
- ---------------------------------------------------------------------------------------------
150,000 PMI Group, Inc. (The) 6,375,000
- ---------------------------------------------------------------------------------------------
1,000,000 Student Loan Marketing Association 74,000,000
- ---------------------------------------------------------------------------------------------
69,150 SunAmerica, Inc. 3,906,975
- ---------------------------------------------------------------------------------------------
361,981,575
- ---------------------------------------------------------------------------------------------
FINANCE (SAVINGS & LOAN)-0.09%
288,500 Ahmanson (H.F.) & Co. 7,789,500
- ---------------------------------------------------------------------------------------------
FOOD/PROCESSING-2.97%
500,000 ConAgra, Inc. 22,687,500
- ---------------------------------------------------------------------------------------------
1,384,700 Dole Food Co. 59,542,100
- ---------------------------------------------------------------------------------------------
1,400,000 Flowers Industries, Inc. 22,575,000
- ---------------------------------------------------------------------------------------------
1,000,000 Heinz (H.J.) Co. 30,375,000
- ---------------------------------------------------------------------------------------------
97,400 Hershey Foods Corp. 7,146,725
- ---------------------------------------------------------------------------------------------
550,000 Hudson Foods, Inc.-Class A 7,700,000
- ---------------------------------------------------------------------------------------------
416,500 Interstate Bakeries Corp. 11,141,375
- ---------------------------------------------------------------------------------------------
400,000 Kellogg Co. 29,300,000
- ---------------------------------------------------------------------------------------------
1,336,700 Nabisco Holdings Corp.-Class A 47,285,762
- ---------------------------------------------------------------------------------------------
600,000 Ralcorp Holdings, Inc.(a) 12,375,000
- ---------------------------------------------------------------------------------------------
250,128,462
- ---------------------------------------------------------------------------------------------
FUNERAL SERVICES-0.96%
1,200,000 Service Corp. International 69,000,000
- ---------------------------------------------------------------------------------------------
387,450 Stewart Enterprises, Inc. 12,107,812
- ---------------------------------------------------------------------------------------------
81,107,812
- ---------------------------------------------------------------------------------------------
GAMING-0.35%
1,000,000 GTECH Holdings Corp.(a) 29,625,000
- ---------------------------------------------------------------------------------------------
HOME BUILDING-0.17%
699,950 Clayton Homes, Inc. 13,999,000
- ---------------------------------------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-0.81%
1,217,800 Conseco Inc. 48,712,000
- ---------------------------------------------------------------------------------------------
533,000 Provident Companies, Inc. 19,721,000
- ---------------------------------------------------------------------------------------------
68,433,000
- ---------------------------------------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY)-7.09%
300,000 ACE, Ltd. 14,100,000
- ---------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
INSURANCE (MULTI-LINE PROPERTY)-(continued)
1,200,000 Aetna Life & Casualty Co. $ 85,800,000
- ---------------------------------------------------------------------------------------------
1,000,000 Allstate Corp. 45,625,000
- ---------------------------------------------------------------------------------------------
400,000 American International Group, Inc. 39,450,000
- ---------------------------------------------------------------------------------------------
375,800 American Re Corp. 16,864,025
- ---------------------------------------------------------------------------------------------
700,000 CIGNA Corp. 82,512,500
- ---------------------------------------------------------------------------------------------
143,200 CNA Financial Corp.(a) 14,749,600
- ---------------------------------------------------------------------------------------------
700,000 Exel Limited 49,350,000
- ---------------------------------------------------------------------------------------------
1,200,000 ITT Hartford Group, Inc. 63,900,000
- ---------------------------------------------------------------------------------------------
160,300 MBIA, Inc. 12,483,362
- ---------------------------------------------------------------------------------------------
3,050,000 TIG Holdings, Inc. 88,450,000
- ---------------------------------------------------------------------------------------------
50,500 Transatlantic Holdings, Inc. 3,541,312
- ---------------------------------------------------------------------------------------------
1,600,000 Travelers Group, Inc. 73,000,000
- ---------------------------------------------------------------------------------------------
246,400 Travelers/Aetna Property Casualty Corp.-Class A(a) 6,991,600
- ---------------------------------------------------------------------------------------------
596,817,399
- ---------------------------------------------------------------------------------------------
LEISURE & RECREATION-1.62%
2,230,400 Callaway Golf Co. 74,160,800
- ---------------------------------------------------------------------------------------------
558,500 Carnival Corp.-Class A 16,126,687
- ---------------------------------------------------------------------------------------------
220,000 Eastman Kodak Co. 17,105,000
- ---------------------------------------------------------------------------------------------
1,000,000 Mattel, Inc. 28,625,000
- ---------------------------------------------------------------------------------------------
136,017,487
- ---------------------------------------------------------------------------------------------
MACHINERY (HEAVY)-0.36%
635,100 Case Corp. 30,484,800
- ---------------------------------------------------------------------------------------------
MACHINERY (MISCELLANEOUS)-0.59%
400,000 Cooper Industries, Inc. 16,600,000
- ---------------------------------------------------------------------------------------------
1,106,100 Pentair, Inc. 33,183,000
- ---------------------------------------------------------------------------------------------
49,783,000
- ---------------------------------------------------------------------------------------------
MEDICAL (DRUGS)-3.60%
970,000 American Home Products Corp. 58,321,250
- ---------------------------------------------------------------------------------------------
282,700 Bergen Brunswig Corp. 7,844,925
- ---------------------------------------------------------------------------------------------
1,638,335 ICN Pharmaceuticals, Inc. 38,091,288
- ---------------------------------------------------------------------------------------------
600,000 Pfizer Inc. 42,825,000
- ---------------------------------------------------------------------------------------------
800,000 Pharmacia & Upjohn, Inc. 35,500,000
- ---------------------------------------------------------------------------------------------
708,800 R.P. Scherer Corp.(a) 32,161,800
- ---------------------------------------------------------------------------------------------
1,404,000 Schering-Plough Corp. 88,101,000
- ---------------------------------------------------------------------------------------------
302,845,263
- ---------------------------------------------------------------------------------------------
MEDICAL (INSTRUMENTS/PRODUCTS)-2.86%
500,000 Arterial Vascular Engineering, Inc.(a) 18,125,000
- ---------------------------------------------------------------------------------------------
160,000 Bausch & Lomb, Inc. 6,800,000
- ---------------------------------------------------------------------------------------------
3,500,000 Baxter International, Inc. 165,375,000
- ---------------------------------------------------------------------------------------------
700,000 Boston Scientific Corp.(a) 31,500,000
- ---------------------------------------------------------------------------------------------
500,000 Hillenbrand Industries, Inc. 18,625,000
- ---------------------------------------------------------------------------------------------
240,425,000
- ---------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 10
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
MEDICAL (PATIENT SERVICES)-4.67%
4,000,000 Caremark International, Inc. $ 101,000,000
- ---------------------------------------------------------------------------------------------
1,600,000 Columbia/HCA Healthcare Corp. 85,400,000
- ---------------------------------------------------------------------------------------------
96,600 Genesis Health Ventures, Inc.(a) 3,030,825
- ---------------------------------------------------------------------------------------------
825,000 Health Care and Retirement Corp.(a) 19,593,750
- ---------------------------------------------------------------------------------------------
288,000 Health Systems International, Inc.-Class A(a) 7,812,000
- ---------------------------------------------------------------------------------------------
182,700 Living Centers of America, Inc.(a) 6,280,312
- ---------------------------------------------------------------------------------------------
800,000 Manor Care, Inc. 31,500,000
- ---------------------------------------------------------------------------------------------
1,077,300 MedPartners/Mullikin, Inc.(a) 22,488,637
- ---------------------------------------------------------------------------------------------
1,200,000 OrNda Healthcorp(a) 28,800,000
- ---------------------------------------------------------------------------------------------
200,000 Pacificare Health Systems, Inc.-Class B(a) 13,550,000
- ---------------------------------------------------------------------------------------------
689,000 Quorum Health Group, Inc.(a) 18,172,375
- ---------------------------------------------------------------------------------------------
500,000 Sybron International Corp.(a) 12,500,000
- ---------------------------------------------------------------------------------------------
193,000 United Healthcare Corp. 9,746,500
- ---------------------------------------------------------------------------------------------
600,000 U.S. Healthcare, Inc. 33,000,000
- ---------------------------------------------------------------------------------------------
392,874,399
- ---------------------------------------------------------------------------------------------
METALS-0.07%
90,400 Harsco Corp. 6,079,400
- ---------------------------------------------------------------------------------------------
NATURAL GAS PIPELINE-0.62%
700,000 Columbia Gas System, Inc. 36,487,500
- ---------------------------------------------------------------------------------------------
400,000 El Paso Natural Gas Co. 15,400,000
- ---------------------------------------------------------------------------------------------
51,887,500
- ---------------------------------------------------------------------------------------------
OFFICE AUTOMATION-0.29%
450,000 Xerox Corp. 24,075,000
- ---------------------------------------------------------------------------------------------
OFFICE PRODUCTS-0.19%
300,000 Reynolds & Reynolds Co.-Class A 15,975,000
- ---------------------------------------------------------------------------------------------
OIL & GAS (INTEGRATED)-2.06%
452,800 Mobil Corp. 50,770,200
- ---------------------------------------------------------------------------------------------
2,310,300 NorAm Energy Corp. 25,124,512
- ---------------------------------------------------------------------------------------------
636,600 Occidental Petroleum Corp. 15,755,850
- ---------------------------------------------------------------------------------------------
1,500,000 Oryx Energy Co.(a) 24,375,000
- ---------------------------------------------------------------------------------------------
700,000 Pennzoil Co. 32,375,000
- ---------------------------------------------------------------------------------------------
300,000 Texaco Inc. 25,162,500
- ---------------------------------------------------------------------------------------------
173,563,062
- ---------------------------------------------------------------------------------------------
OIL EQUIPMENT & SUPPLIES-1.58%
1,000,000 Baker Hughes, Inc. 32,875,000
- ---------------------------------------------------------------------------------------------
900,000 BJ Services Co.(a) 31,612,500
- ---------------------------------------------------------------------------------------------
200,000 Diamond Offshore Drilling, Inc.(a) 11,450,000
- ---------------------------------------------------------------------------------------------
400,000 Halliburton Co. 22,200,000
- ---------------------------------------------------------------------------------------------
800,000 Tidewater, Inc. 35,100,000
- ---------------------------------------------------------------------------------------------
133,237,500
- ---------------------------------------------------------------------------------------------
PUBLISHING-0.55%
1,000,000 New York Times Co.-Class A 32,625,000
- ---------------------------------------------------------------------------------------------
300,000 Scripps (E.W.) Co. 13,987,500
- ---------------------------------------------------------------------------------------------
46,612,500
- ---------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 11
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
RESTAURANTS-0.46%
1,000,000 Darden Restaurants, Inc. $ 10,750,000
- ---------------------------------------------------------------------------------------------
1,500,000 Wendy's International, Inc. 27,937,500
- ---------------------------------------------------------------------------------------------
38,687,500
- ---------------------------------------------------------------------------------------------
RETAIL (FOOD & DRUG)-0.89%
300,000 American Stores Co. 12,375,000
- ---------------------------------------------------------------------------------------------
1,300,000 Safeway, Inc.(a) 42,900,000
- ---------------------------------------------------------------------------------------------
383,584 Tosco Corp. 19,275,121
- ---------------------------------------------------------------------------------------------
74,550,121
- ---------------------------------------------------------------------------------------------
RETAIL (STORES)-0.88%
500,000 Gap, Inc. (The) 16,062,500
- ---------------------------------------------------------------------------------------------
1,200,000 Sears, Roebuck & Co. 58,350,000
- ---------------------------------------------------------------------------------------------
74,412,500
- ---------------------------------------------------------------------------------------------
SHOES & RELATED APPAREL-0.13%
100,000 Nike, Inc.-Class B 10,275,000
- ---------------------------------------------------------------------------------------------
STEEL-0.05%
403,700 UNR Industries, Inc. 3,885,612
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-2.95%
1,400,000 A T & T Corp. 86,800,000
- ---------------------------------------------------------------------------------------------
1,000,000 Frontier Corp. 30,625,000
- ---------------------------------------------------------------------------------------------
600,000 Lucent Technologies, Inc. 22,725,000
- ---------------------------------------------------------------------------------------------
2,503,676 MFS Communications Co., Inc.(a) 94,200,809
- ---------------------------------------------------------------------------------------------
200,000 Tellabs, Inc.(a) 13,375,000
- ---------------------------------------------------------------------------------------------
247,725,809
- ---------------------------------------------------------------------------------------------
TELEPHONE-4.17%
3,500,000 Ameritech Corp. 207,812,500
- ---------------------------------------------------------------------------------------------
2,200,000 BellSouth Corp. 93,225,000
- ---------------------------------------------------------------------------------------------
1,000,000 SBC Communications, Inc. 49,250,000
- ---------------------------------------------------------------------------------------------
350,287,500
- ---------------------------------------------------------------------------------------------
TOBACCO-1.36%
700,000 American Brands, Inc. 31,762,500
- ---------------------------------------------------------------------------------------------
1,100,000 Dimon, Inc. 20,350,000
- ---------------------------------------------------------------------------------------------
600,000 Philip Morris Companies, Inc. 62,400,000
- ---------------------------------------------------------------------------------------------
114,512,500
- ---------------------------------------------------------------------------------------------
Total Domestic Common Stocks 5,885,011,962
- ---------------------------------------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-16.71%
AUSTRALIA-0.45%
8,649,037 Westpac Banking Corp. Ltd. (Banking) 38,266,466
- ---------------------------------------------------------------------------------------------
CANADA-1.94%
5,200,000 Canadian Pacific, Ltd. (Transportation) 114,400,000
- ---------------------------------------------------------------------------------------------
600,000 CanWest Global Communications Corp.
(Advertising/Broadcasting)(a) 16,350,000
- ---------------------------------------------------------------------------------------------
600,000 Northern Telecom Ltd. (Telecommunications) 32,625,000
- ---------------------------------------------------------------------------------------------
163,375,000
- ---------------------------------------------------------------------------------------------
DENMARK-0.54%
460,000 Danisco A/S (Food/Processing) 22,927,370
- ---------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 12
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
DENMARK-(continued)
160,500 Novo-Nordisk A/S-Class B (Medical-Drugs) $ 22,738,755
- ---------------------------------------------------------------------------------------------
45,666,125
- ---------------------------------------------------------------------------------------------
FRANCE-0.97%
13,000 LVMH-Moet Hennessy Louis Vuitton (Beverages) 3,085,970
- ---------------------------------------------------------------------------------------------
517,900 Rhone-Poulenc-ADR (Medical-Drugs) 13,623,118
- ---------------------------------------------------------------------------------------------
904,900 Rhone-Poulenc Rorer, Inc. (Medical-Drugs) 60,741,412
- ---------------------------------------------------------------------------------------------
16,900 Roussel Uclaf (Medical-Drugs) 4,057,761
- ---------------------------------------------------------------------------------------------
81,508,261
- ---------------------------------------------------------------------------------------------
GERMANY-0.67%
292,000 Siemens A.G. (Electric Services) 15,613,022
- ---------------------------------------------------------------------------------------------
760,000 VEBA A.G. (Electric Services) 40,421,703
- ---------------------------------------------------------------------------------------------
56,034,725
- ---------------------------------------------------------------------------------------------
HONG KONG-0.69%
1,080,000 HSBC Holdings (Banking) 16,323,894
- ---------------------------------------------------------------------------------------------
3,034,000 Hutchison Whampoa Ltd. (Conglomerates) 19,087,923
- ---------------------------------------------------------------------------------------------
2,208,000 Sun Hung Kai Properties Ltd. (Real Estate) 22,320,173
- ---------------------------------------------------------------------------------------------
57,731,990
- ---------------------------------------------------------------------------------------------
ITALY-1.24%
3,263,500 Istituto Mobiliare Italiano S.p.A. (Banking) 27,442,172
- ---------------------------------------------------------------------------------------------
14,500,000 Telecom Italia Mobile S.p.A. (Telecommunications) 32,517,878
- ---------------------------------------------------------------------------------------------
20,800,000 Telecom Italia S.p.A. (Telecommunications) 44,785,372
- ---------------------------------------------------------------------------------------------
104,745,422
- ---------------------------------------------------------------------------------------------
JAPAN-2.67%
882,000 Bank of Tokyo-Mitsubishi (Banking-Money Center) 20,484,433
- ---------------------------------------------------------------------------------------------
937,000 Bridgestone Corp. (Automobile/Truck Parts & Tires) 17,906,369
- ---------------------------------------------------------------------------------------------
2,523 DDI Corp. (Telecommunications) 22,054,479
- ---------------------------------------------------------------------------------------------
1,500,000 Fuji Photo Film (Chemicals) 47,455,768
- ---------------------------------------------------------------------------------------------
890,000 Honda Motor Co. (Automobile/Truck Parts & Tires) 23,111,599
- ---------------------------------------------------------------------------------------------
33,960 Nippon Television Network (Advertising/Broadcasting) 10,557,674
- ---------------------------------------------------------------------------------------------
1,145,000 Nomura Securities Co., Ltd. (Finance-Asset Management) 22,404,792
- ---------------------------------------------------------------------------------------------
7,970 NTT Data Communications Systems Co.(Computer Software &
Services) 23,903,077
- ---------------------------------------------------------------------------------------------
411,600 Sony Corp. (Electric Components/Miscellaneous) 27,135,153
- ---------------------------------------------------------------------------------------------
600,000 Yamaha Corp. (Electric Components) 9,930,050
- ---------------------------------------------------------------------------------------------
224,943,394
- ---------------------------------------------------------------------------------------------
MALAYSIA-0.03%
272,000 Malayan Banking Berhad (Banking) 2,616,958
- ---------------------------------------------------------------------------------------------
NETHERLANDS-1.64%
600,000 Unilever PLC-ADR (Food/Processing) 87,075,000
- ---------------------------------------------------------------------------------------------
3,000,000 Verenigde Nederlandse Utgevbedri Verigd Bezit (Publishing) 46,613,897
- ---------------------------------------------------------------------------------------------
40,000 Wolters Kluwer N.V. (Publishing) 4,547,640
- ---------------------------------------------------------------------------------------------
138,236,537
- ---------------------------------------------------------------------------------------------
NEW ZEALAND-0.02%
29,800 Telecom Corp. of New Zealand Ltd.-ADR (Telecommunications) 1,989,150
- ---------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 13
Financials
<TABLE>
<CAPTION>
SHARES MARKET VALUE
<S> <C> <C>
NORWAY-0.23%
4,207,500 UNI Storebrand A/S-Class A (Insurance-Multi-Line
Property)(a) $ 18,933,135
- ---------------------------------------------------------------------------------------------
PHILIPPINES-0.38%
6,700,000 C & P Homes, Inc. (Home Building) 5,817,749
- ---------------------------------------------------------------------------------------------
19,833,000 Filinvest Land Inc. (Real Estate)(a) 8,137,586
- ---------------------------------------------------------------------------------------------
58,708,000 Metro Pacific Corp. (Conglomerates) 17,477,955
- ---------------------------------------------------------------------------------------------
31,433,290
- ---------------------------------------------------------------------------------------------
SPAIN-0.61%
3,250,000 Iberdrola SA (Electric Services) 33,387,368
- ---------------------------------------------------------------------------------------------
417,900 Repsol SA (Oil & Gas Services) 14,544,311
- ---------------------------------------------------------------------------------------------
96,400 Repsol SA-ADR (Oil & Gas Services) 3,349,900
- ---------------------------------------------------------------------------------------------
51,281,579
- ---------------------------------------------------------------------------------------------
SWEDEN-0.94%
188,350 Hennes & Mauritz AB-B shares (Retail-Stores) 17,497,508
- ---------------------------------------------------------------------------------------------
1,100,000 Skandia Forsakrings AB (Insurance-Multi-Line Property) 29,161,191
- ---------------------------------------------------------------------------------------------
1,500,000 Telefonaktiebolaget L.M. Ericsson-ADR (Telecommunications) 32,250,000
- ---------------------------------------------------------------------------------------------
78,908,699
- ---------------------------------------------------------------------------------------------
SWITZERLAND-1.45%
100,000 Ciba-Geigy A.G. (Medical-Drugs) 121,980,484
- ---------------------------------------------------------------------------------------------
THAILAND-0.12%
2,158,100 Krung Thai Bank PLC (Banking) 10,116,758
- ---------------------------------------------------------------------------------------------
UNITED KINGDOM-2.12%
93,400 BOC Group PLC (Chemicals-Specialty) 1,339,570
- ---------------------------------------------------------------------------------------------
1,800,000 Burton Group PLC (Retail-Stores) 4,332,971
- ---------------------------------------------------------------------------------------------
4,000,000 Granada Group PLC (Leisure & Recreation) 53,517,628
- ---------------------------------------------------------------------------------------------
1,459,600 SmithKline Beecham-ADR (Medical-Drugs) 79,365,751
- ---------------------------------------------------------------------------------------------
3,982,300 Standard Chartered PLC (Finance-Asset Management) 39,643,646
- ---------------------------------------------------------------------------------------------
178,199,566
- ---------------------------------------------------------------------------------------------
Total Foreign Stocks & Other Equity Interests 1,405,967,539
- ---------------------------------------------------------------------------------------------
PREFERRED STOCKS-0.39%
PAPER & FOREST PRODUCTS-0.18%
600,000 James River Corp. of Virginia-9.00% Convertible Pfd. 15,150,000
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-0.21%
283,100 MFS Communications Co., Inc.-8.00% Convertible Pfd. 17,976,850
- ---------------------------------------------------------------------------------------------
Total Preferred Stocks 33,126,850
- ---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
CORPORATE BONDS-0.34%
FINANCE (ASSET MANAGEMENT)-0.34%
$ 15,250,000 First Financial Management Corp.-5.00%, 12/15/99,
Convertible Bonds 28,822,500
- ---------------------------------------------------------------------------------------------
MASTER NOTE AGREEMENT-0.91%
76,500,000 Citicorp Securities, Inc., 5.875%(b), 09/09/96 76,500,000
- ---------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 14
Financials
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MARKET VALUE
<S> <C> <C>
U.S. TREASURY SECURITIES-4.04%
U.S. Treasury Bills-4.04%(c)
$ 74,100,000 4.90%, 07/05/96 $ 74,038,522
- ---------------------------------------------------------------------------------------------
100,000,000 5.09%, 03/06/97 96,410,000
- ---------------------------------------------------------------------------------------------
171,600,000 5.06%, 09/26/96 169,563,108
- ---------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 340,011,630
- ---------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS-7.54%(d)
850,230 Daiwa Securities America Inc., 5.50% 07/01/96(e) 850,230
- ---------------------------------------------------------------------------------------------
433,000,000 Goldman, Sachs & Co., 4.75% 07/01/96(f) 433,000,000
- ---------------------------------------------------------------------------------------------
200,000,000 Lehman Government Securities, Inc., 5.52%(g) 200,000,000
- ---------------------------------------------------------------------------------------------
Total Repurchase Agreements 633,850,230
=============================================================================================
TOTAL INVESTMENTS-99.87% 8,403,290,711
=============================================================================================
OTHER ASSETS LESS LIABILITIES-0.13% 10,591,361
=============================================================================================
NET ASSETS-100.00% $8,413,882,072
=============================================================================================
</TABLE>
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The Portfolio may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon 3 business days' notice to the issuer. Interest
rates on master notes are redetermined periodically. Rate shown is the rate
in effect on June 30, 1996.
(c) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(d) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% 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.
(e) 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.
(f) Joint repurchase agreement entered into 06/28/96 with a maturing value of
$770,304,792. Collateralized by $716,792,000 U.S. Treasury obligations,
0.00% to 11.625% due 10/03/96 to 12/31/99.
(g) Open joint repurchase agreement entered into 06/03/96; however, either party
may terminate the agreement upon demand. Interest rates, par, and collateral
are redetermined daily. Collateralized by $191,655,000 U.S. Treasury
obligations, 7.25% to 7.875% due 05/15/04 to 11/15/04.
ABBREVIATIONS:
ADR-American Depository Receipt
Pfd.-Preferred
See Notes to Financial Statements.
12
<PAGE> 15
Financials
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost $7,659,827,419) $8,403,290,711
- -----------------------------------------------------------------------------------------
Foreign currencies, at market value (cost $28,797,799) 28,960,949
- -----------------------------------------------------------------------------------------
Receivables for:
Investments sold 70,427,850
- -----------------------------------------------------------------------------------------
Fund shares sold 45,139,318
- -----------------------------------------------------------------------------------------
Dividends and interest 18,751,775
- -----------------------------------------------------------------------------------------
Investment for deferred compensation plan 38,642
- -----------------------------------------------------------------------------------------
Other assets 241,634
- -----------------------------------------------------------------------------------------
Total assets 8,566,850,879
- -----------------------------------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 121,351,531
- -----------------------------------------------------------------------------------------
Fund shares reacquired 11,713,983
- -----------------------------------------------------------------------------------------
Deferred compensation plan 38,642
- -----------------------------------------------------------------------------------------
Options written 7,181,250
- -----------------------------------------------------------------------------------------
Accrued advisory fees 4,119,540
- -----------------------------------------------------------------------------------------
Accrued administrative service fees 8,303
- -----------------------------------------------------------------------------------------
Accrued distribution fees 6,360,343
- -----------------------------------------------------------------------------------------
Accrued transfer agent fees 1,384,184
- -----------------------------------------------------------------------------------------
Accrued trustees' fees 8,579
- -----------------------------------------------------------------------------------------
Accrued operating expenses 802,452
- -----------------------------------------------------------------------------------------
Total liabilities 152,968,807
- -----------------------------------------------------------------------------------------
Net assets applicable to shares outstanding $8,413,882,072
=========================================================================================
NET ASSETS:
Class A $4,362,521,636
=========================================================================================
Class B $4,051,360,436
=========================================================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 154,601,066
=========================================================================================
Class B 145,028,007
=========================================================================================
Class A:
Net asset value and redemption price per share $ 28.22
=========================================================================================
Offering price per share:
(Net asset value of $28.22 divided by 94.50%) $ 29.86
=========================================================================================
Class B:
Net asset value and offering price per share $ 27.94
=========================================================================================
</TABLE>
See Notes to Financial Statements.
13
<PAGE> 16
Financials
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $2,573,197 foreign withholding tax) $ 67,988,371
- -----------------------------------------------------------------------------------------
Interest 45,324,153
- -----------------------------------------------------------------------------------------
Total investment income 113,312,524
- -----------------------------------------------------------------------------------------
EXPENSES:
Advisory fees 23,275,682
- -----------------------------------------------------------------------------------------
Custodian fees 562,569
- -----------------------------------------------------------------------------------------
Distribution fees -- Class A 4,891,030
- -----------------------------------------------------------------------------------------
Distribution fees -- Class B 17,458,840
- -----------------------------------------------------------------------------------------
Administrative service fees 78,037
- -----------------------------------------------------------------------------------------
Trustees' fees 21,596
- -----------------------------------------------------------------------------------------
Transfer agent fees -- Class A 3,349,828
- -----------------------------------------------------------------------------------------
Transfer agent fees -- Class B 4,358,002
- -----------------------------------------------------------------------------------------
Other 2,369,086
- -----------------------------------------------------------------------------------------
Total expenses 56,364,670
- -----------------------------------------------------------------------------------------
Less fees waived by advisor (677,629)
- -----------------------------------------------------------------------------------------
Net expenses 55,687,041
- -----------------------------------------------------------------------------------------
Net investment income 57,625,483
- -----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FUTURES AND OPTIONS TRANSACTIONS:
Net realized gain (loss) from:
Investment securities 218,488,598
- -----------------------------------------------------------------------------------------
Foreign currencies (1,649,608)
- -----------------------------------------------------------------------------------------
Futures contracts 36,277,100
- -----------------------------------------------------------------------------------------
Options contracts 3,569,322
- -----------------------------------------------------------------------------------------
256,685,412
- -----------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of:
Investment securities 80,002,870
- -----------------------------------------------------------------------------------------
Foreign currencies 28,344
- -----------------------------------------------------------------------------------------
Futures contracts (11,292,015)
- -----------------------------------------------------------------------------------------
Options contracts 5,419,060
- -----------------------------------------------------------------------------------------
74,158,259
- -----------------------------------------------------------------------------------------
Net gain from investment securities, foreign currencies, futures and
options transactions 330,843,671
- -----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $388,469,154
=========================================================================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 17
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 $ 57,625,483 $ 16,293,031
- ----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures and options transactions 256,685,412 412,157,661
- ----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities,
foreign currencies,
futures and options contracts 74,158,259 561,870,244
- ----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 388,469,154 990,320,936
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net investment
income:
Class A -- (10,460,381)
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on investment
securities:
Class A -- (183,638,497)
- ----------------------------------------------------------------------------------------------
Class B -- (154,081,759)
- ----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 742,628,165 1,629,870,392
- ----------------------------------------------------------------------------------------------
Class B 1,013,301,507 1,958,628,734
- ----------------------------------------------------------------------------------------------
Net increase in net assets 2,144,398,826 4,230,639,425
- ----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 6,269,483,246 2,038,843,821
- ----------------------------------------------------------------------------------------------
End of period $8,413,882,072 $6,269,483,246
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $7,290,742,937 $5,534,813,265
- ----------------------------------------------------------------------------------------------
Undistributed net investment income 63,701,298 6,075,815
- ----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign
currencies, futures and options transactions 310,557,645 53,872,233
- ----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities,
foreign currencies, and futures and options
contracts 748,880,192 674,721,933
- ----------------------------------------------------------------------------------------------
$8,413,882,072 $6,269,483,246
==============================================================================================
</TABLE>
See Notes to Financial Statements.
15
<PAGE> 18
Financials
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
AIM Value 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 investment objective is to seek to achieve
long-term growth of capital by investing primarily in equity securities judged
by the Fund's investment advisor to be undervalued relative to the investment
advisor's appraisal of the current or projected earnings of the companies
issuing the securities, or relative to current market values of assets owned by
the companies issuing the securities or relative to the equity market generally.
Income is a secondary objective.
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 - A security listed or traded on an exchange is valued at
its last sales price on the exchange where the security is principally
traded, or lacking any sales on a particular day, the security is valued at
the mean between the closing bid and asked prices on that day. Each security
traded in the over-the-counter market (but not including securities reported
on the NASDAQ National Market System) is valued at the mean between the last
bid and asked prices based upon quotes furnished by market makers for such
securities. If a mean is not available, as is the case in some foreign
markets, the closing bid will be used absent a last sales price. Each
security reported on the NASDAQ National Market System is valued at the last
sales price on the valuation date or absent a last sales price, at the mean
of the closing bid and asked prices. Debt obligations that are issued or
guaranteed by the U.S. Treasury are valued on the basis of prices provided by
an independent pricing service. Prices provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as yield, type of issue, coupon rate and maturity
date. Securities for which market prices are not provided by any of the above
methods are valued at the mean between last bid and asked prices based upon
quotes furnished by independent sources. Securities for which market
quotations either are not readily available or are questionable are valued at
fair value as determined in good faith by or under the supervision of the
Trust's officers in a manner specifically authorized by the Board of
Trustees. Short-term obligations having 60 days or less to maturity are
valued at amortized cost which approximates market value. Generally, trading
in foreign securities is substantially completed each day at various times
prior to the close of the New York Stock Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the New York Stock Exchange.
Occasionally, events affecting the values of such securities and such
exchange rates may occur between the times at which they are determined and
the close of the New York Stock Exchange which will not be reflected in the
computation of the Fund's net asset value. If events materially affecting the
value of such securities occur during such period, then these securities will
be valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
B. Foreign Currency Translations - Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions.
C. Foreign Currency Contracts - A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a forward contract to attempt to
16
<PAGE> 19
Financials
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued)
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a forward contract for the
purchase or sale of a security denominated in a foreign currency in order to
"lock in" the U.S. dollar price of that security. The Fund could be exposed
to risk if counterparties to the contracts are unable to meet the terms of
their contracts or if the value of the foreign currency changes unfavorably.
D. Securities Transactions, Investment Income and Distributions - Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
E. Stock Index Futures Contracts - The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities or cash, and/or by securing a
standby letter of credit from a major commercial bank, as collateral, for the
account of the broker (the Fund's agent in acquiring the futures position).
During the period the futures contract is open, changes in the value of the
contract are recognized as unrealized gains or losses by "marking to market"
on a daily basis to reflect the market value of the contract at the end of
each day's trading. Variation margin payments are made or received depending
upon whether unrealized gains or losses are incurred. When the contract is
closed, the Fund records a realized gain or loss equal to the difference
between the proceeds from (or cost of) the closing transaction and the Fund's
basis in the contract. Risks include the possibility of an illiquid market
and the change in the value of the contract may not correlate with changes in
the securities being hedged.
F. Covered Call Options - The Fund may write call options, but only on a covered
basis; that is, the Fund will own the underlying security. Options written by
the Fund normally will have expiration dates between three and nine months
from the date written. The exercise price of a call option may be below,
equal to, or above the current market value of the underlying security at the
time the option is written. When the Fund writes a covered call option, an
amount equal to the premium received by the Fund is recorded as an asset and
an equivalent liability. The amount of the liability is subsequently
"marked-to-market" to reflect the current market value of the option written.
The current market value of a written option is the last sale price, or in
the absence of a sale, the mean between the last bid and asked prices on that
day. If a written call option expires on the stipulated expiration date, or
if the Fund enters into a closing purchase transaction, the Fund realizes a
gain (or a loss if the closing purchase transaction exceeds the premium
received when the option was written) without regard to any unrealized gain
or loss on the underlying security, and the liability related to such option
is extinguished. If a written option is exercised, the Fund realizes a gain
or a loss from the sale of the underlying security and the proceeds of the
sale are increased by the premium originally received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written. The Fund will
not write a covered call option if, immediately thereafter, the aggregate
value of the securities underlying all such options, determined as of the
dates such options were written, would exceed 5% of the net assets of the
Fund.
G. 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.
H. 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.
17
<PAGE> 20
Financials
NOTE 2 - ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.80% of
the first $150 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $150 million. AIM is currently
voluntarily waiving a portion of its advisory fees payable by the Fund to AIM to
the extent necessary to reduce the fees paid by the Fund at net asset levels
higher than those currently incorporated in the present advisory fee schedule.
AIM will receive a fee calculated at 0.80% of the first $150 million of the
Fund's average daily net assets, plus 0.625% of the Fund's average daily net
assets in excess of $150 million to and including $2 billion, plus 0.60% of the
Fund's average daily net assets in excess of $2 billion. The waiver of fees is
entirely voluntary and the Board of Trustees would be advised of any decision by
AIM to discontinue the waiver. During the six months ended June 30, 1996, AIM
voluntarily waived advisory fees in the amount of $677,629. The master
investment advisory 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 $78,037 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency
services to the Fund. During the six months ended June 30, 1996, AFS was paid
$4,211,759 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 assignees, its rights to all or a portion of
(a) compensation received by AIM Distributors from the Fund pursuant to the
Class B Plan (but not AIM Distributors' duties and obligations pursuant to 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 $4,891,030
and $17,458,840, respectively, as compensation pursuant to the Plans.
AIM Distributors received commissions of $5,302,665 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 $1,026,689 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 $8,395
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.
18
<PAGE> 21
Financials
NOTE 4 - BANK BORROWINGS
The Fund has a $56,800,000 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
$7,783,163,547 and $5,345,533,258, 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 $850,197,851
- -------------------------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (108,501,482)
- -------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $741,696,369
===================================================================================================================
Cost of investments for tax purposes is $7,661,594,342.
</TABLE>
NOTE 6 - SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 1996 and the
year ended December 31, 1995:
<TABLE>
<CAPTION>
JUNE 30, 1996 DECEMBER 31, 1995
------------------------------- -------------------------------
SHARES VALUE SHARES VALUE
----------- -------------- ----------- --------------
<S> <C> <C> <C> <C>
Sold:
Class A 50,929,969 $1,381,762,030 79,351,992 $2,054,533,413
- -------------------------------------------------------- ------------------------------- -------------------------------
Class B 48,436,670 1,303,460,613 75,466,438 1,966,370,940
- -------------------------------------------------------- ------------------------------- -------------------------------
Issued as reinvestment of dividends:
Class A -- -- 6,956,211 184,199,771
- -------------------------------------------------------- ------------------------------- -------------------------------
Class B -- -- 5,526,910 145,522,539
- -------------------------------------------------------- ------------------------------- -------------------------------
Reacquired:
Class A (23,466,587) (639,133,865) (23,428,920) (608,862,792)
- -------------------------------------------------------- ------------------------------- -------------------------------
Class B (10,738,240) (290,159,106) (5,847,788) (153,264,745)
- -------------------------------------------------------- ------------------------------- -------------------------------
65,161,812 $1,755,929,672 138,024,843 $3,588,499,126
======================================================== =============================== ===============================
</TABLE>
NOTE 7 - OPTION CONTRACTS WRITTEN
Transactions in call options written during the six months ended June 30, 1996
are summarized as follows:
<TABLE>
<CAPTION>
OPTION CONTRACTS
----------------------
NUMBER
OF PREMIUMS
CONTRACTS RECEIVED
---------- -----------
<S> <C> <C>
Beginning of period 4,000 $ 1,731,692
- -----------------------------------------------------------------------------------------------------------------------
Written 77,100 22,898,779
- -----------------------------------------------------------------------------------------------------------------------
Closed (7,000) (892,030)
- -----------------------------------------------------------------------------------------------------------------------
Exercised (22,439) (7,665,508)
- -----------------------------------------------------------------------------------------------------------------------
Expired (16,161) (3,615,932)
- -----------------------------------------------------------------------------------------------------------------------
End of period 35,500 $12,457,001
=======================================================================================================================
</TABLE>
Open call option contracts written at June 30, 1996 were as follows:
<TABLE>
<CAPTION>
JUNE 30, UNREALIZED
CONTRACT STRIKE NUMBER OF PREMIUM 1996 APPRECIATION
ISSUE MONTH PRICE CONTRACTS RECEIVED MARKET VALUE (DEPRECIATION)
- ------------------------------------------------ -------- ------ --------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
A T & T Corp. Jul 60 14,000 $ 7,188,066 $ 3,412,500 $ 3,775,566
American Brands, Inc. Jul 45 7,000 853,971 743,750 110,221
Computer Associates International, Inc. Oct 80 2,000 1,191,960 500,000 691,960
Emerson Electric Co. Jul 85 1,500 507,751 787,500 (279,749)
Gateway 2000, Inc. Jul 40 2,000 452,830 50,000 402,830
Praxair, Inc. Oct 40 4,000 1,276,457 1,500,000 (223,543)
SBC Communications, Inc. Jul 50 5,000 985,966 187,500 798,466
- ---------------------------------------------------------------------------------------------------------------------------------
35,500 $12,457,001 $ 7,181,250 $ 5,275,751
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 22
Financials
NOTE 8 - FINANCIAL HIGHLIGHTS
Shown below are the condensed financial highlights for a Class A share
outstanding during the six months ended June 30, 1996 and each of the years in
the nine-year period ended December 31, 1995 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 October 18, 1993 (date sales
commenced) through December 31, 1993.
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, -------------------------------------------------------
1996 1995 1994 1993 1992(a)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
CLASS A:
Net asset value, beginning of period $ 26.81 $ 21.14 $ 20.82 $ 18.24 $ 17.55
- ---------------------------------------------------- ---------- ---------- ---------- -------- ----------
Income from investment operations:
Net investment income 0.24 0.14 0.16 0.04 0.12
- ---------------------------------------------------- ---------- ---------- ---------- -------- ----------
Net gains on securities (both realized and
unrealized) 1.17 7.21 0.52 3.34 2.68
- ---------------------------------------------------- ---------- ---------- ---------- -------- ----------
Total from investment operations 1.41 7.35 0.68 3.38 2.80
- ---------------------------------------------------- ---------- ---------- ---------- -------- ----------
Less distributions:
Dividends from net investment income -- (0.09) (0.16) (0.03) (0.12)
- ---------------------------------------------------- ---------- ---------- ---------- -------- ----------
Distributions from net realized capital gains -- (1.59) (0.20) (0.77) (1.99)
- ---------------------------------------------------- ---------- ---------- ---------- -------- ----------
Total distributions -- (1.68) (0.36) (0.80) (2.11)
- ---------------------------------------------------- ---------- ---------- ---------- -------- ----------
Net asset value, end of period $ 28.22 $ 26.81 $ 21.14 $ 20.82 $ 18.24
==================================================== ========== ========== ========== ======== ==========
Total return(b) 5.26% 34.85% 3.28% 18.71% 16.39%
==================================================== ========== ========== ========== ======== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $4,362,522 $3,408,952 $1,358,725 $765,305 $239,663
==================================================== ========== ========== ========== ======== ==========
Ratio of expenses to average net assets 1.11%(c)(d) 1.12%(d) 0.98% 1.09% 1.16%
==================================================== ========== ========== ========== ======== ==========
Ratio of net investment income to average net assets 1.94%(c)(e) 0.74%(e) 0.92% 0.30% 0.75%
==================================================== ========== ========== ========== ======== ==========
Portfolio turnover rate 83% 151% 127% 177% 170%
==================================================== ========== ========== ========== ======== ==========
<CAPTION>
DECEMBER 31,
-----------------------------------------------------------------------
1991 1990 1989 1988 1987
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
CLASS A:
Net asset value, beginning of period $ 13.75 $ 14.53 $ 12.79 $ 11.47 $ 12.26
- ---------------------------------------------------- --------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.13 0.26 0.40 0.26 0.25
- ---------------------------------------------------- --------- -------- -------- -------- --------
Net gains on securities (both realized and
unrealized) 5.73 0.01 3.58 2.07 0.53
- ---------------------------------------------------- --------- -------- -------- -------- --------
Total from investment operations 5.86 0.27 3.98 2.33 0.78
- ---------------------------------------------------- --------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.14) (0.26) (0.43) (0.26) (0.39)
- ---------------------------------------------------- --------- -------- -------- -------- --------
Distributions from net realized capital gains (1.92) (0.79) (1.81) (0.75) (1.18)
- ---------------------------------------------------- --------- -------- -------- -------- --------
Total distributions (2.06) (1.05) (2.24) (1.01) (1.57)
- ---------------------------------------------------- --------- -------- -------- -------- --------
Net asset value, end of period $ 17.55 $ 13.75 $ 14.53 $ 12.79 $ 11.47
==================================================== ========= ======== ======== ======== ========
Total return(b) 43.45% 1.88% 31.54% 20.61% 5.96%
==================================================== ========= ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $152,149 $86,565 $76,444 $60,076 $55,527
==================================================== ========= ======== ======== ======== ========
Ratio of expenses to average net assets 1.22% 1.21%(d) 1.00%(d) 1.00%(d) 1.00%
==================================================== ========= ======== ======== ======== ========
Ratio of net investment income to average net assets 0.89% 1.87%(e) 2.65%(e) 1.98%(e) 1.91%
==================================================== ========= ======== ======== ======== ========
Portfolio turnover rate 135% 131% 152% 124% 219%
==================================================== ========= ======== ======== ======== ========
</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 are annualized and based on average net assets of $3,945,251,110.
(d) Ratios of expenses to average net assets prior to reduction of advisory fees
were 1.13% (annualized), 1.13%, 1.23%, 1.09% and 1.08% for 1996, 1995 and
1990-88, respectively.
(e) Ratios of net investment income to average net assets prior to reduction of
advisory fees were 1.92% (annualized), 0.73%, 1.85%, 2.56% and 1.90% for
1996, 1995 and 1990-88, respectively.
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, ------------------------------------
1996 1995 1994 1993
---------- ---------- -------- -------
<S> <C> <C> <C> <C>
CLASS B:
Net asset value, beginning of period $ 26.65 $ 21.13 $ 20.82 $ 21.80
- ------------------------------------------------------------------- ---------- ---------- -------- -------
Income from investment operations:
Net investment income (loss) 0.14 (0.01) -- 0.02
- ------------------------------------------------------------------- ---------- ---------- -------- -------
Net gains (losses) on securities (both realized and unrealized) 1.15 7.12 0.51 (0.21)
- ------------------------------------------------------------------- ---------- ---------- -------- -------
Total from investment operations 1.29 7.11 0.51 (0.19)
- ------------------------------------------------------------------- ---------- ---------- -------- -------
Less distributions:
Dividends from net investment income -- -- -- (0.02)
- ------------------------------------------------------------------- ---------- ---------- -------- -------
Distributions from net realized capital gains -- (1.59) (0.20) (0.77)
- ------------------------------------------------------------------- ---------- ---------- -------- -------
Total distributions -- (1.59) (0.20) (0.79)
- ------------------------------------------------------------------- ---------- ---------- -------- -------
Net asset value, end of period $ 27.94 $ 26.65 $ 21.13 $ 20.82
=================================================================== ========== ========== ======== =======
Total return(a) 4.84% 33.73% 2.46% (0.74)%
=================================================================== ========== ========== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $4,051,360 $2,860,531 $680,119 $63,215
=================================================================== ========== ========== ======== =======
Ratio of expenses to average net assets 1.93%(b)(c) 1.94%(c) 1.90% 1.85%(d)
=================================================================== ========== ========== ======== =======
Ratio of net investment income (loss) to average net assets 1.12%(b)(c) (0.08)%(c) 0.00% (0.46)%(d)
=================================================================== ========== ========== ======== =======
Portfolio turnover rate 83% 151% 127% 177%
=================================================================== ========== ========== ======== =======
</TABLE>
(a) Total returns do not deduct contingent deferred sales charges and for
periods less than one year are not annualized.
(b) Ratios are annualized and based on average net assets of $3,520,705,251.
(c) The ratios of expenses and net investment income to average net assets prior
to reduction of advisory fees were 1.95% (annualized), 1.96% and 1.10%
(annualized), (0.09)% for 1996 and 1995, respectively.
(d) Annualized.
20
<PAGE> 23
Trustees &
Officers
<TABLE>
<S> <C> <C>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman and Chief Executive Officer Chairman Suite 1919
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
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 Dana R. Sutton
A I M Management Group Inc. Vice President and Assistant Treasurer State Street Bank & Trust Company
225 Franklin Street
John F. Kroeger Robert G. Alley Boston, MA 02110
Formerly Consultant Vice President
Wendell & Stockel Associates, Inc. COUNSEL TO THE FUND
Stuart W. Coco
Lewis F. Pennock Vice President Ballard Spahr
Attorney Andrews & Ingersoll
Melville B. Cox 1735 Market Street
Ian W. Robinson Vice President Philadelphia, PA 19103
Consultant; Formerly Executive
Vice President and Karen Dunn Kelley COUNSEL TO THE TRUSTEES
Chief Financial Officer Vice President
Bell Atlantic Management Kramer, Levin, Naftalis & Frankel
Services, Inc. Jonathan C. Schoolar 919 Third Avenue
Vice President 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>
