<PAGE> 1
AIM GLOBAL
UTILITIES FUND
[AIM LOGO APPEARS HERE] ANNUAL REPORT DECEMBER 31, 1996
<PAGE> 2
AIM GLOBAL
UTILITIES FUND
For shareholders
who seek high current income
and capital appreciation
through a portfolio
primarily of
common and preferred stocks
of public utility companies.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Global Utilities Fund's performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value. Unless
otherwise indicated, the Fund's performance is computed at net asset value
without a sales charge.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B share
performance reflects the applicable contingent deferred sales charge (CDSC)
for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The performance of the Fund's Class B shares will differ from that of
Class A shares due to differing fees and expenses.
o In 1996, the Fund paid distributions of $0.56 and $0.452 for Class A and
Class B shares, respectively.
o The Fund's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o Past performance cannot guarantee comparable future results.
o International investing presents certain risks not associated with
investing solely in the U.S. These include risks relating to fluctuations
in the value of the U.S. dollar relative to the value of other currencies,
the custody arrangements made for the Fund's foreign holdings, differences
in accounting, political risks, and the lesser degree of public information
required to be provided by non-U.S. companies.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o Standard & Poor's Corporation is a credit-rating agency. The unmanaged
Standard & Poor's Composite Index of 500 Stocks (S&P 500) is widely
regarded by investors as representative of the stock market in general.
o The Dow Jones Average of 15 Utilities is a weighted average of the
performance of 15 large publicly traded utility stocks.
o The Lipper Utility Funds Index is an average of the 30 largest utility
funds tracked 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
Dear Fellow Shareholder:
Financial markets produced another noteworthy year in 1996.
Stocks surged again to enthusiastic levels, but the advance
[PHOTO OF was marked by dramatic volatility and confined mainly to
Charles T. the performance of a select few large-company stocks.
Bauer, Still, most investors in stock funds were rewarded with
Chairman of double-digit returns for the year. Bonds had a difficult
the board of time until encouraging economic reports triggered a fall
THE FUND, rally that helped restore prices and bring yields back down
APPEARS HERE] to near 1995 levels.
As we begin 1997, the parallels to last year are
striking. The economy is growing at a moderate rate,
corporate earnings remain healthy, and inflation is modest.
Such an environment is ideal for financial investments.
Still, many suggest, as we do, that 1997 will be marked
by continued uncertainty and short-term volatility. And as
the market's performance continues to exceed historical averages, some advise
that a correction is overdue.
We believe the best way to achieve your investment goals in uncertain
markets is to follow a few basic strategies. First, you should keep a long-term
outlook. If you leave your money invested over the long term, you can help
avoid the results of the volatility that generally accompanies financial
markets over the short term. Those who try to "time the market"--move money in
and out of the market based on some gauge of future market performance--tend to
be less successful than investors using disciplined, long-term investment
strategies. That's because no one, not even expert market watchers, can
consistently predict what the market will do next.
Another strategy, diversification, may help you cushion the effects of a
volatile market and enhance your return potential. A mutual fund is already
diversified because it invests in many securities. You can diversify even
further by placing some of your assets in several different types of domestic
and international funds that may include stocks, bonds, and money market
securities.
Finally, no matter what your investment goals or time horizon, it makes good
sense to review your portfolio regularly with your financial consultant. In
rapidly changing markets, you need an investment professional on your side who
can explain what is happening and how your portfolio may be affected.
Your financial consultant can help you create and follow a regular
investment plan--investing a certain amount of money at regular intervals--that
can help you stay on track regardless of day-to-day market activity.
In 1997, and in the years ahead, we at AIM plan to meet the challenge of
changing financial markets through the consistent application of disciplined
investment strategies that have served our shareholders well for more than 20
years. We are pleased that AIM funds, overall, have turned in attractive, and
often impressive performance when measured against benchmark indexes and peer
group performance.
We appreciate the trust you have placed in us and we look forward to our
continued close association. If you have any questions or comments about this
report, we invite you to call Client Services at 800-959-4246 during normal
business hours. For automated account information 24 hours a day, call the AIM
Investor Line at 800-246-5463.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
----------------------------
In rapidly changing markets,
you need
an investment professional
on your side
who can explain
what is happening
and how your portfolio
may be affected.
----------------------------
<PAGE> 4
THE MANAGER'S OVERVIEW
FOREIGN UTILITIES FUEL STRONG RETURNS IN 1996
A roundtable discussion with the Fund management team for AIM Global Utilities
Fund for the fiscal year ended December 31, 1996.
- -------------------------------------------------------------------------------
Q. HOW DID AIM GLOBAL UTILITIES FUND PERFORM DURING THE FISCAL YEAR?
A. The Fund's total return was 13.88% for Class A shares and 12.98% for Class
B shares. Both outperformed the Lipper Utility Funds Index total return of
9.26%. The Fund continued to earn sufficient income to pay its regular
dividend, and, in fact, paid out an extra dividend in December of $0.08 per
Class A and Class B shares.
Q. THIS FUND HAS OUTPERFORMED THE LIPPER UTILITY FUNDS INDEX IN EACH OF THE
LAST TWO YEARS. WHY?
A. The Fund's global allocations had a lot to do with it. We slowly tested the
foreign utility waters in 1995, and we increased our foreign holdings in
1996.
Domestic electric utilities did not do well in 1996; however, foreign
electric utilities were attractive last year and performed nicely. Our
increased foreign utility holdings really fueled quite a bit of our return
last year and helped to account for the Fund's attractive performance
compared to the Lipper Utility Funds Index.
Q. WHAT PERCENTAGE OF THE FUND'S HOLDINGS ARE NOW OVERSEAS?
A. The Fund finished the fiscal year with 32% of its holdings in the foreign
sector. We expect that figure to continue to rise as we identify more
foreign utilities with attractive earnings. The foreign sector of utilities
appears to offer greater opportunities for growth than is currently
available with domestic utilities.
Q. HOW WOULD YOU DESCRIBE THE MARKET CONDITIONS DURING THE FISCAL YEAR? WERE
THERE ANY TRENDS THAT INFLUENCED THE MARKET?
A. The domestic economy was characterized by moderate growth, low inflation
and interest rates that were flat in the first half of the year and
slightly lower later in the year. However, overriding concerns about
reports of unexpected strength in the economy and the possibility of rising
interest rates caused considerable volatility in the financial markets for
much of the year, and that affected utility stocks as well.
On the positive side, there were many mergers in the utility market:
electric to electric, electric to gas, gas to electric and domestic to
foreign. On the global front, we are seeing more privatization of
government-owned electric, gas and telephone utilities. Natural events also
were a factor--the harsh winter in 1996 helped to increase natural gas
prices.
Q. DID THE FUND TAKE ADVANTAGE OF THOSE RISING GAS PRICES?
A. Yes. As gas prices rose, we increased our holdings in natural gas companies
to just over 11% of the portfolio, including such market leaders as El Paso
Natural Gas Co., The Williams Companies, Inc., Sonat Inc., and Enron Corp.
Natural gas companies saw their earnings increase by 20% in 1996.
PORTFOLIO COMPOSITION
As of 12/31/96
===============================================================================
TOP 10 HOLDINGS TOP 10 COUNTRIES
===============================================================================
1. Enron Corp. 1. United States
2. Cincinnati Bell, Inc. 2. United Kingdom
3. El Paso Natural Gas Co. 3. Canada
4. Pinnacle West Capital Corp. 4. Spain
5. Williams Companies, Inc. (The) 5. Germany
6. Ameritech Corp. 6. Italy
7. FPL Group, Inc. 7. Brazil
8. Allegheny Power System, Inc. 8. Argentina
9. Sonat, Inc. 9. Japan
10. Southern Co. 10. Austria
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.
===============================================================================
===============================================================================
FUND HAS STRONG YEAR
1-year total returns as of 12/31/96
- -------------------------------------------------------------------------------
AIM Fund Class A Shares 13.88%
AIM Fund Class B Shares 12.98%
Lipper Utility Funds Index 9.26%
===============================================================================
See important Fund & index disclosures inside front cover.
2
<PAGE> 5
Q. WHAT OTHER UTILITY SECTORS WERE STRONG PERFORMERS?
A. The telecommunications industry had another outstanding year. There is such
a tremendous amount of change occurring in telecommunications right now
because of increasing technology: wireless communications, modems, the
Internet, just to name a few. There are new companies coming into the
marketplace, and older companies are doing more things to take advantage of
this exploding industry. We thought telecommunications would be a good
sector for us, and that sector's returns were better than we expected.
Q. HOW DID YOU MANAGE YOUR HOLDINGS WITHIN THE TELECOMMUNICATIONS SECTOR?
A. We reduced our holdings in the regional Bells and long distance companies
and increased our holdings in companies that are more on the cutting edge
of the new telecommunications technology. One such company is Lucent
Technologies Inc., a new offering which once was AT&T's technological
laboratory.
Q. THE UTILITY SECTOR SEEMS TO BE UNDERGOING A LOT OF CHANGE.
A. Change is the prevalent factor in the utilities sector. We saw it first
with deregulation in the natural gas and telecommunication industries, and
we could see it with deregulation of the U.S. electric utilities industry
as we approach the end of the century. There are more mergers and
acquisitions than ever before. The foreign utilities sector seems poised to
provide real growth opportunities not available just a few years ago.
The utilities industry is rapidly changing, and we believe that will
provide the Fund with outstanding growth opportunities in the future while
keeping the Fund's volatility low--utility stocks tend to be less volatile
than other sectors of the market.
Q. INTEREST RATES ALWAYS ARE A CONCERN WHEN IT COMES TO UTILITIES. HOW
INTEREST-RATE SENSITIVE IS THE PORTFOLIO?
A. If interest rates were to rise, then the higher-yielding domestic utilities
might suffer. However, given the increase in foreign holdings, the Fund is
less sensitive to changes in the U.S. interest-rate environment. Interest
rates don't necessarily move in tandem around the world, so a change in
interest rates in the U.S. may have a different effect, or no effect at
all, in the interest rates of other countries. By reducing our exposure to
the U.S., we have better diversified the portfolio.
Q. WHAT IS YOUR MARKET OUTLOOK FOR UTILITIES IN THE NEAR FUTURE?
A. The utilities industry is in the midst of a rapidly changing environment.
That's exciting. We anticipate continuing breakthroughs in
telecommunications, and the prospects in the foreign utilities markets are
enticing. Both of those areas offer the Fund the best chances of real
growth, while domestic electric utilities continue to offer attractive
dividends.
Given the global outlook for stable interest rates and healthy,
moderate growth in most areas in which the Fund invests, the market
conditions seem favorable for utility companies and the Fund in 1997.
AIM GLOBAL UTILITIES FUND VS. BENCHMARK INDEXES
The chart below compares your Fund to benchmark indexes. It is intended to give
you a general idea of how your Fund performed compared to the stock market over
the period 1/18/88 to 12/31/96.
It is important to understand differences between your Fund and these
indexes. Your Fund's total return is shown with a sales charge and includes
fund expenses and management fees. An index measures performance of a
hypothetical portfolio, in this case the Standard & Poor's 500 and the Dow
Jones Average of 15 Utilities. Keep in mind that the S&P 500 is a broad
equities market index that does not include many utility stocks. As of December
31, 1996, only 9.66% of the S&P 500 consisted of utility stocks.
Unlike your Fund, the indexes are not managed,incurring no sales charges,
expenses or fees. You cannot invest in an index. But if you could buy all the
securities that make up a particular index, you would incur expenses that would
affect the return on your investment.
===============================================================================
GROWTH OF A $10,000 INVESTMENT
As of 12/31/96
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AIM Global Utilities Fund, Dow Jones Average
Class A S&P 500 Stock Index of 15 Utilities
(In thousands)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
1/19/88 $9,453 $10,000 $10,000
12/88 11,030 11,545 10,655
12/89 15,013 15,192 14,419
12/90 14,566 14,719 13,767
12/91 18,011 19,184 15,845
12/92 19,438 20,643 16,481
12/93 21,832 22,715 18,062
12/94 19,307 23,023 15,338
12/95 24,728 31,644 20,273
12/96 28,159 38,891 22,114
===============================================================================
</TABLE>
Past performance cannot guarantee comparable future results.
===============================================================================
AVERAGE ANNUAL TOTAL RETURN
As of 12/31/96, including sales charges
- -------------------------------------------------------------------------------
CLASS A
shares Inception (1/18/88) 12.26%*
5 Years 8.12
1 Year 7.61
*12.97% excluding sales charge
CLASS B SHARES
Inception (9/1/93) 4.61%**
1 Year 7.98
**5.42% excluding CDSC
===============================================================================
Source: Towers Data Systems HYPO--Registered Trademark--. Your Fund's total
return includes sales charges, expenses, and management fees. The performance of
the Fund's Class B shares will differ from that of Class A shares due to
differing fees and expenses. For Fund performance calculations and descriptions
of the indexes cited on this page, please refer to the inside front cover.
See important Fund & index disclosures inside front cover.
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-51.90%
ADVERTISING/BROADCASTING-0.33%
Univision Communications, Inc.(a) 21,800 $ 806,600
- --------------------------------------------------------------
COMPUTER MAINFRAMES-0.21%
ViaSat, Inc.(a) 57,000 513,000
- --------------------------------------------------------------
COMPUTER NETWORKING-0.88%
Ascend Communications, Inc.(a) 34,600 2,149,525
- --------------------------------------------------------------
COMPUTER PERIPHERALS-0.25%
U.S. Robotics Corp.(a) 8,500 612,000
- --------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES-0.40%
Puma Technology, Inc.(a) 34,700 598,575
- --------------------------------------------------------------
White Pine Software, Inc.(a) 50,000 362,500
- --------------------------------------------------------------
961,075
- --------------------------------------------------------------
ELECTRIC POWER-18.36%
AES Corp.(a) 17,500 813,750
- --------------------------------------------------------------
Allegheny Power System, Inc. 141,500 4,298,063
- --------------------------------------------------------------
Carolina Power & Light Co. 70,000 2,555,000
- --------------------------------------------------------------
Destec Energy, Inc.(a) 50,000 781,250
- --------------------------------------------------------------
DQE, Inc. 110,000 3,190,000
- --------------------------------------------------------------
Edison International 67,000 1,331,625
- --------------------------------------------------------------
FPL Group, Inc. 94,700 4,356,200
- --------------------------------------------------------------
GPU, Inc. 107,500 3,614,687
- --------------------------------------------------------------
Houston Industries, Inc. 94,400 2,135,800
- --------------------------------------------------------------
Illinova Corp. 95,500 2,626,250
- --------------------------------------------------------------
NIPSCO Industries, Inc. 100,000 3,962,500
- --------------------------------------------------------------
Pinnacle West Capital Corp. 200,000 6,350,000
- --------------------------------------------------------------
Sierra Pacific Resources 45,500 1,308,125
- --------------------------------------------------------------
Southern Co. 185,000 4,185,625
- --------------------------------------------------------------
Texas Utilities Co. 78,300 3,190,725
- --------------------------------------------------------------
44,699,600
- --------------------------------------------------------------
ENERGY (ALTERNATE SOURCES)-1.62%
Calenergy, Inc.(a) 48,888 1,643,859
- --------------------------------------------------------------
Teco Energy, Inc. 95,000 2,291,875
- --------------------------------------------------------------
3,935,734
- --------------------------------------------------------------
GAS DISTRIBUTION-1.55%
KN Energy, Inc. 31,600 1,240,300
- --------------------------------------------------------------
Public Service Co. of Colorado 65,200 2,534,650
- --------------------------------------------------------------
3,774,950
- --------------------------------------------------------------
NATURAL GAS PIPELINE-10.82%
Columbia Gas System, Inc. 30,700 1,953,287
- --------------------------------------------------------------
El Paso Natural Gas Co. 139,500 7,044,750
- --------------------------------------------------------------
Enron Corp. 94,500 4,075,312
- --------------------------------------------------------------
PanEnergy Corp. 76,200 3,429,000
- --------------------------------------------------------------
Sonat, Inc. 82,300 4,238,450
- --------------------------------------------------------------
Williams Companies, Inc. (The) 149,700 5,613,750
- --------------------------------------------------------------
26,354,549
- --------------------------------------------------------------
OIL & GAS (SERVICES)-0.22%
TPC Corp.(a) 60,000 540,000
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
REAL ESTATE-0.57%
Cali Realty Corp. 45,000 $ 1,389,375
- --------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS-2.30%
Crescent Real Estate Equities, Inc. 15,500 817,625
- --------------------------------------------------------------
Meditrust Corp. 24,400 976,000
- --------------------------------------------------------------
OMEGA Healthcare Investors, Inc. 32,000 1,064,000
- --------------------------------------------------------------
Patriot American Hospitality, Inc. 30,400 1,311,000
- --------------------------------------------------------------
Public Storage, Inc. 27,000 837,000
- --------------------------------------------------------------
Starwood Lodging Trust 11,000 606,375
- --------------------------------------------------------------
5,612,000
- --------------------------------------------------------------
TELECOMMUNICATIONS-4.70%
ADC Telecommunications, Inc.(a) 56,600 1,761,675
- --------------------------------------------------------------
AT&T Corp. 27,000 1,174,500
- --------------------------------------------------------------
CellNet Data Systems Inc.(a) 42,000 614,250
- --------------------------------------------------------------
Frontier Corp. 80,000 1,810,000
- --------------------------------------------------------------
Lucent Technologies, Inc. 29,000 1,341,250
- --------------------------------------------------------------
McLeod, Inc.-Class A(a) 40,000 1,020,000
- --------------------------------------------------------------
MFS Communications Company, Inc.(a) 1,343 73,193
- --------------------------------------------------------------
Superior Telecom Inc.(a) 45,000 916,875
- --------------------------------------------------------------
Teleport Communications Group
Inc.-Class A(a) 25,000 762,500
- --------------------------------------------------------------
360 Communications Co.(a) 26,000 601,250
- --------------------------------------------------------------
WorldCom, Inc.(a) 52,534 1,369,167
- --------------------------------------------------------------
11,444,660
- --------------------------------------------------------------
TELEPHONE-9.69%
Ameritech Corp. 75,200 4,559,000
- --------------------------------------------------------------
BellSouth Corp. 102,600 4,142,475
- --------------------------------------------------------------
Century Telephone Enterprises 66,800 2,062,450
- --------------------------------------------------------------
Cincinnati Bell, Inc. 117,000 7,210,125
- --------------------------------------------------------------
GTE Corp. 40,000 1,820,000
- --------------------------------------------------------------
SBC Communications, Inc. 73,500 3,803,625
- --------------------------------------------------------------
23,597,675
- --------------------------------------------------------------
Total Domestic Common Stocks 126,390,743
- --------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED STOCKS-2.82%
ADVERTISING/BROADCASTING-0.34%
Time Warner Inc.-Series M,
10.25% Conv. PIK Pfd 806 862,913
- --------------------------------------------------------------
ELECTRIC SERVICES-0.48%
Citizens Utilities Co.-$2.50 Conv.
Pfd. 24,400 1,165,100
- --------------------------------------------------------------
GAS UTILITY-0.66%
MCN Corp.-$2.01 Conv. Pfd. PRIDES 57,000 1,574,625
- --------------------------------------------------------------
OIL & GAS (SERVICES)-0.29%
Enron Corp.-$1.36 Conv. Pfd. 30,000 720,000
- --------------------------------------------------------------
TELECOMMUNICATIONS-0.88%
MFS Communications Company,
Inc.-$2.68 Conv. Pfd. 23,500 2,144,375
- --------------------------------------------------------------
TELEPHONE-0.17%
Salomon Inc.-$3.48 Conv. Pfd. 6,700 403,675
- --------------------------------------------------------------
Total Domestic Convertible
Preferred Stocks 6,870,688
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-26.98%
ARGENTINA-0.79%
Central Costanera S.A.-Class B
(Electric Power) 475,200 $ 1,454,403
- --------------------------------------------------------------
Telefonica de Argentina S.A.-ADR
(Telephone) 18,300 473,513
- --------------------------------------------------------------
1,927,916
- --------------------------------------------------------------
AUSTRALIA-0.19%
News Corp. Ltd.-$5.00 Conv. Pfd.(b)
(Advertising/Broadcasting)
(Acquired 11/04/96; Cost $500,000) 5,000 471,875
- --------------------------------------------------------------
AUSTRIA-0.39%
Oesterreichische
Elektrizitaetswirtschafts A.G.-
Class A (Electric Power) 12,500 935,610
- --------------------------------------------------------------
BRAZIL-1.03%
Eletricidade de Sao Paulo S.A.(a)
(Electric Power) 3,990 589,419
- --------------------------------------------------------------
Telecomunicacoes Brasileiras S.A.
Telebras-ADR (Telecommunications) 25,000 1,912,500
- --------------------------------------------------------------
2,501,919
- --------------------------------------------------------------
CANADA-1.43%
Manitoba Telephone System(a)
(Telecommunications) 95,000 901,921
- --------------------------------------------------------------
TELUS Corp. (Telecommunications) 95,000 1,380,632
- --------------------------------------------------------------
Westcoast Energy, Inc. (Natural Gas
Pipeline) 71,900 1,204,325
- --------------------------------------------------------------
3,486,878
- --------------------------------------------------------------
CHILE-1.54%
Cia. de Telecomunicaciones de Chile
S.A.-ADR (Telecommunications) 19,000 1,921,375
- --------------------------------------------------------------
Empresa Nacional de Electricidad
S.A.-ADR (Electric Power) 29,800 461,900
- --------------------------------------------------------------
Enersis S.A.-ADR (Electric Power) 49,600 1,376,400
- --------------------------------------------------------------
3,759,675
- --------------------------------------------------------------
GERMANY-1.66%
Deutsche Telekom-ADR(a) (Telephone) 66,500 1,354,938
- --------------------------------------------------------------
VEBA A.G. (Electric Power) 46,500 2,689,433
- --------------------------------------------------------------
4,044,371
- --------------------------------------------------------------
HONG KONG-0.24%
Asia Satellite Telecommunications
Holdings Ltd.- ADR(a)
(Telecommunications) 24,800 579,700
- --------------------------------------------------------------
INDONESIA-0.31%
PT Indosat-ADR (Telecommunications) 27,700 758,288
- --------------------------------------------------------------
ISRAEL-0.78%
ECI Telecommunications Ltd. Designs
(Computer Networking) 33,200 705,500
- --------------------------------------------------------------
Tadiran Telecommunications Ltd.
(Telecommunications) 40,000 895,000
- --------------------------------------------------------------
TTI Team Telecom International
Ltd.(a) (Telecommunications) 48,500 303,125
- --------------------------------------------------------------
1,903,625
- --------------------------------------------------------------
ITALY-1.37%
Telecom Italia Mobile S.p.A.
(Telecommunications) 578,300 1,465,764
- --------------------------------------------------------------
Telecom Italia S.p.A.
(Telecommunications) 717,000 1,862,215
- --------------------------------------------------------------
3,327,979
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
JAPAN-0.27%
Nippon Telegraph & Telephone
(Telecommunications) 85 $ 644,418
- --------------------------------------------------------------
NETHERLANDS-0.84%
Royal PTT Nederland N.V.-ADR
(Telephone) 54,170 2,051,689
- --------------------------------------------------------------
NEW ZEALAND-1.42%
Telecom Corp. of New Zealand
Ltd.-ADR (Telecommunications) 42,800 3,466,800
- --------------------------------------------------------------
PERU-0.49%
Luz del Sur S.A.(a) (Electric Power) 32,000 578,000
- --------------------------------------------------------------
Telefonica del Peru S.A.-ADR(b)
(Telecommunications) 33,000 622,875
- --------------------------------------------------------------
1,200,875
- --------------------------------------------------------------
PORTUGAL-0.88%
Portugal Telecom S.A.-ADR
(Telecommunications) 65,700 1,856,025
- --------------------------------------------------------------
Telecel-Comunicacaoes Pessoais,
S.A.(a) (Telecommunications) 4,600 286,350
- --------------------------------------------------------------
2,142,375
- --------------------------------------------------------------
SOUTH KOREA-0.36%
Korea Electric Power Corp.-ADR
(Electric Power) 42,600 873,300
- --------------------------------------------------------------
SPAIN-3.13%
Autopistas Concesionaria Espanola
S.A. (Engineering & Construction) 77,000 1,061,660
- --------------------------------------------------------------
Empresa Nacional de Electricidad
S.A.-ADR (Electric Power) 20,000 1,400,000
- --------------------------------------------------------------
Iberdrola S.A. (Electric Power) 233,000 3,302,292
- --------------------------------------------------------------
Telefonica de Espana-ADR
(Telecommunications) 26,800 1,855,900
- --------------------------------------------------------------
7,619,852
- --------------------------------------------------------------
SWEDEN-0.49%
Telefonaktiebolaget LM Ericsson-ADR
(Telecommunications) 39,500 1,192,406
- --------------------------------------------------------------
UNITED KINGDOM-7.97%
British Sky Broadcasting Group
PLC-ADR (Advertising/Broadcasting) 10,000 525,000
- --------------------------------------------------------------
Hyder PLC (Water Supply) 53,955 687,263
- --------------------------------------------------------------
London Electricity PLC (Electric
Power) 137,057 1,597,863
- --------------------------------------------------------------
National Grid Group PLC (Electric
Power) 102,537 343,430
- --------------------------------------------------------------
National Power PLC (Electric Power) 175,000 1,466,078
- --------------------------------------------------------------
National Power PLC-ADR (Electric
Power) 40,000 1,355,000
- --------------------------------------------------------------
Nynex CableComms Group-ADR(a)
(Telecommunications) 37,500 679,688
- --------------------------------------------------------------
PowerGen PLC (Electrical Power) 209,500 2,060,185
- --------------------------------------------------------------
PowerGen PLC-ADR (Electric Power) 40,900 1,615,550
- --------------------------------------------------------------
Scottish Power PLC (Electrical
Power) 201,550 1,218,899
- --------------------------------------------------------------
Southern Electric PLC(a) (Electric
Power) 67,200 916,416
- --------------------------------------------------------------
United Utilities PLC (Water Supply) 197,100 2,096,952
- --------------------------------------------------------------
Wessex Water PLC (Water Supply) 169,750 1,081,840
- --------------------------------------------------------------
Yorkshire Electricity Group PLC
(Electric Power) 144,941 1,998,929
- --------------------------------------------------------------
Yorkshire Water PLC (Water Supply) 145,800 1,760,990
- --------------------------------------------------------------
19,404,083
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
VENEZUELA-1.40%
Cia. Anonima Nacional Telefonos de
Venezuela(a) (Telephone) 121,400 $ 3,414,375
- --------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests 65,708,009
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
DOMESTIC CONVERTIBLE BONDS-1.00%
CABLE TELEVISION-0.57%
International Cabletel Inc.,
Conv. Sub. Notes, 7.00%, 06/15/08 $1,500,000 1,376,250
- --------------------------------------------------------------
SEMICONDUCTORS-0.43%
Analog Devices,
Conv. Sub. Notes, 3.50%, 12/01/00 750,000 1,047,660
- --------------------------------------------------------------
Total Domestic Convertible Bonds 2,423,910
- --------------------------------------------------------------
DOMESTIC NON-CONVERTIBLE BONDS-8.51%
ADVERTISING/BROADCASTING-1.28%
Comcast Corp.,
Sr. Sub. Deb., 9.50%, 01/15/08 900,000 936,000
- --------------------------------------------------------------
Time Warner, Inc.,
Deb., 6.85%, 01/15/26 1,000,000 983,190
- --------------------------------------------------------------
Time Warner, Inc.,
Notes, 8.18%, 08/15/07 1,150,000 1,198,990
- --------------------------------------------------------------
3,118,180
- --------------------------------------------------------------
ELECTRIC POWER-2.10%
El Paso Electric Co.,
First Mortgage Bonds, 8.90%,
02/01/06 1,425,000 1,488,455
- --------------------------------------------------------------
Indiana Michigan Power,
Deb., 9.82%, 12/07/22 3,021,728 3,645,775
- --------------------------------------------------------------
5,134,230
- --------------------------------------------------------------
ENERGY (ALTERNATE SOURCES)-1.02%
AES Corp.,
Sr. Sub. Notes, 10.25%, 07/15/06 925,000 994,375
- --------------------------------------------------------------
California Energy Co.,
Disc. Notes, 10.25%, 01/15/04(c) 1,400,000 1,484,000
- --------------------------------------------------------------
2,478,375
- --------------------------------------------------------------
GAS DISTRIBUTION-0.42%
Ferrellgas Partners,
Sr. Notes, 9.375%, 06/15/06 1,000,000 1,021,250
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
NATURAL GAS PIPELINE-2.48%
Enron Corp.,
Sr. Sub. Deb., 6.75%, 07/01/05 $3,750,000 $ 3,712,950
- --------------------------------------------------------------
PanEnergy Corp.,
Notes, 7.875%, 08/15/04 2,205,000 2,329,384
- --------------------------------------------------------------
6,042,334
- --------------------------------------------------------------
TELECOMMUNICATIONS-1.21%
AT&T Corp.,
Sr. Notes, 7.75%, 03/01/07 1,850,000 1,961,315
- --------------------------------------------------------------
TCI Communications Inc.,
Sr. Notes, 8.00%, 08/01/05 1,000,000 980,440
- --------------------------------------------------------------
2,941,755
- --------------------------------------------------------------
Total Domestic Non-Convertible
Bonds 20,736,124
- --------------------------------------------------------------
FOREIGN NON-CONVERTIBLE BONDS-4.63%
CANADA-4.63%(d)
Bell Canada (Telecommunications),
Deb., 10.875%, 10/11/04 1,700,000 1,550,398
- --------------------------------------------------------------
Bell Canada (Telecommunications),
Deb., Series EW, 8.80%, 08/17/05 950,000 791,956
- --------------------------------------------------------------
Canadian Oil Debco Inc.
(Oil & Gas-Services), Deb.,
11.00%, 10/31/00 1,750,000 1,497,846
- --------------------------------------------------------------
Ontario Hydro (Electric Power),
Global Bonds,
9.00%, 06/24/02 2,500,000 2,097,422
- --------------------------------------------------------------
Teleglobe Canada Inc.
(Telecommunications),
Deb., 8.35%, 06/20/03 2,400,000 1,934,477
- --------------------------------------------------------------
Trans-Canada Pipelines
(Oil & Gas-Services),
Series MTN, 8.55%, 02/01/06 2,150,000 1,759,662
- --------------------------------------------------------------
Trans-Canada Pipelines
(Oil & Gas-Services),
Series Q Deb., 10.625%, 10/20/09 1,750,000 1,639,323
- --------------------------------------------------------------
Total Foreign Non-Convertible
Bonds 11,271,084
- --------------------------------------------------------------
REPURCHASE AGREEMENT-1.67%(e)
UBS Securities Inc., 7.05%,
01/02/97(f) 4,071,574 4,071,574
- --------------------------------------------------------------
TOTAL INVESTMENT SECURITIES-97.51% 237,472,132
- --------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-2.49% 6,059,347
- --------------------------------------------------------------
NET ASSETS-100.00% $243,531,479
==============================================================
</TABLE>
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with provisions of Rule 144A under the Securities Act of 1933, as
amended. The valuation of these securities has been determined in accordance
with procedures established by the Board of Trustees. The market value of
this security at December 31, 1996 was $471,875 which represented 0.21% of
the Fund's net assets.
(c) Discounted bond at purchase. Interest rate shown represents coupon rate at
which the bond will accrue at a specified future date.
(d) Foreign denominated security. Par value and coupon are denominated in
Canadian dollars.
(e) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts, and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(f) Joint repurchase agreement entered into 12/31/96 with a maturing value of
$550,215,417. Collateralized by $732,485,305 U.S. Government agency
obligations, 0% to 9.50% due 01/01/98 to 12/15/26.
Abbreviations:
<TABLE>
<S> <C>
ADR - American Depository Receipt PIK - Payment in Kind
Conv. - Convertible PRIDES - Preferred Redeemable Increased
Deb. - Debentures Dividend Equity Securities
MTN - Medium Term Notes Sr. - Senior
Pfd. - Preferred Sub. - Subordinated
</TABLE>
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$186,366,979) $237,472,132
- ---------------------------------------------------------
Foreign currencies, at market value (cost
$296,186) 300,364
- ---------------------------------------------------------
Receivables for:
Investments sold 5,994,069
- ---------------------------------------------------------
Fund shares sold 335,450
- ---------------------------------------------------------
Dividends and interest 1,284,171
- ---------------------------------------------------------
Investment for deferred compensation plan 15,551
- ---------------------------------------------------------
Other assets 15,665
- ---------------------------------------------------------
Total assets 245,417,402
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 922,062
- ---------------------------------------------------------
Fund shares reacquired 170,722
- ---------------------------------------------------------
Dividends 288,972
- ---------------------------------------------------------
Deferred compensation 15,551
- ---------------------------------------------------------
Accrued advisory fees 118,710
- ---------------------------------------------------------
Accrued administrative service fees 7,045
- ---------------------------------------------------------
Accrued distribution fees 196,866
- ---------------------------------------------------------
Accrued trustees' fees 1,702
- ---------------------------------------------------------
Accrued transfer agent fees 64,046
- ---------------------------------------------------------
Accrued operating expenses 100,247
- ---------------------------------------------------------
Total liabilities 1,885,923
- ---------------------------------------------------------
Net assets applicable to shares outstanding $243,531,479
=========================================================
NET ASSETS:
Class A $164,001,056
=========================================================
Class B $ 79,530,423
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 10,244,650
=========================================================
Class B 4,967,904
=========================================================
Class A:
Net asset value and redemption price
per share $ 16.01
=========================================================
Offering price per share:
(Net asset value of $16.01 divided
by 94.50%) $ 16.94
=========================================================
Class B:
Net asset value and offering price
per share $ 16.01
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $490,882 foreign
withholding tax) $ 8,553,274
- ---------------------------------------------------------
Interest 2,922,874
- ---------------------------------------------------------
Total investment income 11,476,148
- ---------------------------------------------------------
EXPENSES:
Advisory fees 1,397,762
- ---------------------------------------------------------
Administrative service fees 80,256
- ---------------------------------------------------------
Custodian fees 91,811
- ---------------------------------------------------------
Trustees' fees 7,354
- ---------------------------------------------------------
Distribution fees -- Class A 409,087
- ---------------------------------------------------------
Distribution fees -- Class B 759,491
- ---------------------------------------------------------
Transfer agent fees -- Class A 334,220
- ---------------------------------------------------------
Transfer agent fees -- Class B 185,241
- ---------------------------------------------------------
Other 147,813
- ---------------------------------------------------------
Total expenses 3,413,035
- ---------------------------------------------------------
Less: Expenses paid indirectly (3,909)
- ---------------------------------------------------------
Net expenses 3,409,126
- ---------------------------------------------------------
Net investment income 8,067,022
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM INVESTMENT
SECURITIES AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain from:
Investment securities 9,910,387
- ---------------------------------------------------------
Foreign currency transactions 31,633
- ---------------------------------------------------------
9,942,020
- ---------------------------------------------------------
Unrealized appreciation of:
Investment securities 12,235,592
- ---------------------------------------------------------
Foreign currencies 12,071
- ---------------------------------------------------------
12,247,663
- ---------------------------------------------------------
Net gain from investment securities and
foreign currencies 22,189,683
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $30,256,705
=========================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
OPERATIONS:
Net investment income $ 8,067,022 $ 8,470,013
- ------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities and
foreign currencies 9,942,020 937,755
- ------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 12,247,663 42,939,910
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 30,256,705 52,347,678
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (6,101,120) (6,295,577)
- ------------------------------------------------------------------------------------------
Class B (2,294,587) (1,690,557)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A (21,359,001) (12,765,899)
- ------------------------------------------------------------------------------------------
Class B 1,711,797 16,638,939
- ------------------------------------------------------------------------------------------
Net increase in net assets 2,213,794 48,234,584
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 241,317,685 193,083,101
- ------------------------------------------------------------------------------------------
End of period $243,531,479 $241,317,685
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $201,870,971 $221,523,475
- ------------------------------------------------------------------------------------------
Undistributed net investment income 112,764 404,516
- ------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of
investment securities and foreign currencies (9,567,151) (19,477,538)
- ------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 51,114,895 38,867,232
- ------------------------------------------------------------------------------------------
$243,531,479 $241,317,685
==========================================================================================
</TABLE>
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Utilities Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of nine separate series
portfolios, each having an unlimited number of shares of beneficial interest.
The Fund currently offers two different classes of shares: the Class A shares
and the Class B shares. Class A shares are sold with a front-end sales charge.
Class B shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's objective is to
achieve a high level of current income, and as a secondary objective the Fund
seeks to achieve capital appreciation, by investing primarily in the common and
preferred stocks of public utility companies.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. Security Valuations -- Securities listed or traded on an exchange (except
convertible bonds) are valued at the last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular day,
the security is valued at the mean between the closing bid and asked prices
on that day. If a mean is not available, as is the case in some foreign
markets, the closing bid will be used absent a last sales price. Each
security traded in the over-the-counter market (but not including securities
reported on the NASDAQ National Market System) is valued at the mean between
the last bid and asked prices based upon quotes furnished by market makers
for such securities. Each security reported on the NASDAQ National Market
System is valued at the last sales price on the valuation date or absent a
last sales price, at the closing bid and asked
8
<PAGE> 11
prices. Debt securities (including convertible bonds) are valued on the basis
of prices provided by an independent pricing service. Prices provided by the
pricing service may be determined without exclusive reliance on quoted
prices, and may reflect appropriate factors such as institution-size trading
in similar groups of securities, developments related to special securities,
yield, quality, coupon rate, maturity, type of issue, individual trading
characteristics and other market data. Securities for which market quotations
either are not readily available or are questionable are valued at fair value
as determined in good faith by or under the supervision of the Trust's
officers in a manner specifically authorized by the Board of Trustees.
Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value. Generally, trading in foreign
securities is substantially completed each day at various times prior to the
close of the New York Stock Exchange. The values of such securities used in
computing the net asset value of the Fund's shares are determined as of such
times. Foreign currency exchange rates are also generally determined prior to
the close of the New York Stock Exchange. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the times
at which they are determined and the close of the New York Stock Exchange
which will not be reflected in the computation of the Fund's net asset value.
If events materially affecting the value of such securities occur during the
period, then these securities will be valued at their fair value as
determined in good faith by or under the supervision of the Board of
Trustees.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. It is the policy of the Fund to declare daily dividends
from net investment income. Such dividends are paid monthly. Distributions
from net realized capital gains, if any, are recorded on ex-dividend date and
are paid annually. On December 31, 1996, undistributed net investment income
was increased by $36,933, paid-in capital reduced by $5,300 and undistributed
net realized gains increased by $31,633 in order to comply with the
requirements of the American Institute of Certified Public Accountants
Statement of Position 93-2. Net assets of the Fund were unaffected by the
reclassifications discussed above.
C. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions.
D. Foreign Currency Contracts -- A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a forward currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a forward currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
E. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements. The Fund has a capital loss
carryforward of $9,488,489 (which may be carried forward to offset future
taxable capital gains, if any) which expires, if not previously utilized, in
the year 2003. The Fund cannot distribute capital gains to shareholders until
the tax loss carryforwards have been utilized.
F. Expenses -- Operating expenses directly attributable to a class of shares are
charged to that class' operations. Expenses which are applicable to both
classes, e.g. advisory fees, are allocated between them.
NOTE 2- ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.60% of
the first $200 million of the Fund's average daily net assets, plus 0.50% of the
Fund's average daily net assets in excess of $200 million to and including $500
million, plus 0.40% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.30% of the Fund's average daily net
assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended December 31, 1996, AIM
was reimbursed $80,256 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the year ended December 31, 1996, AFS
was paid $325,229 for such services.
The Fund received reductions in transfer agency fees payable to AFS of $3,649
from dividends received on balances in cash management bank accounts. In
addition, pricing service expenses in the amount of $260 were paid through
directed brokerage commissions paid by the Fund. The above arrangements resulted
in a reduction in the Fund's total expenses of $3,909 during the year ended
December 31, 1996.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A shares and the Class B shares of the Fund. The Trust has adopted Plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares (the "Class A Plan") and with respect to the Fund's Class B shares (the
"Class B Plan")(collectively, the "Plans"). The Fund,
9
<PAGE> 12
pursuant to the Class A Plan, pays AIM Distributors compensation at an annual
rate of 0.25% of the average daily net assets attributable to the Class A
shares. The Class A Plan is designed to compensate AIM Distributors for certain
promotional and other sales related costs and provides for payments to selected
dealers and financial institutions who furnish continuing personal shareholder
services to their customers who purchase and own Class A shares of the Fund. The
Fund, pursuant to the Class B Plan, pays AIM Distributors compensation at an
annual rate of 1.00% of the average daily net assets attributable to the Class B
shares. Of this amount, the Fund may pay a service fee of 0.25% of the average
daily net assets of the Class B shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own Class B shares of the Fund. Any amounts not paid
as a service fee under such Plans would constitute an asset-based sales charge.
The Plans also impose a cap on the total sales charges, including asset-based
sales charges, that may be paid by the respective classes. AIM Distributors may,
from time to time, assign, transfer or pledge to one or more assignees, its
rights to all or a designated portion of (a) compensation received by AIM
Distributors from the Fund pursuant to the Class B Plan (but not AIM
Distributors' duties and obligations pursuant to the Class B Plan) and (b) any
contingent deferred sales charges payable to AIM Distributors related to the
Class B shares. During the year ended December 31, 1996, the Class A shares and
the Class B shares paid AIM Distributors $409,087 and $759,491, respectively, as
compensation under the Plans.
AIM Distributors received commissions of $95,058 from sales of the Class A
shares of the Fund during the year ended December 31, 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 year ended December 31, 1996,
AIM Distributors received $145,184 in contingent deferred sales charges imposed
on redemptions of Fund shares. Certain officers and trustees of the Trust are
officers and directors of AIM, AIM Distributors and AFS.
During the year ended December 31, 1996, the Fund paid legal fees of $3,406
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $325,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 19, 1996, the Fund was
limited to borrowing $3,600,000. During the year ended December 31, 1996, the
Fund did not borrow under the line of credit agreement. The funds which are
parties to the line of credit are charged a commitment fee of 0.08% on the
unused balance of the committed line. The commitment fee is allocated among such
funds based on their respective average net assets for the period.
NOTE 5-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1996 was
$112,908,079 and $136,028,500, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of December 31, 1996 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $52,730,707
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (1,747,178)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $50,983,529
=========================================================
</TABLE>
Cost of investments for tax purposes is $186,488,603.
NOTE 6-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1996 and 1995
were as follows:
<TABLE>
<CAPTION>
1996 1995
----------------------- -----------------------
SHARES VALUE SHARES VALUE
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold:
Class A 2,473,508 $36,689,173 3,040,993 $39,908,471
- ------------------------------------------------------------------------
Class B 1,424,455 21,097,067 2,223,714 29,286,592
- ------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A 353,355 5,316,653 417,851 5,505,279
- ------------------------------------------------------------------------
Class B 127,578 1,926,340 106,557 1,413,598
- ------------------------------------------------------------------------
Reacquired:
Class A (4,274,871) (63,364,827) (4,470,353) (58,179,649)
- ------------------------------------------------------------------------
Class B (1,425,633) (21,311,610) (1,083,006) (14,061,251)
- ------------------------------------------------------------------------
(1,321,608) $(19,647,204) 235,756 $ 3,873,040
========================================================================
</TABLE>
10
<PAGE> 13
NOTE 7-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a Class A share outstanding during
each of the years in the eight-year period ended December 31, 1996 and the
period January 18, 1988 (date operations commenced) through December 31, 1988
and for a Class B share outstanding during each of the years in the three-year
period ended December 31, 1996 and the period September 1, 1993 (date sales
commenced) through December 31, 1993.
<TABLE>
<CAPTION>
CLASS A SHARES
-----------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992(a) 1991 1990 1989
-------- -------- -------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 14.59 $ 11.85 $ 14.09 $ 13.31 $ 13.75 $ 12.45 $ 13.73 $ 10.99
- ----------------------- -------- -------- -------- -------- -------- ------- ------- -------
Income from investment
operations:
Net investment income 0.55 0.55 0.59 0.60 0.67 0.70 0.66 0.77
- ----------------------- -------- -------- -------- -------- -------- ------- ------- -------
Net gains (losses) on
securities (both
realized and
unrealized) 1.43 2.71 (2.20) 1.02 0.36 2.12 (1.10) 3.06
- ----------------------- -------- -------- -------- -------- -------- ------- ------- -------
Total from
investment
operations 1.98 3.26 (1.61) 1.62 1.03 2.82 (0.44) 3.83
- ----------------------- -------- -------- -------- -------- -------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.56) (0.52) (0.60) (0.61) (0.68) (0.66) (0.70) (0.69)
- ----------------------- -------- -------- -------- -------- -------- ------- ------- -------
Distributions from net
realized capital
gains -- -- -- (0.23) (0.79) (0.86) (0.14) (0.40)
- ----------------------- -------- -------- -------- -------- -------- ------- ------- -------
Returns of capital -- -- (0.03) -- -- -- -- --
- ----------------------- -------- -------- -------- -------- -------- ------- ------- -------
Total distributions (0.56) (0.52) (0.63) (0.84) (1.47) (1.52) (0.84) (1.09)
- ----------------------- -------- -------- -------- -------- -------- ------- ------- -------
Net asset value, end of
period $ 16.01 $ 14.59 $ 11.85 $ 14.09 $ 13.31 $ 13.75 $ 12.45 $ 13.73
======================= ======== ======== ======== ======== ======== ======= ======= =======
Total return(b) 13.88% 28.07% (11.57)% 12.32% 7.92% 23.65% (2.98)% 36.11%
======================= ======== ======== ======== ======== ======== ======= ======= =======
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $164,001 $170,624 $150,515 $200,016 $111,771 $91,939 $69,541 $58,307
======================= ======== ======== ======== ======== ======== ======= ======= =======
Ratio of expenses to
average net assets 1.17%(c)(d) 1.21% 1.18% 1.16% 1.17% 1.23% 1.21%(e) 1.05%(e)
======================= ======== ======== ======== ======== ======== ======= ======= =======
Ratio of net investment
income to average net
assets 3.62%(c) 4.20% 4.67% 4.21% 4.96% 5.36% 5.21%(f) 6.13%(f)
======================= ======== ======== ======== ======== ======== ======= ======= =======
Portfolio turnover rate 48% 88% 101% 76% 148% 169% 123% 115%
======================= ======== ======== ======== ======== ======== ======= ======= =======
Average broker
commission rate(h) $0.0460 N/A N/A N/A N/A N/A N/A N/A
======================= ======== ======== ======== ======== ======== ======= ======= =======
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------- ----------------------------------------------------
1988 1996 1995 1994 1993
------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 10.00 $ 14.60 $ 11.84 $ 14.08 $ 15.30
- ----------------------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.82 0.42 0.44 0.47 0.17
- ----------------------- ------- ------- ------- ------- -------
Net gains (losses) on
securities (both
realized and
unrealized) 0.83 1.44 2.73 (2.19) (0.98)
- ----------------------- ------- ------- ------- ------- -------
Total from
investment
operations 1.65 1.86 3.17 (1.72) (0.81)
- ----------------------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.66) (0.45) (0.41) (0.49) (0.17)
- ----------------------- ------- ------- ------- ------- -------
Distributions from net
realized capital
gains -- -- -- -- (0.24)
- ----------------------- ------- ------- ------- ------- -------
Returns of capital -- -- -- (0.03) --
- ----------------------- ------- ------- ------- ------- -------
Total distributions (0.66) (0.45) (0.41) (0.52) (0.41)
- ----------------------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 10.99 $ 16.01 $ 14.60 $ 11.84 $ 14.08
======================= ======= ======= ======= ======= =======
Total return(b) 17.03% 12.98% 27.16% (12.35)% (5.32)%
======================= ======= ======= ======= ======= =======
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $20,104 $79,530 $70,693 $42,568 $23,892
======================= ======= ======= ======= ======= =======
Ratio of expenses to
average net assets 1.22%(e)(g) 1.96%(c)(d) 1.97% 2.07% 1.99%(g)
======================= ======= ======= ======= ======= =======
Ratio of net investment
income to average net
assets 7.63%(f)(g) 2.83%(c) 3.44% 3.78% 3.38%(g)
======================= ======= ======= ======= ======= =======
Portfolio turnover rate 87% 48% 88% 101% 76%
======================= ======= ======= ======= ======= =======
Average broker
commission rate(h) N/A $0.0460 N/A N/A N/A
======================= ======= ======= ======= ======= =======
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Total returns do not deduct sales charges and for periods less than one year
are not annualized.
(c) Ratios for Class A are based on average daily net assets of $163,634,721.
Ratios for Class B are based on average daily net assets of $75,949,144.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(e) Ratios of expenses to average net assets prior to reduction of advisory fees
were 1.22%, 1.11% and 1.69% (annualized) for 1990-88, respectively.
(f) Ratios of net investment income to average net assets prior to reduction of
advisory fees were 5.20%, 6.07% and 7.16% (annualized) for 1990-88,
respectively.
(g) Annualized.
(h) Disclosure requirement beginning with the Fund's fiscal year ended December
31, 1996.
NOTE 8-SUBSEQUENT EVENT
On November 4, 1996, A I M Management Group Inc. ("AIM Management") and INVESCO
plc announced the execution of an agreement and plan of merger pursuant to which
AIM Management will be merged with and into a direct wholly-owned subsidiary of
INVESCO plc. AIM Management is the parent company of the Fund's advisor. The
merger is expected to take place during the first quarter of 1997.
11
<PAGE> 14
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Global Utilities Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Global Utilities Fund (a portfolio of
AIM Funds Group), including the schedule of investments, as
of December 31, 1996, and the related statement of
operations for the year then ended, the statement of
changes in net assets for each of the years in the two-year
period then ended and the financial highlights for each of
the years in the four-year period then ended. These
financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of December 31, 1996, by correspondence
with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Global
Utilities Fund as of December 31, 1996, the results of its
operations for the year then ended, the changes in its net
assets for each of the years in the two-year period then
ended and the financial highlights for each of the years in
the four-year period then ended, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
February 7, 1997
12
<PAGE> 15
Trustees & Officers
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
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 Carol F. Relihan Houston, TX 77046
Director Senior Vice President and Secretary
Cortland Trust Inc. TRANSFER AGENT
Gary T. Crum
Carl Frischling Senior Vice President A I M Fund Services, Inc.
Partner P.O. Box 4739
Kramer, Levin, Naftalis & Frankel Scott G. Lucas Houston, TX 77210-4739
Senior Vice President
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 AUDITORS
Assistant Secretary
KPMG Peat Marwick LLP
Ofelia M. Mayo 700 Louisiana
Assistant Secretary NationsBank Bldg.
Houston, TX 77002
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
AIM Global Utilities Fund Class A and Class B shares paid ordinary dividends in
the amount of $0.56 and $0.452 per share, respectively, to shareholders during
its tax year ended December 31, 1996. Of these amounts, 69,28% is eligible for
the dividends received deduction for corporations. Missouri residents: During
the Fund's tax year ended December 31, 1996, 0.68% of the Fund's income was
derived from U.S. Treasury obligations.
<PAGE> 16
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS--Registered Trademark--
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Capital Development Fund
AIM Constellation Fund
AIM Global Aggressive Growth Fund
[PHOTO OF GROWTH
11 Greenway Plaza AIM Blue Chip Fund
APPEARS HERE] AIM Global Growth Fund
AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME
AIM Balanced Fund
AIM Charter Fund
INCOME AND GROWTH
AIM Global Utilities Fund
HIGH CURRENT INCOME
AIM High Yield Fund
CURRENT INCOME
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of CT
AIM Tax-Free Intermediate Shares
CURRENT INCOME AND HIGH DEGREE OF SAFETY
AIM Intermediate Government Fund
HIGH DEGREE OF SAFETY AND CURRENT INCOME
AIM Limited Maturity Treasury Shares
A I M Management Group Inc. has provided STABILITY, LIQUIDITY, AND CURRENT INCOME
leadership in the mutual fund industry AIM Money Market Fund
since 1976 and manages approximately $70
billion in assets for more than 3.5 STABILITY, LIQUIDITY, AND CURRENT TAX-FREE INCOME
million shareholders, including AIM Tax-Exempt Cash Fund
individual investors, corporate clients,
and financial institutions as of *AIM Aggressive Growth Fund was closed to new
February 11, 1997. The AIM Family of investors on July 18, 1995. For more complete
Funds--Registered Trademark--is distributed information about any AIM Fund(s), including
nationwide, and AIM today ranks among the sales charges and expenses, ask your financial
nation's top 15 mutual fund companies in consultant or securities dealer for a free
assets under management, according to Lipper prospectus(es). Please read the prospectus(es)
Analytical Services, Inc. carefully before you invest or send money.
---------------
[AIM LOGO APPEARS HERE] BULK RATE
U.S. POSTAGE
A I M Distributors, Inc. PAID
11 Greenway Plaza, Suite 1919 HOUSTON, TX
Houston, TX 77046 Permit No. 1919
---------------
</TABLE>
