<PAGE> 1
AIM GLOBAL
UTILITIES FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT JUNE 30, 1997
<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.
--------------------------------
[COVER PHOTO
APPEARS HERE]
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 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 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:
As 1997 came to its midway point, stocks were again in
record territory and the market environment was ideal for
fixed-income investments. The course was not smooth;
indeed, markets fluctuated widely during the first six
months of the year amid concerns over vigorous economic
[PHOTO OF growth and the possibility of rising interest rates.
Charles T. The point we want to emphasize is that market
Bauer, volatility has become the norm rather than the exception.
Chairman of Those of you who are long-time investors, and those who
the Board of are new shareholders in The AIM Family of
the Fund Funds--Registered Trademark--, should recognize that
APPEARS HERE] periods of falling prices in both stock and bond markets
are inevitable. Indeed, we can learn important lessons
about investing in periods of market uncertainty.
That's why it's a good idea to reassess your financial
goals periodically with your financial consultant.
Managing your investments in changing markets can be
challenging. But 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.
In our experience, we have observed that the best action to take is to stay
focused--not on the market, but on your own long-term goals. The market can
change from day to day. Those who try to "time" the market, over time, tend to
be less successful than those who continue to follow a disciplined investment
strategy.
It's also important to maintain realistic expectations about investing.
Short-term volatility in financial markets may tempt some investors to liquidate
investments regardless of their personal financial objectives. Remember that
time is the best medicine for uncertain markets. The market's performance early
in the year was driven by concerns about the possibility of rising inflation.
Yet, no evidence of inflation has materialized.
On the following pages, your Fund's portfolio management team discusses
market activity and how the Fund was affected. They also discuss the Fund's
portfolio strategy, why they believe the portfolio is well-positioned for
attractive current income and total return, 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
FOREIGN UTILITIES, TELECOMMUNICATIONS
SECTOR DRIVE STRONG RETURNS
A roundtable discussion with the Fund management team for AIM Global Utilities
Fund about the six-month reporting period ended June 30, 1997.
- --------------------------------------------------------------------------------
Q. HOW DID AIM GLOBAL UTILITIES FUND PERFORM DURING THE
SIX-MONTH REPORTING PERIOD?
A. We are pleased to report the Fund's total return was 9.40% for Class A
shares and 8.98% for Class B shares for the six-month reporting period ended
June 30, 1997. Both classes of shares outperformed the Lipper Utility Funds
Index total return of 7.80% during the same period, and far exceeded the Dow
Jones Average of 15 Utilities' total return of -0.04%.
Q. HOW WAS THE FUND ABLE TO OUTPERFORM THESE INDEXES DURING A PERIOD WHEN
DOMESTIC UTILITIES PERFORMED POORLY?
A. The Fund's foreign component figured prominently in terms of performance
during the reporting period. We have actively invested in utilities around
the world since 1993 because we believe there is greater growth potential
for foreign utilities than for domestic utilities. The foreign holdings also
help cushion the Fund when the domestic market turns down, as happened
during the first quarter. On the domestic side, our holdings in the
telecommunications industry continued to appreciate.
================================================================================
FUND VS. INDEXES
- --------------------------------------------------------------------------------
Six-month total returns, as of 6/30/97
9.40% 8.98% 7.80% -0.04%
AIM Fund AIM Fund Lipper Dow Jones
Class A Class B Utility Average of
Shares Shares Funds 15 Utilities
Index
================================================================================
Q. WHAT PERCENTAGE OF THE FUND'S PORTFOLIO IS NOW OVERSEAS?
A. We finished the six-month reporting period with 34% of the Fund's holdings
in the foreign sector, an increase of 2% from the start of the year. We
expect that figure to rise as we identify more foreign utilities with
attractive earnings, and as more companies continue to go public around the
world.
PORTFOLIO COMPOSITION
As of 6/30/97, based on total net assets
================================================================================
TOP 10 INDUSTRIES*
- --------------------------------------------------------------------------------
1. Electric power 26.55%
2. Telecommunications 18.55
3. Telephone 13.76
4. Natural Gas Pipelines 13.00
5. Gas Distribution 3.17
6. REITs 3.07
7. Advertising/Broadcasting 2.83
8. Electric Services 2.80
9. Energy (Alternate Sources) 2.67
10. Water Supply 2.27
================================================================================
TOP 10 HOLDINGS TOP 10 COUNTRIES
- --------------------------------------------------------------------------------
1. El Paso Natural Gas Co. 3.09% 1. United States 66.51%
2. Cincinnati Bell, Inc. 2.97 2. United Kingdom** 7.07
3. Williams Cos.,Inc.(The) 2.47 3. Canada 6.51
4. Pinnacle West Capital Corp. 2.28 4. Spain 2.53
5. Ameritech Corp. 1.79 5. Brazil 2.34
6. Bell South 1.66 6. Germany 2.07
7. FPL, Group 1.65 7. Chile 1.78
8. SBC Communications, Inc 1.59 8. Italy 1.68
9. Sonat, Inc 1.58 9. Portugal 1.45
10. NIPSCO Industries Inc 1.57 10. New Zealand 1.40
* Domestic and Foreign Combined
**Consists of Great Britain and Northern Ireland.
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.
================================================================================
Q. WHAT FACTORS HAVE CAUSED THE DOMESTIC ELECTRIC UTILITIES TO STRUGGLE THIS
YEAR?
A. The domestic electric utility sector has been shadowed by the debate over
deregulation. Domestic electric companies have been forced to become much
more competitive, and many are struggling to adapt.
Nonetheless, domestic electric utility companies continue to provide
attractive dividends. Such electric companies as Pinnacle West Capital and
NIPSCO Industries, Inc., both among the portfolio's top
See important Fund & index disclosures inside front cover.
2
<PAGE> 5
10 holdings at the end of the reporting period, are companies that provide
attractive current income. Domestic and foreign electric companies comprised
the largest industrial sector in the Fund at over 26% of the portfolio.
Q. WHAT ARE THE DRIVING FORCES BEHIND THE EXPLOSION IN TELECOMMUNICATIONS?
A. New technologies are reinventing telecommunications: wireless
communications, modems, and the Internet, just to name a few. There are new
companies coming into the marketplace, and older companies are taking
greater advantage of this rapidly growing industry.
The telecommunications and telephone sectors now comprise over 32% of the
Fund. Some familiar names in the Fund's top 10 holdings at the end of the
reporting period were Cincinnati Bell, Inc., Ameritech Corp., BellSouth
Corp., and SBC Communications, Inc. BellSouth Corp. and SBC Communications,
Inc. both enjoyed double-digit percentage increases in stock value during
the reporting period.
Q. REAL ESTATE HAD A STRONG FIRST HALF OF THE YEAR. DID THE SECTOR'S STRONG
SIX-MONTH PERFORMANCE CHANGE THE FUND'S POSITION THERE?
A. Our real estate investment trusts (REITs) exposure was slightly higher from
4% to 5%. Historically REITs have been a very attractive investment as they
provide average returns of 12% to 15% with very low volatility. They are
becoming a larger part of various indexes and are quite liquid. We believe
that with increasing competition worldwide in the electric,
telecommunication, and gas sectors, REITs may have a more stabilizing
effect on the Fund than electric utilities.
Q. WHAT OTHER NON-UTILITY POSITIONS DOES THE FUND HAVE?
A. Approximately 16% of the portfolio is in companies that provide services or
equipment to the utility area. For instance, we own independent power
producers like California Energy and AES Corp. They can produce electricity
more cheaply than electric companies--their largest clients.
Other non-utility positions in the Fund are companies that provide
telephone equipment, such as Ericsson and Motorola.
Q. WHAT IS YOUR MARKET OUTLOOK FOR UTILITIES IN THE NEAR FUTURE?
A. The utilities industry, both foreign and domestic, is changing rapidly.
That's exciting. We anticipate continuing breakthroughs in
telecommunications, and the prospects in the foreign utilities markets are
enticing. Those two segments offer the Fund the best growth potential,
while the U.S. electric utilities continue to offer attractive dividends.
This new competitive environment in the U.S. may be the biggest change
many utilities have gone through in their long history. While many companies
will prosper, some will fail. There will be many mergers and acquisitions,
and there will be many growth opportunities.
================================================================================
GROWTH OF A $10,000 INVESTMENT
1/18/88 - 6/30/97
- --------------------------------------------------------------------------------
AIM Dow Jones
Utilities Industrial Average
Fund A of 15 Utilities
- --------------------------------------------------------------------------------
1/88 $ 9,453.00 $10,000.00
6/88 $10,278.00 $ 9,952.00
6/89 $12,787.00 $12,459.00
6/90 $14,435.00 $13,332.00
6/91 $14,963.00 $13,369.00
6/92 $17,930.00 $15,288.00
6/93 $21,771.00 $18,755.00
6/94 $19,172.00 $14,451.00
6/95 $21,708.00 $17,650.00
6/96 $25,874.00 $20,389.00
6/97 $30,807.00 $22,112.00
================================================================================
Past performance cannot guarantee comparable future results.
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 the index cited on this page,
please refer to the inside front cover.
AVERAGE ANNUAL TOTAL RETURN
As Of 6/30/97, including sales charges
CLASS A SHARES
Inception (1/18/88) 12.65%
5 Years 10.18
1 Year 12.52*
*19.07% excluding sales charge
CLASS B SHARES
Inception (9/1/93) 6.43%
1 Year 13.18**
**18.18% excluding sales charge
================================================================================
The new, competitive marketplace means utility stocks will be more
volatile than ever before. However, we expect utilities to have the lowest
volatility of any stock in any country. 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 for the second half of 1997.
--------------------------
Competition continues
to be the driving force
within U.S. utilities.
--------------------------
See important Fund & index disclosures inside front cover.
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-50.28%
ADVERTISING/BROADCASTING-0.42%
Univision Communications, Inc.(a) 26,500 $ 1,036,813
- --------------------------------------------------------------
COMPUTER NETWORKING-0.97%
Ascend Communications, Inc.(a) 33,400 1,315,125
- --------------------------------------------------------------
Cascade Communications Corp.(a) 15,000 414,375
- --------------------------------------------------------------
3Com Corp.(a) 14,875 669,375
- --------------------------------------------------------------
2,398,875
- --------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES-0.12%
Puma Technology, Inc.(a) 34,700 290,613
- --------------------------------------------------------------
ELECTRIC POWER-16.29%
AES Corp.(a) 16,700 1,181,525
- --------------------------------------------------------------
Allegheny Power System, Inc. 141,500 3,776,280
- --------------------------------------------------------------
Carolina Power & Light Co. 65,000 2,331,875
- --------------------------------------------------------------
CINergy Corp. 34,800 1,211,475
- --------------------------------------------------------------
DQE, Inc. 110,000 3,107,500
- --------------------------------------------------------------
Duke Power Co. 66,783 3,201,423
- --------------------------------------------------------------
Edison International 61,000 1,517,375
- --------------------------------------------------------------
FPL Group, Inc. 89,200 4,108,774
- --------------------------------------------------------------
Houston Industries, Inc. 57,000 1,221,938
- --------------------------------------------------------------
IPALCO Enterprises, Inc. 32,500 1,015,625
- --------------------------------------------------------------
NIPSCO Industries, Inc. 94,200 3,891,638
- --------------------------------------------------------------
Pinnacle West Capital Corp. 188,100 5,654,755
- --------------------------------------------------------------
Public Service Company of New Mexico 60,000 1,072,500
- --------------------------------------------------------------
Sierra Pacific Resources 45,500 1,456,000
- --------------------------------------------------------------
Southern Co. 172,000 3,762,500
- --------------------------------------------------------------
Texas Utilities Co. 57,800 1,990,488
- --------------------------------------------------------------
40,501,671
- --------------------------------------------------------------
ENERGY (ALTERNATE SOURCES)-1.66%
Calenergy, Inc.(a) 48,888 1,857,744
- --------------------------------------------------------------
Teco Energy, Inc. 88,200 2,254,612
- --------------------------------------------------------------
4,112,356
- --------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-0.07%
Ocwen Asset Investment Corp. 9,100 184,275
- --------------------------------------------------------------
GAS DISTRIBUTION-1.99%
KN Energy, Inc. 31,600 1,331,150
- --------------------------------------------------------------
Public Service Co. of Colorado 65,200 2,705,800
- --------------------------------------------------------------
Public Service Company of North
Carolina, Inc. 47,000 901,813
- --------------------------------------------------------------
4,938,763
- --------------------------------------------------------------
NATURAL GAS PIPELINE-9.34%
Columbia Gas System, Inc. 28,200 1,840,050
- --------------------------------------------------------------
El Paso Natural Gas Co. 139,500 7,672,500
- --------------------------------------------------------------
Enron Corp. 89,200 3,640,475
- --------------------------------------------------------------
Sonat, Inc. 76,500 3,920,625
- --------------------------------------------------------------
Williams Companies, Inc. (The) 140,200 6,133,749
- --------------------------------------------------------------
23,207,399
- --------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.26%
Energen Corp. 19,100 643,431
- --------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL EQUIPMENT & SUPPLIES-0.37%
Coastal Corp. (The) 17,500 $ 930,781
- --------------------------------------------------------------
REAL ESTATE-1.43%
Boston Properties, Inc.(a) 42,600 1,171,500
- --------------------------------------------------------------
Cali Realty Corp. 43,400 1,475,600
- --------------------------------------------------------------
Crescent Operating, Inc.(a) 2,640 31,680
- --------------------------------------------------------------
Golf Trust of America, Inc. 13,500 375,469
- --------------------------------------------------------------
Kilroy Realty Corp. 20,000 505,000
- --------------------------------------------------------------
3,559,249
- --------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS-2.49%
Alexandria Real Estate Equities, Inc. 27,500 603,281
- --------------------------------------------------------------
Crescent Real Estate Equities, Inc. 26,400 838,200
- --------------------------------------------------------------
Meditrust Corp. 21,300 849,338
- --------------------------------------------------------------
OMEGA Healthcare Investors, Inc. 28,100 918,519
- --------------------------------------------------------------
Patriot American Hospitality, Inc. 60,800 1,550,400
- --------------------------------------------------------------
Public Storage, Inc. 27,000 789,750
- --------------------------------------------------------------
Starwood Lodging Trust 14,700 627,506
- --------------------------------------------------------------
6,176,994
- --------------------------------------------------------------
TELECOMMUNICATIONS-4.79%
ADC Telecommunications, Inc.(a) 62,000 2,069,250
- --------------------------------------------------------------
Brooks Fiber Properties, Inc.(a) 40,000 1,350,000
- --------------------------------------------------------------
CellNet Data Systems Inc.(a) 37,400 465,163
- --------------------------------------------------------------
Iridium World Communications Ltd.(a) 16,200 293,625
- --------------------------------------------------------------
Lucent Technologies, Inc. 29,000 2,089,813
- --------------------------------------------------------------
McLeod, Inc.- Class A(a) 40,000 1,350,000
- --------------------------------------------------------------
Qwest Communications International
Inc.(a) 34,100 929,225
- --------------------------------------------------------------
Superior Telecom Inc.(a) 41,500 1,307,250
- --------------------------------------------------------------
Teleport Communications Group
Inc.-Class A(a) 27,000 921,375
- --------------------------------------------------------------
Tellabs, Inc.(a) 20,000 1,117,500
- --------------------------------------------------------------
11,893,201
- --------------------------------------------------------------
TELEPHONE-10.08%
Ameritech Corp. 65,400 4,443,113
- --------------------------------------------------------------
BellSouth Corp. 89,100 4,132,013
- --------------------------------------------------------------
Century Telephone Enterprises 66,800 2,250,325
- --------------------------------------------------------------
Cincinnati Bell, Inc. 234,000 7,371,000
- --------------------------------------------------------------
GTE Corp. 36,600 1,605,825
- --------------------------------------------------------------
SBC Communications, Inc. 63,800 3,947,625
- --------------------------------------------------------------
WorldCom, Inc.(a) 40,000 1,280,000
- --------------------------------------------------------------
25,029,901
- --------------------------------------------------------------
Total Domestic Common Stocks 124,904,322
- --------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED STOCKS-4.11%
ADVERTISING/BROADCASTING-0.38%
Time Warner Inc.-Series M, $102.50 Conv.
PIK Pfd. 848 938,985
- --------------------------------------------------------------
ELECTRIC POWER-0.54%
CalEnergy Co., Inc.-$3.125 Conv. Pfd.
(Acquired 02/20/97; Cost
$750,000)(b) 15,000 854,310
- --------------------------------------------------------------
Citizens Utilities Co.-$2.50 Conv.
Pfd. 11,400 498,750
- --------------------------------------------------------------
1,353,060
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FINANCE (ASSET MANAGEMENT)-1.28%
AES Trust I-$2.69 Conv. Pfd. 54,000 $ 3,179,250
- --------------------------------------------------------------
GAS UTILITY-0.64%
MCN Corp.-$2.013 Conv. PRIDES 57,000 1,588,875
- --------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS-0.26%
Vornado Realty Trust-$3.25 Conv. Pfd. 12,000 636,000
- --------------------------------------------------------------
TELEPHONE-1.01%
Salomon Inc.-$3.48 Conv. Pfd. 6,700 427,963
- --------------------------------------------------------------
WorldCom, Inc.-$2.68 Conv. Pfd. 18,500 2,085,875
- --------------------------------------------------------------
2,513,838
- --------------------------------------------------------------
Total Domestic Convertible Preferred Stocks 10,210,008
- --------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-29.06%
ARGENTINA-0.92%
Central Costanera S.A.-Class B
(Electric Services) 475,200 1,639,694
- --------------------------------------------------------------
Telefonica de Argentina S.A.-ADR
(Telecommunications) 18,300 633,638
- --------------------------------------------------------------
2,273,332
- --------------------------------------------------------------
AUSTRIA-0.35%
Oesterreichische
Elektrizitaetswirtschafts
A.G.-Class A (Electric Power) 12,500 880,407
- --------------------------------------------------------------
AUSTRALIA-0.14%
News Corp. Ltd., $5.00 Conv. Pfd.
(Advertising/ Broadcasting)
(Acquired 11/04/96; Cost
$400,000)(b) 4,000 354,000
- --------------------------------------------------------------
BRAZIL-2.34%
Centrais Eletricas de Santa
Catarina S.A. (Electric Power) 590,000 876,875
- --------------------------------------------------------------
Eletricidade de Sao Paulo S.A.
(Electric Power)(a) 3,990 1,167,442
- --------------------------------------------------------------
Telecomunicacoes Brasileiras
S.A.-Telebras-ADR
(Telecommunications) 25,000 3,793,749
- --------------------------------------------------------------
5,838,066
- --------------------------------------------------------------
CANADA-2.03%
Manitoba Telephone System
(Telecommunications) 95,000 1,011,260
- --------------------------------------------------------------
Philip Services Corp. (Pollution
Control)(a) 50,000 793,750
- --------------------------------------------------------------
TELUS Corp. (Telecommunications) 95,000 1,743,908
- --------------------------------------------------------------
Westshore Terminals Inc. (Coal) 40,800 178,747
- --------------------------------------------------------------
Westcoast Energy, Inc. (Natural Gas
Pipeline) 71,900 1,307,681
- --------------------------------------------------------------
5,035,346
- --------------------------------------------------------------
CHILE-1.78%
Cia. de Telecomunicaciones de Chile
S.A.-ADR (Telephone) 80,750 2,664,749
- --------------------------------------------------------------
Enersis S.A.-ADR (Natural Gas
Pipeline) 49,600 1,763,900
- --------------------------------------------------------------
4,428,649
- --------------------------------------------------------------
DENMARK-0.29%
Tele Danmark A/S-ADR (Telephone) 27,500 718,438
- --------------------------------------------------------------
FINLAND-0.26%
Nokia Oy A.B.-Class A-ADR
(Telecommunications) 8,600 634,250
- --------------------------------------------------------------
GERMANY-2.07%
RWE A.G. (Oil & Gas-Integrated) 28,100 1,208,360
- --------------------------------------------------------------
VEBA A.G. (Electric Power) 46,500 2,612,808
- --------------------------------------------------------------
Viag A.G. (Electric Power) 2,900 1,318,560
- --------------------------------------------------------------
5,139,728
- --------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HONG KONG-0.30%
Asia Satellite Telecommunications
Holdings Ltd.-ADR
(Telecommunications) 24,800 $ 747,100
- --------------------------------------------------------------
INDONESIA-0.28%
PT Indosat-ADR (Telecommunications) 23,000 688,563
- --------------------------------------------------------------
ISRAEL-0.49%
ECI Telecommunications Ltd. Designs
(Computer Networking) 33,200 987,700
- --------------------------------------------------------------
TTI Team Telecom International Ltd.
(Telecommunications)(a) 48,500 224,313
- --------------------------------------------------------------
1,212,013
- --------------------------------------------------------------
ITALY-1.68%
Telecom Italia Mobile S.p.A.
(Telecommunications) 578,300 1,860,215
- --------------------------------------------------------------
Telecom Italia S.p.A.
(Telecommunications) 717,000 2,301,308
- --------------------------------------------------------------
4,161,523
- --------------------------------------------------------------
JAPAN-0.72%
Nippon Telegraph & Telephone
Corp.-ADR (Telephone) 20,000 975,000
- --------------------------------------------------------------
Nippon Telegraph & Telephone Corp.
(Telephone) 85 815,739
- --------------------------------------------------------------
1,790,739
- --------------------------------------------------------------
NETHERLANDS-0.69%
Royal PTT Nederland N.V.-ADR
(Telephone) 43,076 1,706,887
- --------------------------------------------------------------
NEW ZEALAND-1.40%
Telecom Corp. of New Zealand
Ltd.-ADR (Telecommunications) 85,600 3,488,200
- --------------------------------------------------------------
PERU-0.57%
Luz Del Sur S.A. (Electric Power)
(Acquired 12/11/96; Cost
$576,000)(b) 32,000 564,000
- --------------------------------------------------------------
Telefonica del Peru S.A.-ADR
(Telecommunications) 33,000 864,188
- --------------------------------------------------------------
1,428,188
- --------------------------------------------------------------
PORTUGAL-1.45%
Electricidade de Portugal, S.A.-ADR
(Electric Power)(a) 16,100 579,600
- --------------------------------------------------------------
Portugal Telecom S.A.-ADR
(Telecommunications) 65,700 2,636,212
- --------------------------------------------------------------
Telecel-Comunicacaoes Pessoais,
S.A. (Telecommunications)
(Acquired 12/09/96; Cost
$233,082)(a)(b) 4,600 380,650
- --------------------------------------------------------------
3,596,462
- --------------------------------------------------------------
SPAIN-2.53%
Autopistas Concesionaria Espanola
S.A. (Engineering & Construction) 77,000 1,045,131
- --------------------------------------------------------------
Iberdrola S.A. (Electric Power) 233,000 2,941,161
- --------------------------------------------------------------
Telefonica de Espana-ADR
(Telecommunications) 26,800 2,311,500
- --------------------------------------------------------------
6,297,792
- --------------------------------------------------------------
SWEDEN-0.63%
Telefonaktiebolaget LM Ericsson-ADR
(Telecommunications) 39,500 1,555,313
- --------------------------------------------------------------
UNITED KINGDOM-7.07%
British Sky Broadcasting Group
PLC-ADR
(Advertising/Broadcasting) 10,000 446,875
- --------------------------------------------------------------
Doncasters PLC-ADR
(Aerospace/Defense)(a) 8,500 196,563
- --------------------------------------------------------------
Energy Group PLC (Electric Power) 30,000 1,271,250
- --------------------------------------------------------------
Hyder PLC (Water Supply) 53,955 730,042
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
National Grid Group PLC (Electric
Power) 102,537 $ 374,807
- --------------------------------------------------------------
National Power PLC-ADR (Electric
Power) 40,000 1,407,500
- --------------------------------------------------------------
National Power PLC (Electric Power) 175,000 1,521,253
- --------------------------------------------------------------
PowerGen PLC-ADR (Electric Power) 40,900 1,983,650
- --------------------------------------------------------------
PowerGen PLC (Electric Power) 209,500 2,494,495
- --------------------------------------------------------------
Scottish Power PLC (Electrical
Power) 201,550 1,312,358
- --------------------------------------------------------------
Southern Electric PLC (Electric
Power) 124,062 916,270
- --------------------------------------------------------------
United Utilities PLC (Water Supply) 197,100 2,167,965
- --------------------------------------------------------------
Wessex Water PLC (Water Supply) 152,775 1,026,570
- --------------------------------------------------------------
Yorkshire Water PLC (Water Supply) 262,440 1,706,648
- --------------------------------------------------------------
17,556,246
- --------------------------------------------------------------
VENEZUELA-1.07%
Cia. Anonima Nacional Telefonos de
Venezuela (Telephone) 61,900 2,669,438
- --------------------------------------------------------------
Total Foreign Stocks & Other Equity
Interests 72,200,680
- --------------------------------------------------------------
<CAPTION>
<S> <C> <C>
DOMESTIC CONVERTIBLE BONDS & PRINCIPAL
NOTES-1.00% AMOUNT
POLLUTION CONTROL-0.24%
Thermo Ecotek Corp., Conv. Bonds,
4.875%, 04/15/04
(Acquired 04/10/97; Cost
$570,000)(b) $ 570,000 597,075
- --------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST-0.33%
Capstone Capital Corp., Conv. Sub.
Deb., 6.55%, 03/14/02 850,000 819,902
- --------------------------------------------------------------
SEMICONDUCTORS-0.43%
Analog Devices, Conv. Sub. Notes,
3.50%, 12/01/00 750,000 1,079,445
- --------------------------------------------------------------
Total Domestic Convertible
Bonds & Notes 2,496,422
- --------------------------------------------------------------
DOMESTIC NON-CONVERTIBLE BONDS & NOTES-9.59%
ADVERTISING/BROADCASTING-1.71%
Comcast Corp., Sr. Sub. Deb.,
9.50%, 01/15/08 900,000 951,750
- --------------------------------------------------------------
Time Warner, Inc.,
Notes, 8.18%, 08/15/07 1,150,000 1,207,144
- --------------------------------------------------------------
Deb., 9.125%, 01/15/13 1,000,000 1,106,020
- --------------------------------------------------------------
Unsec. Deb., 6.85%, 01/15/26 1,000,000 989,020
- --------------------------------------------------------------
4,253,934
- --------------------------------------------------------------
ELECTRIC POWER-2.07%
El Paso Electric Co., First
Mortgage Bonds, 8.90%, 02/01/06 1,425,000 1,529,267
- --------------------------------------------------------------
Indiana Michigan Power, Deb.,
9.82%, 12/07/22 3,021,500 3,616,826
- --------------------------------------------------------------
5,146,093
- --------------------------------------------------------------
<CAPTION>
<S> <C> <C>
ENERGY (ALTERNATE SOURCES)-1.02%
AES Corp., Sr. Sub. Notes, 10.25%,
07/15/06 $ 925,000 $ 1,017,500
- --------------------------------------------------------------
California Energy Co., Notes,
10.25%, 01/15/04 1,400,000 1,515,500
- --------------------------------------------------------------
2,533,000
- --------------------------------------------------------------
GAS DISTRIBUTION-1.18%
Ferrellgas Partners, Sr. Notes,
9.375%, 06/15/06 1,000,000 1,035,000
- --------------------------------------------------------------
Tennessee Gas Pipeline Co., Bonds,
7.00%, 03/15/27 1,900,000 1,897,093
- --------------------------------------------------------------
2,932,093
- --------------------------------------------------------------
NATURAL GAS PIPELINE-2.42
Enron Corp., Sr. Sub. Deb., 6.75%,
07/01/05 3,750,000 3,673,613
- --------------------------------------------------------------
PanEnergy Corp., Notes, 7.875%,
08/15/04 2,205,000 2,316,463
- --------------------------------------------------------------
5,990,076
- --------------------------------------------------------------
TELECOMMUNICATIONS-1.19%
AT&T Corp., Sr. Notes, 7.75%,
03/01/07 1,850,000 1,949,086
- --------------------------------------------------------------
TCI Communications Inc., Sr. Notes,
8.00%, 08/01/05 1,000,000 1,017,820
- --------------------------------------------------------------
2,966,906
- --------------------------------------------------------------
Total Domestic Non-Convertible Bonds &
Notes 23,822,102
- --------------------------------------------------------------
FOREIGN NON-CONVERTIBLE BONDS & NOTES-4.48%
CANADA-4.48%(c)
Bell Canada (Telecommunications),
Deb., 10.875%, 10/11/04 CAD 1,700,000 1,529,994
- --------------------------------------------------------------
Series EW Deb., 8.80%, 08/17/05 950,000 787,744
- --------------------------------------------------------------
Canadian Oil Debco Inc. (Oil &
Gas), Deb., 11.00%, 10/31/00 1,750,000 1,454,035
- --------------------------------------------------------------
Ontario Hydro (Electric Power),
Global Bonds, 9.00%, 06/24/02 2,500,000 2,054,908
- --------------------------------------------------------------
Teleglobe Canada, Inc.
(Telecommunications), Deb.,
8.35%, 06/20/03 2,400,000 1,912,840
- --------------------------------------------------------------
Trans-Canada Pipelines (Oil & Gas),
Unsec. Notes, 8.55%, 02/01/06 1,750,000 1,643,970
- --------------------------------------------------------------
Series Q Deb., 10.625%, 10/20/09 2,150,000 1,749,767
- --------------------------------------------------------------
Total Foreign Non-Convertible Bonds & Notes 11,133,258
- --------------------------------------------------------------
REPURCHASE AGREEMENT-1.53%(d)
UBS Securities Inc., 6.10%,
07/01/97(e) 3,799,475 3,799,475
- --------------------------------------------------------------
TOTAL INVESTMENT SECURITIES-100.05% 248,566,267
- --------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-(0.05%) (132,605)
- --------------------------------------------------------------
NET ASSETS-100.00% $248,433,662
==============================================================
</TABLE>
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with the 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 06/30/97 was $2,750,035 which represented 1.11% of
the Fund's net assets.
(c) Foreign denominated security. Par value and coupon are denominated in
Canadian dollars.
(d) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts, and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(e) Joint repurchase agreement entered into 06/30/97 with a maturing value of
$300,050,833. Collateralized by $320,816,334 U.S. Government obligations, 0%
to 13.25% due 07/14/97 to 04/01/27 with an aggregate market value at
06/30/97 of $306,003,435.
Abbreviations:
<TABLE>
<S> <C> <C>
ADR - American Depository Gtd. - Guaranteed Sec. - Secured
Receipt Pfd. - Preferred Sr. - Senior
CAD - Canadian Dollars PIK - Payment in Kind Sub. - Subordinated
Conv. - Convertible PRIDES - Preferred Redeemable Unsec. - Unsecured
Deb. - Debentures Increased Dividend
Disc. - Discounted Equity Securities
</TABLE>
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$183,715,131) $248,566,267
- ---------------------------------------------------------
Foreign currencies, at market value (cost
$166,832) 168,090
- ---------------------------------------------------------
Receivables for:
Investments sold 594,950
- ---------------------------------------------------------
Fund shares sold 574,332
- ---------------------------------------------------------
Dividends and interest 1,689,785
- ---------------------------------------------------------
Investment for deferred compensation plan 16,215
- ---------------------------------------------------------
Other assets 20,807
- ---------------------------------------------------------
Total assets 251,630,446
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 2,629,176
- ---------------------------------------------------------
Dividends 84,219
- ---------------------------------------------------------
Deferred compensation 16,215
- ---------------------------------------------------------
Accrued advisory fees 117,923
- ---------------------------------------------------------
Accrued administrative service fees 7,157
- ---------------------------------------------------------
Accrued distribution fees 198,621
- ---------------------------------------------------------
Accrued trustees' fees 1,765
- ---------------------------------------------------------
Accrued transfer agent fees 45,458
- ---------------------------------------------------------
Accrued operating expenses 96,250
- ---------------------------------------------------------
Total liabilities 3,196,784
- ---------------------------------------------------------
Net assets applicable to shares outstanding $248,433,662
=========================================================
NET ASSETS:
Class A $165,557,625
=========================================================
Class B $ 82,876,037
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 9,591,825
=========================================================
Class B 4,803,882
=========================================================
Class A:
Net asset value and redemption price per
share $ 17.26
=========================================================
Offering price per share:
(Net asset value of $17.26 divided by
94.50%) $ 18.26
=========================================================
Class B:
Net asset value and offering price per
share $ 17.25
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $216,659 foreign
withholding tax) $ 3,571,851
- ---------------------------------------------------------
Interest 1,582,202
- ---------------------------------------------------------
Total investment income 5,154,053
- ---------------------------------------------------------
EXPENSES:
Advisory fees 694,947
- ---------------------------------------------------------
Administrative service fees 42,708
- ---------------------------------------------------------
Custodian fees 27,664
- ---------------------------------------------------------
Trustees' fees 3,861
- ---------------------------------------------------------
Distribution fees -- Class A 199,522
- ---------------------------------------------------------
Distribution fees -- Class B 393,448
- ---------------------------------------------------------
Transfer agent fees -- Class A 142,251
- ---------------------------------------------------------
Transfer agent fees -- Class B 80,798
- ---------------------------------------------------------
Other 48,688
- ---------------------------------------------------------
Total expenses 1,633,887
- ---------------------------------------------------------
Less: Expenses paid indirectly (2,197)
- ---------------------------------------------------------
Net expenses 1,631,690
- ---------------------------------------------------------
Net investment income 3,522,363
=========================================================
REALIZED AND UNREALIZED GAIN FROM INVESTMENT
SECURITIES AND FOREIGN CURRENCIES:
Net realized gain from:
Investment securities 4,191,247
- ---------------------------------------------------------
Foreign currencies 5,137
- ---------------------------------------------------------
4,196,384
- ---------------------------------------------------------
Unrealized appreciation (depreciation) of:
Investment securities 13,745,983
- ---------------------------------------------------------
Foreign currencies (1,976)
- ---------------------------------------------------------
13,744,007
- ---------------------------------------------------------
Net gain from investment securities and
foreign currencies 17,940,391
=========================================================
Net increase in net assets resulting from
operations $21,462,754
=========================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
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 $ 3,522,363 $ 8,067,022
- --------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities and
foreign currencies 4,196,384 9,942,020
- --------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 13,744,007 12,247,663
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 21,462,754 30,256,705
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (2,373,315) (6,101,120)
- --------------------------------------------------------------------------------------------
Class B (906,689) (2,294,587)
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A (10,640,885) (21,359,001)
- --------------------------------------------------------------------------------------------
Class B (2,639,682) 1,711,797
- --------------------------------------------------------------------------------------------
Net increase in net assets 4,902,183 2,213,794
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 243,531,479 241,317,685
- --------------------------------------------------------------------------------------------
End of period $248,433,662 $243,531,479
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $188,590,404 $201,870,971
- --------------------------------------------------------------------------------------------
Undistributed net investment income 355,123 112,764
- --------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of
investment securities and foreign currencies (5,370,767) (9,567,151)
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 64,858,902 51,114,895
- --------------------------------------------------------------------------------------------
$248,433,662 $243,531,479
============================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Utilities Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of nine separate series
portfolios, each having an unlimited number of shares of beneficial interest.
The Fund currently offers two different classes of shares: the Class A shares
and the Class B shares. Class A shares are sold with a front-end sales charge.
Class B shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's objective is to
achieve a high level of current income, and as a secondary objective the Fund
seeks to achieve capital appreciation, by investing primarily in the common and
preferred stocks of public utility companies.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. Security Valuations -- 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
8
<PAGE> 11
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. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. It is the policy of the Fund to declare daily dividends
from net investment income. Such dividends are paid monthly. Distributions
from net realized capital gains, if any, are recorded on ex-dividend date
and are paid annually.
C. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions.
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 six months ended June 30, 1997, AIM
was reimbursed $42,708 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the six months ended June 30, 1997, AFS
was paid $153,216 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A shares and the Class B shares of the Fund. The Trust has adopted Plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares (the "Class A Plan") and with respect to the Fund's Class B shares (the
"Class B Plan")(collectively, the "Plans"). The Fund, pursuant to the Class A
Plan, pays AIM Distributors compensation at an annual rate of 0.25% of the
average daily net assets attributable to the Class A shares. The Class A Plan is
designed to compensate AIM Distributors for certain promotional and other sales
related costs and provides for payments to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own Class A shares of the Fund. The Fund, pursuant to
the Class B Plan, pays AIM Distributors compensation at an annual rate of 1.00%
of the average daily net assets attributable to the Class B shares. Of this
amount, the Fund may pay a service fee of 0.25% of the average daily net assets
of the Class B shares to selected dealers and financial institutions who furnish
continuing personal
9
<PAGE> 12
shareholder services to their customers who purchase and own Class B shares of
the Fund. Any amounts not paid as a service fee under such Plans would
constitute an asset-based sales charge. The Plans also impose a cap on the total
sales charges, including asset-based sales charges, that may be paid by the
respective classes. AIM Distributors may, from time to time, assign, transfer or
pledge to one or more assignees, its rights to all or a designated portion of
(a) compensation received by AIM Distributors from the Fund pursuant to the
Class B Plan (but not AIM Distributors' duties and obligations pursuant to the
Class B Plan) and (b) any contingent deferred sales charges payable to AIM
Distributors related to the Class B shares. During the six months ended June 30,
1997, the Class A shares and the Class B shares paid AIM Distributors $199,522
and $393,448, respectively, as compensation under the Plans.
AIM Distributors received commissions of $30,180 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 $52,842 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 $2,472
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 $130 and the Fund
received reductions in transfer agency fees from AFS (an affiliate of AIM) and
reductions in custodian fees of $1,563 and $504, respectively, under expense
offset arrangements. The effect of the above arrangements resulted in a
reduction of the Fund's total expenses of $2,197 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% 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 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
$36,296,353 and $42,872,922, 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 $67,281,773
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (2,430,637)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $64,851,136
=========================================================
</TABLE>
Investments have the same cost for tax and financial statement purposes.
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, 1997 DECEMBER 31, 1996
----------------------- -----------------------
SHARES VALUE SHARES VALUE
--------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 1,956,195 $ 32,242,509 2,473,508 $ 36,689,173
- -------------------- --------- ------------ ---------- ------------
Class B 360,087 5,869,588 1,424,455 21,097,067
- -------------------- --------- ------------ ---------- ------------
Issued as
reinvestment of
dividends:
Class A 127,337 2,077,821 353,355 5,316,653
- -------------------- --------- ------------ ---------- ------------
Class B 47,210 769,703 127,578 1,926,340
- -------------------- --------- ------------ ---------- ------------
Reacquired:
Class A (2,736,357) (44,961,215) (4,274,871) (63,364,827)
- -------------------- --------- ------------ ---------- ------------
Class B (571,319) (9,278,973) (1,425,633) (21,311,610)
- -------------------- --------- ------------ ---------- ------------
(816,847) $(13,280,567) (1,321,608) $(19,647,204)
==================== ========= ============ ========== ============
</TABLE>
10
<PAGE> 13
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a Class A share outstanding during
the six months ended June 30, 1997, and 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
the six months ended June 30, 1997, 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
-------------------------------------------------------------------------------------------------------
DECEMBER 31,
JUNE 30, --------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992(a) 1991 1990 1989 1988
-------- -------- -------- -------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 16.01 $ 14.59 $ 11.85 $ 14.09 $ 13.31 $ 13.75 $ 12.45 $ 13.73 $ 10.99 $ 10.00
- --------------------- -------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Income from
investment
operations:
Net investment
income 0.26 0.55 0.55 0.59 0.60 0.67 0.70 0.66 0.77 0.82
- --------------------- -------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Net gains (losses)
on securities
(both realized and
unrealized) 1.23 1.43 2.71 (2.20) 1.02 0.36 2.12 (1.10) 3.06 0.83
- --------------------- -------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Total from
investment
operations 1.49 1.98 3.26 (1.61) 1.62 1.03 2.82 (0.44) 3.83 1.65
- --------------------- -------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.24) (0.56) (0.52) (0.60) (0.61) (0.68) (0.66) (0.70) (0.69) (0.66)
- --------------------- -------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Distributions from
net realized
capital gains -- -- -- -- (0.23) (0.79) (0.86) (0.14) (0.40) --
- --------------------- -------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Returns of capital -- -- -- (0.03) -- -- -- -- -- --
- --------------------- -------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Total
distributions (0.24) (0.56) (0.52) (0.63) (0.84) (1.47) (1.52) (0.84) (1.09) (0.66)
- --------------------- -------- -------- -------- -------- -------- -------- ------- ------- ------- -------
Net asset value, end
of period $ 17.26 $ 16.01 $ 14.59 $ 11.85 $ 14.09 $ 13.31 $ 13.75 $ 12.45 $ 13.73 $ 10.99
===================== ======= ======= ======== ======== ======== ======== ======= ======= ======= =======
Total return(b) 9.40% 13.88% 28.07% (11.57)% 12.32% 7.92% 23.65% (2.98)% 36.11% 17.03%
===================== ======= ======= ======== ======== ======== ======== ======= ======= ======= =======
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $165,558 $164,001 $170,624 $150,515 $200,016 $111,771 $91,939 $69,541 $58,307 $20,104
===================== ======= ======= ======== ======== ======== ======== ======= ======= ======= =======
Ratio of expenses to
average net assets 1.11%(c)(d) 1.17% 1.21% 1.18% 1.16% 1.17% 1.23% 1.21%(e) 1.05%(e) 1.22%(e)(g)
===================== ======= ======= ======== ======== ======== ======== ======= ======= ======= =======
Ratio of net
investment income to
average net assets 3.40%(c) 3.62% 4.20% 4.67% 4.21% 4.96% 5.36% 5.21%(f) 6.13%(f) 7.63%(f)(g)
===================== ======= ======= ======== ======== ======== ======== ======= ======= ======= =======
Portfolio turnover
rate 15% 48% 88% 101% 76% 148% 169% 123% 115% 87%
===================== ======= ======= ======== ======== ======== ======== ======= ======= ======= =======
Average broker
commission rate
paid(h) $0.0451 $0.0460 N/A N/A N/A N/A N/A N/A N/A N/A
===================== ======= ======= ======== ======== ======== ======== ======= ======= ======= =======
<CAPTION>
CLASS B SHARES
-----------------------------------------------------
DECEMBER 31,
JUNE 30, -------------------------------------
1997 1996 1995 1994 1993
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 16.01 $ 14.60 $ 11.84 $ 14.08 $ 15.30
- --------------------- -------- ------- ------- ------- -------
Income from
investment
operations:
Net investment
income 0.20 0.42 0.44 0.47 0.17
- --------------------- -------- ------- ------- ------- -------
Net gains (losses)
on securities
(both realized and
unrealized) 1.23 1.44 2.73 (2.19) (0.98)
- --------------------- -------- ------- ------- ------- -------
Total from
investment
operations 1.43 1.86 3.17 (1.72) (0.81)
- --------------------- -------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.19) (0.45) (0.41) (0.49) (0.17)
- --------------------- -------- ------- ------- ------- -------
Distributions from
net realized
capital gains -- -- -- -- (0.24)
- --------------------- -------- ------- ------- ------- -------
Returns of capital -- -- -- (0.03) --
- --------------------- -------- ------- ------- ------- -------
Total
distributions (0.19) (0.45) (0.41) (0.52) (0.41)
- --------------------- -------- ------- ------- ------- -------
Net asset value, end
of period $ 17.25 $ 16.01 $ 14.60 $ 11.84 $ 14.08
===================== ======== ======= ======= ======= =======
Total return(b) 8.98% 12.98% 27.16% (12.35)% (5.32)%
===================== ======== ======= ======= ======= =======
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $82,876 $79,530 $70,693 $42,568 $23,892
===================== ======== ======= ======= ======= =======
Ratio of expenses to
average net assets 1.89%(c)(d) 1.96% 1.97% 2.07% 1.99%(g)
===================== ======== ======= ======= ======= =======
Ratio of net
investment income to
average net assets 2.61%(c) 2.83% 3.44% 3.78% 3.38%(g)
===================== ======== ======= ======= ======= =======
Portfolio turnover
rate 15% 48% 88% 101% 76%
===================== ======== ======= ======= ======= =======
Average broker
commission rate
paid(h) $ 0.0451 $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 annualized and based on average daily net assets of
$160,940,762. Ratios for Class B are annualized and based on average daily
net assets of $79,341,726.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have remained the same for
Class A Shares and would have been 1.90% (annualized) for Class B Shares.
(e) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.22%, 1.11% and 1.69% (annualized) for 1990-1988, respectively.
(f) 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 5.20%, 6.07% and 7.16% (annualized) for 1990-1988,
respectively.
(g) Annualized.
(h) Disclosure requirement beginning with the Fund's fiscal year ended December
31, 1996.
11
<PAGE> 14
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 (for 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 33,398,062
Owen Daly II................................................ 773,623,278 0 33,946,271
Carl Frischling............................................. 773,902,641 0 33,666,908
Robert H. Graham............................................ 774,181,971 0 33,387,578
John F. Kroeger............................................. 773,713,539 0 33,856,010
Lewis F. Pennock............................................ 773,903,304 0 33,666,245
Ian W. Robinson............................................. 773,753,378 0 33,816,171
Louis S. Sklar.............................................. 773,993,581 0 33,575,968
(2) Approval of new Investment Advisory Agreement............... 9,140,317 125,919 376,181
(3) Elimination of policy restricting investments in other
companies (for AIM Global Utilities Fund only)............ 7,380,994 300,971 387,355
(4) Elimination of policy restricting investments in puts,
calls, straddles and spreads (for AIM Global Utilities
Fund only)................................................ 7,238,054 415,316 415,950
(5) KPMG Peat Marwick LLP....................................... 763,580,956 7,014,082 36,974,511
</TABLE>
12
<PAGE> 15
Trustees & Officers
<TABLE>
<S> <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
Cortland Trust Inc. and Secretary TRANSFER AGENT
Jack Fields Gary T. Crum A I M Fund Services, Inc.
Formerly Member of the Senior Vice President P.O. Box 4739
U.S. House of Representatives Houston, TX 77210-4739
Scott G. Lucas
Carl Frischling Senior Vice President CUSTODIAN
Partner
Kramer, Levin, Naftalis & Frankel Dana R. Sutton State Street Bank & Trust Company
Vice President and Assistant Treasurer 225 Franklin Street
Robert H. Graham Boston, MA 02110
President and Chief Executive Officer Robert G. Alley
A I M Management Group Inc. Vice President COUNSEL TO THE FUND
John F. Kroeger Stuart W. Coco Ballard Spahr
Formerly Consultant Vice President Andrews & Ingersoll
Wendell & Stockel Associates, Inc. 1735 Market Street
Melville B. Cox Philadelphia, PA 19103
Lewis F. Pennock Vice President
Attorney COUNSEL TO THE TRUSTEES
Karen Dunn Kelly
Ian W. Robinson Vice President Kramer, Levin, Naftalis & Frankel
Consultant; Formerly Executive 919 Third Avenue
Vice President and Jonathan C. Schoolar New York, NY 10022
Chief Financial Officer Vice President
Bell Atlantic Management DISTRIBUTOR
Services, Inc. P. Michelle Grace
Assistant Secretary A I M Distributors, Inc.
Louis S. Sklar 11 Greenway Plaza
Executive Vice President David L. Kite Suite 100
Hines Interests Assistant Secretary Houston, TX 77046
Limited Partnership
Nancy L. Martin
Assistant Secretary
Ofelia M. Mayo
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
<PAGE> 16
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS--Registered Trademark--
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Capital Development Fund
AIM Constellation Fund
AIM Global Aggressive Growth Fund
GROWTH OF CAPITAL
AIM Advisor International Value Fund
[PHOTO OF AIM Blue Chip Fund
11 GREENWAY PLAZA AIM Global Growth Fund
APPEARS HERE] 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 *AIM Aggressive Growth Fund was closed to new investors on
mutual fund industry since 1976 and managed approximately June 5, 1997. For more complete information about any AIM
$72 billion in assets for more than 3.5 million shareholders, Fund(s), including sales charges and expenses, ask your
including individual investors, corporate clients, and financial financial consultant or securities dealer for a free
institutions as of June 30, 1997. The AIM Family of prospectus(es). Please read the prospectus(es) carefully
Funds--Registered Trademark-- is distributed nationwide, and before you invest or send money.
AIM today ranks among the nation's top 15 mutual fund
companies in assets under management, according to Lipper INVEST WITH DISCIPLINE-SM-
Analytical Services, Inc.
[AIM LOGO APPEARS HERE] -----------------
BULK RATE
A I M Distributors, Inc. U.S. POSTAGE
11 Greenway Plaza, Suite 100 PAID
Houston, TX 77046 HOUSTON, TX
Permit No. 1919
-----------------
</TABLE>
