<PAGE> 1
AIM VALUE FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT JUNE 30, 1997
<PAGE> 2
-----------------------------------
AIM VALUE FUND
For shareholders
who seek
[COVER long-term growth of capital
PHOTO
APPEARS through a portfolio
HERE]
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 differing fees and 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 Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
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 Dow Jones Industrial Average (DJIA) is a price-weighted average of 30
actively traded primarily industrial stocks.
o The Lipper Growth Funds Index represents an average of the performance of
the 30 largest growth funds. The Lipper All Equity Funds Average is an
unmanaged average of the performance of all equity funds Lipper tracks.
Both are 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
Dear Fellow Shareholder:
As 1997 came to its midway point, stocks were once again in
record territory. The course was not smooth; indeed, markets
fluctuated widely during the first six months of the year. The
popular Dow Jones Industrial Average of large-company stocks
fell by nearly 10% early in the period; the Russell 2000 Index
[PHOTO OF of small-company stocks lost nearly 20%. Both have since
Charles T. recovered lost ground and set records in an impressive rally
Bauer, which began in May.
Chairman of In past reports, we have observed that market volatility has
the Board of become the norm rather than the exception. We suggested that
The Fund the 20%-30% returns of 1995 and 1996 were unlikely to continue
APPEARS HERE] uninterrupted, and we have seen that to be true so far in 1997.
However, we are still experiencing the longest bull market in
history, now well into its seventh year.
For hundreds of thousands of investors, this bull market is
the only investment climate they have ever known. If you have
been invested in stocks only since 1990, your experience has
truly been extraordinary: the S&P 500 Index--the broad-based index generally
considered "the market"--had an annual return of 30% in 1991, 38% in 1995, and
23% in 1996. And not one down year.
Of course, such returns are well above the averages for stocks. That has
led mutual fund managers, financial consultants, and market experts to voice
concern that some investors may not be prepared for more modest returns in line
with historical averages. Although we've seen nothing but advances every year
in the S&P 500 Index since 1990, it is important to remember that the market
has averaged one down year out of every three since 1928.
Not that we expect severe declines ahead. On the contrary, conditions in
financial markets seem ideal for continued prosperity. But it is important to
maintain realistic expectations about investment performance. Indeed, many
market watchers suggest that stock performance will likely return to historic
norms closer to 10% return per year than 20%. When that may happen is anyone's
guess.
That's why it's a good idea to reassess your investment goals periodically
with your financial consultant. Managing your investments in changing markets
can be challenging, and your financial consultant knows a few time-tested
investment strategies that can help. Diversification, for example, can help you
cushion the effects of volatility and reduce your risk exposure in any one type
of security.
On the following pages, your Fund's management team will discuss the market
environment during the reporting period and why they are confident that the
reasons for investing in the Fund remain as compelling as ever. These
discussions are offered to help you better understand the relative performance
of your Fund.
AIM/INVESCO MERGER FINALIZED
We are pleased to announce that the merger of A I M Management Group Inc. and
INVESCO PLC was concluded on February 28, 1997. AIM is now part of one of the
world's largest independent investment management groups with approximately
$177 billion in assets under management. The combined company, AMVESCAP PLC,
has the financial strength necessary to meet your needs in an increasingly
competitive financial services environment, both in the United States and
worldwide. The merger will not result in any change of portfolio management or
investment style of your AIM Fund.
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. We also invite you to visit AIM's Internet Web
site at www.aimfunds.com.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
----------------------------------
It is important
to maintain realistic expectations
about investment performance.
----------------------------------
<PAGE> 4
The Managers' Overview
FUND PRODUCES SOLID SIX-MONTH RETURNS,
FINDING VALUE-ORIENTED STOCKS IN LOFTY MARKET
A roundtable discussion with the Fund management team for AIM Value Fund for
the six-month period ended June 30, 1997.
- --------------------------------------------------------------------------------
Q: THE TUMULTUOUS MARKET CREATED A TROUBLESOME ENVIRONMENT FOR STOCK FUNDS. HOW
DID AIM VALUE FUND PERFORM DURING THE REPORTING PERIOD?
A: We are pleased to report that the Fund's total return for the six months
ended June 30 was 16.12% for Class A shares and 15.66% for Class B shares,
compared to the 15.40% return posted by the Lipper Growth Funds Index for
the period. Net assets in the Fund grew from $9.98 billion to $12.14
billion.
The Fund performed particularly well during the second quarter of the
year. For the three months ended June 30, total return was 17.90% for A
shares and 17.66% for B shares, besting the 17.44% performance of the S&P
500 during that quarter.
================================================================================
GROWTH OF NET ASSETS
- --------------------------------------------------------------------------------
$12.14
billion
$9.98
billion
12/31/96 6/30/97
================================================================================
================================================================================
A STRONG SIX MONTHS
- --------------------------------------------------------------------------------
Total return 12/31/96 - 6/30/97
16.12%
15.66%
15.40%
11.85%
AIM AIM Lipper Lipper
Value Value Growth All Equity
Fund Fund Funds Funds
Class A Class B Index Average
================================================================================
Q: WHAT WERE THE MARKET CONDITIONS DURING THE FIRST HALF OF 1997?
A: The stock market continued to confound predictions, rising more than anyone
had anticipated. As 1996 closed, many observers were cautioning investors
about inflated expectations of double-digit returns for a third year in a
row. Yet just six months into 1997, both the S&P 500 and the narrower Dow
Jones Industrial Average were up more than 20%. There was a near correction
from mid-March to mid-April, when the Dow lost 9.8% of its value, but the
markets recovered swiftly and completely.
Q: HOW DID YOU MANAGE THE FUND IN SUCH A VOLATILE MARKET?
A: We took advantage of the spring selloff to add to our favorite holdings
while prices were down. The Fund was fully invested as the reporting period
closed, with less than 1% of net assets in cash. This compares to about 12%
cash at the end of 1996.
We were able to find some stocks with relatively good valuations,
consistent earnings, and less sensitivity to the overall U.S. economy. These
included selected financial firms and companies in the pharmaceutical and
health-care industries. A number are firms that draw a significant portion
of their revenue and earnings from faster-growth markets outside the U.S.
Q: WHY ARE YOU FOCUSED ON COMPANIES THAT ARE LESS SENSITIVE TO DOMESTIC
ECONOMIC PERFORMANCE?
A: When we look at the individual companies we follow, the best bargains we
could find were in those defensive areas because the markets aren't pricing
much risk of an economic slowdown into equities.
Seven years into an economic expansion, it seems intuitive to assume
the economy could cool, either naturally or because the Federal Reserve
Board nudges it into a slowdown. Fed Chairman Alan Greenspan has repeatedly
made clear that he would encourage the economy to cool off by raising rates
at the first sign of serious inflation. It simply hasn't happened yet.
Q: WHAT IS YOUR OPINION OF THE FINANCIAL SECTOR?
A: In an environment where we are concerned about a growing consumer debt
burden and possible credit problems, our holdings tend to be in insurance,
mortgage agencies, and, to a lesser extent, banks. Insurance has been an
area of particular focus because valuations there have not risen as much as
growth rates for many insurers might warrant.
For example, we increased our holdings of American International Group,
Inc., (AIG) the largest property/casualty insurer in the U.S. AIG operates
worldwide, receiving about 50% of revenues from overseas, including Eastern
Europe, where it is expanding operations. In May the company declared a
three-for-two stock split.
We also own some of the big moneycenter banks, including Bank America,
Chase Manhattan, and Citicorp. These firms operate in the global economy,
insulated
----------------------------------
We took advantage of the
spring selloff to add to
our favorite holdings while prices
were down.
----------------------------------
See important Fund & index disclosures inside front cover.
2
<PAGE> 5
PORTFOLIO COMPOSITION
As of 6/30/97, based on total net assets
<TABLE>
<CAPTION>
==========================================================================================================
TOP 10 COMMON STOCK HOLDINGS TOP 10 INDUSTRIES
- ----------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
1. WorldCom, Inc. 5.54% 1. Insurance (Multi-Line Property) 12.77%
2. Columbia/HCA Healthcare Corp. 4.21 2. Medical (Drugs) 9.59
3. Baxter International Inc. 4.13 3. Medical (Patient Services) 8.43
4. American International Group, Inc. 4.06 4. Banking 7.80
5. Federal National Mortgage Association 3.59 5. Banking (Money Center) 7.27
6. Allstate Corp. (The) 3.13 6. Telephone 6.01
7. Philip Morris Companies, Inc. 3.07 7. Tobacco 5.19
8. Bristol-Myers Squibb Co. 3.00 8. Finance (Consumer Credit) 5.18
9. Citicorp 2.98 9. Medical Instruments/Products 5.06
10. BankAmerica Corp. 2.98 10. Computer Mainframes 2.97
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.
==========================================================================================================
</TABLE>
somewhat from any potential turn in the domestic business cycle. Many of
these stocks have been selling at relatively low price/earnings ratios
compared to a number of stocks of other large, nonfinancial companies.
Holdings of money-center banks represented 7.27% of the portfolio at the
close of the reporting period.
Q: AND WHAT KINDS OF OPPORTUNITIES DID YOU FIND IN HEALTH-CARE STOCKS?
A: The portfolio is diversified among drugs, medical products, and patient
services.
We found some good values among patient-care providers, especially in
physician practice management firms and HMOs. Both groups are pressured by
the stress on controlling health-care costs and by concern about changes in
Medicare reimbursement. We believe patient-care providers offer an excellent
long-term opportunity, and such stocks composed 8.43% of the portfolio as of
June 30, 1997.
Pharmaceutical companies represented more than 9% of the portfolio as
the reporting period closed. The pharmaceutical companies in the portfolio
tend to be very well-known names, among them Bristol-Myers Squibb, SmithKline
Beecham, and Novartis. These companies are bringing a steady stream of new
products to market and reporting very healthy earnings growth at prices we
find reasonable.
Q: WHAT OTHER AREAS DID YOU EMPHASIZE IN THE FUND?
A: We still consider the long-term prospects of the technology sector excellent.
We are treading carefully in this area, as it is a very competitive business
and valuations of tech stocks tend to be volatile and often driven by
psychology. We have focused on PC and hardware areas, with such holdings as
Dell and Compaq, which have performed very well for us.
Q: WHAT IS YOUR APPROACH TO INVESTING IN FOREIGN MARKETS?
A: As with domestic stocks in the portfolio, the emphasis is on well-
established, global companies that make sense in terms of our value
yardsticks. Approximately 17% of net assets were invested outside the United
States as the reporting period closed, about the same percentage as six and
12 months ago. Our foreign holdings are mainly European and reflect the
corporate consolidation and restructuring that has begun to produce improved
efficiencies and profits there.
Q: HAS IT BEEN DIFFICULT TO FIND STOCKS THAT MEET YOUR VALUE CRITERIA?
A: The market consists of many individual stocks, and we continue to find
investments that meet our guidelines. We had 130 holdings in the portfolio at
the close of the reporting period, which represents considerable portfolio
diversification, a prime tool for dealing with market volatility in AIM's
view.
Q: WHAT IS YOUR MARKET OUTLOOK?
A: In the U.S., a climate of confidence prevailed at the close of the reporting
period. The Federal Reserve Board held interest rates steady when it met in
May, and again in July after the reporting period ended. During the second
quarter of 1997, economic growth slowed significantly, to an annualized 2.2%
rate, but there are no signs of a serious downturn. And corporate earnings
continue to outstrip analysts' forecasts.
However, more and more market participants are voicing worry about the
exceptional rise in stock valuations during the past two and one-half years.
The New York Times has called this "a market oblivious to gravity." Some
caution seems advisable.
We will continue to focus on the areas where we find opportunities;
right now that is in stocks not very sensitive to the overall economy. We are
not predicting a downturn, though one seems inevitable. We are simply going
where the earnings growth and valuations lead us.
----------------------------------------
Our foreign holdings
are mainly European and
reflect the corporate consolidation and
restructuring that has begun
to produce improved efficiencies
and profits there.
----------------------------------------
See important Fund & index disclosures inside front cover.
3
<PAGE> 6
Long-Term Performance
AIM Value Fund vs. Benchmark Indexes
The chart compares your Fund to benchmark indexes. It is important to
understand differences between your Fund and these indexes. An index measures
the performance of a hypothetical portfolio. A market index, such as the S&P
500, is not managed; therefore there are no sales charges, expenses, or fees.
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. Use of these
indexes is intended to give you a general idea of how your Fund performed
compared to these benchmarks.
Growth of a $10,000 Investment
6/30/87 - 6/30/97
(In thousands)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AIM Value Fund S&P 500 Lipper Growth
$49,493 $39,075 $33,647
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
6/30/87 9,450 10,000 10,000
6/88 9,753 9,305 9,537
6/89 11,736 11,207 11,226
6/90 15,128 13,044 12,707
6/91 15,562 14,008 13,367
6/92 19,243 15,879 15,217
6/93 24,710 18,034 17,737
6/94 25,967 18,292 18,037
6/95 33,918 23,047 22,209
6/96 39,174 29,023 26,795
6/97 49,493 39,075 33,647
================================================================================
</TABLE>
================================================================================
AVERAGE ANNUAL TOTAL RETURN
As of 6/30/97, including sales charges
CLASS A SHARES
1 Year 19.39%
5 Years 19.44
10 Years 17.34
CLASS B SHARES
1 Year 20.29%
Inception (10/18/93) 16.45
================================================================================
Source: Towers Data Systems HYPO--Registered Trademark--. Your Fund's total
return includes sales charges, expenses, and management fees. For Fund
performance calculations and descriptions of indexes cited on this page, please
refer to the inside front cover.
4
<PAGE> 7
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-81.06%
AEROSPACE/DEFENSE-0.04%
Boeing Co. (The) 90,400 $ 4,796,850
- ---------------------------------------------------------------
AIRLINES-0.30%
AMR Corp.(a) 400,000 37,000,000
- ---------------------------------------------------------------
BANKING-1.24%
BankBoston Corp. 500,000 36,031,250
- ---------------------------------------------------------------
First American Corp. 783,800 30,078,325
- ---------------------------------------------------------------
Summit Bancorp 99,100 4,967,387
- ---------------------------------------------------------------
Union Planters Corp. 791,000 41,033,125
- ---------------------------------------------------------------
U.S. Bancorp 600,000 38,475,000
- ---------------------------------------------------------------
150,585,087
- ---------------------------------------------------------------
BANKING (MONEY CENTER)-6.76%
BankAmerica Corp. 5,600,000 361,550,000
- ---------------------------------------------------------------
Chase Manhattan Corp. 1,000,000 97,062,500
- ---------------------------------------------------------------
Citicorp 3,000,000 361,687,500
- ---------------------------------------------------------------
820,300,000
- ---------------------------------------------------------------
BIOTECHNOLOGY-1.13%
Amgen, Inc.(b) 900,000 52,312,500
- ---------------------------------------------------------------
Biogen, Inc.(a) 2,500,700 84,711,213
- ---------------------------------------------------------------
137,023,713
- ---------------------------------------------------------------
CHEMICALS-0.26%
Monsanto Co. 726,000 31,263,375
- ---------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.21%
IMC Global, Inc. 742,100 25,973,500
- ---------------------------------------------------------------
COMPUTER MAINFRAMES-2.97%
International Business Machines
Corp. 4,000,000 360,750,000
- ---------------------------------------------------------------
COMPUTER MINI/PCS-2.28%
Compaq Computer Corp.(a) 1,000,000 99,250,000
- ---------------------------------------------------------------
Dell Computer Corp.(a)(b) 400,000 46,975,000
- ---------------------------------------------------------------
Sun Microsystems, Inc.(a)(b) 3,500,000 130,265,625
- ---------------------------------------------------------------
276,490,625
- ---------------------------------------------------------------
COMPUTER NETWORKING-0.80%
Comverse Technology, Inc.(a) 576,100 29,957,200
- ---------------------------------------------------------------
3Com Corp.(a) 1,500,000 67,500,000
- ---------------------------------------------------------------
97,457,200
- ---------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTER PERIPHERALS-0.23%
Seagate Technology, Inc.(a) 350,500 $ 12,333,219
- ---------------------------------------------------------------
Western Digital Corp.(a) 501,900 15,872,587
- ---------------------------------------------------------------
28,205,806
- ---------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES-1.98%
American Management Systems,
Inc.(a) 1,665,500 44,552,125
- ---------------------------------------------------------------
Computer Associates
International, Inc. 2,500,000 139,218,750
- ---------------------------------------------------------------
Compuware Corp.(a) 300,000 14,325,000
- ---------------------------------------------------------------
National Data Corp. 300,000 12,993,750
- ---------------------------------------------------------------
Network General Corp.(a) 151,700 2,256,538
- ---------------------------------------------------------------
Wallace Computer Services, Inc. 884,000 26,575,250
- ---------------------------------------------------------------
239,921,413
- ---------------------------------------------------------------
CONGLOMERATES-0.92%
Corning Inc. 1,101,000 61,243,125
- ---------------------------------------------------------------
Loews Corp. 500,000 50,062,500
- ---------------------------------------------------------------
111,305,625
- ---------------------------------------------------------------
ELECTRIC POWER-1.07%
Allegheny Power System, Inc. 1,500,000 40,031,250
- ---------------------------------------------------------------
American Electric Power Co. 1,800,000 75,600,000
- ---------------------------------------------------------------
DQE, Inc. 500,000 14,125,000
- ---------------------------------------------------------------
129,756,250
- ---------------------------------------------------------------
ELECTRONIC COMPONENTS/MISCELLANEOUS-0.07%
Symbol Technologies, Inc. 242,200 8,143,975
- ---------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-2.16%
Merrill Lynch & Co., Inc. 4,400,000 262,350,000
- ---------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-5.18%
Federal Home Loan Mortgage Corp. 2,500,000 85,937,500
- ---------------------------------------------------------------
Federal National Mortgage
Association 10,000,000 436,250,000
- ---------------------------------------------------------------
Student Loan Marketing
Association 835,900 106,159,300
- ---------------------------------------------------------------
628,346,800
- ---------------------------------------------------------------
FINANCE (SAVINGS & LOAN)-0.76%
Great Western Financial Corp. 259,200 13,932,000
- ---------------------------------------------------------------
Washington Mutual, Inc. 1,302,000 77,794,500
- ---------------------------------------------------------------
91,726,500
- ---------------------------------------------------------------
FOOD/PROCESSING-1.30%
Interstate Bakeries Corp. 690,000 40,925,625
- ---------------------------------------------------------------
Nabisco Holdings Corp.-Class A 2,930,700 116,861,663
- ---------------------------------------------------------------
157,787,288
- ---------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FUNERAL SERVICES-1.79%
Service Corp. International 4,600,000 $ 151,225,000
- ---------------------------------------------------------------
Stewart Enterprises, Inc.-
Class A 1,583,600 66,511,200
- ---------------------------------------------------------------
217,736,200
- ---------------------------------------------------------------
GAS DISTRIBUTION-0.08%
NorAm Energy Corp. 641,200 9,778,300
- ---------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-0.92%
Conseco Inc. 767,800 28,408,600
- ---------------------------------------------------------------
Provident Companies, Inc. 1,000,000 53,500,000
- ---------------------------------------------------------------
ReliaStar Financial Corp. 400,000 29,250,000
- ---------------------------------------------------------------
111,158,600
- ---------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY)-12.64%
Ace, Ltd. 1,213,400 89,639,925
- ---------------------------------------------------------------
Aetna Inc. 929,700 95,178,038
- ---------------------------------------------------------------
Allstate Corp. 5,200,000 379,600,000
- ---------------------------------------------------------------
American International Group,
Inc. 3,300,000 492,937,500
- ---------------------------------------------------------------
Chubb Corp. 300,000 20,062,500
- ---------------------------------------------------------------
CIGNA Corp. 434,500 77,123,750
- ---------------------------------------------------------------
Exel Ltd. 2,000,000 105,500,000
- ---------------------------------------------------------------
Hartford Financial Services
Group Inc. (The) 1,450,000 119,987,500
- ---------------------------------------------------------------
MBIA, Inc. 516,300 58,245,094
- ---------------------------------------------------------------
Progressive Corp. 700,000 60,900,000
- ---------------------------------------------------------------
Transatlantic Holdings, Inc. 300,000 29,775,000
- ---------------------------------------------------------------
Travelers Property Casualty
Corp.-Class A 117,800 4,697,275
- ---------------------------------------------------------------
1,533,646,582
- ---------------------------------------------------------------
LEISURE & RECREATION-1.25%
Callaway Golf Co. 800,000 28,400,000
- ---------------------------------------------------------------
Carnival Corp.-Class A 3,000,000 123,750,000
- ---------------------------------------------------------------
152,150,000
- ---------------------------------------------------------------
MEDICAL (DRUGS)-4.03%
American Home Products Corp. 1,000,000 76,500,000
- ---------------------------------------------------------------
Bristol-Myers Squibb Co. 4,500,000 364,500,000
- ---------------------------------------------------------------
ICN Pharmaceuticals, Inc. 1,660,035 47,622,254
- ---------------------------------------------------------------
488,622,254
- ---------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-8.43%
Columbia/HCA Healthcare Corp. 13,000,000 511,062,500
- ---------------------------------------------------------------
Health Care and Retirement
Corp.(a) 1,065,600 35,564,400
- ---------------------------------------------------------------
MedPartners, Inc.(a) 9,044,000 195,576,500
- ---------------------------------------------------------------
PhyCor, Inc.(a) 511,200 17,604,450
- ---------------------------------------------------------------
Quorum Health Group, Inc.(a) 600,000 21,450,000
- ---------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MEDICAL (PATIENT SERVICES)-(CONTINUED)
Tenet Healthcare Corp.(a) 5,000,000 $ 147,812,500
- ---------------------------------------------------------------
United Healthcare Corp. 1,800,000 93,600,000
- ---------------------------------------------------------------
1,022,670,350
- ---------------------------------------------------------------
MEDICAL INSTRUMENTS/PRODUCTS-5.06%
Baxter International Inc. 9,600,000 501,600,000
- ---------------------------------------------------------------
Boston Scientific Corp.(a) 840,000 51,607,500
- ---------------------------------------------------------------
Hillenbrand Industries, Inc. 600,000 28,500,000
- ---------------------------------------------------------------
Sybron International Corp.(a) 800,000 31,900,000
- ---------------------------------------------------------------
613,607,500
- ---------------------------------------------------------------
NATURAL GAS PIPELINE-1.00%
El Paso Natural Gas Co. 1,932,900 106,309,500
- ---------------------------------------------------------------
Williams Companies, Inc. (The) 351,500 15,378,125
- ---------------------------------------------------------------
121,687,625
- ---------------------------------------------------------------
OIL & GAS (REFINING/MARKETING)-0.49%
Tosco Corp. 2,000,021 59,875,629
- ---------------------------------------------------------------
OIL EQUIPMENT & SUPPLIES-2.29%
Baker Hughes, Inc. 2,500,000 96,718,750
- ---------------------------------------------------------------
BJ Services Co.(a) 1,000,000 53,625,000
- ---------------------------------------------------------------
Cooper Cameron Corp.(a) 1,000,000 46,750,000
- ---------------------------------------------------------------
Noble Drilling Corp.(a) 2,000,000 45,125,000
- ---------------------------------------------------------------
Tidewater, Inc. 800,000 35,200,000
- ---------------------------------------------------------------
277,418,750
- ---------------------------------------------------------------
RETAIL (FOOD & DRUG)-0.42%
Kroger Co.(a) 1,761,300 51,077,700
- ---------------------------------------------------------------
RETAIL (STORES)-0.48%
Dayton Hudson Corp. 1,100,000 58,506,250
- ---------------------------------------------------------------
SEMICONDUCTORS-0.99%
Intel Corp. 500,000 70,906,250
- ---------------------------------------------------------------
National Semiconductor Corp.(a) 1,600,000 49,000,000
- ---------------------------------------------------------------
119,906,250
- ---------------------------------------------------------------
TELECOMMUNICATIONS-0.59%
Lucent Technologies, Inc. 1,000,000 72,062,500
- ---------------------------------------------------------------
TELEPHONE-5.75%
Cincinnati Bell, Inc. 800,000 25,200,000
- ---------------------------------------------------------------
WorldCom, Inc.(a) 21,000,093 672,002,975
- ---------------------------------------------------------------
697,202,975
- ---------------------------------------------------------------
TOBACCO-5.19%
DIMON, Inc. 1,000,000 26,500,000
- ---------------------------------------------------------------
Philip Morris Companies, Inc. 8,400,000 372,750,000
- ---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TOBACCO-(CONTINUED)
RJR Nabisco Holdings Corp. 7,000,000 $ 231,000,000
- ---------------------------------------------------------------
630,250,000
- ---------------------------------------------------------------
Total Domestic Common Stocks 9,836,541,472
- ---------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-17.58%
AUSTRALIA-0.43%
Westpac Banking Corp., Ltd.
(Banking) 8,649,037 52,095,978
- ---------------------------------------------------------------
BRAZIL-0.61%
Uniao de Bancos Brasileiro
S.A.-GDR (Banking)(a) 2,000,000 74,250,000
- ---------------------------------------------------------------
CANADA-3.91%
Bank of Montreal (Banking) 1,600,000 62,449,763
- ---------------------------------------------------------------
Canadian National Railway Co.
(Railroads) 1,400,000 61,250,000
- ---------------------------------------------------------------
CanWest Global Communications
Corp.
(Advertising/Broadcasting) 169,100 2,504,794
- ---------------------------------------------------------------
Newbridge Networks Corp.
(Computer Networking)(a) 1,100,000 47,850,000
- ---------------------------------------------------------------
Potash Corp. of Saskatchewan
Inc. (Fertilizers) 377,300 28,321,081
- ---------------------------------------------------------------
Royal Bank of Canada (Banking) 6,000,000 271,769,434
- ---------------------------------------------------------------
474,145,072
- ---------------------------------------------------------------
DENMARK-0.29%
Novo Nordisk A/S (Medical-Drugs) 321,000 35,001,130
- ---------------------------------------------------------------
FINLAND-0.61%
Nokia Oy A.B.-Class A-ADR
(Telecommunications) 1,000,000 73,750,000
- ---------------------------------------------------------------
GERMANY-0.44%
Bayerische Hypotheken-und
Wechsel-Bank A.G. (Banking) 1,800,000 53,821,455
- ---------------------------------------------------------------
HONG KONG-0.50%
HSBC Holdings PLC (Banking) 2,000,000 60,149,987
- ---------------------------------------------------------------
ITALY-1.16%
Credito Italiano S.p.A.
(Banking) 30,000,000 54,843,284
- ---------------------------------------------------------------
Istituto Mobiliare Italiano
S.p.A. (Banking) 5,000,000 44,752,496
- ---------------------------------------------------------------
Telecom Italia S.p.A.
(Telephone) 12,743,350 40,901,507
- ---------------------------------------------------------------
140,497,287
- ---------------------------------------------------------------
MALAYSIA-0.02%
Malayan Banking Berhad (Banking) 272,000 2,855,784
- ---------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
NETHERLANDS-0.40%
VNU-Verenigde Nederlandse
Uitgeversbedrijven Verenigd
Bezit (Publishing) 2,000,000 $ 44,220,286
- ---------------------------------------------------------------
Wolters Kluwer N.V. (Publishing) 40,000 4,870,345
- ---------------------------------------------------------------
49,090,631
- ---------------------------------------------------------------
NORWAY-0.13%
Storebrand A.S.A.
(Insurance-Multi-Line
Property)(a) 2,655,250 15,831,800
- ---------------------------------------------------------------
PHILIPPINES-0.18%
C & P Homes, Inc. (Home
Building) 10,050,000 3,772,179
- ---------------------------------------------------------------
Filinvest Land Inc. (Home
Building)(a) 19,833,000 4,962,762
- ---------------------------------------------------------------
Metro Pacific Corp. (Real
Estate) 58,708,000 12,687,125
- ---------------------------------------------------------------
21,422,066
- ---------------------------------------------------------------
SPAIN-0.05%
Banco Popular Espanol S.A.
(Banking) 26,488 6,489,425
- ---------------------------------------------------------------
SWEDEN-2.13%
Nordbanken A.B. (Banking) 1,900,000 64,107,039
- ---------------------------------------------------------------
Sparbanken Sverige A.B.-Class A
(Banking) 5,000,000 111,175,748
- ---------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson-ADR
(Telecommunications) 2,000,000 78,750,000
- ---------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson-Class B
(Telecommunications) 100,000 3,936,397
- ---------------------------------------------------------------
257,969,184
- ---------------------------------------------------------------
SWITZERLAND-2.63%
Novartis A.G. (Medical-Drugs)(a) 200,010 319,742,014
- ---------------------------------------------------------------
UNITED KINGDOM-4.09%
Granada Group PLC (Leisure &
Recreation) 5,769,250 75,899,554
- ---------------------------------------------------------------
Ladbroke Group PLC (Hotels &
Motels) 6,750,000 26,415,839
- ---------------------------------------------------------------
Railtrack Group PLC (Railroads) 3,500,000 36,457,605
- ---------------------------------------------------------------
Reed International PLC
(Publishing) 2,275,800 22,057,173
- ---------------------------------------------------------------
SmithKline Beecham PLC-ADR
(Medical-Drugs) 3,500,000 320,687,500
- ---------------------------------------------------------------
Standard Chartered PLC
(Finance-Asset Management) 960,100 14,645,517
- ---------------------------------------------------------------
496,163,188
- ---------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests 2,133,275,001
- ---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC PREFERRED STOCKS-0.37%
INSURANCE (LIFE & HEALTH)-0.11%
Conseco Inc.-$4.278 Conv. PRIDES 105,000 $ 13,623,750
- ---------------------------------------------------------------
TELEPHONE-0.26%
WorldCom, Inc.-$2.68 Conv.
Preferred 283,100 31,919,525
- ---------------------------------------------------------------
Total Preferred Stocks 45,543,275
- ---------------------------------------------------------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-0.41%(c)
Smith Barney Inc., 5.60%,
07/01/97(d) $49,328,160 $ 49,328,160
- ---------------------------------------------------------------
TOTAL INVESTMENTS-99.42% 12,064,687,908
- ---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.58% 70,373,088
- ---------------------------------------------------------------
NET ASSETS-100.00% $12,135,060,996
===============================================================
</TABLE>
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) A portion of these securities are subject to call options written. See Note
8.
(c) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(d) Joint repurchase agreement entered into 06/30/97 with a maturing value of
$150,023,333. Collateralized by $147,768,000 U.S. Government obligations, 0%
to 7.875% due 07/24/97 to 11/15/07 with an aggregate market value at
06/30/97 of $153,000,411.
Investment Abbreviations:
ADR - American Depository Receipt
Conv. - Convertible
GDR - Global Depository Receipt
PRIDES - Preferred Redemption Increased Dividend Equity Security
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$9,698,130,431) $12,064,687,908
- ----------------------------------------------------------
Foreign currencies, at value (cost
$42,141,166) 42,171,660
- ----------------------------------------------------------
Receivables for:
Investments sold 103,979,884
- ----------------------------------------------------------
Fund shares sold 27,869,406
- ----------------------------------------------------------
Dividends and interest 18,107,370
- ----------------------------------------------------------
Investment for deferred compensation plan 63,015
- ----------------------------------------------------------
Other assets 132,230
- ----------------------------------------------------------
Total assets 12,257,011,473
- ----------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 84,139,105
- ----------------------------------------------------------
Fund shares reacquired 14,925,550
- ----------------------------------------------------------
Options written 3,150,000
- ----------------------------------------------------------
Deferred compensation plan 63,015
- ----------------------------------------------------------
Accrued advisory fees 5,958,974
- ----------------------------------------------------------
Accrued administrative service fees 19,683
- ----------------------------------------------------------
Accrued distribution fees 10,101,962
- ----------------------------------------------------------
Accrued transfer agent fees 2,170,332
- ----------------------------------------------------------
Accrued trustees' fees 14,896
- ----------------------------------------------------------
Accrued operating expenses 1,406,960
- ----------------------------------------------------------
Total liabilities 121,950,477
- ----------------------------------------------------------
Net assets applicable to shares
outstanding $12,135,060,996
==========================================================
NET ASSETS:
Class A $ 6,106,845,473
==========================================================
Class B $ 6,028,215,523
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 180,406,786
==========================================================
Class B 180,195,284
==========================================================
Class A:
Net asset value and redemption price
per share $ 33.85
==========================================================
Offering price per share:
(Net asset value of $33.85 divided
by 94.50%) $ 35.82
==========================================================
Class B:
Net asset value and offering price per
share $ 33.45
==========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $3,936,980 foreign
withholding tax) $ 85,648,474
- ----------------------------------------------------------
Interest 11,378,266
- ----------------------------------------------------------
Total investment income 97,026,740
- ----------------------------------------------------------
EXPENSES:
Advisory fees 33,532,444
- ----------------------------------------------------------
Custodian fees 825,291
- ----------------------------------------------------------
Distribution fees -- Class A 6,788,326
- ----------------------------------------------------------
Distribution fees -- Class B 26,290,331
- ----------------------------------------------------------
Administrative service fees 116,866
- ----------------------------------------------------------
Trustees' fees 28,516
- ----------------------------------------------------------
Transfer agent fees -- Class A 4,031,764
- ----------------------------------------------------------
Transfer agent fees -- Class B 5,418,297
- ----------------------------------------------------------
Other 1,331,074
- ----------------------------------------------------------
Total expenses 78,362,909
- ----------------------------------------------------------
Less: Fees waived by advisor (1,088,146)
- ----------------------------------------------------------
Expenses paid indirectly (101,753)
- ----------------------------------------------------------
Net expenses 77,173,010
- ----------------------------------------------------------
Net investment income 19,853,730
- ----------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM
INVESTMENT SECURITIES, FOREIGN
CURRENCIES AND OPTION CONTRACTS:
Net realized gain from:
Investment securities 602,108,261
- ----------------------------------------------------------
Foreign currencies 467,630
- ----------------------------------------------------------
Option contracts 11,157,149
- ----------------------------------------------------------
613,733,040
- ----------------------------------------------------------
Unrealized appreciation of:
Investment securities 998,079,056
- ----------------------------------------------------------
Foreign currencies 551,976
- ----------------------------------------------------------
Option contracts 7,334,211
- ----------------------------------------------------------
1,005,965,243
- ----------------------------------------------------------
Net gain from investment securities,
foreign currencies and option contracts 1,619,698,283
- ----------------------------------------------------------
Net increase in net assets resulting from
operations $1,639,552,013
==========================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
--------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 19,853,730 $ 103,535,521
- -------------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures and option contracts 613,733,040 379,159,846
- -------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 1,005,965,243 687,919,898
- -------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,639,552,013 1,170,615,265
- -------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A -- (68,036,562)
- -------------------------------------------------------------------------------------------------
Class B -- (33,169,539)
- -------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (182,879,810)
- -------------------------------------------------------------------------------------------------
Class B -- (175,428,877)
- -------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 166,123,588 1,320,636,081
- -------------------------------------------------------------------------------------------------
Class B 353,391,085 1,674,774,506
- -------------------------------------------------------------------------------------------------
Net increase in net assets 2,159,066,686 3,706,511,064
- -------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 9,975,994,310 6,269,483,246
- -------------------------------------------------------------------------------------------------
End of period $12,135,060,996 $9,975,994,310
=================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 9,049,738,525 $8,530,223,852
- -------------------------------------------------------------------------------------------------
Undistributed net investment income 26,793,756 6,940,026
- -------------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign
currencies, futures and option contracts 689,921,641 76,188,601
- -------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 2,368,607,074 1,362,641,831
- -------------------------------------------------------------------------------------------------
$12,135,060,996 $9,975,994,310
=================================================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
(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 (except
convertible bonds) 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 (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 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 the 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. Forward 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.
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,
11
<PAGE> 14
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 value of the Fund's portfolio
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 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.
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.
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, 1997, AIM
voluntarily waived advisory fees in the amount of $1,088,146.
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, 1997, AIM
was reimbursed $116,866 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, 1997, AFS was paid
$5,341,507 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
12
<PAGE> 15
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, 1997, the Class A shares
and the Class B shares paid AIM Distributors $6,788,326 and $26,290,331,
respectively, as compensation pursuant to the Plans.
AIM Distributors received commissions of $2,199,699 from sales of the Class A
shares of the Fund during the six months ended June 30, 1997. 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,
1997, AIM Distributors received $1,023,454 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, 1997, the Fund paid legal fees of $17,372
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-INDIRECT EXPENSES
AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund. For the six months
ended June 30, 1997, the Fund's expenses were reduced by $5,108 and the Fund
received reductions in transfer agency fees from AFS (an affiliate of AIM) and
reductions in custodian fees of $70,222 and $26,423, respectively, under expense
offset arrangements. The effect of the above arrangements resulted in reductions
of the Fund's total expenses of $101,753 during the six months ended June 30,
1997.
NOTE 4-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 5-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) $500,000,000 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 15, 1997, the Fund was
limited to borrowing up to the lesser of (i) $325,000,000 or (ii) the limits set
by its prospectus for borrowings. During the six months ended June 30, 1997, 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 0.05% of 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 6-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, 1997 was
$7,953,271,000 and $6,235,372,022, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of June 30, 1997 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $2,417,511,347
- ----------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (52,304,809)
- ----------------------------------------------------------
Net unrealized appreciation of investment
securities $2,365,206,538
==========================================================
</TABLE>
Cost of investments for tax purposes is $9,699,481,370.
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 1997 and the
year ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
--------------------------- ----------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- --------------
<S> <C> <C> <C> <C>
Sold:
Class A 28,544,053 $ 870,710,599 83,369,308 $2,309,759,146
- ------------------------------------------------------------ ----------- ------------- ----------- --------------
Class B 22,357,454 677,437,771 73,576,913 2,011,544,498
- ------------------------------------------------------------ ----------- ------------- ----------- --------------
Issued as reinvestment of dividends:
Class A -- -- 8,503,122 239,780,446
- ------------------------------------------------------------ ----------- ------------- ----------- --------------
Class B -- -- 7,058,251 197,560,616
- ------------------------------------------------------------ ----------- ------------- ----------- --------------
Reacquired:
Class A (23,117,118) (704,587,011) (44,030,263) (1,228,903,511)
- ------------------------------------------------------------ ----------- ----------- ----------- --------------
Class B (10,758,566) (324,046,686) (19,368,345) (534,330,608)
- ------------------------------------------------------------ ----------- ----------- ----------- --------------
17,025,823 $ 519,514,673 109,108,986 $2,995,410,587
============================================================ =========== ============= =========== ==============
</TABLE>
13
<PAGE> 16
NOTE 8-OPTION CONTRACTS WRITTEN
Transactions in call options written during the six months ended June 30, 1997
are summarized as follows:
<TABLE>
<CAPTION>
OPTION CONTRACTS
--------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- --------
<S> <C> <C>
Beginning of period 100,123 $ 31,917,627
- ----------------------------------------------------------------------------------------
Written 50,965 24,296,675
- ----------------------------------------------------------------------------------------
Closed (36,950) (15,128,246)
- ----------------------------------------------------------------------------------------
Exercised (89,912) (28,861,577)
- ----------------------------------------------------------------------------------------
Expired (12,726) (6,654,104)
- ----------------------------------------------------------------------------------------
End of period 11,500 $ 5,570,375
========================================================================================
</TABLE>
Open call option contracts written at June 30, 1997 were as follows:
<TABLE>
<CAPTION>
JUNE 30,
NUMBER 1997
CONTRACT STRIKE OF PREMIUM MARKET UNREALIZED
ISSUE MONTH PRICE CONTRACTS RECEIVED VALUE APPRECIATION
----- -------- ------ --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Amgen, Inc. Jul. 65 5,000 $1,734,942 $ 93,750 $1,641,192
Dell Computer Corp. Aug. 115 1,500 1,887,686 1,650,000 237,686
Sun Microsystems, Inc. Jul. 35 5,000 1,947,747 1,406,250 541,497
- ---------------------------------------------------------------------------------------------------------------------------------
11,500 $5,570,375 $3,150,000 $2,420,375
=================================================================================================================================
</TABLE>
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a Class A share outstanding during
the six months ended June 30, 1997, each of the years in the nine-year period
ended December 31, 1996 and for a Class B share outstanding during the six
months ended June 30, 1997, each of the years in the three-year period ended
December 31, 1996 and the period October 18, 1993 (date sales commenced) through
December 31, 1993.
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, ----------------------------------------------------------------------
1997 1996 1995 1994 1993 1992(a)
------------ ------------ ------------ ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
CLASS A:
Net asset value, beginning of
period $ 29.15 $ 26.81 $ 21.14 $ 20.82 $ 18.24 $ 17.55
- ---------------------------------- ------------ ------------ ------------ ------------ --------- ---------
Income from investment operations:
Net investment income 0.11 0.43(b) 0.14 0.16 0.04 0.12
- ---------------------------------- ------------ ------------ ------------ ------------ --------- ---------
Net gains on securities (both
realized and unrealized) 4.59 3.42 7.21 0.52 3.34 2.68
- ---------------------------------- ------------ ------------ ------------ ------------ --------- ---------
Total from investment
operations 4.70 3.85 7.35 0.68 3.38 2.80
- ---------------------------------- ------------ ------------ ------------ ------------ --------- ---------
Less distributions:
Dividends from net investment
income -- (0.41) (0.09) (0.16) (0.03) (0.12)
- ---------------------------------- ------------ ------------ ------------ ------------ --------- ---------
Distributions from net realized
capital gains -- (1.10) (1.59) (0.20) (0.77) (1.99)
- ---------------------------------- ------------ ------------ ------------ ------------ --------- ---------
Total distributions -- (1.51) (1.68) (0.36) (0.80) (2.11)
- ---------------------------------- ------------ ------------ ------------ ------------ --------- ---------
Net asset value, end of period $ 33.85 $ 29.15 $ 26.81 $ 21.14 $ 20.82 $ 18.24
================================== ============ ============ ============ ============ ========= =========
Total return(c) 16.12% 14.52% 34.85% 3.28% 18.71% 16.39%
================================== ============ ============ ============ ============ ========= =========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $ 6,106,845 $5,100,061 $ 3,408,952 $ 1,358,725 $765,305 $239,663
================================== ============ ============ ============ ============ ========= =========
Ratio of expenses to average net
assets(d) 1.05%(e)(f) 1.11% 1.12% 0.98% 1.09% 1.16%
================================== ============ ============ ============ ============ ========= =========
Ratio of net investment income to
average net assets(g) 0.77%(e) 1.65% 0.74% 0.92% 0.30% 0.75%
================================== ============ ============ ============ ============ ========= =========
Portfolio turnover rate 61% 126% 151% 127% 177% 170%
================================== ============ ============ ============ ============ ========= =========
Average broker commission rate
paid(h) $ 0.0469 $ 0.0436 N/A N/A N/A N/A
================================== ============ ============ ============ ============ ========= =========
<CAPTION>
DECEMBER 31,
---------------------------------------------
1991 1990 1989 1988
--------- -------- -------- --------
<S> <C> <C> <C> <C>
CLASS A:
Net asset value, beginning of
period $ 13.75 $ 14.53 $ 12.79 $ 11.47
- ---------------------------------- --------- -------- -------- --------
Income from investment operations:
Net investment income 0.13 0.26 0.40 0.26
- ---------------------------------- --------- -------- -------- --------
Net gains on securities (both
realized and unrealized) 5.73 0.01 3.58 2.07
- ---------------------------------- --------- -------- -------- --------
Total from investment
operations 5.86 0.27 3.98 2.33
- ---------------------------------- --------- -------- -------- --------
Less distributions:
Dividends from net investment
income (0.14) (0.26) (0.43) (0.26)
- ---------------------------------- --------- -------- -------- --------
Distributions from net realized
capital gains (1.92) (0.79) (1.81) (0.75)
- ---------------------------------- --------- -------- -------- --------
Total distributions (2.06) (1.05) (2.24) (1.01)
- ---------------------------------- --------- -------- -------- --------
Net asset value, end of period $ 17.55 $ 13.75 $ 14.53 $ 12.79
================================== ========= ======== ======== ========
Total return(c) 43.45% 1.88% 31.54% 20.61%
================================== ========= ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $152,149 $86,565 $76,444 $60,076
================================== ========= ======== ======== ========
Ratio of expenses to average net
assets(d) 1.22% 1.21% 1.00% 1.00%
================================== ========= ======== ======== ========
Ratio of net investment income to
average net assets(g) 0.89% 1.87% 2.65% 1.98%
================================== ========= ======== ======== ========
Portfolio turnover rate 135% 131% 152% 124%
================================== ========= ======== ======== ========
Average broker commission rate
paid(h) N/A N/A N/A N/A
================================== ========= ======== ======== ========
</TABLE>
(a) The Fund changed investment advisors on June 30, 1992.
(b) Calculated using average shares outstanding.
(c) Total returns do not deduct sales charges and are not annualized for periods
less than one year.
(d) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.07% (annualized), and 1.13%, 1.13%, 1.23%, 1.09% and 1.08% for 1997-1995
and 1990-88, respectively.
(e) Ratios are annualized and based on average net assets of $5,475,666,552.
(f) Includes expenses paid indirectly. Excluding expenses paid indirectly, the
ratio of expenses to average net assets would have been the same.
(g) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 0.75% (annualized) 1.63%, 0.73%, 1.85%, 2.56% and 1.90%
for 1997-1995 and 1990-88, respectively.
(h) Disclosure requirement beginning with the Fund's fiscal year ended December
31, 1996.
14
<PAGE> 17
NOTE 9-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, ------------------------------------------------------
1997 1996 1995 1994 1993
---------- ------------ ------------ --------- --------
<S> <C> <C> <C> <C> <C>
CLASS B:
Net asset value, beginning of period $ 28.92 $ 26.65 $ 21.13 $ 20.82 $ 21.80
- ----------------------------------------------------- ---------- ------------ ------------ --------- --------
Income from investment operations:
Net investment income (loss) -- 0.20(a) (0.01) -- 0.02
- ----------------------------------------------------- ---------- ------------ ------------ --------- --------
Net gains (losses) on securities (both realized and
unrealized) 4.53 3.38 7.12 0.51 (0.21)
- ----------------------------------------------------- ---------- ------------ ------------ --------- --------
Total from investment operations 4.53 3.58 7.11 0.51 (0.19)
- ----------------------------------------------------- ---------- ------------ ------------ --------- --------
Less distributions:
Dividends from net investment income -- (0.21) -- -- (0.02)
- ----------------------------------------------------- ---------- ------------ ------------ --------- --------
Distributions from net realized capital gains -- (1.10) (1.59) (0.20) (0.77)
- ----------------------------------------------------- ---------- ------------ ------------ --------- --------
Total distributions -- (1.31) (1.59) (0.20) (0.79)
- ----------------------------------------------------- ---------- ------------ ------------ --------- --------
Net asset value, end of period $ 33.45 $ 28.92 $ 26.65 $ 21.13 $ 20.82
===================================================== ========== ============ ============ ========= ========
Total return(b) 15.66% 13.57% 33.73% 2.46% (0.74)%
===================================================== ========== ============ ============ ========= ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $6,028,216 $ 4,875,933 $ 2,860,531 $ 680,119 $ 63,215
===================================================== ========== ============ ============ ========= ========
Ratio of expenses to average net assets(c) 1.86%(d)(e) 1.94% 1.94% 1.90% 1.85%(f)
===================================================== ========== ============ ============ ========= ========
Ratio of net investment income (loss) to average net
assets(c) (0.04)%(d) 0.82% (0.08)% 0.00% (0.46)%(f)
===================================================== ========== ============ ============ ========= ========
Portfolio turnover rate 61% 126% 151% 127% 177%
===================================================== ========== ============ ============ ========= ========
Average broker commission rate paid(g) $ 0.0469 $ 0.0436 N/A N/A N/A
===================================================== ========== ============ ============ ========= ========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Total returns do not deduct contingent deferred sales charges and for
periods less than one year are not annualized.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.88% (annualized), 1.96% and 1.96% for 1997-1995, respectively. Ratio of
net investment income (loss) to average net assets prior to fee waivers
and/or expense reimbursements were (0.06)% (annualized), 0.81% and (0.09)%
for 1997-1995, respectively.
(d) Ratios are annualized and based on average net assets of $5,301,641,349.
(e) Includes expenses paid indirectly. Excluding expenses paid indirectly, the
ratio of expenses to average net assets would have been the same.
(f) Annualized.
(g) Disclosure requirement beginning with the Fund's fiscal year ended December
31, 1996.
15
<PAGE> 18
SUPPLEMENTAL PROXY INFORMATION -- SHAREHOLDER MEETING
- --------------------------------------------------------------------------------
The Annual Meeting of Shareholders of the Trust was held on February 7, 1997.
The meeting was held for the following purposes:
(1) To elect trustees as follows: Charles T. Bauer, Bruce L. Crockett, Owen Daly
II, Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F. Pennock,
Ian W. Robinson, and Louis S. Sklar.
(2) To approve a new Investment Advisory Agreement between the Trust and AIM.
(3) To approve the elimination of the fundamental investment policy prohibiting
or restricting investments in other investment companies and/or the
amendment of certain related fundamental investment policies.
(4) To approve the elimination of the fundamental investment policy prohibiting
or restricting investments in puts, calls, straddles, and spreads (AIM
Global Utilities Fund, AIM Growth Fund, and AIM Value Fund only).
(5) Ratification of KPMG Peat Marwick LLP as independent accountants for the
Trust's fiscal year ending December 31, 1997.
The following votes were cast with respect to each item:
<TABLE>
<CAPTION>
Votes
Trustee/Matter Votes For Against Abstentions
-------------- --------- ------------- -----------
<S> <C> <C> <C> <C>
(1) Charles T. Bauer............................................ 773,545,353 0 34,024,196
Bruce L. Crockett........................................... 774,171,487 0 33,398,063
Owen Daly II................................................ 773,623,278 0 33,946,270
Carl Frischling............................................. 773,902,641 0 33,666,910
Robert H. Graham............................................ 774,181,971 0 33,387,581
John F. Kroeger............................................. 773,713,539 0 33,856,014
Lewis F. Pennock............................................ 773,903,304 0 33,666,247
Ian W. Robinson............................................. 773,753,378 0 33,816,174
Louis S. Sklar.............................................. 773,993,581 0 33,575,971
(2) Approval of new Investment Advisory Agreement............... 161,480,217 2,829,647 8,537,933
(3) Elimination of policy restricting investments in other
investment companies (for AIM Value Fund)................... 125,014,291 6,858,302 9,222,000
(4) Elimination of policy prohibiting or restricting investments
in puts, calls, straddles and spreads (for AIM Value
Fund)....................................................... 121,696,795 9,586,381 9,811,416
(5) KPMG Peat Marwick LLP....................................... 763,580,956 7,014,082 36,974,512
</TABLE>
16
<PAGE> 19
Trustees & Officers
<TABLE>
<S> <C> <C>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
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 100
Owen Daly II Carol F. Relihan Houston, TX 77046
Director Senior Vice President and Secretary
Cortland Trust Inc. TRANSFER AGENT
Gary T. Crum
Jack Fields Senior Vice President A I M Fund Services, Inc.
Formerly Member of the P.O. Box 4739
U.S. House of Representatives Scott G. Lucas Houston, TX 77210-4739
Senior Vice President
Carl Frischling CUSTODIAN
Partner Dana R. Sutton
Kramer, Levin, Naftalis & Frankel Vice President and Assistant Treasurer State Street Bank & Trust Company
225 Franklin Street
Robert H. Graham Robert G. Alley Boston, MA 02110
President and Chief Executive Officer Vice President
A I M Management Group Inc. COUNSEL TO THE FUND
Stuart W. Coco
John F. Kroeger Vice President Ballard Spahr
Formerly Consultant Andrews & Ingersoll
Wendell & Stockel Associates, Inc. Melville B. Cox 1735 Market Street
Vice President Philadelphia, PA 19103
Lewis F. Pennock
Attorney Karen Dunn Kelley COUNSEL TO THE TRUSTEES
Vice President
Ian W. Robinson Kramer, Levin, Naftalis & Frankel
Consultant; Formerly Executive Vice President and Jonathan C. Schoolar 919 Third Avenue
Chief Financial Officer Vice President New York, NY 10022
Bell Atlantic Management
Services, Inc. P. Michelle Grace DISTRIBUTOR
Assistant Secretary
Louis S. Sklar A I M Distributors, Inc.
Executive Vice President David L. Kite 11 Greenway Plaza
Hines Interests Assistant Secretary Suite 100
Limited Partnership Houston, TX 77046
Nancy L. Martin
Assistant Secretary
Ofelia M. Mayo
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
<PAGE> 20
<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 OF CAPITAL
11 GREENWAY PLAZA AIM Advisor International Value Fund
APPEARS HERE] AIM Blue Chip Fund
AIM Global Growth Fund
AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME OR INCOME WITH CAPITAL GROWTH
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund
AIM Charter Fund
AIM Global Utilities Fund
HIGH CURRENT INCOME OR CURRENT INCOME
AIM High Yield Fund
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Shares
CURRENT INCOME AND HIGH DEGREE OF SAFETY
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Shares
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
A I M Management Group Inc. has provided leadership in
the mutual fund industry since 1976 and managed *AIM Aggressive Growth Fund was closed to new investors
approximately $72 billion in assets for more than 3.5 on June 5, 1997. For more complete information about
million shareholders, including individual investors, any AIM Fund(s), including sales charges and expenses,
corporate clients, and financial institutions as of ask your financial consultant or securities dealer
June 30, 1997. The AIM Family of Funds--Registered for a free prospectus(es). Please read the prospectus(es)
Trademark--is distributed nationwide, and AIM today carefully before you invest or send money.
ranks among the nation' top 15 mutual fund companies
in asset under management, according to Lipper
Analytical Services, Inc.
Invest with DISCIPLINE-SM-
[AIM LOGO APPEARS HERE] BULK RATE
U.S. POSTAGE
A I M Distributors, Inc. PAID
Greenway Plaza, Suite 100 HOUSTON, TX
Houston, TX 77046 Permit No. 1919
</TABLE>
