<PAGE> 1
SEMIANNUAL REPORT / JUNE 30 1999
AIM MUNICIPAL BOND FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[ COVER IMAGE ]
--------------------------------------
BENEATH THE BROOKLYN BRIDGE BY JANE WOOSTER SCOTT
STATE AND LOCAL GOVERNMENTS REGULARLY ISSUE MUNICIPAL BONDS
TO FUND A WIDE ARRAY OF PROJECTS, INCLUDING ROADS, BRIDGES AND
RECREATIONAL FACILITIES, THAT IMPROVE THE QUALITY OF LIFE IN
COMMUNITIES ACROSS THE NATION. SCOTT'S PAINTING CAPTURES A SLICE
OF AN URBAN LANDSCAPE MADE MORE HOSPITABLE AND ENJOYABLE
BECAUSE OF THESE PROJECTS.
--------------------------------------
AIM Municipal Bond Fund is for shareholders who seek a high level of current
income exempt from federal income taxes by investing in a diversified portfolio
of municipal bonds.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Municipal Bond Fund's performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 4.75% sales charge, and Class B and Class C
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 CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B and Class C shares will differ from
that of Class A shares due to differences in sales charge structure and
expenses.
o The 30-day yield is calculated on the basis of a formula defined by the SEC.
The formula is based on the portfolio's potential earnings from dividends,
interest, yield-to-maturity, or yield-to-call of the bonds in the portfolio,
net of all expenses and expressed on an annualized basis.
o The taxable-equivalent yield is calculated in the same manner as the 30-day
yield with an adjustment for a stated, assumed tax rate.
o The fund's annualized distribution rate reflects its most recent monthly
dividend distribution multiplied by 12 and divided by the most recent
month-end net asset value
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lipper Municipal Debt Funds Index represents an average of the
performance of the 30 largest municipal-bond funds.
o Government securities, such as U.S. Treasury bills, notes and bonds, offer a
high degree of safety and are guaranteed as to the timely payment of
principal and interest if held to maturity. Fund shares are not insured, and
their value will vary with market conditions.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS
NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. THERE IS A RISK THAT YOU COULD
LOSE SOME OR ALL OF YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the fund.
AIM MUNICIPAL BOND FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
With only several months remaining in 1999, the question on
[PHOTO OF many of your minds may be, "How will the year 2000 computer
Charles T. issue affect AIM and my investments?" We would like you to
Bauer, feel comfortable. We are pleased to be able to report to you
Chairman of that as of June 1999 we achieved a major milestone toward
the Board of year 2000 compliance status: we have successfully completed
THE FUND the testing of all of our mission-critical systems.
APPEARS HERE] Earlier this year, AIM participated in an industrywide
test that gave us a chance to see how our technology systems
might be affected by the changeover to the year 2000 (Y2K).
Everything went as well as we had hoped; in general, the
industry sailed through the testing process with flying
colors. The financial industry has been seen as a leader in
planning for year 2000 concerns. Thus, it was no surprise to
most participants that the test was an overwhelming success.
The general purpose of the process was to test
electronic interfaces among financial industry members in the United States and
to follow transactions through a typical trading cycle--from order entry to the
settlement process. Investment banks, broker-dealers, custodian banks and mutual
fund companies all worked together to make this possible. Approximately 400
firms were involved in the testing; AIM was one of 70 asset managers.
During the testing process, thousands of transactions were submitted and
approximately 260,000 steps were tested. Of those, only a handful experienced
minor glitches--just 0.02% of the total number of transactions. All problems
were worked through quickly before the hypothetical trades were settled. Of
course, AIM will keep testing and planning throughout 1999 as a precaution.
AIM'S INTERNAL EFFORTS CONTINUE
As you know from our previous communications to you, AIM has been addressing the
year 2000 issue for several years. Now that we have finished adjusting our
applications and systems, our focus for the rest of 1999 is to continue
monitoring the year 2000 readiness status of outside sources we're linked to
electronically. On the investment side, our portfolio management staff is
continually evaluating the Y2K preparedness of the domestic and foreign
companies in which we invest.
We feel that our preparations for 2000 are very comprehensive, and the
industrywide testing showed that our colleagues in the financial industry are
also working hard to be ready for the new year. We do not think shareholders
need to take any extraordinary measures with their investments to prepare for
2000. However, if you have any lingering concerns, it may reassure you to know
that AIM is finalizing contingency plans that will be ready if necessary. Our
plans will give AIM employees guidelines to follow for a wide variety of
situations.
For a more comprehensive discussion of our Y2K efforts and for periodic
updates, please visit our Web site, www.aimfunds.com.
We are pleased to send you this report covering your fund's performance over
the last six months. If you have any questions or comments, please contact our
Client Services department at 800-959-4246, or e-mail your inquiry to us at
[email protected]. You can access information about your account through our
automated AIM Investor Line at 800-246-5463 or at our Web site.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--. We appreciate your business.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
A I M Advisors, Inc.
-----------------------------
THE FINANCIAL
INDUSTRY HAS BEEN SEEN
AS A LEADER IN
PLANNING FOR YEAR
2000 CONCERNS.
-----------------------------
-----------------------------
PLEASE NOTE THAT
THE INFORMATION ABOUT
THE YEAR 2000 IN THIS LETTER
IS DEEMED AIM'S YEAR
2000 READINESS DISCLOSURE.
-----------------------------
AIM MUNICIPAL BOND FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
FUND WEATHERS BOND-MARKET DOWNTURN
INTEREST-RATE CONCERNS RATTLED BOND MARKETS DURING THE REPORTING PERIOD. HOW DID
AIM MUNICIPAL BOND FUND PERFORM?
Despite a challenging market environment, the fund continued to provide
attractive current income (see chart below), exempt from federal income taxes,
while maintaining relative share-price stability. During the reporting period,
net asset value per share remained within a relatively narrow range of $8.08 to
$8.42 for Class A, B and C shares, extending the fund's long-time record of
relative price stability as shown on the accompanying chart.
The fund's investment strategy is designed to protect it in a "down" market
like the one that existed during the reporting period. We endeavor to keep the
weighted average maturity of the fund's portfolio relatively short and avoid
buying discounted bonds, which tend to be more volatile in price. For the
six-month period ended June 30, 1999, total return was -0.63%, -1.11% and -0.99%
for Class A, B and C shares, respectively, excluding sales charges. By
comparison, the total return of the fund's peer group, the Lipper
Municipal Debt Funds Index, was -1.46%. Please keep in mind that the fund is
managed for income and stability of net asset value rather than total return.
WHAT WERE SOME OF THE MAJOR TRENDS IN THE BOND MARKET?
U.S. Treasury securities performed poorly because of heightened concerns that
the Federal Reserve Board (the Fed) would raise interest rates to slow economic
growth and combat inflation. The dramatic and unexpected rise in the inflation
rate in April was one major factor heightening concerns that the Fed would
tighten monetary policy.
Uncertainty about how far the Fed might raise interest rates eroded Treasury
prices in May and June, sending their yields higher. The yield of the benchmark
30-year U.S. Treasury bond soared from 5.09% at the beginning of the reporting
period to 6.16% on June 24, its highest level since 1997.
Speculation surrounding the Fed's possible action did not end until June 30,
when the central bank raised the federal funds rate from 4.75% to 5%. At the
same time, the Fed announced that it had shifted from a tightening to a neutral
bias, indicating it planned no further rate hikes in the near future. That
sparked a "relief rally" in the bond market, dropping the yield on the 30-year
Treasury to 5.97% at the close of the reporting period.
Only a few bond classes, such as high-yield corporate bonds and
emerging-market debt, posted gains for the reporting period. Most other types of
bonds at least performed better than Treasuries. Lower-
----------------------------------------
THE FUND'S INVESTMENT STRATEGY IS
DESIGNED TO PROTECT IT IN A "DOWN"
MARKET LIKE THE ONE THAT EXISTED
DURING THE REPORTING PERIOD.
----------------------------------------
FUND PROVIDES SOLID INCOME
As of 6/30/99
30-DAY DISTRIBUTION RATE AND YIELD
================================================================================
30-DAY
SEC YIELD TAXABLE
30-DAY TAXABLE AT EQUIVALENT
DISTRIBUTION EQUIVALENT MAXIMUM 30-DAY
RATE AT DISTRIBUTION OFFERING SEC
NAV RATE* PRICE YIELD*
- --------------------------------------------------------------------------------
Class A 5.19% 8.59% 3.81% 6.31%
Class B 4.44 7.35 3.24 5.36
Class C 4.45 7.37 3.24 5.36
*Assumes highest marginal federal income tax rate of 39.6%
================================================================================
CLASS A SHARES VS.
30-YEAR U.S. TREASURY BOND
================================================================================
TAXABLE TAXABLE 30-YEAR
EQUIVALENT EQUIVALENT TREASURY
DISTRIBUTION YIELD* BOND
RATE* YIELD
- --------------------------------------------------------------------------------
8.59% 6.31% 5.97%
[BAR CHART]
================================================================================
HISTORY OF NET ASSET VALUE STABILITY
6/30/92-6/30/99 [LINE CHART]
================================================================================
6/30/92 8.23 11/29/93 8.63 4/28/95 8.03 9/30/96 8.14 2/28/98 8.35
7/31/92 8.5 12/31/93 8.61 5/31/95 8.17 10/31/96 8.17 3/31/98 8.32
8/30/92 8.33 1/31/94 8.68 6/30/95 8.11 11/29/96 8.24 4/30/98 8.27
9/30/92 8.31 2/28/94 8.46 7/31/95 8.12 12/31/96 8.19 5/31/98 8.33
10/30/92 8.11 3/31/94 8.13 8/31/95 8.16 1/31/97 8.18 6/30/98 8.32
11/30/92 8.27 4/29/94 8.12 9/29/95 8.16 2/28/97 8.2 7/31/98 8.31
12/30/92 8.27 5/27/94 8.16 10/31/95 8.21 3/31/97 8.1 8/31/98 8.37
1/30/93 8.31 6/30/94 8.09 11/30/95 8.28 4/30/97 8.11 9/30/98 8.41
2/30/93 8.57 7/29/94 8.17 12/29/95 8.72 5/30/97 8.17 10/31/98 8.38
3/30/93 8.43 8/31/94 8.15 1/31/96 8.32 6/30/97 8.2 11/30/98 8.37
4/30/93 8.48 9/30/94 8.01 2/29/96 8.26 7/31/97 8.31 12/31/98 8.35
5/30/93 8.47 10/31/94 7.86 3/29/96 8.16 8/31/97 8.23 1/31/99 8.41
6/30/93 8.58 11/30/94 7.74 4/30/96 8.11 9/30/97 8.27 2/28/99 8.34
7/30/93 8.54 12/30/94 7.78 5/31/96 8.08 10/31/97 8.28 3/31/99 8.32
8/30/93 8.69 1/31/95 7.91 6/28/96 8.1 11/28/97 8.28 4/30/99 8.3
9/30/93 8.74 2/28/95 8.02 7/31/96 8.12 12/31/97 8.36 5/31/99 8.23
10/30/93 8.74 3/31/95 8.04 8/30/96 8.1 1/31/98 8.38 6/30/99 8.09
Source: Towers Data Systems HYPO--Registered Trademark--. This chart has no
calculations; it only shows net asset value. There is no guarantee that the fund
will maintain a constant net asset value. Figures are historical and reflect
reinvestment of all distributions, changes in net asset value, and exclude the
effect of the fund's maximum sales charge. Class B shares commenced sales 9/1/93
and Class C shares commenced sales 8/4/97.
================================================================================
See important fund and index disclosures inside front cover.
AIM MUNICIPAL BOND FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 6/30/99, based on total net assets
TOP FIVE BOND HOLDINGS
================================================================================
COUPON MATURITY %
- --------------------------------------------------------------------------------
New York State 7.375% 01/01/02 2.06%
Urban Develop-
ment Corp.
Connecticut 6.50 03/15/02 1.42
(State of)
Mississippi 7.50 09/01/09 1.26
Higher
Education
Assistance
Corp.
New York 7.65 02/01/02 1.26
(City of)
University of 5.75 04/01/22 1.16
Illinois Auxiliary
Facilities
System
================================================================================
================================================================================
HOLDINGS BY TYPE
Revenue
57%
General Obligation
13%
Escrow &
Pre-refunding
30%
[PIE CHART]
NUMBER OF HOLDINGS 292
AVERAGE MATURITY 13.26 YEARS
DURATION 6.252 YEARS
The fund's portfolio composition is subject to change, and there is no assurance
that the fund will continue to hold any particular security.
================================================================================
rated bonds outpaced higher-rated bonds and shorter-term securities outperformed
longer-term securities.
HOW DID MUNICIPAL BONDS PERFORM?
While municipal bonds (munis) tended to track the performance of Treasuries,
they fared better than Treasuries for the reporting period. Although munis fell
in price, sending their yields to their highest levels in nearly two years, they
retained their value better than Treasuries. Consequently, the yield differences
between long-term munis and long-term Treasuries, narrow at the outset of the
reporting period, widened. At the end of the reporting period, the yields of
long-term munis were about 87% of those of long-term Treasuries.
Munis tended to be more stable in price because of a decline in new-issue
volume in the face of increased demand. During the first half of 1999, $113
billion in new municipal bonds entered the market, a 23% decline from the
comparable period in 1998. In a rising-interest-rate environment, state and
local governments cut back on their issuance of new bonds as the cost of
borrowing money increased.
HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD?
The fund had 292 holdings. Revenue bonds, which are supported with income from
various projects, made up 57% of the portfolio. The focus was on bonds for
essential service projects, particularly hospitals, water-treatment facilities
and utilities.
The fund had an average portfolio quality rating of AA/Aa as measured by
Standard & Poor's Corporation (S&P) and Moody's Investors Service, two widely
known credit-rating agencies. S&P and Moody's ratings are historical and are
based on analysis of the credit quality of the individual municipal securities
in the fund's portfolio.
Approximately 64% of the portfolio's holdings were securities rated AAA, and
91% of the portfolio was rated A or better. Credit-enhanced securities--those
backed by insurance or escrowed with U.S. Treasury securities--composed about
59% of the portfolio.
HOW TAX-EFFICIENT WAS THE FUND?
For more than five years, the fund has paid no taxable capital-gains
distributions or ordinary income distributions. We make every effort to avoid
transactions that would result in capital gains that are not offset by capital
losses.
WHAT IS YOUR OUTLOOK?
In the United States, the economic climate appears favorable for bonds. Although
there is still some question about the Fed's future actions, inflation remains
low. Economic growth is strong, corporate earnings are solid and the country
enjoys nearly full employment. Moreover, bond yields have risen nearly 1% since
the beginning of the reporting period. This development could make bonds more
attractive to investors seeking a steady source of income.
Rising wages are pushing more people into the higher federal income-tax
brackets. And despite considerable political rhetoric about replacing the
current federal tax code with a flat tax or a national sales tax, we don't
believe this is likely to occur. Consequently, municipal bonds could gain in
popularity as an option for investors wanting to reduce their federal income-tax
bills.
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/99, including sales charges
================================================================================
CLASS A SHARES
- --------------------------------------------------------------------------------
10 years 6.10%
5 years 4.55
1 year -2.54*
*2.26% excluding sales charges
CLASS B SHARES
- --------------------------------------------------------------------------------
Inception (9/1/93) 3.59%
5 years 4.40
1 year -3.46**
**1.40% excluding CDSC
CLASS C SHARES
- --------------------------------------------------------------------------------
Inception (8/4/97) 2.99%
1 year 0.43***
***1.40% excluding CDSC
Market volatility can significantly affect short-term performance. Results of an
investment made today may differ substantially from the historical performance
shown.
================================================================================
See important fund and index disclosures inside front cover.
AIM MUNICIPAL BOND FUND
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ALABAMA-1.21%
Alabama (State of)
Housing Finance
Authority; Single
Family Mortgage Series
D-2 RB
5.50%, 10/01/17(b) -- Aaa $1,670 $ 1,647,154
- ----------------------------------------------------------------
Courtland Industrial
Development Board
(Champion International
Corp. Project);
Refunding PCR
6.40%, 11/01/26(b) -- Baa1 2,315 2,410,285
- ----------------------------------------------------------------
McIntosh Industrial
Development Board;
Environmental
Improvement Series C
IDR
5.375%, 06/01/28 AA- A2 1,000 962,370
- ----------------------------------------------------------------
5,019,809
- ----------------------------------------------------------------
ALASKA-1.10%
Alaska (State of) Housing
Finance Corp.;
Collateralized First
Veterans' Home Mortgage
Series A-2 RB
6.75%, 12/01/24(b) AAA Aaa 4,020 4,171,996
- ----------------------------------------------------------------
Alaska (State of) Housing
Finance Corp.;
Collateralized Mortgage
Program First Series RB
6.875%, 06/01/33 AAA Aaa 375 389,276
- ----------------------------------------------------------------
4,561,272
- ----------------------------------------------------------------
ARIZONA-1.55%
Arizona (State of)
Educational Loan
Marketing Corp.; RB
6.125%, 09/01/02(b) -- Aa 1,900 1,980,047
- ----------------------------------------------------------------
Mohave (County of)
Unified School District
No. 1 (Lake Havasu);
Series 1996 A GO
5.90%, 07/01/15(c) AAA Aaa 1,000 1,065,680
- ----------------------------------------------------------------
Pima (County of) Unified
School District No. 10
(Amphitheater); School
Improvement Series 1992
E GO
6.50%, 07/01/05 A+ A3 3,100 3,400,049
- ----------------------------------------------------------------
6,445,776
- ----------------------------------------------------------------
ARKANSAS-1.44%
Arkansas (State of)
(Construction Building
System); University
Series RB
5.00%, 04/01/19(c) AAA Aaa 1,000 954,060
- ----------------------------------------------------------------
Fayetteville (City of);
Water and Sewer
Refunding and
Improvement Series 1992
RB
6.15%, 08/15/99(d)(e) NRR NRR 2,000 2,065,660
- ----------------------------------------------------------------
Little Rock (City of);
Sewer Improvement
Series B RB
5.75%, 02/01/06 AA Aa3 2,000 2,019,780
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ARKANSAS-(CONTINUED)
University of Arkansas
(Razorback Stadium);
Athletic Facilities
Series RB
5.05%, 09/15/20(c) -- Aaa $1,000 $ 970,800
- ----------------------------------------------------------------
6,010,300
- ----------------------------------------------------------------
CALIFORNIA-1.54%
Foothill/Eastern Corridor
Agency (California Toll
Road Project); Senior
Lien Series A RB
6.00%, 01/01/16 BBB- Baa3 400 434,032
- ----------------------------------------------------------------
Sacramento (City of);
Refunding Municipal
Utility District Series
M RB
5.25%, 07/01/28 A A2 1,000 961,170
- ----------------------------------------------------------------
Sacramento (City of)
California Cogeneration
Authority (Procter &
Gamble Project); Series
1995 RB
7.00%, 07/01/04 BBB- -- 500 552,455
- ----------------------------------------------------------------
San Francisco (City and
County of) Parking
Authority; Parking
Meter Series 1994 RB
7.00%, 06/01/05(d)(e) AAA Aaa 1,000 1,149,290
- ----------------------------------------------------------------
South Whittier Elementary
School District;
Unlimited Tax Series A
GO
5.00%, 08/01/23(c) AAA Aaa 3,500 3,312,505
- ----------------------------------------------------------------
6,409,452
- ----------------------------------------------------------------
COLORADO-1.08%
Adams County School
District No. 1;
Unlimited Tax Building
Series 1992 A GO
6.625%, 12/01/02(d)(e) AAA Aaa 500 541,230
- ----------------------------------------------------------------
Colorado Health
Facilities Authority
(National Jewish
Medical and Research
Project); Hospital
Series RB
5.25%, 01/01/18 BBB -- 500 463,180
- ----------------------------------------------------------------
5.375%, 01/01/29 BBB -- 1,000 912,770
- ----------------------------------------------------------------
Highlands Ranch Metro
District No. 1;
Refunding & Improvement
Unlimited Tax Series A
GO
7.30%, 09/01/02(d)(e) NRR NRR 500 555,760
- ----------------------------------------------------------------
Mesa County School
District No. 51; 1989
Series B Certificates
of Participation
6.875%, 12/01/05(c) AAA Aaa 1,465 1,562,012
- ----------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
COLORADO-(CONTINUED)
Mountain Village Metro
District (San Miguel
County); Unlimited Tax
Refunding Series GO
7.95%, 12/01/02(d)(e) NRR NRR $ 50 $ 56,052
- ----------------------------------------------------------------
7.95%, 12/01/03(f) -- -- 375 400,136
- ----------------------------------------------------------------
4,491,140
- ----------------------------------------------------------------
CONNECTICUT-3.24%
Bridgeport (City of);
Unlimited Tax Series A
GO
6.00%, 09/01/06(c) AAA Aaa 1,000 1,085,080
- ----------------------------------------------------------------
Connecticut (State of);
General Purpose Public
Improvement Series
1992-A GO
6.50%, 03/15/02(d)(e) NRR NRR 5,500 5,906,505
- ----------------------------------------------------------------
Connecticut (State of)
Health and Education
Facilities Authority
(Yale University);
Series T-2 RB
3.60%, 07/01/27(g) A1+ VMIG-1 531 531,000
- ----------------------------------------------------------------
Connecticut (State of)
Health Care Development
Authority (Independent
Living Project); Series
AA2 RB
3.30%, 07/01/15(g) -- VMIG-1 1,273 1,273,000
- ----------------------------------------------------------------
Connecticut (State of)
Housing Finance
Authority; Housing
Mortgage Financing
Program Sub-Series C-2
RB
5.85%, 11/15/28(b) AA Aa3 3,465 3,510,357
- ----------------------------------------------------------------
Connecticut (State of)
Special Tax Obligation;
Second Lien Series RB
3.45%, 12/01/10(g) A1+ VMIG-1 176 176,000
- ----------------------------------------------------------------
Waterbury Housing
Authority; Refunding
Mortgage Series A RB
5.45%, 07/01/23(c) AAA Aaa 1,000 986,950
- ----------------------------------------------------------------
13,468,892
- ----------------------------------------------------------------
DELAWARE-0.17%
Delaware Economic
Development
Authority(Osteopathic
Hospital Association);
Series A RB
6.75% 01/01/13(d) NRR Aaa 250 280,498
- ----------------------------------------------------------------
University of Delaware;
RB
3.45%, 11/01/23(g) AA+ -- 433 433,000
- ----------------------------------------------------------------
713,498
- ----------------------------------------------------------------
FLORIDA-2.05%
Dade (County of)
(Courthouse Center
Project); RB
5.90%, 04/01/05(d)(e) NRR NRR 500 538,795
- ----------------------------------------------------------------
Escambia (County of)
(Champion International
Corp. Project); PCR
6.90%, 08/01/22(b) BBB Baa1 1,125 1,208,813
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
FLORIDA-(CONTINUED)
Highlands (County of)
Health Facilities
Authority (Adventist
Health System Project);
Hospital Series RB
5.25%, 11/15/20 A- Baa1 $2,000 $ 1,852,280
- ----------------------------------------------------------------
Lee (County of) Housing
Finance Authority
(Forestwood Apartments
Project); Multifamily
Housing Series A RB
3.70%, 06/15/25(g) AAA -- 609 609,000
- ----------------------------------------------------------------
Lee (County of); Water
and Sewer Series A RB
4.75%, 10/01/23(c) AAA Aaa 1,000 903,880
- ----------------------------------------------------------------
Miami-Dade (County of);
Water and Sewer Series
A RB
5.00%, 10/01/29(c) AAA Aaa 1,000 934,150
- ----------------------------------------------------------------
Miami (City of) Parking
System; Series 1992 A
RB
6.70%, 10/01/01(d)(e) NRR NRR 1,120 1,199,486
- ----------------------------------------------------------------
Orange County Health
Facilities Authority
(South Central Nursing
Homes); Mortgage Series
A RB
5.40%, 07/01/19(c) AAA Aaa 1,000 991,550
- ----------------------------------------------------------------
Plantation (City of)
Health Facilities
Authority (Covenant
Retirement Communities
Inc.); RB
7.75%, 12/01/02(d)(e) NRR NRR 250 281,175
- ----------------------------------------------------------------
8,519,129
- ----------------------------------------------------------------
GEORGIA-1.38%
De Kalb Private Hospital
Authority (Egleston
Children's Hospital
Project); Series A RB
3.35%, 03/01/24(g) A1+ VMIG-1 325 325,000
- ----------------------------------------------------------------
Fulton (County of)
Development Authority
(Delta Airlines Inc.
Project); Special
Facilities RB
5.45%, 05/01/23(b) BBB- Baa3 3,700 3,497,129
- ----------------------------------------------------------------
Georgia (State of)
Housing and Finance
Authority (Home
Ownership Opportunity
Program); Series C RB
6.50%, 12/01/11 AA+ Aa2 800 838,424
- ----------------------------------------------------------------
Savannah (City of)
Economic Development
Authority (Hershey
Foods Corp. Project);
IDR
6.60%, 06/01/12 A+ -- 1,000 1,068,130
- ----------------------------------------------------------------
5,728,683
- ----------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
GUAM-0.11%
Guam Power Authority;
Series A RB
5.25%, 10/01/34 BBB Baa3 $ 500 $ 473,900
- ----------------------------------------------------------------
IDAHO-0.27%
Idaho Health Facilities
Authority (Elks
Rehabilitation Hospital
Project); Hospital
Series RB
5.30%, 07/15/18 BBB -- 1,150 1,119,088
- ----------------------------------------------------------------
ILLINOIS-10.79%
Berwyn (City of) (Macneal
Memorial Hospital
Association); Hospital
Series 1991 RB
7.00%, 06/01/01(d)(e) AAA Aaa 3,250 3,479,580
- ----------------------------------------------------------------
Chicago (City of); Sales
Tax Series RB
5.25%, 01/01/28(c) AAA Aaa 650 621,355
- ----------------------------------------------------------------
Chicago (City of);
Wastewater Transmission
RB
5.25%, Second Lien
Series B 01/01/17(c) AAA Aaa 2,500 2,441,300
- ----------------------------------------------------------------
5.125%, Second Lien
Series 01/01/18(c) AAA Aaa 1,000 954,580
- ----------------------------------------------------------------
Chicago Emergency
Telephone System;
Unlimited Tax Series GO
5.60%, 01/01/10(d) AAA Aaa 400 419,064
- ----------------------------------------------------------------
Chicago Midway Airport;
Series A RB
5.625%, 01/01/22(c) AAA Aaa 1,000 1,012,080
- ----------------------------------------------------------------
Cook (County of); Series
1992 B GO
5.75%, 11/15/02(d)(e) AAA Aaa 2,000 2,123,040
- ----------------------------------------------------------------
Du Page (County of) High
School District No. 87
(Glenbard TWP);
Unlimited Tax Series B
GO
5.10%, 12/01/20 -- Aa3 2,000 1,885,580
- ----------------------------------------------------------------
Illinois (State of);
Sales Tax Series 1993 B
RB
6.50%, 06/15/01(d)(e) AAA NRR 1,500 1,593,630
- ----------------------------------------------------------------
Illinois (State of);
Unlimited Tax Series GO
5.25%, 07/01/22(c) AAA Aaa 4,475 4,335,649
- ----------------------------------------------------------------
Illinois (State of)
Development Finance
Authority (American
College of Surgeons);
Series 1996 RB
3.70%, 08/01/26(g) A1+ -- 240 240,000
- ----------------------------------------------------------------
Illinois (State of)
Development Finance
Authority (CPC
International Project);
PCR
6.75%, 05/01/16 -- A2 2,500 2,636,675
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ILLINOIS-(CONTINUED)
Illinois Educational
Facilities Authority
(Midwestern
University); Series B
RB
5.50%, 05/15/18 A -- $1,000 $ 978,120
- ----------------------------------------------------------------
Illinois Educational
Facilities Authority
(Northwestern
University); Adjustable
Medium Term Series RB
5.25%, 11/01/14(e) AA+ Aa1 1,000 1,008,320
- ----------------------------------------------------------------
Illinois Educational
Facilities Authority
(Shedd Aquarium
Society); RB
5.60%, 07/01/27(c) AAA Aaa 3,500 3,526,600
- ----------------------------------------------------------------
Illinois Health
Facilities Authority
(Evangelical Hospital
Corp.); RB
6.25%, Series A
04/15/22(d) NRR NRR 1,000 1,105,360
- ----------------------------------------------------------------
6.25%, Series 1992-C
04/15/22(d) NRR NRR 1,150 1,271,164
- ----------------------------------------------------------------
Illinois Health
Facilities Authority
(Franciscan Sisters
Health Care); Refunding
Series 1992 RB
6.40%, 09/01/04(d) AAA Aaa 2,475 2,683,024
- ----------------------------------------------------------------
Illinois Health
Facilities Authority
(Memorial Hospital); RB
7.25%, 05/01/02(d)(e) NRR NRR 200 218,648
- ----------------------------------------------------------------
Illinois Health
Facilities Authority;
Revolving Fund Pool
Series D RB
3.65%, 08/01/15(g) A1+ VMIG-1 2,937 2,937,000
- ----------------------------------------------------------------
Kane (County of) School
District No. 131
(Aurora East Side);
Limited GO
5.35%, 01/01/04(c) AAA Aaa 1,000 1,032,950
- ----------------------------------------------------------------
Lake County Community
Consolidated School
District No. 73
(Hawthorn); Unlimited
Tax Series 1997 GO
5.45%, 01/01/12(c) -- Aaa 1,950 2,001,558
- ----------------------------------------------------------------
Peoria and Pekin and
Waukegan (Cities of);
GNMA Collateralized
Mortgage Series 1990 RB
7.875%, 08/01/22(b) AA+ -- 90 93,735
- ----------------------------------------------------------------
Tazewell County Community
High School District
No. 303 (Pekin);
Unlimited Tax Series
1996 GO
5.625%, 01/01/14(c) AAA Aaa 1,435 1,487,708
- ----------------------------------------------------------------
University of Illinois
Auxiliary Facilities
System; Series 1991 RB
5.75%, 04/01/22 AA- Aa3 4,750 4,813,128
- ----------------------------------------------------------------
44,899,848
- ----------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
INDIANA-0.19%
Carmel Retirement Rental
Housing (Beverly
Enterprises Project);
Refunding Series RB
8.75%, 12/01/08(f) -- -- $ 95 $ 104,661
- ----------------------------------------------------------------
Indiana (State of)
Housing Finance
Authority; Series B-1
RB
6.15%, 07/01/17 -- Aaa 165 170,242
- ----------------------------------------------------------------
Indiana Transportation
Finance Authority
(Airport Lease
Facility); Series A RB
6.25%, 11/01/02(d)(e) NRR Aaa 395 425,166
- ----------------------------------------------------------------
6.25%, 11/01/16 A A1 105 109,512
- ----------------------------------------------------------------
809,581
- ----------------------------------------------------------------
IOWA-0.26%
Iowa Finance Authority
(Trinity Regional
Hospital Project);
Hospital Facilities
Refunding Series 1997
RB
6.00%, 07/01/12(c) AAA Aaa 1,000 1,086,690
- ----------------------------------------------------------------
KANSAS-0.07%
Newton (City of) (Newton
Healthcare Corp.);
Hospital Series A RB
7.375%, 11/15/04(d)(e) NRR NRR 250 287,158
- ----------------------------------------------------------------
KENTUCKY-2.07%
Carrollton & Henderson
(Cities of) Public
Energy Authority;
Series A RB
5.00%, 01/01/08(c) AAA Aaa 2,000 2,019,260
- ----------------------------------------------------------------
5.00%, 01/01/09(c) AAA Aaa 1,880 1,888,441
- ----------------------------------------------------------------
Jefferson (County of)
(Beverly Enterprises
Project); Refunding
Health Facilities
Series RB
5.875%, 05/01/08(f) -- -- 595 589,978
- ----------------------------------------------------------------
Kentucky Economic
Development Finance
Authority (Appalachian
Regional Healthcare);
Refunding & Improvement
Hospital Systems Series
RB
5.875%, 10/01/22 BB+ -- 1,000 957,780
- ----------------------------------------------------------------
Mount Sterling (City of);
Lease Funding Series
1993 A RB
6.15%, 03/01/13 -- Aa 3,000 3,173,040
- ----------------------------------------------------------------
8,628,499
- ----------------------------------------------------------------
LOUISIANA-3.41%
Louisiana Public
Facilities Authority
(Medical Center at New
Orleans Project); RB
6.125%, 10/15/07(c) AAA -- 2,775 2,884,113
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
LOUISIANA-(CONTINUED)
Louisiana Public
Facilities Authority
(Our Lady of Lake
Regional Hospital);
Hospital Refunding
Series C RB
6.00%, 12/01/01(d)(e) AAA Aaa $2,500 $ 2,649,925
- ----------------------------------------------------------------
Louisiana Public
Facilities Authority
(Tulane University of
Louisiana); RB
6.00%, 10/01/16(c) AAA Aaa 2,500 2,686,725
- ----------------------------------------------------------------
Louisiana Stadium &
Exposition District
Hotel Occupancy Tax and
Stadium Revenue;
Refunding Series B RB
5.00%, 07/01/26(c) AAA Aaa 1,000 928,780
- ----------------------------------------------------------------
Louisiana University
System Supervisors
Board (Northwestern
State University); RB
5.10%, 04/01/24(c) AAA Aaa 700 656,047
- ----------------------------------------------------------------
New Orleans Levee
District; Series 1995 A
RB
5.95%, 11/01/07(c) AAA Aaa 1,000 1,067,440
- ----------------------------------------------------------------
Ouachita Parish Hospital
Service District No. 1
(Glenwood Regional
Medical Center);
Refunding Series 1996
RB
5.70%, 05/15/16(c) AAA Aaa 1,000 1,031,800
- ----------------------------------------------------------------
St. John Baptist Parish
(Sales Tax
Distribution); Public
Improvement Series 1987
RB
7.60%, 01/01/08(d) NRR NRR 500 587,870
- ----------------------------------------------------------------
7.60%, 01/01/09(d) NRR NRR 500 595,160
- ----------------------------------------------------------------
West Feliciana Parish
(Gulf States); Series A
PCR
7.50%, 05/01/15 BB+ Ba1 1,000 1,083,520
- ----------------------------------------------------------------
14,171,380
- ----------------------------------------------------------------
MAINE-0.21%
Maine (State of)
Education Loan
Authority; Education
Loan Series A-2 RB
6.95%, 12/01/07(b) -- A 855 890,628
- ----------------------------------------------------------------
MARYLAND-0.45%
Maryland Health and
Higher Education
Facilities Authority
(Doctors Community
Hospital Inc.); Series
1990 RB
8.75%, 07/01/00(d)(e) AAA Aaa 1,000 1,069,770
- ----------------------------------------------------------------
Maryland State Community
Development
Administration
(Department of Economic
and Community
Development); Single
Family Housing
Refunding Series 5 RB
7.70%, 04/01/15(b) -- Aa2 790 814,229
- ----------------------------------------------------------------
1,883,999
- ----------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MASSACHUSETTS-4.44%
Massachusetts (State of);
Consolidated Loan
Series 1991 C GO
7.00%, 08/01/01(d)(e) NRR NRR $2,450 $ 2,632,011
- ----------------------------------------------------------------
Massachusetts Bay
Transportation
Authority (General
Transportation System
Project); Series B RB
5.00%, 03/01/28 AA- Aa3 2,000 1,842,940
- ----------------------------------------------------------------
Massachusetts Health and
Education Facilities
Authority (Caritas
Christ Obligation
Group); Series A RB
5.625%, 07/01/20 BBB Baa2 1,000 949,850
- ----------------------------------------------------------------
Massachusetts Health and
Education Facilities
Authority (Lowell
General Hospital);
Series 1991 A RB
8.40%, 06/01/01(d)(e) NRR NRR 3,550 3,890,800
- ----------------------------------------------------------------
Massachusetts Health and
Education Facilities
Authority (Valley
Regional Health System
Issue); Series 1990 B
RB
8.00%, 07/01/00(d)(e) NRR Aaa 3,000 3,187,710
- ----------------------------------------------------------------
Massachusetts Health and
Education Facilities
Authority (Winchester
Hospital); Series D RB
5.80%, 07/01/09(c) AAA -- 1,000 1,051,490
- ----------------------------------------------------------------
Massachusetts Housing
Finance Authority;
Single Family Series 11
RB
7.75%, 12/01/22(b) AAA Aaa 1,480 1,523,719
- ----------------------------------------------------------------
Massachusetts Industrial
Finance Agency (Beverly
Enterprises); Refunding
Series RB
8.00%, 05/01/02(f) -- -- 150 154,268
- ----------------------------------------------------------------
Massachusetts Municipal
Wholesale Electric
Cooperative Power
Supply; System Series
1992 A RB
6.75%, 07/01/08(c) AAA Aaa 3,000 3,226,050
- ----------------------------------------------------------------
18,458,838
- ----------------------------------------------------------------
MICHIGAN-3.62%
Detroit (City of) School
District; School
Building and Site
Unlimited Tax Series
1992 GO
6.00%, 05/01/01(d)(e) NRR NRR 1,000 1,051,130
- ----------------------------------------------------------------
6.15%, 05/01/01(d)(e) NRR NRR 1,300 1,369,849
- ----------------------------------------------------------------
Flint (City of) Hospital
Building Authority;
Hospital Series B RB
5.375%, 07/01/18(c) A -- 1,000 957,000
- ----------------------------------------------------------------
Garden City Hospital
Finance Authority
(Garden City Hospital);
Hospital Refunding
Series RB
5.625%, 09/01/10 -- Ba3 1,000 957,310
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MICHIGAN-(CONTINUED)
Lake Orion Community
School District; School
Building and Site
Unlimited Tax Refunding
Series 1994 GO
7.00%, 05/01/05(d)(e) AAA Aaa $2,500 $ 2,822,275
- ----------------------------------------------------------------
Lakeview Community School
District; Unlimited Tax
Series 1996 GO
5.75%, 05/01/07(d)(e) AAA Aaa 1,000 1,061,251
- ----------------------------------------------------------------
Lincoln Park (City of)
School District;
Unlimited Tax Series
1996 GO
6.00%, 05/01/06(d)(e) AAA Aaa 1,210 1,309,595
- ----------------------------------------------------------------
Michigan (State of)
Housing Development
Authority; Refunding
Series A RB
6.60%, 04/01/12 AA- -- 945 1,005,499
- ----------------------------------------------------------------
Ypsilanti (City of)
School District;
Refunding Unlimited Tax
Series 1996 GO
5.75%, 05/01/07(c)(e) AAA Aaa 4,275 4,536,844
- ----------------------------------------------------------------
15,070,753
- ----------------------------------------------------------------
MINNESOTA-0.25%
Centennial Independent
School District No. 12;
Unlimited Tax Series A
GO
5.60%, 02/01/05(c) AAA Aaa 1,000 1,051,610
- ----------------------------------------------------------------
MISSISSIPPI-2.78%
Mississippi (State of)
Development Board
(Panola County
Hospital); Special
Obligation Series RB
5.00%, 07/01/28 A -- 5,000 1,865,040
- ----------------------------------------------------------------
Mississippi (State of)
Development Board
(Capital Projects and
Equipment Acquisition);
Special Obligation
Series A2 RB
5.00%, 07/01/24(c) AAA Aaa 2,000 4,435,400
- ----------------------------------------------------------------
Mississippi Higher
Education Assistance
Corp.; Student Loan
Sub-Series C RB
7.50%, 09/01/09(b) -- A 5,000 5,262,150
- ----------------------------------------------------------------
11,562,590
- ----------------------------------------------------------------
MISSOURI-2.27%
Kansas City Industrial
Development Authority
(General Motors Corp.
Project); PCR
6.05%, 04/01/06 A A3 1,435 1,450,885
- ----------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MISSOURI-(CONTINUED)
Kansas City Municipal
Assistance Corp.
(Truman Medical Center
Charitable Foundation);
Leasehold Improvement
Series 1991 A RB
7.00%, 11/01/01(d)(e) NRR NRR $ 605 $ 642,704
- ----------------------------------------------------------------
Missouri Development
Finance Board (Procter
& Gamble Paper
Products); Solid Waste
Disposal Series RB
5.20%, 03/15/29(b) AA Aa2 1,000 952,060
- ----------------------------------------------------------------
Missouri (State of)
Environmental
Improvement and Energy
Resources; Series 1995
C PCR
5.85%, 01/01/10 -- Aa1 1,000 1,052,390
- ----------------------------------------------------------------
Missouri (State of)
Health and Educational
Facilities Authority
(BJC Health System
Project); Hospital
Series RB
5.00%, 05/15/28 AA Aa2 1,550 1,421,691
- ----------------------------------------------------------------
Missouri (State of)
Health and Educational
Facilities Authority
(Fontbonne College);
Educational Facilities
Series RB
5.125%, 10/01/17(c) A -- 2,555 2,419,994
- ----------------------------------------------------------------
5.20%, 10/01/20(c) A -- 1,575 1,495,305
- ----------------------------------------------------------------
9,435,029
- ----------------------------------------------------------------
NEVADA-1.43%
Boulder (City of)
Hospital (Boulder City
Hospital Inc.);
Hospital Refunding
Series RB
5.85%, 01/01/22(f) -- -- 500 474,680
- ----------------------------------------------------------------
Humboldt (County of)
(Sierra Pacific
Project); Series 1987
PCR
6.55%, 10/01/13(c) AAA Aaa 3,000 3,191,580
- ----------------------------------------------------------------
Las Vegas (City of);
Refunding 1992 Limited
Tax GO
6.50%, 04/01/02(d)(e) AAA Aaa 1,000 1,074,750
- ----------------------------------------------------------------
Reno Redevelopment
Agency; Refunding
Sub-Series A Tax
Anticipation Notes
6.00%, 06/01/10 -- Baa 1,185 1,208,854
- ----------------------------------------------------------------
5,949,864
- ----------------------------------------------------------------
NEW HAMPSHIRE-1.59%
Hudson (City of);
Unlimited Tax Series GO
5.25%, 03/15/28 -- Aa3 1,610 1,577,140
- ----------------------------------------------------------------
New Hampshire Higher
Educational & Health
Facilities Authority
(Dartmouth College);
Refunding Series RB
5.375%, 06/01/23 -- Aaa 1,000 1,004,710
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
NEW HAMPSHIRE-(CONTINUED)
New Hampshire State
Turnpike System; Series
1990 RB
7.40%, 04/01/00(d)(e) AAA Aaa $3,850 $ 4,032,952
- ----------------------------------------------------------------
6,614,802
- ----------------------------------------------------------------
NEW JERSEY-0.92%
Hudson County
Correctional Facility;
Certificate of
Participation Series
1992 RB
6.60%, 12/01/21(c) AAA Aaa 1,250 1,331,813
- ----------------------------------------------------------------
New Jersey Economic
Development Authority
(Atlantic City Sewer
Co.); Sewer Facility
Series 1991 RB
7.25%, 12/01/11(b)(f) -- -- 1,715 1,820,009
- ----------------------------------------------------------------
New Jersey City Economic
Development Authority
(Franciscan Oaks
Project); First
Mortgage Series RB
5.70%, 10/01/17(f) -- -- 500 495,475
- ----------------------------------------------------------------
New Jersey Health Care
Facility Financing
Authority (St. Peters
Medical Center); Series
1987 C RB
8.60%, 07/01/17(c) AAA Aaa 190 195,444
- ----------------------------------------------------------------
3,842,741
- ----------------------------------------------------------------
NEW MEXICO-1.43%
Albuquerque (City of)
(Albuquerque Academy
Project); Educational
Facilities Series 1995
RB
5.75%, 10/15/03(d)(e) NRR NRR 915 960,777
- ----------------------------------------------------------------
Las Cruces South Central
Solid Waste Authority;
Environmental Services
RB
5.65%, 06/01/09 -- A 575 583,309
- ----------------------------------------------------------------
Los Alamos (County of);
Utility Series A RB
6.00%, 07/01/15(c) AAA Aaa 2,000 2,135,940
- ----------------------------------------------------------------
Santa Fe (City of);
Series 1994 A RB
6.25%, 06/01/04(d)(e) AAA Aaa 2,100 2,259,978
- ----------------------------------------------------------------
5,940,004
- ----------------------------------------------------------------
NEW YORK-8.37%
New York (City of); GO
8.25%, Unlimited Tax
Series 1991 F
11/15/01(d)(e) AAA Aaa 1,955 2,164,439
- ----------------------------------------------------------------
11/15/15 A- A3 45 49,767
- ----------------------------------------------------------------
7.65%, Unlimited Tax
Series 1992 F
02/01/02(d)(e) NRR Aaa 4,775 5,233,973
- ----------------------------------------------------------------
7.00%, Unlimited Tax
Series H
02/01/02(d)(e) NRR NRR 320 345,341
- ----------------------------------------------------------------
02/01/20 A- A3 30 31,997
- ----------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
NEW YORK-(CONTINUED)
7.20%, Unlimited Tax
Series H
02/01/02(d)(e) NRR NRR $ 375 $ 406,500
- ----------------------------------------------------------------
02/01/15 A- A3 125 133,950
- ----------------------------------------------------------------
7.70%, Unlimited Tax
Series D
02/01/02(d)(e) NRR Aaa 1,970 2,161,740
- ----------------------------------------------------------------
02/01/09 A- A3 30 32,530
- ----------------------------------------------------------------
7.00%, Unlimited Tax
Series C, Sub-Series
C-1 08/01/02(d)(e) NRR Aaa 1,800 1,966,338
- ----------------------------------------------------------------
7.375, Unlimited Tax
Series B, Sub-Series
B-1 08/15/04(d)(e) NRR Aaa 500 570,130
- ----------------------------------------------------------------
6.25%, Unlimited Tax
Series A 08/01/17 A- A3 3,035 3,223,382
- ----------------------------------------------------------------
7.00%, Unlimited Tax
Series C, Sub-Series
C-1 08/01/17 A- A3 200 215,538
- ----------------------------------------------------------------
7.00%, Unlimited Tax
Series B 02/01/18(c) AAA Aaa 1,000 1,071,590
- ----------------------------------------------------------------
New York City Industrial
Development Agency
(Brooklyn Navy Yard
Cogen Partners); RB
5.65%, 10/01/28(b) BBB- Baa3 500 491,520
- ----------------------------------------------------------------
New York City Industrial
Development Agency (The
Lighthouse Inc.
Project); Series 1992
RB
6.50%, 07/01/02(d)(e) NRR NRR 1,500 1,617,090
- ----------------------------------------------------------------
New York City Municipal
Water Finance
Authority; Water &
Sewer Systems Series A
RB
5.00%, 06/15/17 A A1 1,350 1,283,931
- ----------------------------------------------------------------
New York State Dorm
Authority (City
University System);
Series C RB
6.00%, 07/01/00(d)(e) NRR NRR 135 138,243
- ----------------------------------------------------------------
6.00%, 07/01/16 BBB+ Baa1 365 369,833
- ----------------------------------------------------------------
New York State Dorm
Authority (State
University Educational
Facilities); Refunding
Series A RB
6.50%, 05/15/06 A- A3 1,000 1,096,440
- ----------------------------------------------------------------
New York State
Environmental Facility
Corp.; Water Revenue
Series E PCR
6.875%, 06/15/01(d)(e) NRR Aaa 2,300 2,463,990
- ----------------------------------------------------------------
6.875%, 06/15/10 AA+ Aaa 1,100 1,170,532
- ----------------------------------------------------------------
New York State Urban
Development Corp.;
Capital Facilities 1991
Series 3 RB
7.375%, 01/01/02(d)(e) NRR Aaa 7,850 8,570,159
- ----------------------------------------------------------------
34,808,953
- ----------------------------------------------------------------
NORTH CAROLINA-1.66%
North Carolina Eastern
Municipal Power Agency;
Series A RB
6.125%, 01/01/10(c) AAA Aaa 1,500 1,584,060
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
NORTH CAROLINA-(CONTINUED)
North Carolina Housing
Finance Agency; Single
Family-Series II RB
6.20%, 03/01/16 AA Aa2 $ 600 $ 621,456
- ----------------------------------------------------------------
North Carolina Medical
Care Community Hospital
(Annie Penn Memorial
Hospital); Refunding
Series RB
5.375%, 01/01/22 -- Baa3 250 234,065
- ----------------------------------------------------------------
North Carolina Municipal
Power Agency (No. 1
Catawba Electric
Project); Refunding RB
7.25%, 01/01/07 A- Baa1 2,750 3,029,648
- ----------------------------------------------------------------
North Carolina Municipal
Power Agency (No. 1
Catawba Electric
Project); Series 1990
RB
6.50%, 01/01/10(d) AAA Aaa 260 287,277
- ----------------------------------------------------------------
6.50%, 01/01/10(c) AAA Aaa 1,115 1,146,922
- ----------------------------------------------------------------
6,903,428
- ----------------------------------------------------------------
NORTH DAKOTA-0.24%
North Dakota Housing
Finance Agency; Home
Mortgage Series B RB
5.85%, 07/01/28(b) -- Aa3 970 985,384
- ----------------------------------------------------------------
OHIO-1.71%
Cleveland (City of)
Parking Facilities;
Improvement Series RB
8.00%, 09/15/02(d)(e) NRR NRR 500 562,185
- ----------------------------------------------------------------
Fairfield (City of)
School District;
Unlimited Tax Series
1995 GO
6.10%, 12/01/15(c) AAA Aaa 1,000 1,069,180
- ----------------------------------------------------------------
Findlay (City of);
Limited Tax Series 1996
GO
5.875%, 07/01/17 AA- Aa3 1,000 1,046,500
- ----------------------------------------------------------------
Mason (City of) Health
Care Facilities (MCV
Health Care Facilities,
Inc.); Series 1990 RB
7.625%, 02/01/01(d)(e) AAA -- 2,120 2,259,411
- ----------------------------------------------------------------
Montgomery (County of)
(Grandview Hospital &
Medical Center);
Refunding Hospital
Series RB
5.50%, 12/01/10 BBB- -- 1,000 980,060
- ----------------------------------------------------------------
Ohio Department of
Transportation
(Panhandle Rail Line
Project); Series 1992
Certificates of
Participation
6.50%, 04/15/12(c) AAA Aaa 1,100 1,176,736
- ----------------------------------------------------------------
7,094,072
- ----------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
OKLAHOMA-1.89%
McAlester (City of)
Public Works Authority;
Refunding and
Improvement Series 1995
RB
5.50%, 12/01/09(d)(e) AAA Aaa $ 975 $ 1,033,471
- ----------------------------------------------------------------
Oklahoma Development
Finance Authority
Public Facilities
Financing Program
(Oklahoma State
University Project); RB
5.00%, 07/01/18(c) -- Aaa 600 569,664
- ----------------------------------------------------------------
Sapula (City of)
Municipal Authority;
Capital Improvement
Series RB
5.00%, 07/01/21(c) AAA Aaa 1,000 945,190
- ----------------------------------------------------------------
Southern Oklahoma
Memorial Hospital
Authority; Series 1993
A RB
5.60%, 02/01/00(d) NRR NRR 1,250 1,263,925
- ----------------------------------------------------------------
Tulsa (City of)
Industrial Authority
(St. Johns Hospital);
RB
6.25%, 02/15/14 AA Aa3 2,000 2,121,600
- ----------------------------------------------------------------
Tulsa (City of)
Industrial Authority
(Tulsa Regional Medical
Center); Hospital
Series RB
7.20%, 06/01/03(d)(e) AAA NRR 500 558,115
- ----------------------------------------------------------------
Tulsa Public Facilities
Authority- Capital
Improvements-Water
System; Series 1988 B
RB
6.00%, 03/01/08 A+ -- 1,305 1,358,048
- ----------------------------------------------------------------
7,850,013
- ----------------------------------------------------------------
OREGON-1.07%
Cow Creek Band Umpqua
Tribe of Indians;
Series B RB
5.10%, 07/01/12(c) AAA Aaa 1,000 1,001,740
- ----------------------------------------------------------------
Marion (County of) (Ogden
Martin Systems);
Refunding Solid Waste &
Electric Series RB
5.50%, 10/01/06(c) AAA Aaa 1,000 1,051,020
- ----------------------------------------------------------------
Portland (City of) Sewer
System; Series 1994 A
RB
6.20%, 06/01/04(d)(e) NRR NRR 1,200 1,295,700
- ----------------------------------------------------------------
6.25%, 06/01/04(d)(e) NRR NRR 1,000 1,081,920
- ----------------------------------------------------------------
4,430,380
- ----------------------------------------------------------------
PENNSYLVANIA-3.79%
Allegheny (County of)
Industrial Development
Authority (USX Corp.);
Environmental
Improvement Series IDR
5.60%, 09/01/30 BBB- Baa2 1,000 947,850
- ----------------------------------------------------------------
Chester (County of)
Health and Educational
Facilities Authority
(Jefferson Health
Systems); Series B RB
5.375%, 05/15/27 AA- A1 4,000 3,782,000
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
PENNSYLVANIA-(CONTINUED)
Chester Upland School
Authority; Refunding
School Series B RB
5.25%, 09/01/21(c) AAA Aaa $1,000 $ 974,380
- ----------------------------------------------------------------
Montgomery County
Industrial Development
Authority (Meadowood
Corp. Project);
Refunding First
Mortgage Series A RB
10.25%, 12/01/00(d)(e) NRR NRR 100 110,474
- ----------------------------------------------------------------
Montgomery County
Industrial Development
Authority (Pennsburg
Nursing &
Rehabilitation Center);
RB
7.625%, 03/31/04(d)(e) NRR Aaa 100 114,969
- ----------------------------------------------------------------
Pennsylvania (State of);
Third Series GO
6.75%, 11/15/13(c) AAA Aaa 1,250 1,379,038
- ----------------------------------------------------------------
Pennsylvania Economic
Development Finance
Authority (Colver
Project); Resource
Recovery Series 1994 D
RB
7.05%, 12/01/10(b) BBB- -- 2,900 3,182,112
- ----------------------------------------------------------------
Pennsylvania Higher
Education Facilities
Authority (UPMC Health
System); Series A RB
5.00%, 08/01/29(c) AAA Aaa 5,000 4,593,000
- ----------------------------------------------------------------
Scranton-Lackawanna
Health & Welfare
Authority (Moses Taylor
Hospital Project);
Series B RB
8.50%, 07/01/01(d)(e) AAA NRR 250 275,388
- ----------------------------------------------------------------
York Pennsylvania General
Authority; RB
3.70%, 09/01/26(g) A1 -- 407 407,000
- ----------------------------------------------------------------
15,766,211
- ----------------------------------------------------------------
PUERTO RICO-0.34%
Puerto Rico (Commonwealth
of) Electric Power
Authority; RB
7.00%, Series 1991 P
07/01/01(d)(e) NRR Aaa 1,325 1,424,653
- ----------------------------------------------------------------
RHODE ISLAND-0.58%
Rhode Island Depositors
Economic Protection
Corp.; Special
Obligation Series 1992
A RB
6.95%, 08/01/02(d)(e) AAA Aaa 1,250 1,365,438
- ----------------------------------------------------------------
Rhode Island Housing and
Mortgage Finance
Agency; Homeownership
Opportunity Series 15 B
RB
6.00%, 10/01/04 AA+ Aa2 1,000 1,042,210
- ----------------------------------------------------------------
2,407,648
- ----------------------------------------------------------------
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
SOUTH CAROLINA-0.87%
Charleston (County of)
(Care Alliance Health
Services); Series A RB
5.125%, 08/15/16(c) AAA Aaa $1,500 $ 1,452,600
- ----------------------------------------------------------------
Piedmont Municipal Power
Agency; Refunding
Electric Series A RB
5.75%, 01/01/24 BBB- Baa2 1,150 1,121,975
- ----------------------------------------------------------------
South Carolina State
Education Assistance
Authority; Guaranteed
Student Loan Series
1990 RB
6.60%, 09/01/01(b) AA -- 500 512,200
- ----------------------------------------------------------------
South Carolina State
Housing Finance and
Development Authority;
Homeownership Mortgage
Series 1990 C RB
7.50%, 07/01/05(b) AA Aa2 500 517,330
- ----------------------------------------------------------------
3,604,105
- ----------------------------------------------------------------
SOUTH DAKOTA-0.51%
South Dakota Health &
Educational Facilities
Authority (Huron
Regional Medical
Center); RB
7.25%, 04/01/20 BBB -- 100 107,443
- ----------------------------------------------------------------
South Dakota Housing
Development Authority;
Homeownership Mortgage
Series F RB
5.80%, 05/01/28(b) AAA Aa1 1,995 2,011,160
- ----------------------------------------------------------------
2,118,603
- ----------------------------------------------------------------
TENNESSEE-1.38%
Franklin Industrial
Development Board
(Landings Apartment
Project); Multifamily
Housing Series A RB
5.75%, 04/01/10(c) AAA Aaa 1,035 1,066,361
- ----------------------------------------------------------------
Montgomery (County of)
Health, Educational and
Housing Facilities
Board (Clarksville
Project); Refunding and
Improvement Hospital
Series RB
5.375%, 01/01/28(c) A -- 1,800 1,679,742
- ----------------------------------------------------------------
Shelby (County of);
Unlimited Tax School
Series B GO
6.00%, 03/01/02(d)(e) NRR NRR 1,000 1,050,540
- ----------------------------------------------------------------
Shelby County Health,
Educational & Housing
Facilities Board (Kirby
Pines); Health Care
Facilities Series A RB
6.25%, 11/15/16(f) -- -- 1,000 994,670
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
TENNESSEE-(CONTINUED)
Tennessee Housing
Development Agency;
Homeownership
Progressive Series Q RB
6.80%, 07/01/17 AA Aa2 $ 890 $ 929,222
- ----------------------------------------------------------------
5,720,535
- ----------------------------------------------------------------
TEXAS-15.29%
Arlington Independent
School District;
Pre-Refunding Unlimited
Tax Series GO
5.75%, 02/15/05(d)(e) NRR Aaa 705 744,642
- ----------------------------------------------------------------
Arlington Independent
School District;
Unlimited Tax Series GO
5.75%, 02/15/21(d) -- Aaa 295 305,980
- ----------------------------------------------------------------
Austin (City of); Utility
System RB
6.50%, 05/15/01(d)(e) AAA Aaa 1,380 1,464,953
- ----------------------------------------------------------------
Austin Community College
District; Combined Fee
Revenue Building and
Refunding Series 1995
RB
6.10%, 02/01/05(d)(e) AAA Aaa 1,115 1,196,306
- ----------------------------------------------------------------
Bellville Independent
School District;
Unlimited Tax School
Building and Refunding
Series 1995 A GO
6.125%, 02/01/20(c) -- Aaa 830 881,701
- ----------------------------------------------------------------
Bexar (County of) Housing
Authority (Fountainhead
Apartments); RB
3.50%, 09/15/26(g) A1+ -- 1,167 1,167,000
- ----------------------------------------------------------------
Brazos (County of) Health
Facilities Development
Corp. (Franciscan
Services Corp.); Series
A RB
5.375%, 01/01/22(c) AAA Aaa 2,000 1,962,880
- ----------------------------------------------------------------
Brazos Higher Education
Loan Authority Inc.;
Student Loan Refunding
RB
6.30%, Series 1992 C-1
11/01/01(b) -- Aa 325 336,999
- ----------------------------------------------------------------
6.45%, Series 1992 C-1
11/01/02(b) -- Aa 1,135 1,185,371
- ----------------------------------------------------------------
Carrollton (City of); GO
5.75%, 08/15/06(d)(e) NRR NRR 1,000 1,059,680
- ----------------------------------------------------------------
Comal County Industrial
Development Authority
(The Coleman Company,
Inc. Project);
Industrial Development
Series 1980 RB
9.25%, 08/01/00(d) NRR NRR 590 609,028
- ----------------------------------------------------------------
Dallas (City of);
Waterworks and Sewer
System Series A RB
6.00%, 10/01/01(d)(e) NRR NRR 2,030 2,131,236
- ----------------------------------------------------------------
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
Dallas (City of);
Waterworks and Sewer
System Refunding and
Improvement Series RB
5.35%, 04/01/14 AA Aa2 $3,055 $ 3,087,505
- ----------------------------------------------------------------
Dallas-Fort Worth
Regional Airport
Authority; Airport
Series 1985 RB
6.10%, 11/01/07 A+ A1 160 160,725
- ----------------------------------------------------------------
6.10%, 11/01/07(c) AAA Aaa 400 400,592
- ----------------------------------------------------------------
De Soto (City of)
Independent School
District; Refunding
Unlimited Tax Series GO
5.125%, 08/15/17(c) AAA -- 2,155 2,056,948
- ----------------------------------------------------------------
Denton (County of);
Refunding Limited Tax
Permanent Improvement
Series GO
5.125%, 07/15/26 AA Aa2 1,000 942,180
- ----------------------------------------------------------------
Edgewood (City of)
Independent School
District; Unlimited Tax
School Series GO
5.40%, 02/15/23(c) -- Aaa 800 787,368
- ----------------------------------------------------------------
Georgetown (City of);
Utility System Series
1995 A RB
6.20%, 08/15/05(d)(e) AAA Aaa 1,500 1,622,310
- ----------------------------------------------------------------
Harris County; Toll Road
Unlimited Tax General
Obligation and
Subordinate Lien
Refunding Series 1991
RB
6.75%, 08/01/14 AA Aa2 3,850 4,121,117
- ----------------------------------------------------------------
Harris County Health
Facilities Development
Corp. (Saint Luke's
Episcopal Hospital
Project); Series 1991
RB
6.70%, 02/15/03(d) AAA NRR 1,000 1,075,910
- ----------------------------------------------------------------
Harris County Mental
Health and Mental
Retardation Authority;
Refunding Series 1992
RB
6.25%, 09/15/10(c) AAA Aaa 4,500 4,677,065
- ----------------------------------------------------------------
Houston (City of);
Refunding Series 1992 C
GO
6.25%, 03/01/02(d)(e) NRR NRR 1,470 1,540,295
- ----------------------------------------------------------------
Houston Higher Education
Finance Corp. (Rice
University Project);
Higher Education Series
A RB
5.375%, 11/15/29 AAA Aaa 3,225 3,179,624
- ----------------------------------------------------------------
Hurst, Euless, Bedford,
Texas Independent
School District;
Refunding RB
6.50%, 08/15/04(d)(e) AAA Aaa 640 697,798
- ----------------------------------------------------------------
6.50%, 08/15/24(c) AAA Aaa 360 387,749
- ----------------------------------------------------------------
Keller (City of)
Independent School
District; Certificates
of Participation Series
1994 RB
6.00%, 08/15/05(c) AAA Aaa 1,000 1,073,760
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
Lockhart (City of);
Certificates of
Participation Tax and
Utility Systems Series
1996 GO
5.90%, 08/01/06(d)(e) AAA Aaa $1,100 $ 1,178,573
- ----------------------------------------------------------------
5.85%, 08/01/11(c) AAA Aaa 605 633,084
- ----------------------------------------------------------------
North Central Texas
Health Facilities
Development Corp. (CC
Young Memorial
Project); Hospital
Series RB
5.375%, 02/15/25(c) A -- 1,000 955,140
- ----------------------------------------------------------------
North Texas Higher
Education Authority
Inc.; Student Loan
Refunding Series D RB
6.10%, 04/01/08(b) -- Aa 1,000 1,018,250
- ----------------------------------------------------------------
6.30%, 04/01/09(b) -- A 500 507,130
- ----------------------------------------------------------------
Plano (City of)
Independent School
District; Unlimited Tax
Series 1991 B GO
5.625%, 02/15/01(d)(e) AAA Aaa 2,500 2,559,825
- ----------------------------------------------------------------
Richardson (City of)
Hospital Authority
(Baylor/Richardson
Project); Refunding and
Improvement Hospital
Series RB
5.50%, 12/01/18 BBB+ Baa2 1,000 931,150
- ----------------------------------------------------------------
5.625%, 12/01/28 BBB+ Baa2 1,250 1,151,663
- ----------------------------------------------------------------
Southwest Higher
Education Authority
Inc. (Southern
Methodist University);
Higher Education Series
D RB
5.00%, 10/01/22 A+ A1 1,750 1,610,053
- ----------------------------------------------------------------
Tarrant County Health
Facilities Development
Corp. (Fort Worth
Osteopathic Hospital);
Hospital Series RB
5.125%, 05/15/16(c) AAA Aaa 1,000 965,450
- ----------------------------------------------------------------
Tarrant County Texas
Water Control and
Improvement District
No. 1; Refunding Series
1993 RB
5.20%, 03/01/10(c) AAA Aaa 2,000 2,009,760
- ----------------------------------------------------------------
Texas (State of) Public
Property Finance Corp.
(Mental Health Mental
Retardation); Series
1996 RB
6.20%, 09/01/16 BBB+ -- 1,590 1,652,360
- ----------------------------------------------------------------
Texas (State of);
Unlimited Tax Veteran's
Land GO
6.40%, 12/01/24(b) AA Aa2 2,000 2,150,600
- ----------------------------------------------------------------
Texas (State of)
Department of Housing
and Community Affairs
(Asmara Project);
Multifamily Housing
Series 1996 A RB
6.30%, 01/01/16 A -- 310 328,160
- ----------------------------------------------------------------
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
Texas National Research
Laboratory Community
Financing Corp.
(Superconducting Super
Collider); Lease RB
7.10%, 12/01/01(d)(e) AAA Aaa $ 600 $ 651,642
- ----------------------------------------------------------------
Travis (County of) Health
Facility (Charity
Obligation Group);
Hospital Series A RB
5.125%, 11/01/24 AA+ Aa2 2,500 2,333,725
- ----------------------------------------------------------------
Tyler Health Facilities
Development Corp. (East
Texas Medical Center);
Hospital Series D RB
5.375%, 11/01/27(c) AAA Aaa 1,000 964,020
- ----------------------------------------------------------------
Tyler Health Facilities
Development Corp.
(Mother Frances
Hospital); Hospital
Series A RB
5.625%, 07/01/13 -- Baa2 1,000 982,440
- ----------------------------------------------------------------
Victoria (County of)
(Texas Hospital
Citizens Medical
Center); RB
6.20%, 01/01/10(c) AAA Aaa 1,000 1,061,630
- ----------------------------------------------------------------
Weatherford (City of)
Independent School
District; Refunding
Series 1994 GO
6.40%, 02/15/05(d)(e) NRR Aaa 900 979,227
- ----------------------------------------------------------------
6.40%, 02/15/12(c) -- Aaa 100 107,019
- ----------------------------------------------------------------
63,587,623
- ----------------------------------------------------------------
UTAH-1.91%
Central Utah Water
Conservancy District;
Limited Tax Series D GO
5.00%, 04/01/27(c) AAA Aaa 1,660 1,538,023
- ----------------------------------------------------------------
Intermountain Power
Agency (Utah Power
Supply); Series 1986 B
RB
5.00%, 07/01/16 A+ A1 1,550 1,466,781
- ----------------------------------------------------------------
Salt Lake (County of)
(Westminster College
Project); RB
5.75%, 10/01/27 BBB -- 1,000 967,400
- ----------------------------------------------------------------
Utah (State of)
Associated Municipal
Power System (San Juan
Project); Refunding
Series RB
5.00%, 06/01/22(c) AAA Aaa 775 723,881
- ----------------------------------------------------------------
Utah (State of) Housing
Finance Agency;
Federally Insured Term
Subordinated Single
Family Mortgage RB
6.30%, Sub-Series 1994
E-1, 07/01/06 AA- -- 365 380,885
- ----------------------------------------------------------------
7.15%, Sub-Series 1994
G-1, 07/01/06 AA- A1 195 207,617
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
UTAH-(CONTINUED)
Utah (State of) Housing
Finance Agency; Single
Family Mortgage RB
6.05%, Series 1994 C
07/01/06 -- Aa2 $ 495 $ 512,058
- ----------------------------------------------------------------
6.45%, Series G2 RB
07/01/27(b) AAA Aaa 910 943,024
- ----------------------------------------------------------------
Utah (State of) Water
Finance Agency; Series
A RB
5.30%, 10/01/23(c) AAA Aaa 1,250 1,219,900
- ----------------------------------------------------------------
7,959,569
- ----------------------------------------------------------------
VIRGIN ISLANDS-0.87%
Virgin Islands Public
Finance Authority;
Matching Fund Loan
Notes Series A RB
7.25%, 10/01/02(d)(e) AAA NRR 1,000 1,109,050
- ----------------------------------------------------------------
Virgin Islands Territory
(Hugo Insurance Claims
Fund); Special Tax Bond
Series 1991 GO
7.75%, 10/01/01(d)(e) NRR NRR 2,350 2,529,634
- ----------------------------------------------------------------
3,638,684
- ----------------------------------------------------------------
VIRGINIA-1.37%
Covington-Alleghany
(County of) Industrial
Development Authority
(Beverly Enterprises);
Refunding Series RB
9.375%, 09/01/01(f) -- -- 40 41,690
- ----------------------------------------------------------------
Lynchburg (City of)
Industrial Development
Authority (Centra
Health Inc.); Refunding
Healthcare Facilities
Series RB
5.20%, 01/01/18 A+ A1 2,500 2,369,200
- ----------------------------------------------------------------
Richmond (City of);
Public Improvement
Refunding Series B GO
6.25%, 01/15/18 AA A1 2,000 2,094,120
- ----------------------------------------------------------------
Richmond (City of) Public
Utility; Refunding
Series A RB
5.125%, 01/15/28 A+ A1 1,000 943,560
- ----------------------------------------------------------------
Virginia Housing
Development Authority;
Commonwealth Mortgage
Series A RB
7.10%, 01/01/17 AA+ Aa1 250 259,978
- ----------------------------------------------------------------
5,708,548
- ----------------------------------------------------------------
WASHINGTON-2.19%
Clark (County of) Gamas
School District No.
117; GO
6.00%, 12/01/05(d)(e) AAA Aaa 1,000 1,071,110
- ----------------------------------------------------------------
King (County of);
Unlimited Tax GO
5.50%, 07/01/07(d) AAA Aaa 500 522,990
- ----------------------------------------------------------------
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
WASHINGTON-(CONTINUED)
King (County of);
Unlimited Tax Refunding
GO
6.50%, 12/01/11 AA+ Aa1 $ 500 $ 500,935
- ----------------------------------------------------------------
Pend Oreille (County of)
Public Utility District
No. 1; Electric Series
B RB
6.30%, 01/01/17 A- A 1,400 1,461,628
- ----------------------------------------------------------------
Seattle (City of)
Metropolitan
Municipality Sewer
District; Series T RB
6.80%, 01/01/00(d)(e) NRR NRR 1,780 1,841,730
- ----------------------------------------------------------------
Washington State Public
Power Supply System
(Nuclear Project No.
1); Refunding Series A
RB
6.00%, 07/01/07(c) AAA Aaa 1,000 1,076,760
- ----------------------------------------------------------------
5.75%, 07/01/12(c) AAA Aaa 2,000 2,083,980
- ----------------------------------------------------------------
West Richland (City of);
Water & Sewer Series RB
7.00%, 12/01/04(d)(e) AAA Aaa 500 559,335
- ----------------------------------------------------------------
9,118,468
- ----------------------------------------------------------------
WEST VIRGINIA-0.11%
Ohio County Board of
Education; Unlimited
Tax Refunding Series GO
5.125%, 06/01/18 A+ A3 500 478,105
- ----------------------------------------------------------------
WISCONSIN-0.63%
Wisconsin Health and
Educational Facility
Authority (United
Health Group, Inc.); RB
5.25%, 12/15/27(c) AAA Aaa 1,000 949,090
- ----------------------------------------------------------------
Wisconsin Health and
Educational Facilities
Authority (Sinai
Samaritan Medical
Center); Series 1994 F
RB
5.75%, 08/15/16(c) AAA Aaa 1,500 1,559,160
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
WISCONSIN-(CONTINUED)
Wisconsin Housing and
Economic Development
Authority; Home
Ownership RB
7.35%, Series 1994 E
01/01/17 AA Aa2 $ 110 $ 116,274
- ----------------------------------------------------------------
2,624,524
- ----------------------------------------------------------------
WYOMING-0.82%
Campbell (County of)
School District No. 1
(Gillette); Unlimited
Tax Series GO
5.35%, 06/01/04 AAA Aaa 1,000 1,043,680
- ----------------------------------------------------------------
Laramie (County of)
(Memorial Hospital
Project); Hospital
Series RB
6.70%, 05/01/12(c) AAA Aaa 250 269,788
- ----------------------------------------------------------------
Natrona (County of)
Wyoming Medical Center;
RB
6.00%, 09/15/11(c) AAA Aaa 1,000 1,060,450
- ----------------------------------------------------------------
Sweetwater (County of)
(Idaho Power Company
Project); Series 1996 A
PCR
6.05%, 07/15/26 A A3 1,000 1,041,580
- ----------------------------------------------------------------
3,415,498
- ----------------------------------------------------------------
TOTAL INVESTMENTS-96.92% 403,189,957
- ----------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-3.08% 12,803,136
- ----------------------------------------------------------------
NET ASSETS-100.00% $415,993,093
- ----------------------------------------------------------------
</TABLE>
Notes to Schedule of Investments:
(a) Ratings assigned by Moody's Investors Service, Inc. ("Moody's") and Standard
& Poor's Corporation ("S&P"). NRR indicates a security that is not re-rated
subsequent to funding of an escrow fund (consisting of U.S. Treasury
obligations); this funding is pursuant to an advance refunding of the
security.
(b) Security subject to the alternative minimum tax.
(c) Secured by bond insurance.
(d) Secured by an escrow fund of U.S. Treasury obligations.
(e) Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(f) Unrated security; determined by the investment advisor to be of comparable
quality to the rated securities in which the Fund may invest pursuant to
guidelines of quality adopted by the Board of Trustees and followed by the
investment advisor.
(g) Demand security; payable upon demand by the Fund with usually no more than
seven calendar days' notice. Interest rates are redetermined periodically.
Rates shown are in effect on 06/30/99.
Investment Abbreviations:
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
NRR - Not Re-Rated
PCR - Pollution Control Revenue Bonds
RB - Revenue Bonds
See Notes to Financial Statements.
15
<PAGE> 18
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$389,347,471) $403,189,957
- ----------------------------------------------------------
Receivables for:
Fund shares sold 2,236,893
- ----------------------------------------------------------
Interest 7,446,812
- ----------------------------------------------------------
Investments sold 8,264,800
- ----------------------------------------------------------
Investment for deferred compensation plan 58,905
- ----------------------------------------------------------
Other assets 52,965
- ----------------------------------------------------------
Total assets 421,250,332
- ----------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 689,995
- ----------------------------------------------------------
Investments purchased 3,182,416
- ----------------------------------------------------------
Dividends 806,979
- ----------------------------------------------------------
Deferred compensation plan 58,905
- ----------------------------------------------------------
Accrued advisory fees 153,303
- ----------------------------------------------------------
Accrued distribution fees 313,559
- ----------------------------------------------------------
Accrued transfer agent fees 17,271
- ----------------------------------------------------------
Accrued operating expenses 34,811
- ----------------------------------------------------------
Total liabilities 5,257,239
- ----------------------------------------------------------
Net assets applicable to shares outstanding $415,993,093
- ----------------------------------------------------------
NET ASSETS:
Class A $328,213,918
==========================================================
Class B $ 77,687,940
==========================================================
Class C $ 10,091,235
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 40,574,282
==========================================================
Class B 9,590,509
==========================================================
Class C 1,247,725
==========================================================
Class A:
Net asset value and redemption price per
share $ 8.09
- ----------------------------------------------------------
Offering price per share:
(Net asset value of $8.09 / 95.25%) $ 8.49
==========================================================
Class B:
Net asset value and offering price per
share $ 8.10
==========================================================
Class C:
Net asset value and offering price per
share $ 8.09
==========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $11,875,621
- ----------------------------------------------------------
EXPENSES:
Advisory fees 924,460
- ----------------------------------------------------------
Administrative services fees 40,876
- ----------------------------------------------------------
Custodian fees 10,416
- ----------------------------------------------------------
Transfer agent fees - Class A 79,376
- ----------------------------------------------------------
Transfer agent fees - Class B 18,810
- ----------------------------------------------------------
Transfer agent fees - Class C 2,551
- ----------------------------------------------------------
Trustees' fees 5,871
- ----------------------------------------------------------
Distribution fees - Class A 409,228
- ----------------------------------------------------------
Distribution fees - Class B 374,766
- ----------------------------------------------------------
Distribution fees - Class C 51,528
- ----------------------------------------------------------
Other 92,488
- ----------------------------------------------------------
Total expenses 2,010,370
- ----------------------------------------------------------
Less: Expenses paid indirectly (2,636)
- ----------------------------------------------------------
Net expenses 2,007,734
- ----------------------------------------------------------
Net investment income 9,867,887
- ----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES:
Net realized gain from investment securities 114,508
- ----------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities (13,292,705)
- ----------------------------------------------------------
Net gain (loss) on investment securities (13,178,197)
- ----------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $(3,310,310)
==========================================================
</TABLE>
See Notes to Financial Statements.
16
<PAGE> 19
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1999 and for the year ended December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 9,867,887 $ 18,756,162
- ------------------------------------------------------------------------------------------
Net realized gain from investment securities 114,508 595,427
- ------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (13,292,705) (197,391)
- ------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (3,310,310) 19,154,198
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (8,068,780) (16,134,077)
- ------------------------------------------------------------------------------------------
Class B (1,581,267) (2,410,612)
- ------------------------------------------------------------------------------------------
Class C (217,840) (214,027)
- ------------------------------------------------------------------------------------------
Distributions in excess of net investment income:
Class A (288,244) (87,502)
- ------------------------------------------------------------------------------------------
Class B (56,488) (15,369)
- ------------------------------------------------------------------------------------------
Class C (7,782) (1,355)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A 11,183,702 8,923,504
- ------------------------------------------------------------------------------------------
Class B 7,485,282 25,558,113
- ------------------------------------------------------------------------------------------
Class C 861,603 8,741,537
- ------------------------------------------------------------------------------------------
Net increase in net assets 5,999,876 43,514,410
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 409,993,217 366,478,807
- ------------------------------------------------------------------------------------------
End of period $415,993,093 $409,993,217
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $403,346,332 $383,815,745
- ------------------------------------------------------------------------------------------
Undistributed net investment income (426,416) (73,902)
- ------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (769,309) (883,817)
- ------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 13,842,486 27,135,191
- ------------------------------------------------------------------------------------------
$415,993,093 $409,993,217
==========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Municipal Bond 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 three different classes of shares: Class A shares,
Class B shares and Class C shares. Class A shares are sold with a front-end
sales charge. Class B and Class C 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 a high level of current income exempt from federal income taxes
consistent with the preservation of principal by investing in a diversified
portfolio of municipal bonds.
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 -- Portfolio securities are valued on the basis of
prices provided by an independent pricing service approved by the Board of
Trustees, provided that securities with a demand feature exercisable within
one to seven days will be valued at par. Prices provided by the pricing
service may be determined without exclusive reliance on quoted prices and
may reflect appropriate factors such as institution-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
individual trading characteristics and other market data. Portfolio
securities for which prices are not provided by the pricing service are
valued at the mean between the last available bid and asked prices, unless
the Board of Trustees, or persons designated by the Board of Trustees,
determines that the mean between the last available bid and asked prices
does not accurately
17
<PAGE> 20
reflect the current market value of the security. 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. Notwithstanding the above, short-term
obligations with maturities of 60 days or less are valued at amortized
cost.
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. It is
the policy of the Fund to declare daily dividends from net investment
income. Such dividends are paid monthly. Distributions from net realized
capital gains, if any, are recorded on ex-dividend date and are paid
annually.
C. Federal Income Taxes -- The Fund intends to comply with the requirements
of the Internal Revenue Code necessary to qualify as a regulated
investment company and, as such, will not be subject to federal income
taxes on otherwise taxable income (including net realized capital gains)
which is distributed to shareholders. Therefore, no provision for
federal income taxes is recorded in the financial statements. The Fund
has a capital loss carryforward of $871,215 (which may be carried
forward to offset future taxable capital gains, if any) which expires,
if not previously utilized, in the year 2002. The Fund cannot distribute
capital gains to shareholders until the tax loss carryforwards have been
utilized.
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 0.50% of
the first $200 million of the Fund's average daily net assets, plus 0.40% of the
Fund's average daily net assets in excess of $200 million to and including $500
million, plus 0.35% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.30% of the Fund's average daily net
assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the six months ended June 30, 1999, AIM
was paid $40,876 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the six months ended June 30, 1999, AFS
was paid $69,813 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 and Class C 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 and Class C 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 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 or Class C 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, 1999, the Class A, Class B and
Class C shares paid AIM Distributors $409,228, $374,766 and $51,528,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $56,436 from sales of the Class A
shares of the Fund during the six months ended June 30, 1999. 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,
1999, AIM Distributors received $72,158 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, 1999, the Fund paid legal fees of $2,261
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, 1999, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) of $2,636 under an expense
offset arrangement. The effect of the above arrangements resulted in a reduction
of the Fund's total expenses of $2,636 during the six months ended June 30,
1999.
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) $975,000,000 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. During the six
months ended June 30, 1999, 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 0.09% 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. Prior to May 28, 1999, the commitment fee rate was
0.05%.
18
<PAGE> 21
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, 1999 was
$48,632,189 and $43,977,621, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of June 30, 1999 was as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $17,616,779
- -------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (3,774,293)
- -------------------------------------------------------------------------
Net unrealized appreciation of investment securities $13,842,486
=========================================================================
</TABLE>
Investments have the same cost for tax and financial statement purposes.
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 1999 and the
year ended December 31, 1998 were as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 8,034,721 $ 66,839,546 12,409,366 $ 103,769,637
- ---------------------------------------------------------------------------------------------------------------------------
Class B 2,044,386 16,994,547 5,306,019 44,489,342
- ---------------------------------------------------------------------------------------------------------------------------
Class C 466,916 3,883,248 1,294,847 10,824,561
- ---------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 548,606 4,542,906 1,031,670 8,611,126
- ---------------------------------------------------------------------------------------------------------------------------
Class B 128,258 1,063,514 183,219 1,532,455
- ---------------------------------------------------------------------------------------------------------------------------
Class C 16,097 133,379 16,529 138,044
- ---------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (7,232,545) (60,198,750) (12,388,704) (103,457,259)
- ---------------------------------------------------------------------------------------------------------------------------
Class B (1,273,607) (10,572,779) (2,444,886) (20,463,684)
- ---------------------------------------------------------------------------------------------------------------------------
Class C (380,096) (3,155,024) (265,347) (2,221,068)
- ---------------------------------------------------------------------------------------------------------------------------
2,352,736 $ 19,530,587 5,142,713 $ 43,223,154
===========================================================================================================================
</TABLE>
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A and a share of
Class B outstanding during the six months ended June 30, 1999 and each of the
years in the five-year period ended December 31, 1998, and for a share of Class
C outstanding during the six months ended June 30, 1999, the year ended December
31, 1998 and the period August 4, 1997 (date sales commenced) through December
31, 1997.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
DECEMBER 31,
JUNE 30, ------------------------------------------------------------
1999 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.35 $ 8.34 $ 8.19 $ 8.31 $ 7.78 $ 8.61
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.20 0.42 0.42 0.43 0.43 0.46
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) (0.25) 0.01 0.16 (0.12) 0.56 (0.78)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total from investment operations (0.05) 0.43 0.58 0.31 0.99 (0.32)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.21) (0.42) (0.43) (0.43) (0.43) (0.45)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Distributions from net realized gains -- -- -- -- -- (0.03)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Returns of capital -- -- -- -- (0.03) (0.03)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total distributions (0.21) (0.42) (0.43) (0.43) (0.46) (0.51)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 8.09 $ 8.35 $ 8.34 $ 8.19 $ 8.31 $ 7.78
====================================================== ======== ======== ======== ======== ======== ========
Total return(a) (0.63)% 5.28% 7.27% 3.90% 13.05% (3.79)%
====================================================== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $328,214 $327,705 $318,469 $278,812 $284,803 $257,456
====================================================== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 0.82%(b) 0.82% 0.90% 0.80% 0.88% 0.89%
====================================================== ======== ======== ======== ======== ======== ========
Ratio of net investment income to average net assets 4.94%(b) 5.00% 5.14% 5.29% 5.26% 5.61%
====================================================== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 11% 19% 24% 26% 36% 43%
====================================================== ======== ======== ======== ======== ======== ========
</TABLE>
(a) Does not deduct sales charges and is not annualized for periods less than
one year.
(b) Ratios are annualized and based on average daily net assets of $330,095,387.
19
<PAGE> 22
NOTE 8-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------------------- ------------------------------
DECEMBER 31, DECEMBER 31,
JUNE 30, ---------------------------------------------------- JUNE 30, -----------------
1999 1998 1997 1996 1995 1994 1999 1998 1997
-------- ------- ------- ------- ------- ------ -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 8.37 $ 8.36 $ 8.19 $ 8.31 $ 7.78 $ 8.61 $ 8.35 $ 8.35 $ 8.30
- ---------------------------- ------- ------- ------- ------- ------- ------ ------- ------ ------
Income from investment
operations:
Net investment income 0.17 0.36 0.36 0.37 0.39 0.39 0.17 0.36 0.15
- ---------------------------- ------- ------- ------- ------- ------- ------ ------- ------ ------
Net gains (losses) on
securities (both
realized and unrealized) (0.26) 0.01 0.17 (0.13) 0.54 (0.78) (0.25) -- 0.04
- ---------------------------- ------- ------- ------- ------- ------- ------ ------- ------ ------
Total from investment
operations (0.09) 0.37 0.53 0.24 0.93 (0.39) (0.08) 0.36 0.19
- ---------------------------- ------- ------- ------- ------- ------- ------ ------- ------ ------
Less distributions:
Dividends from net
investment income (0.18) (0.36) (0.36) (0.36) (0.37) (0.38) (0.18) (0.36) (0.14)
- ---------------------------- ------- ------- ------- ------- ------- ------ ------- ------ ------
Distributions from net
realized gains -- -- -- -- -- (0.03) -- -- --
- ---------------------------- ------- ------- ------- ------- ------- ------ ------- ------ ------
Returns of capital -- -- -- -- (0.03) (0.03) -- -- --
- ---------------------------- ------- ------- ------- ------- ------- ------ ------- ------ ------
Total distributions (0.18) (0.36) (0.36) (0.36) (0.40) (0.44) (0.18) (0.36) (0.14)
- ---------------------------- ------- ------- ------- ------- ------- ------ ------- ------ ------
Net asset value, end of
period $ 8.10 $ 8.37 $ 8.36 $ 8.19 $ 8.31 $ 7.78 $ 8.09 $ 8.35 $ 8.35
============================ ======= ======= ======= ======= ======= ====== ======= ====== ======
Total return(a) (1.11)% 4.48% 6.59% 2.99% 12.14% (4.57)% (0.99)% 4.36% 2.36%
============================ ======= ======= ======= ======= ======= ====== ======= ====== ======
Ratios/supplemental data:
Net assets, end of period
(000s omitted) $77,688 $72,723 $47,185 $33,770 $21,478 $9,175 $10,091 $9,565 $ 825
============================ ======= ======= ======= ======= ======= ====== ======= ====== ======
Ratio of expenses to average
net assets 1.57%(b) 1.57% 1.66% 1.61% 1.68%(c) 1.67%(c) 1.57%(b) 1.57% 1.67%(d)
============================ ======= ======= ======= ======= ======= ====== ======= ====== ======
Ratio of net investment
income to average net
assets 4.19%(b) 4.25% 4.38% 4.49% 4.46%(e) 4.83%(e) 4.19%(b) 4.25% 4.37%(d)
============================ ======= ======= ======= ======= ======= ====== ======= ====== ======
Portfolio turnover rate 11% 19% 24% 26% 36% 43% 11% 19% 24%
============================ ======= ======= ======= ======= ======= ====== ======= ====== ======
</TABLE>
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratios are annualized and based on average daily net assets of $75,574,387
and $10,390,953 for Class B and Class C, respectively.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average daily net assets prior to fee waivers and/or expense reimbursements
were 1.77% and 1.84% for the periods 1995-1994, respectively.
(d) Annualized.
(e) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average daily net assets prior to fee waivers and/or expense
reimbursements were 4.37% and 4.66% for the periods 1995-1994,
respectively.
20
<PAGE> 23
<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; Carol F. Relihan A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Secretary 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Gary T. Crum Houston, TX 77046
Senior Vice President
Owen Daly II TRANSFER AGENT
Director Dana R. Sutton
Cortland Trust Inc. Vice President and Treasurer A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn Jr. Robert G. Alley Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President
Formerly Vice Chairman and President, CUSTODIAN
Mercantile-Safe Deposit & Trust Co.; and Stuart W. Coco
President, Mercantile Bankshares Vice President The Bank of New York
90 Washington Street
Jack Fields Melville B. Cox 11th Floor
Chief Executive Officer Vice President New York, NY 10286
Texana Global, Inc.;
Formerly Member Karen Dunn Kelley COUNSEL TO THE FUND
of the U.S. House of Representatives Vice President
Ballard Spahr
Carl Frischling Edgar M. Larsen Andrews & Ingersoll, LLP
Partner Vice President 1735 Market Street
Kramer, Levin, Naftalis & Frankel LLP Philadelphia, PA 19103
Mary J. Benson
Robert H. Graham Assistant Vice President and COUNSEL TO THE TRUSTEES
President and Chief Executive Officer Assistant Treasurer
A I M Management Group Inc. Kramer, Levin, Naftalis & Frankel LLP
Sheri Morris 919 Third Avenue
Prema Mathai-Davis Assistant Vice President and New York, NY 10022
Chief Executive Officer, YWCA of the U.S.A., Assistant Treasurer
Commissioner, New York City Dept. for DISTRIBUTOR
the Aging; and member of the Board of Directors, Renee A. Friedli
Metropolitan Transportation Authority of Assistant Secretary A I M Distributors, Inc.
New York State 11 Greenway Plaza
P. Michelle Grace Suite 100
Lewis F. Pennock Assistant Secretary Houston, TX 77046
Attorney
Jeffrey H. Kupor
Louis S. Sklar Assistant Secretary
Executive Vice President
Hines Interests Nancy L. Martin
Limited Partnership Assistant Secretary
Ofelia M. Mayo
Assistant Secretary
Lisa A. Moss
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
</TABLE>
<PAGE> 24
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund(1) AIM Money Market Fund leadership in the mutual-fund industry
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund since 1976 and managed approximately
AIM Capital Development Fund $121 billion in assets for more than 6.3
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS million shareholders, including
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund individual investors, corporate clients,
AIM Large Cap Growth Fund AIM Asian Growth Fund and financial institutions as of June
AIM Mid Cap Equity Fund(A) AIM Developing Markets Fund 30, 1999.
AIM Select Growth Fund AIM Europe Growth Fund The AIM Family of Funds--Registered
AIM Small Cap Growth Fund(B) AIM European Development Fund Trademark--is distributed nationwide, and
AIM Small Cap Opportunities Fund AIM International Equity Fund AIM today is the 10th-largest
AIM Value Fund AIM Japan Growth Fund mutual-fund complex in the United States
AIM Weingarten Fund AIM Latin American Growth Fund in assets under management, according to
AIM New Pacific Growth Fund Strategic Insight, an independent
GROWTH & INCOME FUNDS mutual-fund monitor.
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund
AIM Advisor Real Estate Fund AIM Global Growth Fund
AIM Balanced Fund
AIM Basic Value Fund(C) GLOBAL GROWTH & INCOME FUNDS
AIM Charter Fund AIM Global Growth & Income Fund
AIM Global Utilities Fund
INCOME FUNDS
AIM Floating Rate Fund GLOBAL INCOME FUNDS
AIM High Yield Fund AIM Emerging Markets Debt Fund(D)
AIM High Yield Fund II AIM Global Government Income Fund
AIM Income Fund AIM Global Income Fund
AIM Intermediate Government Fund AIM Strategic Income Fund
AIM Limited Maturity Treasury Fund
THEME FUNDS
TAX-FREE INCOME FUNDS AIM Global Consumer Products and Services Fund
AIM High Income Municipal Fund AIM Global Financial Services Fund
AIM Municipal Bond Fund AIM Global Health Care Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Infrastructure Fund
AIM Tax-Free Intermediate Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund(E)
AIM Global Trends Fund(F)
</TABLE>
(1) AIM Aggressive Growth Fund reopened to new investors November 16, 1998. (A)
On September 8, 1998, AIM Mid Cap Growth Fund was renamed AIM Mid Cap Equity
Fund. (B) On September 8, 1998, AIM Small Cap Equity Fund was renamed AIM Small
Cap Growth Fund. (C) On September 8, 1998, AIM America Value Fund was renamed
AIM Basic Value Fund. (D) On September 8, 1998, AIM Global High Income Fund was
renamed AIM Emerging Markets Debt Fund. (E) On June 1, 1999, AIM Global
Telecommunications Fund was renamed AIM Global Telecommunications and Technology
Fund. (F) On September 8, 1998, AIM New Dimension Fund was renamed AIM Global
Trends 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.
[AIM LOGO APPEARS HERE] Invest with DISCIPLINE--Registered Trademark--
MBD-SAR-1
