<PAGE> 1
[COVER PHOTO APPEARS HERE]
AIM GROWTH FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT JUNE 30, 1997
<PAGE> 2
[COVER PHOTO APPEARS HERE]
---------------------------------
AIM GROWTH FUND
For shareholders who seek
long-term growth of capital.
The Fund invests primarily
in the common stocks of
established medium- to
large-size companies
with prospects for above-average,
long-term earnings growth.
---------------------------------
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Growth Fund's performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value. Unless
otherwise indicated, the Fund's performance is computed without a sales
charge.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 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 The Fund's portfolio composition is subject to change and there is no
assurance the Fund will continue to hold any particular security.
o Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lipper Growth Fund Index represents an average of the
performance of the 30 largest growth mutual funds tracked by Lipper
Analytical Services, Inc., an independent mutual fund performance monitor.
o The unmanaged Standard & Poor's Composite Index of 500 Stocks (S&P 500) is
widely regarded by investors as representative of the stock market in
general.
o The Dow Jones Industrial Average (DJIA) is an unmanaged composite of the
performance of 30 large-company stocks.
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
[PHOTO OF fluctuated widely during the first six months of the year. The
CHARLES T. popular Dow Jones Industrial Average of large-company stocks
BAUER, fell by nearly 10% early in the period; the Russell 2000 Index
CHAIRMAN OF of small-company stocks lost nearly 20%. Both have since
THE BOARD OF recovered lost ground and set records in an impressive rally
THE FUND which began in May.
APPEARS HERE] In past reports, we have observed that market volatility
has become the norm rather than the exception. We suggested that
the 20%-30% returns of 1995 and 1996 were unlikely to continue
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
AIM GROWTH FUND POSTS
SOLID RETURNS IN VOLATILE MARKET
A roundtable discussion with the Fund management team for AIM Growth Fund for
the six-month period ended June 30, 1997.
Q. STOCKS FLUCTUATED WIDELY IN THE FIRST HALF OF 1997. HOW DID AIM GROWTH FUND
PERFORM IN THAT ENVIRONMENT?
A. We are pleased with the Fund's performance during that volatile period. For
the six months ended June 30, 1997, the Fund posted a total return of 12.31%
and 11.87% for Class A and Class B shares, respectively.
Much of the Fund's performance occurred late in the period when the market
staged an impressive rally. From April 30, 1997 to June 30, 1997, the Fund's
total return was 12.77% for Class A shares and 12.66% for Class B shares. That
bested the 10.83% total return of the Standard and Poor's Composite Index of
500 Stocks (S&P 500) and 10.92% total return of the Lipper Growth Fund Index
for the same period.
Q. WHAT TOUCHED OFF THE MARKET VOLATILITY?
A. The primary cause of the stock market's weakness in the first quarter was
rapid economic expansion which raised concerns that the Federal Reserve Board
(the Fed) would hike interest rates to forestall inflation.
Stock prices were already plunging when the Fed, in a widely anticipated
move, raised interest rates in March. From mid-March to mid-April 1997, the Dow
Jones Industrial Average (DJIA) lost 9.8% of its value--just short of the 10%
decline many market observers had predicted.
Later reports showing that economic growth was slowing and inflationary
pressures were minimal sparked a spirited stock-market rally. The DJIA recouped
its losses and advanced to record highs in June.
Q. HOW DID THE FUND BENEFIT WHEN STOCKS RALLIED?
A. The Fund invests primarily in large- and mid-cap stocks, and both segments
were up sharply during the last two months of the reporting period. As of June
30, the Fund was 61% invested in large-cap stocks, 36% in mid-cap stocks, and
3% in small-cap stocks.
The Fund also benefited from owning the stocks of such industry-leaders as
United Technologies Corp., E. I. Du Pont de Nemours & Co., and Merck & Co,
which helped boost the DJIA to record highs.
Q. HOW DID THE FUND TAKE ADVANTAGE OF THE INVESTMENT CLIMATE?
A. We focus on companies that offer the most attractive potential for growth.
That strategy doesn't change--even in volatile markets. The Fund's top equity
holdings were in the following sectors: technology, 29%; health care, 16%; and
financial, 10%. These sectors have been among the principal growth segments of
the economy.
PORTFOLIO COMPOSITION
As of June 30, 1997, based on total net assets
<TABLE>
<CAPTION>
===================================================================================
TOP 10 EQUITY HOLDINGS % TOP 10 INDUSTRIES %
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Philip Morris Companies, Inc. 1.56% 1. Computer Software/Services 8.18%
2. Applied Materials, Inc. 1.37 2. Semiconductors 7.43
3. Dell Computer Corp. 1.03 3. Medical (Patient Services) 6.47
4. Microsoft Corporation 1.00 4. Retail (Stores) 6.43
5. HEALTHSOUTH Corp. 0.99 5. Medical (Drugs) 5.98
6. Compuware Corp. 0.99 6. Telecommunications 4.45
7. Service Corp. International 0.86 7. Finance (Consumer Credit) 4.10
8. Lockheed Martin Corp. 0.86 8. Medical Instruments/Products 3.17
9. Tenet Healthcare Corp. 0.86 9. Computer MINI/PCS 2.74
10. Sun Microsystems Inc. 0.83 10. Insurance (Multi-Line Property) 2.71
===================================================================================
</TABLE>
---------------------------
Many technology companies
reported excellent earnings
for the first and second
quarters of 1997 . . .
---------------------------
See important Fund & index disclosures inside front cover.
2
<PAGE> 5
Q. GIVEN THE VOLATILITY OF TECHNOLOGY STOCKS, WHY DOES THE FUND HAVE SO MUCH
INVESTED IN THAT SECTOR?
A. Many technology companies reported excellent earnings for the first and
second quarters of 1997, and our stock-selection process found a number of
technology firms we consider very promising.
The Fund benefited from holding the stocks of such companies as Applied
Materials, Inc., the world's largest supplier of wafer fabrication systems and
services to the semiconductor industry. Other technology stocks in the
portfolio that posted solid gains included industry leaders Microsoft Corp. and
Dell Computer Corp.
We reduced our holdings in networking company stocks, when earnings fell
short of expectations, from 4% to 2% of the portfolio. At the same time, we
increased our holdings in semiconductor makers, whose stocks rose
significantly, from 3% to nearly 7.5% of the portfolio.
Q. WHERE WAS YOUR FOCUS IN HEALTH-CARE STOCKS?
A. Our primary emphasis was on the stocks of pharmaceutical companies and
patient-care providers. These companies are bringing new products to the market
and are reporting substantial earnings growth. Pharmaceutical manufacturers in
the portfolio included such recognizable names as Merck & Co. and Bristol-Myers
Squibb Co.
In the patient-care area, health maintenance organizations continue to
lead the efficiency drive in the U.S. health-care industry and have recently
improved their pricing structure. The Fund's holdings in this area included
HEALTHSOUTH Corp., the nation's largest provider of rehabilitative health-care
services.
Q. WHY DO YOU THINK FINANCIAL COMPANIES HAVE STRONG GROWTH PROSPECTS?
A. The relatively long period of stable interest rates and low inflation has
created a favorable environment for financial companies. We expect this sector
to remain vibrant as long as inflation is held in check.
The consolidation and restructuring taking place in the banking industry
is also giving financial institutions a boost. For example, NationsBank, one of
the stocks in the portfolio, merged with Boatmen's Bancshares and reported a
31% rise in net income for the first six months of 1997.
In the consumer-credit field, our leading holdings included the stocks of
the Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation, among the most important players in the home mortgage market, and
the Student Loan Marketing Association, the nation's leading provider of
financial funding services for college education loans.
Q. WHAT IS YOUR MARKET OUTLOOK?
A. Conditions appear to favor continued strength in the stock market. Economic
growth is slowing to a moderate pace, inflation continues to be astonishingly
low, and corporate profits continue to exceed analysts' expectations.
Nonetheless, it is important that investors maintain realistic
expectations about investment performance. We have enjoyed record-breaking
returns from stocks in recent years, but such analysts have suggested that
stock performance may return to historic norms that are closer to 10% per year
than 20%.
GROWTH OF $10,000 INVESTMENT
12/4/67-6/30/97
AIM GROWTH FUND
DELIVERS LONG-TERM PERFORMANCE
As you can see, AIM Growth Fund has produced a consistent record of growth over
the long-term: a hypothetical investment of $10,000 in the Fund's Class A
shares nearly 30 years ago grew to $150,592 by 6/30/97.
<TABLE>
<S> <C>
12/4/67 $10,000
10,512
10,082
7,505
11,399
13,641
10,854
9,292
11,778
12,762
6/30/77 12,249
13,159
15,307
18,132
23,229
19,562
32,244
28,835
35,789
47,262
6/30/87 56,859
50,923
57,657
71,265
71,689
77,741
84,236
78,579
103,747
124,916
6/30/97 150,592
</TABLE>
PAST PERFORMANCE CANNOT GUARANTEE COMPARABLE FUTURE RESULTS.
Source: Towers Data Systems HYPO--Registered Trademark--
AVERAGE ANNUAL TOTAL RETURN
As of 6/30/97, including sales charges
CLASS A SHARES
1 Year 13.92%*
5 Years 12.85
10 Years 9.71
20 Years 13.05
Inception (12/4/67) 9.40
*20.55% excluding sales charge
CLASS B SHARES
1 Year 14.58%**
Inception (9/1/93) 13.10
**19.58% excluding CDSC
------------------------------
We focus on companies
that offer
the most attractive
potential for growth.
That strategy doesn't change--
even in volatile markets.
------------------------------
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-82.32%
ADVERTISING/BROADCASTING-0.89%
American Radio Systems Corp.(a) 9,000 $ 358,875
- --------------------------------------------------------------
Chancellor Corp.-Class A(a) 3,500 140,000
- --------------------------------------------------------------
Clear Channel Communications,
Inc.(a) 34,400 2,115,600
- --------------------------------------------------------------
Interpublic Group of Companies,
Inc. 15,000 919,688
- --------------------------------------------------------------
Jacor Communications, Inc.(a) 22,500 860,625
- --------------------------------------------------------------
Omnicom Group, Inc. 10,000 616,250
- --------------------------------------------------------------
Paxson Communications Corp.(a) 6,600 84,150
- --------------------------------------------------------------
5,095,188
- --------------------------------------------------------------
AEROSPACE/DEFENSE-1.13%
Lockheed Martin Corp. 47,600 4,929,575
- --------------------------------------------------------------
United Technologies Corp. 18,100 1,502,300
- --------------------------------------------------------------
6,431,875
- --------------------------------------------------------------
AIRLINES-0.05%
Southwest Airlines Co. 10,300 266,513
- --------------------------------------------------------------
AUTOMOBILE/TRUCK PARTS &
TIRES-0.16%
Mark IV Industries, Inc. 37,590 902,160
- --------------------------------------------------------------
BANKING-0.76%
AmSouth Bancorporation 15,000 567,188
- --------------------------------------------------------------
BankBoston Corp. 14,100 1,016,081
- --------------------------------------------------------------
NationsBank Corp. 43,000 2,773,500
- --------------------------------------------------------------
4,356,769
- --------------------------------------------------------------
BANKING (MONEY CENTER)-0.61%
BankAmerica Corp. 54,000 3,486,375
- --------------------------------------------------------------
BEVERAGES (SOFT DRINKS)-0.46%
PepsiCo, Inc. 70,000 2,629,375
- --------------------------------------------------------------
BIOTECHNOLOGY-0.57%
Amgen, Inc. 32,700 1,900,688
- --------------------------------------------------------------
Biogen, Inc.(a) 39,400 1,334,675
- --------------------------------------------------------------
3,235,363
- --------------------------------------------------------------
BUILDING MATERIALS-0.11%
Georgia Pacific Corp. 7,200 614,700
- --------------------------------------------------------------
BUSINESS SERVICES-0.90%
AccuStaff, Inc.(a) 59,500 1,409,406
- --------------------------------------------------------------
Corrections Corp. of America(a) 22,500 894,375
- --------------------------------------------------------------
Diebold, Inc. 20,800 811,200
- --------------------------------------------------------------
Equifax, Inc. 29,500 1,097,031
- --------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
BUSINESS SERVICES-(CONTINUED)
Paychex, Inc. 24,600 $ 934,800
- --------------------------------------------------------------
5,146,812
- --------------------------------------------------------------
CHEMICALS-0.80%
Du Pont (E.I.) de Nemours & Co. 50,000 3,143,750
- --------------------------------------------------------------
Monsanto Co. 33,000 1,421,062
- --------------------------------------------------------------
4,564,812
- --------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.08%
IMC Global, Inc. 12,700 444,500
- --------------------------------------------------------------
COMPUTER MAINFRAMES-0.28%
International Business Machines
Corp. 18,000 1,623,375
- --------------------------------------------------------------
COMPUTER MINI/PCS-2.74%
Compaq Computer Corp.(a) 46,100 4,575,425
- --------------------------------------------------------------
Dell Computer Corp.(a) 50,000 5,871,875
- --------------------------------------------------------------
Micron Electronics, Inc.(a) 25,000 445,313
- --------------------------------------------------------------
Sun Microsystems, Inc.(a) 127,000 4,726,781
- --------------------------------------------------------------
15,619,394
- --------------------------------------------------------------
COMPUTER NETWORKING-1.31%
Ascend Communications, Inc.(a) 20,000 787,500
- --------------------------------------------------------------
Bay Networks, Inc.(a) 47,500 1,261,719
- --------------------------------------------------------------
Cabletron Systems, Inc.(a) 28,100 795,581
- --------------------------------------------------------------
Cisco Systems, Inc.(a) 30,300 2,033,887
- --------------------------------------------------------------
3Com Corp.(a) 58,000 2,610,000
- --------------------------------------------------------------
7,488,687
- --------------------------------------------------------------
COMPUTER PERIPHERALS-1.10%
Adaptec, Inc.(a) 40,900 1,421,275
- --------------------------------------------------------------
CDW Computer Centers, Inc.(a) 23,050 1,223,091
- --------------------------------------------------------------
EMC Corp.(a) 60,000 2,340,000
- --------------------------------------------------------------
Microchip Technology, Inc.(a) 43,700 1,300,075
- --------------------------------------------------------------
6,284,441
- --------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES-7.80%
Affiliated Computer Services,
Inc.(a) 22,600 632,800
- --------------------------------------------------------------
America Online, Inc.(a) 10,000 556,250
- --------------------------------------------------------------
BISYS Group, Inc. (The)(a) 11,200 467,600
- --------------------------------------------------------------
BMC Software, Inc.(a) 54,000 2,990,250
- --------------------------------------------------------------
Cadence Design Systems, Inc.(a) 57,000 1,909,500
- --------------------------------------------------------------
Computer Associates International,
Inc. 36,500 2,032,594
- --------------------------------------------------------------
Computer Sciences Corp.(a) 15,000 1,081,875
- --------------------------------------------------------------
Compuware Corp.(a) 118,000 5,634,500
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTER SOFTWARE/SERVICES-(CONTINUED)
CSG Systems International, Inc.(a) 12,800 $ 395,200
- --------------------------------------------------------------
DST Systems, Inc.(a) 22,100 736,206
- --------------------------------------------------------------
First Data Corp. 20,300 891,931
- --------------------------------------------------------------
Fiserv, Inc.(a) 56,300 2,512,388
- --------------------------------------------------------------
HBO & Co. 56,600 3,898,325
- --------------------------------------------------------------
HPR, Inc.(a) 11,100 205,350
- --------------------------------------------------------------
McAfee Associates, Inc.(a) 29,600 1,868,500
- --------------------------------------------------------------
Microsoft Corp.(a) 45,300 5,724,788
- --------------------------------------------------------------
National Data Corp. 32,000 1,386,000
- --------------------------------------------------------------
Oracle Corp.(a) 37,600 1,894,100
- --------------------------------------------------------------
Parametric Technology Co.(a) 51,300 2,183,456
- --------------------------------------------------------------
Physician Computer Network, Inc.(a) 16,600 112,050
- --------------------------------------------------------------
Security Dynamics Technologies,
Inc.(a) 21,400 789,125
- --------------------------------------------------------------
Sterling Commerce, Inc.(a) 113,300 3,724,737
- --------------------------------------------------------------
Sterling Software, Inc.(a) 13,000 406,250
- --------------------------------------------------------------
SunGard Data Systems Inc.(a) 11,800 548,700
- --------------------------------------------------------------
Sybase, Inc.(a) 21,500 319,812
- --------------------------------------------------------------
Synopsys, Inc.(a) 30,700 1,128,225
- --------------------------------------------------------------
Transition Systems, Inc.(a) 400 7,275
- --------------------------------------------------------------
Wind River Systems(a) 11,900 455,173
- --------------------------------------------------------------
44,492,960
- --------------------------------------------------------------
CONGLOMERATES-2.05%
AlliedSignal Inc. 11,000 924,000
- --------------------------------------------------------------
Corning Inc. 48,800 2,714,500
- --------------------------------------------------------------
General Electric Co. 30,000 1,961,250
- --------------------------------------------------------------
Loews Corp. 20,800 2,082,600
- --------------------------------------------------------------
Tyco International Ltd. 39,700 2,761,631
- --------------------------------------------------------------
U.S. Industries, Inc.(a) 35,600 1,268,250
- --------------------------------------------------------------
11,712,231
- --------------------------------------------------------------
CONSUMER NON-DURABLES-0.24%
Blyth Industries, Inc.(a) 11,100 374,625
- --------------------------------------------------------------
Central Garden and Pet Co.(a) 11,300 282,500
- --------------------------------------------------------------
Rexall Sundown, Inc.(a) 18,900 737,100
- --------------------------------------------------------------
1,394,225
- --------------------------------------------------------------
CONTAINERS-0.13%
Sealed Air Corp.(a) 15,600 741,000
- --------------------------------------------------------------
COSMETICS & TOILETRIES-0.77%
General Nutrition Companies,
Inc.(a) 35,800 1,002,400
- --------------------------------------------------------------
Kimberly-Clark Corp. 15,000 746,250
- --------------------------------------------------------------
Procter & Gamble Co. (The) 10,000 1,412,500
- --------------------------------------------------------------
Warner-Lambert Co. 10,000 1,242,500
- --------------------------------------------------------------
4,403,650
- --------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRIC POWER-0.14%
AES Corp.(a) 11,400 $ 806,550
- --------------------------------------------------------------
ELECTRONIC COMPONENTS/MISCELLANEOUS-1.72%
ASE Test Ltd.(a) 1,800 76,050
- --------------------------------------------------------------
Berg Electronics Corp.(a) 11,200 402,500
- --------------------------------------------------------------
BMC Industries, Inc. 10,900 373,325
- --------------------------------------------------------------
Honeywell, Inc. 17,800 1,350,575
- --------------------------------------------------------------
Raychem Corp. 5,800 431,375
- --------------------------------------------------------------
SCI Systems, Inc.(a) 20,000 1,275,000
- --------------------------------------------------------------
Symbol Technologies, Inc. 18,000 605,250
- --------------------------------------------------------------
Tektronix, Inc. 9,500 570,000
- --------------------------------------------------------------
Teradyne, Inc.(a) 106,800 4,191,900
- --------------------------------------------------------------
Thermo Instrument Systems, Inc.(a) 16,800 514,500
- --------------------------------------------------------------
9,790,475
- --------------------------------------------------------------
ELECTRONIC/PC DISTRIBUTORS-0.33%
Arrow Electronics, Inc.(a) 6,600 350,625
- --------------------------------------------------------------
Avnet, Inc. 4,300 247,250
- --------------------------------------------------------------
Ingram Micro, Inc.-Class A(a) 52,900 1,276,213
- --------------------------------------------------------------
1,874,088
- --------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-0.36%
Franklin Resources, Inc. 21,650 1,570,978
- --------------------------------------------------------------
T. Rowe Price Associates 8,900 459,463
- --------------------------------------------------------------
2,030,441
- --------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-4.04%
Aames Financial Corp. 18,850 348,725
- --------------------------------------------------------------
American Express Co. 19,000 1,415,500
- --------------------------------------------------------------
Capital One Financial Corp. 11,200 422,800
- --------------------------------------------------------------
Cityscape Financial Corp.(a) 4,400 87,725
- --------------------------------------------------------------
Concord EFS, Inc.(a) 47,700 1,234,237
- --------------------------------------------------------------
Federal Home Loan Mortgage Corp. 62,500 2,148,437
- --------------------------------------------------------------
Federal National Mortgage
Association 54,500 2,377,562
- --------------------------------------------------------------
Green Tree Financial Corp. 87,500 3,117,188
- --------------------------------------------------------------
Household International, Inc. 22,700 2,665,831
- --------------------------------------------------------------
IMC Mortgage Co.(a) 30,000 498,750
- --------------------------------------------------------------
Imperial Credit Industries, Inc.(a) 34,100 701,181
- --------------------------------------------------------------
MBNA Corp. 59,500 2,179,188
- --------------------------------------------------------------
Money Store, Inc. (The) 37,200 1,067,175
- --------------------------------------------------------------
PMT Services, Inc.(a) 23,000 350,750
- --------------------------------------------------------------
Student Loan Marketing Association 21,500 2,730,500
- --------------------------------------------------------------
SunAmerica, Inc. 35,400 1,725,750
- --------------------------------------------------------------
23,071,299
- --------------------------------------------------------------
FINANCE (LEASING COMPANIES)-0.10%
Comdisco, Inc. 22,500 585,000
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FINANCE (SAVINGS & LOAN)-0.60%
Ahmanson (H.F.) & Co. 39,600 $ 1,702,800
- --------------------------------------------------------------
ContiFinancial Corp.(a) 7,500 273,750
- --------------------------------------------------------------
Washington Mutual, Inc. 24,000 1,434,000
- --------------------------------------------------------------
3,410,550
- --------------------------------------------------------------
FOOD/PROCESSING-0.72%
ConAgra, Inc. 29,500 1,891,687
- --------------------------------------------------------------
Dean Foods Co. 39,600 1,598,850
- --------------------------------------------------------------
Lancaster Colony Corp. 12,900 624,038
- --------------------------------------------------------------
4,114,575
- --------------------------------------------------------------
FUNERAL SERVICES-1.12%
Equity Corp. International(a) 11,200 270,900
- --------------------------------------------------------------
Service Corp. International 150,000 4,931,250
- --------------------------------------------------------------
Stewart Enterprises, Inc.-Class A 28,650 1,203,300
- --------------------------------------------------------------
6,405,450
- --------------------------------------------------------------
FURNITURE-0.16%
Leggett & Platt, Inc. 21,500 924,500
- --------------------------------------------------------------
GAMING-0.38%
GTECH Holdings Corp.(a) 17,900 577,275
- --------------------------------------------------------------
International Game Technology 59,000 1,047,250
- --------------------------------------------------------------
MGM Grand, Inc.(a) 14,600 540,200
- --------------------------------------------------------------
2,164,725
- --------------------------------------------------------------
HOTELS/MOTELS-0.66%
Choice Hotels International,
Inc.(a) 20,800 352,300
- --------------------------------------------------------------
Doubletree Corp.(a) 3,500 143,938
- --------------------------------------------------------------
HFS, Inc.(a) 31,700 1,838,600
- --------------------------------------------------------------
Host Marriott Corp.(a) 10,000 178,125
- --------------------------------------------------------------
Marriot International, Inc. 9,000 552,375
- --------------------------------------------------------------
Promus Hotel Corp.(a) 14,700 569,625
- --------------------------------------------------------------
Sun International Hotels Ltd.(a) 3,200 118,200
- --------------------------------------------------------------
3,753,163
- --------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-0.11%
Conseco Inc. 17,500 647,500
- --------------------------------------------------------------
INSURANCE (MULTI-LINE
PROPERTY)-2.65%
Aetna Inc. 23,100 2,364,862
- --------------------------------------------------------------
Allstate Corp. 31,600 2,306,800
- --------------------------------------------------------------
American International Group, Inc. 13,000 1,941,875
- --------------------------------------------------------------
CapMAC Holdings, Inc. 20,500 689,313
- --------------------------------------------------------------
Everest Re Holdings, Inc. 50,400 1,997,100
- --------------------------------------------------------------
MGIC Investment Corp. 78,400 3,758,300
- --------------------------------------------------------------
Progressive Corp. 1,500 130,500
- --------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
INSURANCE (MULTI-LINE PROPERTY)-(CONTINUED)
Providian Financial Corp.(a) 11,400 $ 366,225
- --------------------------------------------------------------
Travelers Group, Inc. 25,000 1,576,563
- --------------------------------------------------------------
15,131,538
- --------------------------------------------------------------
LEISURE & RECREATION-0.93%
Carnival Corp.-Class A 52,100 2,149,125
- --------------------------------------------------------------
Harley-Davidson, Inc. 31,900 1,529,206
- --------------------------------------------------------------
Regal Cinemas, Inc.(a) 20,000 660,000
- --------------------------------------------------------------
Speedway Motorsports, Inc.(a) 8,100 176,175
- --------------------------------------------------------------
Walt Disney Co. (The) 10,000 802,500
- --------------------------------------------------------------
5,317,006
- --------------------------------------------------------------
MACHINERY (HEAVY)-0.27%
Deere & Co. 28,000 1,536,500
- --------------------------------------------------------------
MACHINERY (MISCELLANEOUS)-0.89%
Kulicke & Soffa Industries, Inc.(a) 7,500 243,515
- --------------------------------------------------------------
Pentair, Inc. 11,400 374,775
- --------------------------------------------------------------
Thermo Electron Corp.(a) 131,250 4,462,500
- --------------------------------------------------------------
5,080,790
- --------------------------------------------------------------
MEDICAL (DRUGS)-4.65%
Abbott Laboratories 27,200 1,815,600
- --------------------------------------------------------------
American Home Products Corp. 46,000 3,519,000
- --------------------------------------------------------------
AmeriSource Health Corp.-Class A(a) 13,600 678,300
- --------------------------------------------------------------
Bristol-Myers Squibb Co. 40,800 3,304,800
- --------------------------------------------------------------
Cardinal Health, Inc. 25,050 1,434,112
- --------------------------------------------------------------
Covance, Inc.(a) 40,050 773,466
- --------------------------------------------------------------
Curative Technologies, Inc.(a) 5,500 158,125
- --------------------------------------------------------------
Dura Pharmaceuticals, Inc.(a) 17,900 713,762
- --------------------------------------------------------------
Express Scripts, Inc.-Class A(a) 17,300 722,275
- --------------------------------------------------------------
Forest Laboratories, Inc.(a) 25,100 1,044,788
- --------------------------------------------------------------
Johnson & Johnson 40,100 2,581,438
- --------------------------------------------------------------
Jones Medical Industries, Inc. 25,200 1,197,000
- --------------------------------------------------------------
McKesson Corp. 10,800 837,000
- --------------------------------------------------------------
Merck & Co., Inc. 21,500 2,225,250
- --------------------------------------------------------------
Parexel International Corp.(a) 10,900 346,075
- --------------------------------------------------------------
Pfizer, Inc. 13,000 1,553,500
- --------------------------------------------------------------
Pharmacia & Upjohn, Inc. 24,000 834,000
- --------------------------------------------------------------
Schering-Plough Corp. 32,400 1,551,150
- --------------------------------------------------------------
Watson Pharmaceuticals, Inc.(a) 29,500 1,246,375
- --------------------------------------------------------------
26,536,016
- --------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-6.47%
Beverly Enterprises, Inc.(a) 35,000 568,750
- --------------------------------------------------------------
Cerner Corp.(a) 15,600 327,600
- --------------------------------------------------------------
6
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MEDICAL (PATIENT SERVICES)-(CONTINUED)
Columbia/HCA Healthcare Corp. 76,580 $ 3,010,551
- --------------------------------------------------------------
FPA Medical Management, Inc.(a) 28,400 672,725
- --------------------------------------------------------------
Genesis Health Ventures, Inc.(a) 15,700 529,875
- --------------------------------------------------------------
Health Care and Retirement Corp.(a) 52,450 1,750,519
- --------------------------------------------------------------
Health Management Associates,
Inc.-Class A(a) 74,825 2,132,512
- --------------------------------------------------------------
HEALTHSOUTH Corp.(a) 226,700 5,653,331
- --------------------------------------------------------------
Humana, Inc.(a) 45,500 1,052,187
- --------------------------------------------------------------
Lincare Holdings, Inc.(a) 22,600 971,800
- --------------------------------------------------------------
MedPartners, Inc.(a) 110,980 2,399,942
- --------------------------------------------------------------
OccuSystems, Inc.(a) 34,700 1,006,300
- --------------------------------------------------------------
Orthodontic Centers of America,
Inc.(a) 17,800 323,738
- --------------------------------------------------------------
Oxford Health Plans, Inc.(a) 44,000 3,157,000
- --------------------------------------------------------------
PhyCor, Inc.(a) 16,600 571,663
- --------------------------------------------------------------
Quorum Health Group, Inc.(a) 51,100 1,826,825
- --------------------------------------------------------------
Tenet Healthcare Corp.(a) 165,470 4,891,707
- --------------------------------------------------------------
Total Renal Care Holdings, Inc.(a) 12,500 502,344
- --------------------------------------------------------------
United Healthcare Corp. 38,000 1,976,000
- --------------------------------------------------------------
Universal Health Services,
Inc.-Class B(a) 35,200 1,355,200
- --------------------------------------------------------------
Vencor, Inc.(a) 37,300 1,575,925
- --------------------------------------------------------------
Wellpoint Health Networks, Inc.(a) 15,100 692,713
- --------------------------------------------------------------
36,949,207
- --------------------------------------------------------------
MEDICAL INSTRUMENTS/PRODUCTS-3.17%
Bard (C.R.), Inc. 19,900 722,619
- --------------------------------------------------------------
Baxter International Inc. 55,500 2,899,875
- --------------------------------------------------------------
Becton, Dickinson & Co. 35,100 1,776,937
- --------------------------------------------------------------
Dentsply International, Inc. 6,700 328,300
- --------------------------------------------------------------
Guidant Corp. 27,500 2,337,500
- --------------------------------------------------------------
Hillenbrand Industries, Inc. 16,000 760,000
- --------------------------------------------------------------
Omnicare, Inc. 71,400 2,240,175
- --------------------------------------------------------------
Physician Sales & Service, Inc.(a) 15,900 302,100
- --------------------------------------------------------------
Quintiles Transnational Corp.(a) 16,700 1,162,737
- --------------------------------------------------------------
Stryker Corp. 45,200 1,576,350
- --------------------------------------------------------------
Sybron International Corp.(a) 63,500 2,532,063
- --------------------------------------------------------------
U.S. Surgical Corp. 39,600 1,475,100
- --------------------------------------------------------------
18,113,756
- --------------------------------------------------------------
OFFICE AUTOMATION-0.62%
Xerox Corp. 44,600 3,517,825
- --------------------------------------------------------------
OFFICE PRODUCTS-0.32%
Avery Dennison Corp. 27,400 1,099,425
- --------------------------------------------------------------
Reynolds & Reynolds Co.-Class A 44,300 697,725
- --------------------------------------------------------------
1,797,150
- --------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL & GAS (DRILLING)-0.24%
Marine Drilling Companies, Inc.(a) 39,900 $ 783,038
- --------------------------------------------------------------
Santa Fe International Corp.(a) 16,900 574,600
- --------------------------------------------------------------
1,357,638
- --------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.31%
Apache Corp. 15,000 487,500
- --------------------------------------------------------------
Burlington Resources, Inc. 17,500 772,187
- --------------------------------------------------------------
Santa Fe Energy Resources, Inc.(a) 34,000 499,375
- --------------------------------------------------------------
1,759,062
- --------------------------------------------------------------
OIL & GAS (SERVICES)-1.10%
EVI, Inc.(a) 12,200 512,400
- --------------------------------------------------------------
Exxon Corp. 47,400 2,915,100
- --------------------------------------------------------------
Global Marine, Inc.(a) 25,000 581,250
- --------------------------------------------------------------
Halliburton Co. 28,800 2,282,400
- --------------------------------------------------------------
6,291,150
- --------------------------------------------------------------
OIL EQUIPMENT & SUPPLIES-2.60%
Baker Hughes, Inc. 38,000 1,470,125
- --------------------------------------------------------------
BJ Services Co.(a) 21,400 1,147,575
- --------------------------------------------------------------
Coastal Corp. (The) 16,000 851,000
- --------------------------------------------------------------
Cooper Cameron Corp.(a) 27,200 1,271,600
- --------------------------------------------------------------
Diamond Offshore Drilling, Inc. 7,500 585,938
- --------------------------------------------------------------
ENSCO International, Inc.(a) 14,200 749,050
- --------------------------------------------------------------
Falcon Drilling Company, Inc.(a) 15,000 864,375
- --------------------------------------------------------------
Nabors Industries, Inc.(a) 39,000 975,000
- --------------------------------------------------------------
Pride Petroleum Services, Inc.(a) 32,900 789,600
- --------------------------------------------------------------
Rowan Companies, Inc.(a) 60,000 1,691,250
- --------------------------------------------------------------
Schlumberger Ltd. 6,800 850,000
- --------------------------------------------------------------
Smith International, Inc.(a) 21,500 1,306,125
- --------------------------------------------------------------
Tidewater, Inc. 27,200 1,196,800
- --------------------------------------------------------------
Varco International, Inc.(a) 33,300 1,073,925
- --------------------------------------------------------------
14,822,363
- --------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.34%
Bowater, Inc. 10,200 471,750
- --------------------------------------------------------------
Fort Howard Corp.(a) 20,200 1,022,625
- --------------------------------------------------------------
Mead Corp. 7,500 466,875
- --------------------------------------------------------------
1,961,250
- --------------------------------------------------------------
POLLUTION CONTROL-0.60%
United Waste Systems, Inc.(a) 23,900 979,900
- --------------------------------------------------------------
U.S. Filter Corp.(a) 39,700 1,081,825
- --------------------------------------------------------------
USA Waste Services, Inc.(a) 35,000 1,351,875
- --------------------------------------------------------------
3,413,600
- --------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
PUBLISHING-0.21%
New York Times Co.-Class A 18,000 $ 891,000
- --------------------------------------------------------------
Times Mirror Co. 6,000 331,500
- --------------------------------------------------------------
1,222,500
- --------------------------------------------------------------
RESTAURANTS-0.61%
Applebee's International, Inc. 31,700 847,975
- --------------------------------------------------------------
Cracker Barrel Old Country Store,
Inc. 25,000 662,500
- --------------------------------------------------------------
Lone Star Steakhouse & Saloon(a) 23,900 621,400
- --------------------------------------------------------------
Outback Steakhouse, Inc.(a) 5,200 125,775
- --------------------------------------------------------------
Starbucks Corp.(a) 13,600 529,550
- --------------------------------------------------------------
Wendy's International, Inc. 27,800 721,062
- --------------------------------------------------------------
3,508,262
- --------------------------------------------------------------
RETAIL (FOOD & DRUG)-1.77%
American Stores Co. 47,000 2,320,625
- --------------------------------------------------------------
CVS Corp. 39,549 2,026,886
- --------------------------------------------------------------
Kroger Co.(a) 55,800 1,618,200
- --------------------------------------------------------------
Quality Food Centers, Inc.(a) 16,600 630,800
- --------------------------------------------------------------
Rite Aid Corp. 42,600 2,124,675
- --------------------------------------------------------------
Safeway, Inc.(a) 30,000 1,383,750
- --------------------------------------------------------------
10,104,936
- --------------------------------------------------------------
RETAIL (STORES)-6.43%
Bed Bath & Beyond, Inc.(a) 25,200 765,450
- --------------------------------------------------------------
CompUSA, Inc.(a) 64,300 1,382,450
- --------------------------------------------------------------
Consolidated Stores Corp.(a) 86,594 3,009,133
- --------------------------------------------------------------
Costco Companies, Inc.(a) 61,600 2,025,100
- --------------------------------------------------------------
Dayton Hudson Corp. 85,800 4,563,487
- --------------------------------------------------------------
Dollar General Corp. 16,968 636,300
- --------------------------------------------------------------
Dollar Tree Stores, Inc.(a) 15,300 770,737
- --------------------------------------------------------------
Federated Department Stores,
Inc.(a) 22,000 764,500
- --------------------------------------------------------------
Finish Line, Inc. (The)-Class A(a) 20,000 292,500
- --------------------------------------------------------------
Hollywood Entertainment Corp.(a) 11,100 253,913
- --------------------------------------------------------------
Home Depot, Inc. 4,400 303,325
- --------------------------------------------------------------
Jones Apparel Group, Inc.(a) 25,100 1,198,525
- --------------------------------------------------------------
Kohl's Corp.(a) 17,900 947,581
- --------------------------------------------------------------
Lowe's Companies, Inc. 88,400 3,281,850
- --------------------------------------------------------------
Men's Wearhouse, Inc. (The)(a) 34,500 1,086,750
- --------------------------------------------------------------
Meyer (Fred), Inc.(a) 15,900 821,831
- --------------------------------------------------------------
Nordstrom, Inc. 16,000 785,000
- --------------------------------------------------------------
Pep Boys-Manny, Moe & Jack 47,100 1,604,344
- --------------------------------------------------------------
Petco Animal Supplies, Inc.(a) 20,400 612,000
- --------------------------------------------------------------
Ross Stores, Inc. 17,700 578,569
- --------------------------------------------------------------
Sports Authority, Inc. (The)(a) 21,700 421,794
- --------------------------------------------------------------
Staples, Inc.(a) 100,050 2,326,163
- --------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (STORES)-(CONTINUED)
Sysco Corp. 19,600 $ 715,400
- --------------------------------------------------------------
Tech Data Corp.(a) 39,300 1,235,494
- --------------------------------------------------------------
Tiffany & Co. 11,200 517,300
- --------------------------------------------------------------
TJX Companies, Inc. 65,400 1,724,925
- --------------------------------------------------------------
Toys "R" Us, Inc.(a) 56,700 1,984,500
- --------------------------------------------------------------
Viking Office Products, Inc.(a) 38,600 733,400
- --------------------------------------------------------------
Wal-Mart Stores, Inc. 27,300 923,081
- --------------------------------------------------------------
Williams-Sonoma, Inc.(a) 10,100 431,775
- --------------------------------------------------------------
36,697,177
- --------------------------------------------------------------
SCIENTIFIC INSTRUMENTS-0.44%
Perkin-Elmer Corp. 31,300 2,490,306
- --------------------------------------------------------------
SECURITY & SAFETY SERVICES-0.01%
Rural/Metro Corp.(a) 1,200 34,837
- --------------------------------------------------------------
SEMICONDUCTORS-7.43%
Altera Corp.(a) 78,600 3,969,300
- --------------------------------------------------------------
Analog Devices, Inc.(a) 65,400 1,737,188
- --------------------------------------------------------------
Applied Materials, Inc.(a) 110,600 7,831,863
- --------------------------------------------------------------
Atmel Corp.(a) 22,500 630,000
- --------------------------------------------------------------
Dallas Semiconductor Corp. 15,000 588,750
- --------------------------------------------------------------
Intel Corp. 10,000 1,418,125
- --------------------------------------------------------------
Kemet Corp.(a) 6,000 149,250
- --------------------------------------------------------------
KLA-Tencor Corp.(a) 73,100 3,563,625
- --------------------------------------------------------------
Lam Research Corp.(a) 30,000 1,111,875
- --------------------------------------------------------------
Linear Technology Corp. 50,600 2,618,550
- --------------------------------------------------------------
LSI Logic Corp.(a) 59,100 1,891,200
- --------------------------------------------------------------
Maxim Integrated Products, Inc.(a) 40,000 2,275,000
- --------------------------------------------------------------
Motorola, Inc. 40,200 3,055,200
- --------------------------------------------------------------
National Semiconductor Corp.(a) 96,700 2,961,437
- --------------------------------------------------------------
Novellus Systems, Inc.(a) 12,600 1,089,900
- --------------------------------------------------------------
PMC-Sierra, Inc.(a) 5,000 131,250
- --------------------------------------------------------------
Sanmina Corp.(a) 25,000 1,587,500
- --------------------------------------------------------------
Solectron Corp.(a) 20,000 1,400,000
- --------------------------------------------------------------
Texas Instruments, Inc. 28,300 2,378,969
- --------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 8,400 274,575
- --------------------------------------------------------------
Xilinx, Inc.(a) 35,000 1,717,188
- --------------------------------------------------------------
42,380,745
- --------------------------------------------------------------
SHOES & RELATED APPAREL-0.22%
Payless ShoeSource, Inc.(a) 12,000 656,250
- --------------------------------------------------------------
Wolverine World Wide, Inc. 18,975 576,366
- --------------------------------------------------------------
1,232,616
- --------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TELECOMMUNICATIONS-2.92%
ADC Telecommunications, Inc. 119,700 $ 3,994,987
- --------------------------------------------------------------
Aspect Telecommunications Corp.(a) 15,000 333,750
- --------------------------------------------------------------
Billing Information Concepts(a) 18,600 648,675
- --------------------------------------------------------------
DSC Communications Corp.(a) 77,700 1,728,825
- --------------------------------------------------------------
LCI International, Inc.(a) 25,000 546,875
- --------------------------------------------------------------
Lucent Technologies, Inc. 57,800 4,165,212
- --------------------------------------------------------------
MasTec, Inc.(a) 3,100 146,669
- --------------------------------------------------------------
PairGain Technologies, Inc.(a) 15,700 243,350
- --------------------------------------------------------------
Tellabs, Inc.(a) 83,800 4,682,325
- --------------------------------------------------------------
U.S. Long Distance Corp.(a) 9,500 163,875
- --------------------------------------------------------------
16,654,543
- --------------------------------------------------------------
TELEPHONE-0.72%
Cincinnati Bell, Inc. 59,000 1,858,500
- --------------------------------------------------------------
WorldCom, Inc.(a) 70,000 2,240,000
- --------------------------------------------------------------
4,098,500
- --------------------------------------------------------------
TEXTILES-0.64%
Fruit of The Loom, Inc.-Class A(a) 5,500 170,500
- --------------------------------------------------------------
Liz Claiborne, Inc. 30,600 1,426,725
- --------------------------------------------------------------
Nautica Enterprises, Inc.(a) 20,500 541,969
- --------------------------------------------------------------
Tommy Hilfiger Corp.(a) 13,500 542,531
- --------------------------------------------------------------
Unifi, Inc. 25,800 964,275
- --------------------------------------------------------------
3,646,000
- --------------------------------------------------------------
TOBACCO-2.26%
Philip Morris Companies, Inc. 200,000 8,875,000
- --------------------------------------------------------------
RJR Nabisco Holdings Corp. 122,300 4,035,900
- --------------------------------------------------------------
12,910,900
- --------------------------------------------------------------
TRUCKING-0.12%
CNF Transportation Inc. 21,800 703,050
- --------------------------------------------------------------
Total Domestic Common Stocks 469,781,944
- --------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-5.28%
CANADA-1.22%
Newbridge Networks Corp. (Computer
Networking)(a) 80,300 3,493,050
- --------------------------------------------------------------
Northern Telecom Ltd.
(Telecommunications) 26,000 2,366,000
- --------------------------------------------------------------
Potash Corp. of Saskatchewan Inc.
(Fertilizers) 6,700 502,918
- --------------------------------------------------------------
Precision Drilling Corp. (Oil &
Gas-Drilling)(a) 12,500 604,688
- --------------------------------------------------------------
6,966,656
- --------------------------------------------------------------
FINLAND-0.43%
Nokia Oy A.B.-Class A-ADR
(Telecommunications) 33,350 2,459,563
- --------------------------------------------------------------
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
IRELAND-0.38%
CBT Group PLC-ADR (Computer
Software/Services)(a) 1,800 $ 113,625
- --------------------------------------------------------------
Elan Corp. PLC-ADR
(Medical-Drugs)(a) 45,000 2,036,250
- --------------------------------------------------------------
2,149,875
- --------------------------------------------------------------
ISRAEL-0.48%
ECI Telecommunications Ltd. Designs
(Computer Networking) 15,000 446,250
- --------------------------------------------------------------
Tecnomatix Technologies Ltd.
(Computer Software/Services)(a) 10,000 325,000
- --------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd.-ADR (Medical-Drugs) 30,000 1,942,500
- --------------------------------------------------------------
2,713,750
- --------------------------------------------------------------
MEXICO-0.14%
Coca-Cola Femsa S.A.-ADR
(Beverages-Soft Drinks) 3,400 175,525
- --------------------------------------------------------------
Panamerican Beverages, Inc.-Class A
(Beverages-Soft Drinks) 19,000 624,625
- --------------------------------------------------------------
800,150
- --------------------------------------------------------------
NETHERLANDS-0.81%
Aegon N.V. (Insurance-Multi-Line
Property) 4,952 346,974
- --------------------------------------------------------------
Baan Co., N.V. (Computer
Software/Services)(a) 12,200 840,275
- --------------------------------------------------------------
Gucci Group N.V.-ADR-New York
Shares (Textiles) 12,000 772,500
- --------------------------------------------------------------
Philips Electronics N.V.-ADR-New
York Shares (Electronic
Components/Miscellaneous) 25,000 1,796,875
- --------------------------------------------------------------
Royal Dutch Petroleum Co.-ADR-New
York Shares (Oil & Gas-Services) 16,000 870,000
- --------------------------------------------------------------
4,626,624
- --------------------------------------------------------------
SWEDEN-0.69%
Telefonaktiebolaget LM Ericsson-ADR
(Telecommunications) 100,000 3,937,500
- --------------------------------------------------------------
UNITED KINGDOM-1.13%
Danka Business Systems PLC-ADR
(Office Automation) 68,900 2,816,288
- --------------------------------------------------------------
SmithKline Beecham PLC-ADR
(Medical-Drugs) 39,500 3,619,188
- --------------------------------------------------------------
6,435,476
- --------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests 30,089,594
- --------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED STOCKS-0.15%
HOTELS/MOTELS-0.15%
Host Marriott Financial
Trust-$3.375 Conv. Pfd. (Acquired
02/12/97-02/19/97; Cost
$867,603)(b) 14,950 867,264
- --------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
DOMESTIC CONVERTIBLE CORPORATE BONDS-0.06%
FINANCE (CONSUMER CREDIT)-0.06%
Cityscape Financial Corp., Conv.
Sub. Deb., 6.00%, 05/01/06
(Acquired 01/23/97-03/20/97;
Cost $360,225)(b) $ 390,000 $ 348,563
- --------------------------------------------------------------
FOREIGN CONVERTIBLE CORPORATE BONDS-0.16%
NETHERLANDS-0.16%
Baan Co., N.V. (Computer
Software/Services), Conv. Sub.
Notes, 4.50%, 12/15/01 580,000 926,538
- --------------------------------------------------------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
U.S. TREASURY SECURITIES-9.66%
U.S. TREASURY BILLS-9.66%(C)
4.97%, 09/25/97 $55,790,000(d) $ 55,134,468
- --------------------------------------------------------------
REPURCHASE AGREEMENT-3.09%(e)
UBS Securities, Inc., 6.10%,
07/01/97(f) 17,651,264 17,651,264
- --------------------------------------------------------------
TOTAL INVESTMENTS-100.72% 574,799,635
- --------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.72)% (4,087,587)
- --------------------------------------------------------------
NET ASSETS-100.00% $570,712,048
- --------------------------------------------------------------
</TABLE>
(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 these securities at 06/30/97 was $1,215,827 which represented 0.21%
of the Fund's net assets.
(c) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(d) A portion of the principal balance was pledged as collateral to cover margin
requirements for open futures contracts. See Note 8.
(e) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(f) Joint repurchase agreement entered into 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.
Investment Abbreviations:
ADR - American Depository Receipt
Conv. - Convertible
Deb. - Debentures
Pfd. - Preferred
Sub. - Subordinated
See Notes to Financial Statements.
10
<PAGE> 13
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$439,925,742) $574,799,635
- ---------------------------------------------------------
Foreign currencies, at market value (cost
$46) 46
- ---------------------------------------------------------
Receivables for:
Investments sold 3,544,865
- ---------------------------------------------------------
Fund shares sold 1,657,665
- ---------------------------------------------------------
Dividends and interest 271,251
- ---------------------------------------------------------
Investment for deferred compensation plan 55,581
- ---------------------------------------------------------
Other assets 16,037
- ---------------------------------------------------------
Total assets 580,345,080
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 7,429,985
- ---------------------------------------------------------
Fund shares reacquired 692,911
- ---------------------------------------------------------
Variation margin 412,300
- ---------------------------------------------------------
Deferred compensation plan 55,581
- ---------------------------------------------------------
Accrued advisory fees 313,054
- ---------------------------------------------------------
Accrued administrative service fees 6,598
- ---------------------------------------------------------
Accrued distribution fees 497,490
- ---------------------------------------------------------
Accrued trustees' fees 1,995
- ---------------------------------------------------------
Accrued transfer agent fees 108,369
- ---------------------------------------------------------
Accrued operating expenses 114,749
- ---------------------------------------------------------
Total liabilities 9,633,032
- ---------------------------------------------------------
Net assets applicable to shares outstanding $570,712,048
- ---------------------------------------------------------
NET ASSETS:
Class A $247,519,715
- ---------------------------------------------------------
Class B $323,192,333
- ---------------------------------------------------------
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 14,908,926
- ---------------------------------------------------------
Class B 20,180,193
- ---------------------------------------------------------
Class A:
Net asset value and redemption price per
share $ 16.60
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $16.60 divided by
94.50%) $ 17.57
- ---------------------------------------------------------
Class B:
Net asset value and offering price per
share $ 16.02
- ---------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $25,893 foreign
withholding tax) $ 1,414,329
- ---------------------------------------------------------
Interest 1,971,628
- ---------------------------------------------------------
Total investment income 3,385,957
- ---------------------------------------------------------
EXPENSES:
Advisory fees 1,782,859
- ---------------------------------------------------------
Custodian fees 68,783
- ---------------------------------------------------------
Transfer agent fees-Class A 160,626
- ---------------------------------------------------------
Transfer agent fees-Class B 380,623
- ---------------------------------------------------------
Administrative service fees 39,376
- ---------------------------------------------------------
Trustees' fees 4,534
- ---------------------------------------------------------
Distribution fees-Class A 293,586
- ---------------------------------------------------------
Distribution fees-Class B 1,469,955
- ---------------------------------------------------------
Other 137,296
- ---------------------------------------------------------
Total expenses 4,337,638
- ---------------------------------------------------------
Less: Expenses paid indirectly (4,866)
- ---------------------------------------------------------
Net expenses 4,332,772
- ---------------------------------------------------------
Net investment income (loss) (946,815)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND FUTURES CONTRACTS:
Net realized gain (loss) from:
Investment securities 6,595,150
- ---------------------------------------------------------
Foreign currencies (53,048)
- ---------------------------------------------------------
Futures contracts 9,681,331
- ---------------------------------------------------------
16,223,433
- ---------------------------------------------------------
Unrealized appreciation (depreciation) of:
Investment securities 47,149,575
- ---------------------------------------------------------
Foreign currencies (222)
- ---------------------------------------------------------
Futures contracts (1,611,902)
- ---------------------------------------------------------
45,537,451
- ---------------------------------------------------------
Net gain from investment securities,
foreign currencies and futures
contracts 61,760,884
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $60,814,069
- ---------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
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 (loss) $ (946,815) $ 124,753
- --------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and futures contracts 16,223,433 25,815,431
- --------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities,
foreign currencies and futures contracts 45,537,451 41,005,363
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 60,814,069 66,945,547
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (9,939,277)
- --------------------------------------------------------------------------------------------
Class B -- (12,535,665)
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A (7,979,833) 35,293,722
- --------------------------------------------------------------------------------------------
Class B 9,188,273 122,675,148
- --------------------------------------------------------------------------------------------
Net increase in net assets 62,022,509 202,439,475
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 508,689,539 306,250,064
- --------------------------------------------------------------------------------------------
End of period $570,712,048 $508,689,539
- --------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Shares of beneficial interest $414,140,599 $412,932,159
- --------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (880,500) 66,315
- --------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and futures contracts 23,171,473 6,948,040
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and futures contracts 134,280,476 88,743,025
- --------------------------------------------------------------------------------------------
$570,712,048 $508,689,539
- --------------------------------------------------------------------------------------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Growth 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 are 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 long-term growth
of capital by investing primarily in the common stocks of established medium- to
large-size companies with prospects for above-average, long-term earnings
growth. Realization of current income is an incidental consideration.
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
12
<PAGE> 15
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. 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.
C. 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.
D. 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.
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 as collateral for the
account of the broker (the Fund's agent in acquiring the futures position).
During the period the futures contracts are open, changes in the value of the
contracts are recognized as unrealized gains or losses by "marking to market"
on a daily basis to reflect the market value of the contracts 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 contracts are
closed, the Fund recognizes 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 contracts may not correlate with changes
in the value of the Fund's portfolio being hedged.
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.
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 $39,376 for such services.
The Fund, pursuant to a transfer agency and shareholder 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 $306,278 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 shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee under such
Plans would constitute an asset-based sales charge. The Plans also impose a cap
on the total sales charges, including asset-based sales charges, that may be
paid by the respective classes. AIM Distributors may, from time to time, assign,
transfer or pledge to one or more assignees, its rights to all or a portion of
(a) compensation received by AIM Distributors from the Fund pursuant to the
Class B Plan (but not AIM Distributors' duties and obligations pursuant to Class
B Plan) and (b) any contingent
13
<PAGE> 16
deferred sales charges payable to AIM Distributors related to Class B shares.
During the six months ended June 30, 1997, the Class A shares and the Class B
shares paid AIM Distributors $293,586 and $1,469,955, respectively, as
compensation under the Plans.
AIM Distributors received commissions of $78,831 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 $67,790 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 $3,220
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 $260 and the Fund
received reductions in transfer agency fees from AFS (an affiliate of AIM) and
reductions in custodian fees of $3,470 and $1,136, respectively, under expense
offset arrangements. The effect of the above arrangements resulted in reductions
of the Fund's total expenses of $4,866 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
$262,179,573 and $231,856,770, 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 $136,997,800
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (2,422,894)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $134,574,906
=========================================================
</TABLE>
Cost of investments for tax purposes is $440,224,729.
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 1997 and 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 7,705,156 $ 117,496,369 10,862,824 $ 152,766,558
- --------------------------------------------------------------------------------
Class B 3,625,519 53,592,637 12,013,218 167,088,540
- --------------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A -- -- 657,046 9,474,936
- --------------------------------------------------------------------------------
Class B -- -- 845,350 11,809,495
- --------------------------------------------------------------------------------
Reacquired:
Class A (8,212,453) (125,476,202) (8,993,672) (126,947,772)
- --------------------------------------------------------------------------------
Class B (3,048,895) (44,404,364) (4,060,745) (56,222,887)
- --------------------------------------------------------------------------------
69,327 $ 1,208,440 11,324,021 $ 157,968,870
- --------------------------------------------------------------------------------
</TABLE>
NOTE 8-OPEN FUTURES CONTRACTS
On June 30, 1997, $2,067,000 principal amount of U.S. Treasury bills were
pledged as collateral to cover margin requirements for open futures contracts.
Open futures contracts at June 30, 1997 were as follows:
<TABLE>
<CAPTION>
UNREALIZED
NO. OF APPRECIATION
CONTRACT CONTRACTS MONTH COMMITMENT (DEPRECIATION)
<S> <C> <C> <C> <C>
124
S&P 500 Index contracts Sept. 97 Buy $(593,301)
- ---------------------------------------------------------------------
</TABLE>
14
<PAGE> 17
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 September 1, 1993 (date sales commenced)
through December 31, 1993.
<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, -----------------------------------------------------------------
1997 1996 1995 1994 1993 1992(a) 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A:
Net asset value, beginning of period $ 14.78 $ 13.05 $ 10.32 $ 11.32 $ 12.28 $ 14.73 $ 12.35
- ------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.02 0.07 0.02 -- -- 0.06 0.11
- ------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) 1.80 2.34 3.50 (0.57) 0.41 (0.04) 4.33
- ------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Total from investment operations 1.82 2.41 3.52 (0.57) 0.41 0.02 4.44
- ------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income -- -- -- -- -- (0.06) (0.13)
- ------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Distributions from capital gains -- (0.68) (0.79) (0.43) (1.37) (2.41) (1.93)
- ------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Total distributions -- (0.68) (0.79) (0.43) (1.37) (2.47) (2.06)
- ------------------------------------------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 16.60 $ 14.78 $ 13.05 $ 10.32 $ 11.32 $ 12.28 $ 14.73
=========================================== ======== ======== ======== ======== ======== ======== ========
Total return(b) 12.31% 18.61% 34.31% (4.99)% 3.64% 0.19% 37.05%
=========================================== ======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $247,520 $227,882 $168,217 $123,271 $146,723 $168,395 $185,461
=========================================== ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.14%(c)(d) 1.18% 1.28% 1.22% 1.17% 1.17% 1.21%
=========================================== ======== ======== ======== ======== ======== ======== ========
Ratio of net investment income to average
net assets 0.14%(c) 0.46% 0.20% 0.02% 0.02% 0.42% 0.73%
=========================================== ======== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 50% 97% 87% 201% 192% 133% 73%
=========================================== ======== ======== ======== ======== ======== ======== ========
Average broker commission rate paid(e) $ 0.0557 $ 0.0621 N/A N/A N/A N/A N/A
=========================================== ======== ======== ======== ======== ======== ======== ========
<CAPTION>
DECEMBER 31,
------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
CLASS A:
Net asset value, beginning of period $ 13.92 $ 11.93 $ 11.04
- ------------------------------------------- -------- -------- --------
Income from investment operations:
Net investment income 0.21 0.25 0.23
- ------------------------------------------- -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) (0.91) 3.16 0.87
- ------------------------------------------- -------- -------- --------
Total from investment operations (0.70) 3.41 1.12
- ------------------------------------------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.20) (0.27) (0.23)
- ------------------------------------------- -------- -------- --------
Distributions from capital gains (0.67) (1.15) --
- ------------------------------------------- -------- -------- --------
Total distributions (0.87) (1.42) (0.23)
- ------------------------------------------- -------- -------- --------
Net asset value, end of period $ 12.35 $ 13.92 $ 11.93
=========================================== ========= ======== ========
Total return(b) (5.04)% 28.87% 10.13%
=========================================== ========= ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $153,245 $187,805 $180,793
=========================================== ========= ======== ========
Ratio of expenses to average net assets 1.16% 1.00% 0.98%
=========================================== ========= ======== ========
Ratio of net investment income to average
net assets 1.41% 1.62% 1.73%
=========================================== ========= ======== ========
Portfolio turnover rate 61% 53% 38%
=========================================== ========= ======== ========
Average broker commission rate paid(e) 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 are not annualized for periods
less than one year.
(c) Ratios are annualized and based on average net assets of $236,815,505.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(e) Disclosure requirement beginning with the Fund's fiscal year ended December
31, 1996.
<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 $ 14.32 $ 12.77 $ 10.21 $ 11.31 $ 12.83
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (0.05) (0.05) (0.08)(a) (0.06) (0.01)
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Net gains (losses) on securities (both realized and
unrealized) 1.75 2.28 3.43(a) (0.61) (0.14)
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Total from investment operations 1.70 2.23 3.35 (0.67) (0.15)
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Less distributions:
Distributions from capital gains -- (0.68) (0.79) (0.43) (1.37)
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Total distributions -- (0.68) (0.79) (0.43) (1.37)
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Net asset value, end of period $ 16.02 $ 14.32 $ 12.77 $ 10.21 $ 11.31
============================================================ ======= ======= ======= ======= =======
Total return(b) 11.87% 17.60% 33.00% (5.88)% (0.92)%
============================================================ ======= ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $323,192 $280,807 $138,034 $38,448 $11,053
============================================================ ======= ======= ======= ======= =======
Ratio of expenses to average net assets 2.04%(c)(d) 2.03% 2.13% 2.18% 1.91%(e)
============================================================ ======= ======= ======= ======= =======
Ratio of net investment income (loss) to average net assets (0.76)%(c) (0.39)% (0.65)% (0.94)% (0.72)%(e)
============================================================ ======= ======= ======= ======= =======
Portfolio turnover rate 50% 97% 87% 201% 192%
============================================================ ======= ======= ======= ======= =======
Average broker commission rate paid(f) $0.0557 $0.0621 N/A N/A N/A
============================================================ ======= ======= ======= ======= =======
</TABLE>
(a) Calculated using average shares outstanding.
(b) Total returns do not reflect deduction of contingent deferred sales charges
and are not annualized for periods less than one year.
(c) Ratios are annualized and based on average net assets of $296,427,344.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(e) Annualized.
(f) 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............... 18,826,674 298,560 940,841
(3) Elimination of policy restricting investments in other
investment companies (For AIM Growth Fund only)............. 13,954,962 693,082 1,011,593
(4) Elimination of policy prohibiting or restricting investments
in puts, calls, straddles and spreads (For AIM Growth Fund
only)....................................................... 13,621,220 1,000,689 1,037,726
(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 Jonathan C. Schoolar 919 Third Avenue
Vice President and Vice President New York, NY 10022
Chief Financial Officer
Bell Atlantic Management P. Michelle Grace DISTRIBUTOR
Services, Inc. Assistant Secretary
A I M Distributors, Inc.
Louis S. Sklar David L. Kite 11 Greenway Plaza
Executive Vice President Assistant Secretary Suite 100
Hines Interests 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> 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 ELEVEN
GREENWAY PLAZA GROWTH OF CAPITAL
APPEARS HERE] AIM Advisor International Value Fund
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 *AIM Aggressive Growth Fund was closed
provided leadership in the mutual fund to new investors on June 5, 1997. For
industry since 1976 and managed more complete information about any AIM
approximately $72 billion in assets for Fund(s), including sales charges and
more than 3.5 million shareholders, expenses, ask your financial consultant
including individual investors, or securities dealer for a free
corporate clients, and Financial prospectus(es). Please read the
institutions as of June 30, 1997. The prospectus(es) carefully before you
AIM Family of Funds--Registered invest or send money.
Trademark-- is distributed nationwide,
and AIM today ranks among the nation's
top 15 mutual fund companies in assets
under management, according to Lipper
Analytical Services, Inc. INVEST WITH DISCIPLINE-SM-
[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
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