<PAGE> 1
AIM MONEY
MARKET FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT JUNE 30, 1998
<PAGE> 2
Chairman's Letter
Dear Fellow Shareholder:
The fixed-income markets continued to be buffeted by overseas
[PHOTO OF turmoil during the first half of 1998, the period covered by
Charles T. this report. Early in January, the market was expecting an
Bauer, imminent reduction in rates by the Federal Reserve Board (the
Chairman of Fed) to counteract the negative effects from the Asian
the Board of economic crises. However, as it became apparent that the U.S.
THE FUND economy was going to shrug off the Asian influence and
APPEARS HERE] continue its strong growth, interest rates rose. The one-year
Treasury bill, whose yield had dropped as low as 5.10% in
January, backed up to the 5.45% area by late February.
Fueled by low interest rates and strong stock and labor
markets, the U.S. economy continued its solid growth in the
first quarter of 1998, rising at a 5.4% annual rate. Despite
this rapid growth, inflation remained contained, the
annualized rate running between 1% and 2%. As the second
quarter came to a close, it appeared that the economy was
finally slowing in response to the Asian influence and the
strike at General Motors; second-quarter economic growth was at an annual rate
of 1.4%.
During this reporting period, the Fed remained on watch for signs of
incipient inflation, which never appeared. As the Asia situation continued to
unfold, the Fed remained hesitant to raise rates. As a result, the Federal Funds
target remained at 5.5% throughout the reporting period.
YOUR INVESTMENT PORTFOLIO
In light of the continued asset volatility and uncertainty in the markets, the
Fund maintained a weighted average maturity (WAM) in the 13- to 29-day range. As
of June 30, the WAM stood at 19 days. This strategy produced competitive yields.
At the end of the reporting period, seven-day yields were as follows: Class A
shares, 4.67%; Class B shares, 3.89%; Class C shares, 3.89%; and AIM Cash
Reserve Shares, 4.74%.
AIM Money Market Fund seeks to provide as high a level of current income as
possible consistent with preservation of capital and liquidity by investing in
high-quality money market instruments including commercial paper, repurchase
agreements, and U.S. Treasury and U.S. government agency securities. An
investment in the Fund is neither insured nor guaranteed by the U.S. government,
and there can be no assurance that the Fund will be able to maintain a stable
net asset value of $1.00 per share.
OUTLOOK FOR THE FUTURE
As the third quarter opened, most market participants were expecting the Fed to
remain on the sidelines for the foreseeable future, though opinion remained
divided about its next move. Some were concerned that strong U.S. growth would
generate inflationary pressures, leading to a tighter Fed policy. Others
remained concerned that Asia's dampening effects on the U.S. would eventually
encourage the Fed to lower rates. With the flat yield curve and all the
uncertainty about the future direction of rates and where the stock market is
headed, Fund managers will continue to maintain the WAM toward the shorter end
of the spectrum.
We are pleased to send you this report on AIM Money Market Fund. As always,
we are ready to respond to any questions or comments. Please contact our Client
Services department at 800-959-4246. Automated information about your AIM
account is available 24 hours a day on the AIM Investor Line, 800-246-5463. Or
visit our Web site at www.aimfunds.com.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE> 3
SCHEDULE OF INVESTMENTS
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
BANK NOTES-0.71%
BANKS-DOMESTIC-0.71%
Morgan Guaranty Trust
5.81%(a) 10/16/98 $ 8,000 $ 8,000,052
- ----------------------------------------------------------------
COMMERCIAL PAPER-36.18%(B)
ASSET-BACKED
SECURITIES-18.01%
Centric Capital Corp.
5.50% 07/17/98 9,250 9,227,389
- ----------------------------------------------------------------
5.53% 08/04/98 15,000 14,921,658
- ----------------------------------------------------------------
5.50% 08/14/98 4,000 3,973,111
- ----------------------------------------------------------------
Clipper Receivables Corp.
5.47% 07/02/98 10,000 9,998,481
- ----------------------------------------------------------------
5.59% 08/10/98 18,332 18,218,138
- ----------------------------------------------------------------
Falcon Asset Securitization
Corp.
5.52% 07/22/98 15,130 15,081,282
- ----------------------------------------------------------------
Monte Rosa Capital Corp.
5.60% 08/28/98 25,000 24,774,444
- ----------------------------------------------------------------
5.54% 09/11/98 20,000 19,778,400
- ----------------------------------------------------------------
Preferred Receivable Funding
Corp.
5.405% 07/06/98 3,000 2,997,748
- ----------------------------------------------------------------
5.51% 07/10/98 16,000 15,977,960
- ----------------------------------------------------------------
5.405% 07/15/98 17,500 17,463,216
- ----------------------------------------------------------------
Receivables Capital Corp.
5.53% 07/06/98 25,000 24,980,799
- ----------------------------------------------------------------
Sheffield Receivables Corp.
5.57% 09/08/98 25,000 24,733,104
- ----------------------------------------------------------------
202,125,730
- ----------------------------------------------------------------
AUTOMOBILE-3.55%
Daimler-Benz North America
5.52% 07/14/98 25,000 24,950,167
- ----------------------------------------------------------------
Toyota Motor Credit Corp.
5.53% 07/24/98 15,000 14,947,004
- ----------------------------------------------------------------
39,897,171
- ----------------------------------------------------------------
BEVERAGES-3.45%
Diageo Capital PLC
5.50% 07/31/98 24,000 23,890,000
- ----------------------------------------------------------------
5.48% 08/31/98 15,000 14,860,717
- ----------------------------------------------------------------
38,750,717
- ----------------------------------------------------------------
CHEMICALS-2.21%
Du Pont (E.I.) de Nemours
and Co.
5.495% 08/27/98 25,000 24,782,490
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
COMPUTER SOFTWARE & SERVICES-2.56%
First Data Corp.
5.52% 08/18/98 $ 9,000 $ 8,933,760
- ----------------------------------------------------------------
5.51% 09/01/98 20,000 19,810,211
- ----------------------------------------------------------------
28,743,971
- ----------------------------------------------------------------
ELECTRICAL EQUIPMENT-1.51%
Hitachi America, Ltd.
5.52% 07/08/98 17,000 16,981,753
- ----------------------------------------------------------------
INSURANCE (PROPERTY &
CASUALTY)-1.75%
A.I. Credit Corp.
5.45% 10/05/98 20,000 19,709,333
- ----------------------------------------------------------------
MACHINERY-0.40%
Dover Corp.
5.59% 08/28/98 4,540 4,499,112
- ----------------------------------------------------------------
METAL MINING-1.85%
Rio Tinto America, Inc.
5.54% 08/18/98 10,000 9,926,134
- ----------------------------------------------------------------
5.46% 09/04/98 11,000 10,891,558
- ----------------------------------------------------------------
20,817,692
- ----------------------------------------------------------------
OIL & GAS (INTEGRATED)-0.89%
Shell Martinez Refining
Co.(c)
5.60% 07/14/98 10,000 10,000,000
- ----------------------------------------------------------------
Total Commercial Paper 406,307,969
- ----------------------------------------------------------------
MASTER NOTE AGREEMENTS-14.81%
Citicorp Securities, Inc.(d)
6.75% 01/25/99 29,000 29,000,000
- ----------------------------------------------------------------
The Goldman Sachs Group,
L.P.(e)
5.6523% 10/19/98 50,000 50,000,000
- ----------------------------------------------------------------
Merrill Lynch Mortgage
Capital, Inc.(f)
6.80% 08/17/98 37,400 37,400,000
- ----------------------------------------------------------------
Morgan Stanley Dean Witter &
Co.(g)
6.60% 11/23/98 50,000 50,000,000
- ----------------------------------------------------------------
Total Master Note
Agreements 166,400,000
- ----------------------------------------------------------------
TAXABLE MUNICIPAL BONDS-2.76%
HEALTH CARE-0.89%
Jacksonville Florida Health
Facilities; Hospital
Series Revenue Bonds
5.70%(h) 08/15/19 10,000 10,000,000
- ----------------------------------------------------------------
</TABLE>
2
<PAGE> 4
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
HOSPITAL MANAGEMENT-0.98%
Illinois Health Facilities
Authority (Loyola
University Health
Systems); Revenue Bonds
5.70%(h) 07/01/24 $ 11,000 $ 11,000,000
- ----------------------------------------------------------------
MULTIPLE INDUSTRY-0.89%
Mississippi Business Finance
Corp. (Mississippi
Industrial Development);
Revenue Bonds
5.64%(h) 02/01/23 10,000 10,000,000
- ----------------------------------------------------------------
Total Taxable Municipal
Bonds 31,000,000
- ----------------------------------------------------------------
U.S. GOVERNMENT AGENCY
SECURITIES-3.97%
Fannie Mae(i)
5.261% 06/02/99 32,000 32,000,000
- ----------------------------------------------------------------
Sallie Mae(i)
5.321% 08/20/98 2,600 2,600,000
- ----------------------------------------------------------------
5.341% 02/08/99 10,000 10,001,028
- ----------------------------------------------------------------
Total U.S. Government
Agency Securities 44,601,028
- ----------------------------------------------------------------
Total Investments
(excluding repurchase
agreements) 656,309,049
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
<S> <C> <C> <C>
REPURCHASE AGREEMENTS-25.97%(j)
Greenwich Capital Markets,
Inc.(k)
6.00% 07/01/98 $197,100 $ 197,100,000
- ----------------------------------------------------------------
SBC Warburg Dillon Read
Inc.(l)
5.85% 07/01/98 44,611 44,611,446
- ----------------------------------------------------------------
Salomon Smith Barney
Holdings, Inc.(m)
6.125% -- 50,000 50,000,000
- ----------------------------------------------------------------
Total Repurchase
Agreements 291,711,446
- ----------------------------------------------------------------
TOTAL INVESTMENTS-84.40% 948,020,495(n)
- ----------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-15.60% 175,259,142
- ----------------------------------------------------------------
NET ASSETS-100.00% $1,123,279,637
================================================================
</TABLE>
Notes to Schedule of Investments:
(a) Interest rates are redetermined daily. Rate shown is the rate in effect on
06/30/98.
(b) Treasury bills and some commercial paper 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.
(c) Trust certificates representing an interest in a trust (comprised of
eligible debt obligations) entitling the Fund to receive interest. The Fund
has the right, upon seven calendar days' notice to the trustee, to put its
certificates to the trust at par value plus accrued interest. Because trust
certificates involve a trust and a third party put feature, they involve
complexities and potential risks that may not be present where the debt
obligation is owned directly. Rates shown are the rates in effect on
06/30/98.
(d) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon three business days' notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in effect
on 06/30/98.
(e) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon seven days' prior notice. Interest rates on master
notes are redetermined periodically. Rate shown is the rate in effect on
06/30/98.
(f) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement generally upon two business days notice. Interest rates
on master notes are redetermined periodically. Rate shown is the rate in
effect on 06/30/98.
(g) Master Note Purchase Agreement may be terminated by any party upon three
business days' prior written notice. Interest rates on master notes are
redetermined periodically. Rate shown is the rate in effect on 06/30/98.
(h) Demand security; payable upon demand by the Fund with usually no more than
seven calendar days notice. Interest rates are redetermined weekly. Rates
shown are rates in effect on 06/30/98.
(i) Interest rates are redetermined weekly. Rates shown are rates in effect on
06/30/98.
(j) 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.
(k) Joint repurchase agreement entered into 06/30/98 with a maturing value of
$200,033,333. Collateralized by $205,565,153 U.S. Government obligations,
6.00% to 12.25% due 09/01/01 to 06/01/28 with an aggregate market value at
06/30/98 of $204,004,737.
(l) Joint repurchase agreement entered into 06/30/98 with a maturing value of
$1,000,162,500. Collateralized by $3,590,870,000 U.S. Government
obligations, 0% due 08/15/00 to 11/15/24 with an aggregate market value at
06/30/98 of $1,148,593,549.
(m) Open repurchase agreement entered into 06/30/98. Collateralized by
$622,412,000 U.S. Government obligations, 0% to 9.65% due 09/18/98 to
12/15/43 with an aggregate market value at 06/30/98 of $612,000,396.
(n) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
3
<PAGE> 5
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase
agreements, at value (amortized cost) $ 656,309,049
- ----------------------------------------------------------
Repurchase agreements 291,711,446
- ----------------------------------------------------------
Receivables for:
Fund shares sold 202,850,311
- ----------------------------------------------------------
Interest 1,482,457
- ----------------------------------------------------------
Investment for deferred compensation plan 84,451
- ----------------------------------------------------------
Other assets 422,815
- ----------------------------------------------------------
Total assets 1,152,860,529
- ----------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 27,963,831
- ----------------------------------------------------------
Dividends 169,779
- ----------------------------------------------------------
Deferred compensation plan 84,451
- ----------------------------------------------------------
Accrued advisory fees 503,290
- ----------------------------------------------------------
Accrued administrative services fees 5,442
- ----------------------------------------------------------
Accrued distribution fees 708,700
- ----------------------------------------------------------
Accrued transfer agent fees 127,998
- ----------------------------------------------------------
Accrued operating expenses 17,401
- ----------------------------------------------------------
Total liabilities 29,580,892
- ----------------------------------------------------------
Net assets applicable to shares
outstanding $1,123,279,637
==========================================================
NET ASSETS:
Class A $ 504,181,590
==========================================================
Class B $ 155,215,789
==========================================================
Class C $ 14,913,208
==========================================================
AIM Cash Reserve Shares $ 448,969,050
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 504,165,604
==========================================================
Class B 155,209,764
==========================================================
Class C 14,912,713
==========================================================
AIM Cash Reserve Shares 448,954,447
==========================================================
Class A:
Net asset value and redemption price per
share $ 1.00
==========================================================
Offering price per share:
(Net asset value of $1.00 divided by 94.50%) $ 1.06
==========================================================
Class B:
Net asset value and offering price per
share $ 1.00
==========================================================
Class C:
Net asset value and offering price per
share $ 1.00
==========================================================
AIM Cash Reserve Shares:
Net asset value, offering and redemption
price per share $ 1.00
==========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $25,732,095
- ---------------------------------------------------------
EXPENSES:
Advisory fees 2,508,465
- ---------------------------------------------------------
Administrative services fees 32,652
- ---------------------------------------------------------
Custodian fees 13,969
- ---------------------------------------------------------
Distribution fees -- Class A 523,080
- ---------------------------------------------------------
Distribution fees -- Class B 606,632
- ---------------------------------------------------------
Distribution fees -- Class C 61,156
- ---------------------------------------------------------
Distribution fees -- AIM Cash Reserve Shares 450,185
- ---------------------------------------------------------
Trustees' fees 5,474
- ---------------------------------------------------------
Transfer agent fees -- Class A 337,539
- ---------------------------------------------------------
Transfer agent fees -- Class B 97,864
- ---------------------------------------------------------
Transfer agent fees -- Class C 9,866
- ---------------------------------------------------------
Transfer agent fees -- AIM Cash Reserve
Shares 290,508
- ---------------------------------------------------------
Other 231,938
- ---------------------------------------------------------
Total expenses 5,169,328
- ---------------------------------------------------------
Less: Expenses paid indirectly (5,506)
- ---------------------------------------------------------
Net expenses 5,163,822
- ---------------------------------------------------------
Net investment income 20,568,273
- ---------------------------------------------------------
Net realized gain from investments 2,781
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $20,571,054
==========================================================
</TABLE>
See Notes to Financial Statements.
4
<PAGE> 6
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
-------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 20,568,273 $ 37,026,961
- --------------------------------------------------------------------------------------------
Net realized gain from investments 2,781 19,347
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 20,571,054 37,046,308
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (9,620,725) (15,420,950)
- --------------------------------------------------------------------------------------------
Class B (2,340,027) (4,508,913)
- --------------------------------------------------------------------------------------------
Class C (234,940) (81,245)
- --------------------------------------------------------------------------------------------
AIM Cash Reserve Shares (8,372,581) (17,015,853)
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A 128,167,996 88,133,325
- --------------------------------------------------------------------------------------------
Class B 39,157,250 24,881,617
- --------------------------------------------------------------------------------------------
Class C 6,626,091 8,286,622
- --------------------------------------------------------------------------------------------
AIM Cash Reserve Shares 104,851,872 28,629,341
- --------------------------------------------------------------------------------------------
Net increase in net assets 278,805,990 149,950,252
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 844,473,647 694,523,395
- --------------------------------------------------------------------------------------------
End of period $1,123,279,637 $844,473,647
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $1,123,242,529 $844,439,320
- --------------------------------------------------------------------------------------------
Undistributed net realized gain from investments 37,108 34,327
- --------------------------------------------------------------------------------------------
$1,123,279,637 $844,473,647
============================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Money Market 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 four different classes of shares: Class A shares, Class B
shares, Class C shares and AIM Cash Reserve Shares. Class A shares are sold with
a front-end sales charge. Class B shares and Class C shares are sold with a
contingent deferred sales charge. AIM Cash Reserve Shares are sold at net asset
value. Matters affecting each portfolio or class will be voted on exclusively by
the shareholders of such portfolio or class. The assets, liabilities and
operations of each portfolio are accounted for separately. Information presented
in these financial statements pertains only to the Fund. The Fund's objective is
to provide as high a level of current income as is consistent with preservation
of capital and liquidity.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- The Fund's securities are valued on the basis of
amortized cost which approximates market value. This method values a
security at its cost on the date of purchase and thereafter, assumes a
constant amortization to maturity of any discount or premiums.
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, adjusted for amortization of
5
<PAGE> 7
premiums and discounts on investments, is recorded as earned from settlement
date and is recorded on the accrual basis. Dividends to shareholders are
declared daily and are paid monthly.
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 -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
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 0.55% of
the first $1 billion of the Fund's average daily net assets plus 0.50% of the
Fund's average daily net assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the six months ended June 30, 1998, AIM
was reimbursed $32,652 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") for certain costs incurred in providing
transfer agency and shareholder services to the Fund. During the six months
ended June 30, 1998, the Fund paid AFS $395,131 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, Class B, Class C and the AIM Cash Reserve Shares of the Fund. The Trust
has adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act with
respect to the Fund's Class A shares, Class C shares and the AIM Cash Reserve
Shares (the "Class A and C Plan"), and the Fund's Class B shares (the "Class B
Plan") (collectively, the "Plans"). The Fund, pursuant to the Class A and C
Plan, pays AIM Distributors compensation at an annual rate of 0.25% of the
average daily net assets of the Class A shares and the AIM Cash Reserve Shares,
and 1.00% of the average daily net assets of the Class C shares. 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 of the Class B shares. Of these
amounts, the Fund may pay a service fee of 0.25% of the average daily net assets
of the Class A, Class B, Class C or AIM Cash Reserve Shares to selected dealers
and financial institutions who furnish continuing personal shareholder services
to their customers who purchase and own the appropriate class of shares of the
Fund. Any amounts not paid as a service fee under the 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. During the six months ended June 30, 1998, the Class A, Class B, Class
C, and AIM Cash Reserve Shares paid AIM Distributors $523,080, $606,632, $61,156
and $450,185, respectively, as compensation under the Plans.
AIM Distributors received commissions of $177,624 from sales of the Class A
shares of the Fund during the six months ended June 30, 1998. 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,
1998, AIM Distributors received $126,074 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, 1998, the Fund paid legal fees of $2,069
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
During the six months ended June 30, 1998, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian
fees of $5,498 and $8, respectively under expense offset arrangements. The
effect of the above arrangements resulted in a reduction of the Fund's total
expenses of $5,506 during the six months ended June 30, 1998.
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.
6
<PAGE> 8
NOTE 5-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 1998 and the
year ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold:
Class A 6,245,461,052 $ 6,245,461,052 4,653,429,305 $ 4,653,429,305
- -------------------------------------------------------------------------------------------------------------------------------
Class B 237,742,598 237,742,598 420,215,854 420,215,854
- -------------------------------------------------------------------------------------------------------------------------------
Class C* 172,036,489 172,036,489 61,859,578 61,859,578
- -------------------------------------------------------------------------------------------------------------------------------
AIM Cash Reserve Shares 2,901,371,082 2,901,371,082 4,356,728,398 4,356,728,398
- -------------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 7,516,019 7,516,019 13,299,323 13,299,323
- -------------------------------------------------------------------------------------------------------------------------------
Class B 2,066,312 2,066,312 3,988,737 3,988,737
- -------------------------------------------------------------------------------------------------------------------------------
Class C* 205,417 205,417 75,390 75,390
- -------------------------------------------------------------------------------------------------------------------------------
AIM Cash Reserve Shares 6,699,820 6,699,820 13,807,718 13,807,718
- -------------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (6,124,809,074) (6,124,809,074) (4,578,595,303) (4,578,595,303)
- -------------------------------------------------------------------------------------------------------------------------------
Class B (200,651,661) (200,651,661) (399,322,974) (399,322,974)
- -------------------------------------------------------------------------------------------------------------------------------
Class C* (165,615,815) (165,615,815) (53,648,346) (53,648,346)
- -------------------------------------------------------------------------------------------------------------------------------
AIM Cash Reserve Shares (2,803,219,030) (2,803,219,030) (4,341,906,775) (4,341,906,775)
- -------------------------------------------------------------------------------------------------------------------------------
278,803,209 $ 278,803,209 149,930,905 $ 149,930,905
===============================================================================================================================
</TABLE>
*Class C shares commenced sales on August 4, 1997.
NOTE 6-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A, Class B and AIM
Cash Reserve Shares outstanding during the six months ended June 30, 1998, each
of the years in the four-year period ended December 31, 1997 and the period
October 16, 1993 (date operations commenced) through December 31, 1993; and for
a share of Class C outstanding during the six months ended June 30, 1998 and the
period August 4, 1997 (date sales commenced) through December 31, 1997.
<TABLE>
<CAPTION>
CLASS A SHARES
------------------------------------------------------------------
DECEMBER 31,
JUNE 30, ------------------------------------------------------
1998 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.0228 0.0453 0.0433 0.0495 0.0337 0.0048
- -------------------------------------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.0228) (0.0453) (0.0433) (0.0495) (0.0337) (0.0048)
- -------------------------------------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================== ======== ======== ======== ======== ======== ========
Total return(a) 4.64% 4.63% 4.42% 5.06% 3.43% 2.27%(b)
====================================== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $504,182 $376,012 $287,905 $221,487 $148,886 $ 81,460
====================================== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets 1.02%(c) 1.05% 1.07% 1.03% 0.97%(d) 1.00%(b)(d)
====================================== ======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets 4.62%(c) 4.55% 4.34% 4.91% 3.53%(d) 2.27%(b)(d)
====================================== ======== ======== ======== ======== ======== ========
<CAPTION>
CLASS B SHARES
------------------------------------------------------------------
DECEMBER 31,
JUNE 30, -----------------------------------------------------
1998 1997 1996 1995 1994 1993
-------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------- -------- -------- -------- ------- -------- --------
Income from investment operations:
Net investment income 0.0189 0.0378 0.0360 0.0419 0.0259 0.0032
- -------------------------------------- -------- -------- -------- ------- -------- --------
Less distributions:
Dividends from net investment income (0.0189) (0.0378) (0.0360) (0.0419) (0.0259) (0.0032)
- -------------------------------------- -------- -------- -------- ------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================== ======== ======== ======== ======= ======== ========
Total return(a) 3.85% 3.84% 3.66% 4.27% 2.62% 1.51%(b)
====================================== ======== ======== ======== ======= ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $155,216 $116,058 $ 91,148 $69,857 $ 33,999 $ 1,289
====================================== ======== ======== ======== ======= ======== ========
Ratio of expenses to average net
assets 1.77%(c) 1.80% 1.81% 1.78% 1.78%(e) 1.75%(b)(e)
====================================== ======== ======== ======== ======= ======== ========
Ratio of net investment income to
average net assets 3.87%(c) 3.80% 3.60% 4.14% 3.14%(e) 1.54%(b)(e)
====================================== ======== ======== ======== ======= ======== ========
</TABLE>
(a) Does not deduct sales charges where applicable and is annualized for periods
less than one year.
(b) Annualized.
(c) Ratios are annualized and based on average net assets of $421,931,673 and
$122,331,933 for Class A and Class B, respectively.
(d) After fee waivers and/or expense reimbursements. Ratios of expenses and net
investment income to average daily net assets prior to fee waivers and/or
expense reimbursements were 1.06% and 3.44%, respectively, for 1994 and
1.20% (annualized) and 2.07% (annualized), respectively, for 1993.
(e) After fee waivers and/or expense reimbursements. Ratios of expenses and net
investment income to average daily net assets prior to fee waivers and/or
expense reimbursements were 1.87% and 3.05%, respectively, for 1994 and
1.95% (annualized) and 1.34% (annualized), respectively, for 1993.
7
<PAGE> 9
NOTE 6-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS C SHARES AIM CASH RESERVE SHARES
----------------------- --------------------------------------------------------------
DECEMBER 31,
JUNE 30, DECEMBER 31, JUNE 30, --------------------------------------------------
1998 1997 1998 1997 1996 1995 1994 1993
-------- ------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.0190 0.0158 0.0231 0.0456 0.0433 0.0493 0.0337 0.0048
- ----------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment
income (0.0190) (0.0158) (0.0231) (0.0456) (0.0433) (0.0493) (0.0337) (0.0048)
- ----------------------------------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=================================== ======== ======== ======== ======== ======== ======== ======== ========
Total return(a) 3.85% 3.92% 4.72% 4.66% 4.41% 5.04% 3.42% 2.27%
=================================== ======== ======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $ 14,913 $ 8,287 $448,969 $344,117 $315,470 $293,450 $359,952 $241,778
=================================== ======== ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets 1.77%(b) 1.80%(c) 1.02%(b) 1.05% 1.08% 1.04% 0.99%(d) 1.00%(c)(d)
=================================== ======== ======== ======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets 3.87%(b) 3.80%(c) 4.62%(b) 4.55% 4.32% 4.92% 3.49%(d) 2.27%(c)(d)
=================================== ======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
(a) Does not deduct sales charges where applicable and is annualized for periods
less than one year.
(b) Ratios are annualized and based on average net assets of $12,332,618 and
$363,132,327 for Class C and AIM Cash Reserve Shares, respectively.
(c) Annualized.
(d) After fee waivers and/or expense reimbursements. Ratios of expenses and net
investment income to average daily net assets prior to fee waivers and/or
expense reimbursements were 1.08% and 3.40%, respectively, for 1994 and
1.20% (annualized) and 2.07% (annualized), respectively, for 1993.
8
<PAGE> 10
Trustees & Officers
<TABLE>
<CAPTION>
<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
Director
ACE Limited; John J. Arthur A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Treasurer 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Carol F. Relihan Houston, TX 77046
Senior Vice President and Secretary
Owen Daly II TRANSFER AGENT
Director Gary T. Crum
Cortland Trust Inc. Senior Vice President A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn Jr. Dana R. Sutton Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President and Assistant Treasurer
Formerly Vice Chairman and President, CUSTODIAN
Mercantile-Safe Deposit & Trust Co.; and Robert G. Alley
President, Mercantile Bankshares Vice President State Street Bank and Trust Company
225 Franklin Street
Jack Fields Stuart W. Coco Boston, MA 02110
Chief Executive Officer Vice President
Texana Global, Inc.; COUNSEL TO THE FUND
Formerly Member Melville B. Cox
of the U.S. House of Representatives Vice President Ballard Spahr
Andrews & Ingersoll, LLP
Carl Frischling Karen Dunn Kelley 1735 Market Street
Partner Vice President Philadelphia, PA 19103
Kramer, Levin, Naftalis & Frankel
Jonathan C. Schoolar COUNSEL TO THE TRUSTEES
Robert H. Graham Vice President
President and Chief Executive Officer Kramer, Levin, Naftalis & Frankel
A I M Management Group Inc. Renee A. Friedli 919 Third Avenue
Assistant Secretary New York, NY 10022
Lewis F. Pennock
Attorney P. Michelle Grace DISTRIBUTOR
Assistant Secretary
Ian W. Robinson A I M Distributors, Inc.
Consultant; Formerly Executive Jeffrey H. Kupor 11 Greenway Plaza
Vice President and Assistant Secretary Suite 100
Chief Financial Officer Houston, TX 77046
Bell Atlantic Management Nancy L. Martin
Services, Inc. Assistant Secretary
Louis S. Sklar Ofelia M. Mayo
Executive Vice President Assistant Secretary
Hines Interests
Limited Partnership Lisa A. Moss
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE> 11
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS INTERNATIONAL GROWTH FUNDS
AIM Aggressive Growth Fund(1) AIM Advisor International Value Fund
AIM Blue Chip Fund AIM Asian Growth Fund
AIM Capital Development Fund AIM Developing Markets Fund(2)
AIM Constellation Fund AIM Emerging Markets Fund(2)
AIM Mid Cap Growth Fund(2) AIM Europe Growth Fund(2)
AIM Select Growth Fund(3) AIM European Development Fund
[PHOTO OF AIM Small Cap Equity Fund(2) AIM International Equity Fund
11 GREENWAY PLAZA AIM Small Cap Opportunities Fund AIM International Growth Fund(2)
APPEARS HERE] AIM Value Fund AIM Weingarten Fund AIM Japan Growth Fund(2)
AIM Latin American Growth Fund(2)
GROWTH & INCOME FUNDS AIM New Pacific Growth Fund(2)
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund AIM Global Aggressive Growth Fund
AIM Advisor Real Estate Fund AIM Global Growth Fund
AIM America Value Fund(2) AIM Worldwide Growth Fund(2)
AIM Balanced Fund
AIM Charter Fund GLOBAL GROWTH & INCOME FUNDS
INCOME FUNDS AIM Global Growth & Income Fund(2)
AIM Global Utilities Fund
AIM Floating Rate Fund(2)
AIM High Yield Fund GLOBAL INCOME FUNDS
AIM Income Fund
AIM Intermediate Government Fund AIM Global Government Income Fund(2)
AIM Limited Maturity Treasury Fund AIM Global High Income Fund(2)
AIM Global Income Fund
TAX-FREE INCOME FUNDS AIM Strategic Income Fund(2)
AIM High Income Municipal Fund THEME FUNDS
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Consumer Products and Services Fund(2)
AIM Tax-Free Intermediate Fund AIM Global Financial Services Fund(2)
AIM Global Health Care Fund(2)
MONEY MARKET FUNDS AIM Global Infrastructure Fund(2)
AIM Global Resources Fund(2)
AIM Dollar Fund(2) AIM Global Telecommunications Fund(2)
AIM Money Market Fund AIM New Dimension Fund(2)
AIM Tax-Exempt Cash Fund
</TABLE>
(1) AIM Aggressive Growth Fund was closed to new investors on June 5, 1997.
(2) Effective May 29, 1998, A I M Advisors, Inc. became advisor to the former GT
Global Funds. (3) On May 1, 1998, AIM Growth Fund was renamed AIM Select Growth
Fund. For more complete information about any AIM Fund(s), including sales
charges and expenses, ask your financial consultant or securities dealer for a
free prospectus(es). Please read the prospectus(es) carefully before you invest
or send money.
A I M Management Group Inc. has provided leadership in the mutual fund industry
since 1976 and managed approximately $101 billion in assets for more than 5.2
million shareholders, including individual investors, corporate clients, and
financial institutions, as of June 30, 1998. The AIM Family of Funds--Registered
Trademark-- is distributed nationwide, and AIM today is the ninth-largest mutual
fund complex in the U.S. in assets under management, according to Strategic
Insight, an independent mutual fund monitor.
INVEST WITH DISCIPLINE(SM)
