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[AIM LOGO APPEARS HERE]
[GRAPHIC]
AIM MONEY
MARKET FUND
ANNUAL REPORT DECEMBER 31, 1997
<PAGE> 2
Chairman's Letter
Dear Shareholder:
We are pleased to send you this report on AIM Money Market
[PHOTO OF Fund for the 1997 fiscal year. The fixed-income markets were
Charles T. influenced by several events in the past year. The Federal
Bauer, Reserve Board (the Fed) raised the federal funds rate target
Chairman of in March, and market participants spent the rest of the year
the Board of speculating when the next move would occur. Continued low
THE FUND inflation in the face of sturdy economic growth also held
APPEARS HERE] market watchers' attention. Finally, the Asian financial
crisis increased market volatility in the second half of
1997.
In March, the Fed raised the federal funds rate target
from 5.25% to 5.50%. For much of the second and third
quarters of the year, market participants anticipated
additional rate hikes. Interest rate volatility increased as
the markets were buffeted by wide swings in the reported
economic numbers. Despite overall growth in the economy,
the Consumer Price Index (CPI) and other inflation measures remained at
acceptable levels. The Fed was able to adhere to its steady policy and not raise
rates a second time during 1997.
In the fourth quarter of the year, the U.S. market began to focus on the
Asian crisis. Initially, this led to lower yields in the Treasury market as the
ensuing flight to quality pushed prices higher. However, rumored foreign selling
in the Treasury and government securities markets, coupled with year-end
technical pressures, caused rates to rise in December.
Because the Asian turmoil is expected to have a slowing effect on the U.S.
economy, many market participants are anticipating stable to lower interest
rates as 1998 unfolds.
In light of the continued volatility and uncertainty in the markets, the
Fund maintained a weighted average maturity (WAM) in the 13- to 27-day range. At
fiscal year-end, the WAM stood at 20.10 days. This strategy produced competitive
yields. As the fiscal year ended, seven-day yields were as follows: Class A
shares, 4.76%; Class B shares 3.99%; Class C shares, 3.99%; AIM Cash Reserve
Shares, 4.83%.
As of the close of the fiscal year, the U.S. economy was growing strongly
without generating inflationary pressures: for 1997 as a whole, the rise in the
core CPI, which excludes the volatile energy and food sectors, was a mere
2.2%--the smallest increase since 1965. Sound fiscal policy was shrinking the
federal deficit, short-term interest rates had been stable for nine months, and
opinion was almost unanimous that the Fed would not raise rates early in 1998.
Indeed, some considered a monetary easing as the next Fed policy move. The
yield curve was extremely flat as the fiscal year closed, with the 30-year
Treasury bond yielding only 60 basis points more than the three-month Treasury
bill. (A basis point is one one-hundredth of a percentage point.)
The short maturities of the securities held by AIM Money Market Fund enable
it to respond swiftly to such changes in the financial environment and provide
an attractive shelter from potential market volatility.
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.
As always, we are ready to respond to any questions or comments you may have
concerning this report on your Fund. 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
December 31, 1997
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
COMMERCIAL PAPER-35.99%(a)
ASSET-BACKED SECURITIES-11.83%
Ciesco, L.P.
5.67% 02/09/98 $ 3,750 $ 3,726,965
- -----------------------------------------------------------------
Delaware Funding Corp.
5.57% 01/23/98 10,000 9,965,961
- -----------------------------------------------------------------
Eiger Capital Corp.
5.92% 02/13/98 11,000 10,922,218
- -----------------------------------------------------------------
Falcon Asset Securitization
Corp.
5.64% 01/23/98 10,000 9,965,533
- -----------------------------------------------------------------
6.00% 01/29/98 5,000 4,976,667
- -----------------------------------------------------------------
Fleet Funding Corp.
5.83% 01/30/98 6,819 6,786,976
- -----------------------------------------------------------------
Preferred Receivable Funding
Corp.
5.64% 01/06/98 8,000 7,993,733
- -----------------------------------------------------------------
5.59% 01/23/98 20,000 19,931,678
- -----------------------------------------------------------------
5.80% 02/11/98 5,050 5,016,642
- -----------------------------------------------------------------
5.75% 03/11/98 4,975 4,920,171
- -----------------------------------------------------------------
Sheffield Receivables Corp.
5.76% 01/23/98 8,700 8,669,376
- -----------------------------------------------------------------
5.81% 02/02/98 7,100 7,063,332
- -----------------------------------------------------------------
99,939,252
- -----------------------------------------------------------------
AUTOMOBILE-2.26%
Daimler-Benz North America
5.62% 04/09/98 19,381 19,084,492
- -----------------------------------------------------------------
CHEMICALS-2.59%
Henkel Corp.
5.60% 02/04/98 22,000 21,883,645
- -----------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES-2.00%
First Data Corp.
5.60% 02/10/98 5,000 4,968,889
- -----------------------------------------------------------------
5.72% 03/03/98 12,000 11,883,693
- -----------------------------------------------------------------
16,852,582
- -----------------------------------------------------------------
ELECTRICAL EQUIPMENT-1.77%
Hitachi America, Inc.
5.89% 01/15/98 15,000 14,965,642
- -----------------------------------------------------------------
FINANCE (BUSINESS CREDIT)-1.53%
National Rural Utilities
Cooperative Finance Corp.
5.54% 01/14/98 8,000 7,983,996
- -----------------------------------------------------------------
5.54% 02/02/98 5,000 4,975,378
- -----------------------------------------------------------------
12,959,374
- -----------------------------------------------------------------
FINANCE (MISCELLANEOUS)-0.60%
USAA Capital Corp.
6.50% 01/16/98 5,050 5,036,323
- -----------------------------------------------------------------
FINANCE (MULTIPLE INDUSTRY)-1.18%
General Electric Capital
Corp.
5.55% 01/28/98 10,000 9,958,375
- -----------------------------------------------------------------
FINANCE (PERSONAL CREDIT)-2.71%
AVCO Financial Services, Inc.
5.55% 02/11/98 $10,000 $ 9,936,792
- -----------------------------------------------------------------
Associates Corporation of
North America
5.68% 02/11/98 13,000 12,915,905
- -----------------------------------------------------------------
22,852,697
- -----------------------------------------------------------------
INSURANCE (LIFE)-1.84%
MetLife Funding, Inc.
5.71% 03/20/98 15,730 15,535,394
- -----------------------------------------------------------------
MACHINERY-1.39%
Dover Corp.
6.50% 01/16/98 11,795 11,763,055
- -----------------------------------------------------------------
METAL MINING-3.93%
Rio Tinto America, Inc.
5.70% 03/16/98 20,800 20,556,292
- -----------------------------------------------------------------
U.S. Borax, Inc.
5.70% 03/19/98 12,750 12,594,554
- -----------------------------------------------------------------
33,150,846
- -----------------------------------------------------------------
OIL & GAS (INTEGRATED)-1.18%
Shell Oil Co.
5.81% 03/11/98 10,000 10,000,000
- -----------------------------------------------------------------
TRANSPORTATION (EQUIPMENT)-1.18%
Rockwell International Corp.
5.70% 02/03/98 10,000 9,947,750
- -----------------------------------------------------------------
Total Commercial Paper 303,929,427
- -----------------------------------------------------------------
MASTER NOTE AGREEMENTS-18.18%
Citicorp Securities, Inc.(b)
7.00% 01/26/98 20,000 20,000,000
- -----------------------------------------------------------------
Goldman Sachs & Co.(c)
5.6875% 04/20/98 41,000 41,000,000
- -----------------------------------------------------------------
Merrill Lynch Mortgage
Capital, Inc.(d)
7.05% 08/17/98 37,150 37,150,000
- -----------------------------------------------------------------
Morgan (J.P.) Securities,
Inc.(e)
6.82% 04/06/98 18,650 18,650,000
- -----------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co.(f)
6.85% 05/26/98 36,750 36,750,000
- -----------------------------------------------------------------
Total Master Note Agreements 153,550,000
- -----------------------------------------------------------------
MEDIUM-TERM NOTES-1.18%
FINANCE (PERSONAL CREDIT)-1.18%
Associates Corp. of North
America(g)
6.12% 03/02/98 10,000 9,998,730
- -----------------------------------------------------------------
TAXABLE MUNICIPAL BONDS-2.49%
HEALTH CARE-1.19%
Jacksonville Florida Health
Facilities; Hospital
Series Revenue Bonds
6.00%(h) 08/15/19 10,000 10,000,000
- -----------------------------------------------------------------
</TABLE>
2
<PAGE> 4
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
HOSPITAL MANAGEMENT-1.30%
Illinois Health Facilities
Authority (Loyola University
Health Systems); Revenue Bond
6.00%(h) 07/01/24 $11,000 $ 11,000,000
- -----------------------------------------------------------------
Total Taxable Municipal Bonds 21,000,000
- -----------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-5.28%
Federal National Mortgage
Association
5.504%(h) 06/02/99 32,000 32,000,000
- -----------------------------------------------------------------
Student Loan Marketing
Association
5.619%(h) 08/20/98 2,600 2,600,000
- -----------------------------------------------------------------
5.639%(h) 02/08/99 10,000 10,001,870
- -----------------------------------------------------------------
Total U.S. Government Agency Securities 44,601,870
- -----------------------------------------------------------------
U.S. TREASURY SECURITIES-0.58%
U.S. Treasury Bills(a)
4.975% 04/30/98 $ 5,000 $ 4,917,774
- -----------------------------------------------------------------
Total Investments (excluding Repurchase
Agreements) 537,997,801
- -----------------------------------------------------------------
REPURCHASE AGREEMENTS-23.88%(i)
Goldman Sachs & Co.(j)
6.53% 01/02/98 21,619 21,619,327
- -----------------------------------------------------------------
SBC Capital Markets, Inc.(k)
6.55% 01/02/98 180,000 180,000,000
- -----------------------------------------------------------------
Total Repurchase Agreements 201,619,327
- -----------------------------------------------------------------
TOTAL INVESTMENTS-87.58% 739,617,128(l)
- -----------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-12.42% 104,856,519
- -----------------------------------------------------------------
NET ASSETS-100.00% $844,473,647
=================================================================
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) 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.
(b) 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
12/31/97.
(c) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon seven business days prior written notice. Interest
rates on master notes are redetermined periodically. Rate shown is the rate
in effect on 12/31/97.
(d) 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 12/31/97.
(e) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon seven calendar days notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in
effect on 12/31/97.
(f) Master Note Purchase Agreement may be terminated by either party upon three
business days prior written notice. Interest rates on master notes are
redetermined periodically. Rate shown is the rate in effect on 12/31/97.
(g) Interest rates are redetermined daily. Rate shown is rate in effect on
12/31/97.
(h) Interest rates are redetermined weekly. Rates shown are rates in effect on
12/31/97.
(i) 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.
(j) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$900,326,500. Collateralized by $856,643,000 U.S. Government obligations,
0% to 14% due 01/08/98 to 08/15/23 with an aggregate market value at
12/31/97 of $918,902,583.
(k) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$500,181,944. Collateralized by $601,835,000 U.S. Government obligations, 0%
to 10.75%, due 05/21/98 to 08/15/23 with an aggregate market value at
12/31/97 of $510,077,411.
(l) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
3
<PAGE> 5
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase
agreements, at value (amortized cost) $ 537,997,801
- ----------------------------------------------------------
Repurchase agreements 201,619,327
- ----------------------------------------------------------
Receivables for:
Fund shares sold 125,761,897
- ----------------------------------------------------------
Interest 1,228,005
- ----------------------------------------------------------
Investment for deferred compensation plan 89,136
- ----------------------------------------------------------
Other assets 305,351
- ----------------------------------------------------------
Total assets 867,001,517
- ----------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 21,090,083
- ----------------------------------------------------------
Dividends 192,464
- ----------------------------------------------------------
Deferred compensation plan 89,136
- ----------------------------------------------------------
Accrued advisory fees 405,694
- ----------------------------------------------------------
Accrued administrative service fees 5,003
- ----------------------------------------------------------
Accrued distribution fees 570,983
- ----------------------------------------------------------
Accrued transfer agent fees 155,291
- ----------------------------------------------------------
Accrued operating expenses 19,216
- ----------------------------------------------------------
Total liabilities 22,527,870
- ----------------------------------------------------------
Net assets applicable to shares
outstanding $ 844,473,647
==========================================================
NET ASSETS:
Class A $ 376,011,656
==========================================================
Class B $ 116,057,949
==========================================================
Class C $ 8,286,877
==========================================================
AIM Cash Reserve Shares $ 344,117,165
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 375,997,608
==========================================================
Class B 116,052,514
==========================================================
Class C 8,286,622
==========================================================
AIM Cash Reserve Shares 344,102,576
==========================================================
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 YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $46,694,810
- ---------------------------------------------------------
EXPENSES:
Advisory fees 4,586,148
- ---------------------------------------------------------
Administrative service fees 68,947
- ---------------------------------------------------------
Custodian fees 33,501
- ---------------------------------------------------------
Distribution fees -- Class A 850,644
- ---------------------------------------------------------
Distribution fees -- Class B 1,195,121
- ---------------------------------------------------------
Distribution fees -- Class C 21,600
- ---------------------------------------------------------
Distribution fees -- AIM Cash Reserve Shares 931,232
- ---------------------------------------------------------
Trustees' fees 14,225
- ---------------------------------------------------------
Transfer agent fees -- Class A 629,608
- ---------------------------------------------------------
Transfer agent fees -- Class B 221,143
- ---------------------------------------------------------
Transfer agent fees -- Class C 4,033
- ---------------------------------------------------------
Transfer agent fees -- AIM Cash Reserve
Shares 689,255
- ---------------------------------------------------------
Other 432,259
- ---------------------------------------------------------
Total expenses 9,677,716
- ---------------------------------------------------------
Less: Expenses paid indirectly (9,867)
- ---------------------------------------------------------
Net expenses 9,667,849
- ---------------------------------------------------------
Net investment income 37,026,961
- ---------------------------------------------------------
Net realized gain on sales of investments 19,347
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $37,046,308
=========================================================
</TABLE>
See Notes to Financial Statements.
4
<PAGE> 6
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 37,026,961 $ 31,806,351
- ------------------------------------------------------------------------------------------
Net realized gain on sales of investments 19,347 108,101
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 37,046,308 31,914,452
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (15,420,950) (11,567,004)
- ------------------------------------------------------------------------------------------
Class B (4,508,913) (3,560,364)
- ------------------------------------------------------------------------------------------
Class C (81,245) --
- ------------------------------------------------------------------------------------------
AIM Cash Reserve Shares (17,015,853) (16,678,983)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A 88,133,325 66,344,581
- ------------------------------------------------------------------------------------------
Class B 24,881,617 21,306,761
- ------------------------------------------------------------------------------------------
Class C 8,286,622 --
- ------------------------------------------------------------------------------------------
AIM Cash Reserve Shares 28,629,341 21,970,272
- ------------------------------------------------------------------------------------------
Net increase in net assets 149,950,252 109,729,715
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 694,523,395 584,793,680
- ------------------------------------------------------------------------------------------
End of period $844,473,647 $694,523,395
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $844,439,320 $694,508,415
- ------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investments 34,327 14,980
- ------------------------------------------------------------------------------------------
$844,473,647 $694,523,395
==========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
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: the Class A shares, the Class
B shares, the Class C shares and AIM Cash Reserve Shares. The new Class C shares
commenced sales on August 4, 1997. 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 premiums and
discounts on investments, is recorded as earned from settlement date and is
recorded on the accrual basis.
5
<PAGE> 7
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 year ended December 31, 1997, AIM
was reimbursed $68,947 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 year ended
December 31, 1997, the Fund paid AFS $784,714 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 attributable to 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 attributable to 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 by the Class
B or Class C shares 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. AIM Distributors
may, from time to time, assign, transfer, or pledge to one or more designees,
its rights to all or a designated portion of (a) compensation received by AIM
Distributors from the Fund pursuant to the Class B Plan (but not AIM
Distributors' duties and obligations pursuant to the Class B Plan) and (b) any
contingent deferred sales charges received by AIM Distributors related to the
Class B shares. During the year ended December 31, 1997, the Class A and Class B
shares and the AIM Cash Reserve Shares, and during the period August 4, 1997
through December 31, 1997 the Class C shares, paid AIM Distributors $850,644,
$1,195,121, $931,232 and $21,600, respectively, as compensation under the Plans.
AIM Distributors received commissions of $443,904 from sales of the Class A
shares of the Fund during the year ended December 31, 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 year ended December 31, 1997,
AIM Distributors received $344,545 in contingent deferred sales charges imposed
on redemptions of Fund shares. Certain officers and trustees of the Trust are
officers and directors of AIM, AIM Distributors and AFS.
During the year ended December 31, 1997, the Fund paid legal fees of $6,392
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 year ended December 31, 1997, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian
fees of $9,526 and $341, respectively under expense offset arrangements. The
effect of the above arrangements resulted in reductions of the Fund's total
expenses of $9,867 during the year ended December 31, 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.
6
<PAGE> 8
NOTE 5-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold:
Class A 4,653,429,305 $ 4,653,429,305 2,107,832,986 $ 2,107,832,986
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class B 420,215,854 420,215,854 334,518,591 334,518,591
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class C* 61,859,578 61,859,578 -- --
- ----------------------------------------------------- --------------------------------- ---------------------------------
AIM Cash Reserve Shares 4,356,728,398 4,356,728,398 3,871,719,488 3,871,719,488
- ----------------------------------------------------- --------------------------------- ---------------------------------
Issued as reinvestment of dividends:
Class A 13,299,323 13,299,323 10,061,164 10,061,164
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class B 3,988,737 3,988,737 3,197,896 3,197,896
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class C* 75,390 75,390 -- --
- ----------------------------------------------------- --------------------------------- ---------------------------------
AIM Cash Reserve Shares 13,807,718 13,807,718 14,185,926 14,185,926
- ----------------------------------------------------- --------------------------------- ---------------------------------
Reacquired:
Class A (4,578,595,303) (4,578,595,303) (2,051,549,569) (2,051,549,569)
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class B (399,322,974) (399,322,974) (316,409,726) (316,409,726)
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class C* (53,648,346) (53,648,346) -- --
- ----------------------------------------------------- --------------------------------- ---------------------------------
AIM Cash Reserve Shares (4,341,906,775) (4,341,906,775) (3,863,935,142) (3,863,935,142)
- ----------------------------------------------------- --------------------------------- ---------------------------------
149,930,905 $ 149,930,905 109,621,614 $ 109,621,614
================================= =================================
</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 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 period August 4, 1997 (date sales commenced) through December 31,
1997.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
---------------------------------------------------------- -----------------------------------
1997 1996 1995 1994 1993 1997 1996 1995
-------- -------- -------- -------- -------- -------- -------- -------
<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 0.0453 0.0433 0.0495 0.0337 0.0048 0.0378 0.0360 0.0419
- --------------------- -------- -------- -------- -------- -------- -------- -------- -------
Less distributions:
Dividends from net
investment income (0.0453) (0.0433) (0.0495) (0.0337) (0.0048) (0.0378) (0.0360) (0.0419)
- --------------------- -------- -------- -------- -------- -------- -------- -------- -------
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) 4.63% 4.42% 5.06% 3.43% 2.27%(e) 3.84% 3.66% 4.27%
===================== ======== ======== ======== ======== ======== ======== ======== =======
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $376,012 $287,905 $221,487 $148,886 $ 81,460 $116,058 $ 91,148 $69,857
===================== ======== ======== ======== ======== ======== ======== ======== =======
Ratio of expenses to
average net assets 1.05%(b)(c) 1.07% 1.03% 0.97%(d) 1.00%(d)(e) 1.80%(b)(c) 1.81% 1.78%
===================== ======== ======== ======== ======== ======== ======== ======== =======
Ratio of net
investment income to
average net assets 4.55%(b) 4.34% 4.91% 3.53%(d) 2.27%(d)(e) 3.80%(b) 3.60% 4.14%
===================== ======== ======== ======== ======== ======== ======== ======== =======
<CAPTION>
CLASS C
CLASS B SHARES SHARES AIM CASH RESERVE SHARES
------------------- -------- ------------------------------------------------------
1994 1993 1997 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 0.0259 0.0032 0.0158 0.0456 0.0433 0.0493 0.0337 0.0048
- --------------------- -------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income (0.0259) (0.0032) (0.0158) (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) 2.62% 1.51%(e) 3.92%(e) 4.66% 4.41% 5.04% 3.42% 2.27%(e)
===================== ======== ======== ======= ======== ======== ======== ======== ========
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $ 33,999 $ 1,289 $ 8,287 $344,117 $315,470 $293,450 $359,952 $241,778
===================== ======== ======== ======= ======== ======== ======== ======== ========
Ratio of expenses to
average net assets 1.78%(f) 1.75%(e)(f) 1.80%(b)(c)(e) 1.05%(b)(c) 1.08% 1.04% 0.99%(g) 1.00%(e)(g)
===================== ======== ======== ======= ======== ======== ======= ======== ========
Ratio of net
investment income to
average net assets 3.14%(f) 1.54%(e)(f) 3.80%(b)(e) 4.55%(b) 4.32% 4.92% 3.49%(g) 2.27%(e)(g)
===================== ======== ======== ======= ======== ======== ======= ======== ========
</TABLE>
(a) Does not deduct sales charges where applicable and are annualized for
periods less than one year.
(b) Ratios are based on average net assets as follows: Class A shares -
$340,257,685, Class B shares - $119,512,069, Class C shares - $5,256,063 and
AIM Cash Reserve Shares - $372,492,695.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly
the ratio of expenses to average daily net assets would have been the same.
(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) Annualized.
(f) 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.
(g) 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.
7
<PAGE> 9
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Money Market Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Money Market Fund (a portfolio of AIM
Funds Group), including the schedule of investments, as
of December 31, 1997, and the related statement of
operations for the year then ended, the statement of
changes in net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years or periods in the four-year period
then ended and the period October 16, 1993 (date
operations commenced) through December 31, 1993. These
financial statements and financial highlights are the
responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures
included confirmation of securities owned as of December
31, 1997, by correspondence with the custodian. An audit
also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Money
Market Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in net
assets for each of the years in the two-year period then
ended and the financial highlights for each of the years
or periods in the four-year period then ended, and the
period October 16, 1993 (date operations commenced)
through December 31, 1993, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
February 6, 1998
8
<PAGE> 10
Trustees & Officers
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman 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
Jack Fields Dana R. Sutton Houston, TX 77210-4739
Chief Executive Officer Vice President and Assistant Treasurer
Texana Global, Inc.; CUSTODIAN
Formerly Member Robert G. Alley
of the U.S. House of Representatives Vice President State Street Bank and Trust Company
225 Franklin Street
Carl Frischling Stuart W. Coco Boston, MA 02110
Partner Vice President
Kramer, Levin, Naftalis & Frankel COUNSEL TO THE FUND
Melville B. Cox
Robert H. Graham Vice President Ballard Spahr
President and Chief Executive Officer Andrews & Ingersoll
A I M Management Group Inc. Karen Dunn Kelly 1735 Market Street
Vice President Philadelphia, PA 19103
John F. Kroeger
Formerly Consultant Jonathan C. Schoolar COUNSEL TO THE TRUSTEES
Wendell & Stockel Associates, Inc. Vice President
Kramer, Levin, Naftalis & Frankel
Lewis F. Pennock P. Michelle Grace 919 Third Avenue
Attorney Assistant Secretary New York, NY 10022
Ian W. Robinson Nancy L. Martin DISTRIBUTOR
Consultant; Formerly Executive Assistant Secretary
Vice President and A I M Distributors, Inc.
Chief Financial Officer Ofelia M. Mayo 11 Greenway Plaza
Bell Atlantic Management Assistant Secretary Suite 100
Services, Inc. Houston, TX 77046
Kathleen J. Pflueger
Louis S. Sklar Assistant Secretary AUDITORS
Executive Vice President
Hines Interests Samuel D. Sirko KPMG Peat Marwick LLP
Limited Partnership Assistant Secretary 700 Louisiana
Houston, TX 77002
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
<TABLE>
<S> <C>
THE AIM FAMILY OF FUNDS--Registered Trademark--
AGGRESSIVE GROWTH
AIM Aggressive Growth Fund*
AIM Asian Growth Fund
AIM Capital Development Fund
AIM Constellation Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
[PHOTO OF GROWTH OF CAPITAL
11 GREENWAY PLAZA AIM Advisor International Value Fund
APPEARS HERE] AIM Blue Chip Fund
AIM Global Growth Fund
AIM Growth Fund
AIM International Equity Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH AND INCOME OR INCOME WITH CAPITAL GROWTH
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund
AIM Charter Fund
AIM Global Utilities Fund
HIGH CURRENT INCOME OR CURRENT INCOME
AIM High Yield Fund
AIM Global Income Fund
AIM Income Fund
CURRENT TAX-FREE INCOME
AIM High Income Municipal Fund
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
CURRENT INCOME AND HIGH DEGREE OF SAFETY
A I M Management Group Inc. has provided leadership in the AIM Intermediate Government Fund
mutual fund industry since 1976 and manages approximately AIM Limited Maturity Treasury Fund
$83 billion in assets for more than 3.7 million shareholders, AIM Money Market Fund
including individual investors, corporate clients, and financial AIM Tax-Exempt Cash Fund
institutions as of December 31, 1997. The AIM Family of
Funds--Registered Trademark-- is distributed nationwide, and *AIM Aggressive Growth Fund was closed to new investors on
AIM today ranks among the nation's top 15 mutual fund June 5, 1997. For more complete information about any AIM
companies in assets under management, according to Lipper Fund(s), including sales charges and expenses, ask your
Analytical Services, Inc. financial consultant or securities dealer for a free
prospectus(es). Please read the prospectus(es) carefully
before you invest or send money.
INVEST WITH DISCIPLINE(SM)
</TABLE>
