<PAGE> 1
SEMIANNUAL REPORT / JUNE 30 1999
AIM SELECT GROWTH FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-------------------------------------
THE ARTIST'S GARDEN AT GIVERNY
BY CLAUDE MONET
A CAREFULLY SELECTED COMBINATION OF MULTI-COLORED FLOWERS
CAN RESULT IN A STUNNINGLY BEAUTIFUL GARDEN, JUST LIKE THE
ONE DEPICTED IN MONET'S CLASSIC WORK. IN AIM SELECT
GROWTH FUND, WE ENDEAVOR TO OWN THE MOST ATTRACTIVE
LARGE-, MID- AND SMALL-CAP STOCKS IN AN EFFORT TO PRODUCE
THE BEST RESULTS FOR OUR INVESTORS.
-------------------------------------
For shareholders who seek long-term growth of capital. The fund invests
primarily in the common stocks of established medium- to large-sized companies
with prospects for above-average, long-term earnings growth.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Select Growth 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 5.50% 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 class
expenses.
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 Russell 3000 Index measures the performance of the stocks of
the 3,000 largest U.S. companies based on total market capitalization.
o The Dow Jones Industrial Average (the Dow) is a price-weighted average of 30
actively traded primarily industrial stocks.
o The unmanaged Lipper Growth Funds Index represents an average of the
performance of the 30 largest growth funds charted by Lipper, Inc., an
independent mutual-fund performance monitor.
o The Standard & Poor's Composite Index of 500 stocks
(the S&P 500) is a group of unmanaged securities widely regarded by investors
to be representative of the stock market in general.
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 GOVERNMENTAL 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 SELECT GROWTH 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 SELECT GROWTH FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
DIVERSIFIED INVESTMENT STRATEGY
BOOSTS FUND RETURNS
THERE WAS A SIGNIFICANT SHIFT IN MARKET SENTIMENT DURING THE REPORTING PERIOD.
HOW DID THIS CHANGE AFFECT AIM SELECT GROWTH FUND'S PERFORMANCE?
The fund's exposure to a variety of equity classes proved advantageous when
investors shifted their focus from large-cap growth stocks to smaller-company
issues and value stocks. Excluding sales charges, cumulative total returns for
Class A, B and C shares for the six months ended June 30, 1999, were 13.80%,
13.31% and 13.32%, respectively. The fund outperformed its benchmarks, the
Russell 3000 Index, the Lipper Growth Funds Index and the S&P 500, which posted
gains of 11.36%, 11.89% and 12.38%, respectively, over the same period.
WHAT WERE SOME OF THE KEY TRENDS IN THE STOCK MARKET?
During the first quarter of 1999, mega-cap growth stocks and Internet stocks
outperformed other issues by a wide margin. In a world of economic uncertainty,
exemplified by the Brazilian currency crisis in January, U.S. investors favored
mega-cap stocks because of their relative safety and liquidity. Internet stocks
were attractive because of the growth of the Web as a medium of commerce,
communication and entertainment.
However, during the second quarter, relatively expensive mega-cap and
Internet stocks lost much of their luster. Investors shifted their focus to mid-
and small-cap stocks and to value stocks. Additionally, stocks of cyclical
industries such as energy came back into favor.
For the reporting period, nearly every major market index recorded
impressive gains, with the venerable Dow Jones Industrial Average passing the
11,000 mark for the first time. Financial markets were volatile, however, as it
became increasingly apparent that the Federal Reserve Board (the Fed) would
raise interest rates to slow strong economic growth and contain inflation, which
rose significantly in April. On June 30, the central bank raised the federal
funds rate from 4.75% to 5%, but announced that it was shifting from a
tightening to a neutral bias with regard to further near-term interest rate
hikes. This announcement sparked a "relief rally" in the stock market.
HOW DID THE FUND BENEFIT FROM ITS DIVERSIFIED INVESTMENT STRATEGY?
Because it held large-, mid-, and small-cap stocks as well as growth and value
stocks, the fund was able to take advantage of rallies in different segments of
the market. At the end of the reporting period, large-cap stocks, the market
favorites early in the reporting period, composed 56% of the fund's holdings.
Mid- and small-cap stocks, which rallied strongly in the second half of the
period, made up 38% and 6%, respectively.
As of June 30, 1999, the fund's top sector weightings were technology, 34%;
financial, 15%; and consumer cyclicals, 14%. During the six months since our
last report, we increased our consumer-cyclical holdings while decreasing our
stake in health-care stocks.
HOW DID TECHNOLOGY STOCKS FARE?
Technology stocks surged upward, especially toward the end of the reporting
period, when it became apparent that the Fed would be content with a modest
interest-rate hike. When enthusiasm for Internet stocks waned, semiconductor
stocks rallied. We remain optimistic about the technology sector because of its
generally positive earnings-growth prospects.
Technology stocks in the portfolio included America Online, the top online
Internet service provider with about 17 million subscribers worldwide; and
software giant Microsoft, which is slated to unveil the next version of its
operating system, Windows 2000, at the end of this year.
================================================================================
FUND OUTPERFORMS
Six months ended 6/30/99
Total returns, excluding sales charges
- --------------------------------------------------------------------------------
[BAR CHART]
Class A Shares 13.80%
Class B Shares 13.31%
Class C Shares 13.32%
Russell 3000 11.36%
Lipper Growth Funds 11.89%
S&P 500 12.38%
================================================================================
See important fund and index disclosures inside front cover.
AIM SELECT GROWTH FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
Other technology stocks we liked included PMC-Sierra, which develops
semiconductor networking components for telecommunications and data
communications systems, and EMC, a manufacturer of storage and memory expansion
products for midrange and mainframe computers. Finland-based Nokia is the
fastest-growing company in the wireless equipment and infrastructure industry.
The world's largest cellular-phone maker, Nokia has developed a promising
technology called WAP (wireless application protocol) as a new standard for
delivering Internet content to cellular phones.
WHAT WERE SOME OF THE TRENDS IN THE FINANCIAL INDUSTRY?
The financial sector benefited from a booming economy, low inflation and buoyant
financial markets. Although interest rates rose during the reporting period, the
financial sector got a boost when the Fed announced that it was adopting a
neutral stance toward further tightening of monetary policy.
Securities brokers and companies that offered a wide range of financial
services did particularly well. Knight/Trimark, one of the fund's top holdings,
is a securities broker that has established a significant online trading
presence. Citigroup, created from the merger of Citicorp and the Travelers Group
last year, offers credit-card, insurance, banking and investment services in
nearly 100 countries. Both companies have reported strong earnings growth.
WHERE WAS YOUR FOCUS IN THE CONSUMER-CYCLICAL SECTOR?
Our emphasis was on retail stocks. Low unemployment and rising wages bolstered
consumer confidence, and that was great news for the nation's retailers. Healthy
consumer spending meant strong performance by retail stocks, particularly those
of apparel and specialty chains. Many of the nation's retailers are also
benefiting from more efficient management, aimed at reducing excess inventory
levels in a more cost-effective manner and cutting expenses.
Retail stocks in the fund's portfolio included Dayton Hudson, operator of
Target, Mervyn's and other outlets. Favorable markup and markdown policies have
bolstered the company's earnings. Two other firms represented in the portfolio,
Home Depot and Lowe's, are benefiting from the boom in home construction and
renovation.
Another consumer-cyclical stock that performed well for the fund was Clear
Channel Communications, a diversified media company that owns and/or programs
radio and television stations in major markets across the United States.
WHAT IS YOUR OUTLOOK?
The climate appears favorable for stocks. The economy is growing at a healthy
pace, corporate profits are solid and inflation is minimal. While interest rates
increased over the reporting period, they remain relatively low. Additionally,
as Pacific Rim economies begin to recover, the Asian crisis, which has
periodically jolted markets since late 1997, appears to be receding as a threat.
Perhaps most significant has been the broadening of the market rally to
include small- and mid-cap stocks and value stocks. These stocks have languished
over the past few years as investors favored mega-cap growth stocks. Regardless
of market trends, we believe the fund should be well positioned because of its
diversified investment strategy.
PORTFOLIO COMPOSITION
As of June 30, 1999, based on total net assets
<TABLE>
<CAPTION>
====================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. MCI WorldCom, Inc. 3.28% 1. Computers (Software & Services) 10.93%
2. Knight/Trimark Group Inc. 3.08 2. Financial (Diversified) 6.26
3. Microsoft Corp. 2.92 3. Communications Equipment 4.82
4. America Online, Inc. 2.38 4. Electrical Equipment 4.30
5. Comverse Technology, Inc. 1.88 5. Electronics (Semiconductors) 4.29
6. PMC-Sierra Inc. 1.86 6. Telecommunications (Long Distance) 3.67
7. Tyco International Ltd. 1.84 7. Services (Commercial & Consumer) 3.65
8. EMC Corp. 1.75 8. Investment Management 3.27
9. Citigroup Inc. 1.65 9. Services-Data Processing 2.77
10. Freddie Mac 1.62 10. Broadcasting (Television,
Radio & Cable) 2.68
===================================================================================
</TABLE>
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/99, including sales charges
CLASS A SHARES
10 Years 14.28%
5 Years 22.17
1 Year 19.15*
*26.12%, excluding sales charges
CLASS B SHARES
Inception (9/1/93) 16.71%
5 Years 22.31
1 Year 20.13**
**25.13%, excluding CDSC
CLASS C SHARES
Inception (8/4/97) 18.13%
1 Year 25.07***
***24.07%, excluding CDSC
================================================================================
See important fund and index disclosures inside front cover.
AIM SELECT GROWTH FUND
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-86.59%
BANKS (MONEY CENTER)-0.85%
Chase Manhattan Corp. (The) 84,600 $ 7,328,475
- --------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-2.68%
CBS Corp.(a) 122,400 5,316,750
- --------------------------------------------------------------
Chancellor Media Corp.(a) 76,000 4,189,500
- --------------------------------------------------------------
Clear Channel Communications,
Inc.(a) 197,956 13,646,592
- --------------------------------------------------------------
23,152,842
- --------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-3.51%
Comverse Technology, Inc.(a) 214,950 16,228,725
- --------------------------------------------------------------
Juniper Networks, Inc.(a) 21,600 3,218,400
- --------------------------------------------------------------
Lucent Technologies, Inc. 160,800 10,843,950
- --------------------------------------------------------------
30,291,075
- --------------------------------------------------------------
COMPUTERS (HARDWARE)-2.01%
Dell Computer Corp.(a) 179,000 6,623,000
- --------------------------------------------------------------
Sun Microsystems, Inc.(a) 156,000 10,744,500
- --------------------------------------------------------------
17,367,500
- --------------------------------------------------------------
COMPUTERS (NETWORKING)-1.08%
Cisco Systems, Inc.(a) 144,000 9,288,000
- --------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.75%
EMC Corp.(a) 274,000 15,070,000
- --------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-10.93%
America Online, Inc. 186,000 20,553,000
- --------------------------------------------------------------
Cadence Design Systems, Inc.(a) 147,000 1,874,250
- --------------------------------------------------------------
Citrix Systems, Inc.(a) 123,300 6,966,450
- --------------------------------------------------------------
Electronic Arts, Inc.(a) 96,700 5,245,975
- --------------------------------------------------------------
InfoSpace.com, Inc.(a) 120,000 5,640,000
- --------------------------------------------------------------
ISS Group, Inc.(a) 16,400 619,100
- --------------------------------------------------------------
Lycos, Inc.(a) 45,000 4,134,375
- --------------------------------------------------------------
Marimba, Inc.(a) 23,450 1,235,522
- --------------------------------------------------------------
Medical Manager Corp.(a) 120,000 5,310,000
- --------------------------------------------------------------
Microsoft Corp.(a) 279,600 25,216,425
- --------------------------------------------------------------
Oracle Corp.(a) 216,000 8,019,000
- --------------------------------------------------------------
Sterling Commerce, Inc.(a) 100,000 3,650,000
- --------------------------------------------------------------
USWeb Corp.(a) 261,000 5,790,937
- --------------------------------------------------------------
94,255,034
- --------------------------------------------------------------
CONSUMER FINANCE-2.12%
Capital One Financial Corp. 93,000 5,178,938
- --------------------------------------------------------------
MBNA Corp. 158,925 4,867,078
- --------------------------------------------------------------
Providian Financial Corp. 88,050 8,232,675
- --------------------------------------------------------------
18,278,691
- --------------------------------------------------------------
ELECTRIC COMPANIES-1.36%
Niagara Mohawk Holdings, Inc.(a) 214,300 3,442,194
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRIC COMPANIES-(CONTINUED)
Northeast Utilities(a) 218,600 $ 3,866,487
- --------------------------------------------------------------
Texas Utilities Co. 107,000 4,413,750
- --------------------------------------------------------------
11,722,431
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-3.00%
American Power Conversion Corp.(a) 100,000 2,012,500
- --------------------------------------------------------------
Raychem Corp. 161,000 5,957,000
- --------------------------------------------------------------
Sanmina Corp.(a) 87,200 6,616,300
- --------------------------------------------------------------
SCI Systems, Inc.(a) 99,500 4,726,250
- --------------------------------------------------------------
Solectron Corp.(a) 98,000 6,535,375
- --------------------------------------------------------------
25,847,425
- --------------------------------------------------------------
ELECTRONICS (INSTRUMENTATION)-2.01%
Quanta Services, Inc.(a) 295,000 12,980,000
- --------------------------------------------------------------
Waters Corp.(a) 82,000 4,356,250
- --------------------------------------------------------------
17,336,250
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-4.28%
Altera Corp.(a) 280,800 10,336,950
- --------------------------------------------------------------
Linear Technology Corp. 88,800 5,971,800
- --------------------------------------------------------------
Maxim Integrated Products, Inc.(a) 70,000 4,655,000
- --------------------------------------------------------------
PMC-Sierra, Inc.(a) 271,600 16,007,425
- --------------------------------------------------------------
36,971,175
- --------------------------------------------------------------
ENGINEERING & CONSTRUCTION-0.46%
McDermott International, Inc. 140,700 3,974,775
- --------------------------------------------------------------
ENTERTAINMENT-1.22%
SFX Entertainment, Inc.-Class A(a) 164,200 10,508,800
- --------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-0.91%
Teradyne, Inc.(a) 110,000 7,892,500
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-6.26%
American Express Co. 40,100 5,218,012
- --------------------------------------------------------------
Associates First Capital
Corp.-Class A 114,900 5,091,506
- --------------------------------------------------------------
Citigroup, Inc. 300,375 14,267,812
- --------------------------------------------------------------
Fannie Mae 81,500 5,572,562
- --------------------------------------------------------------
Freddie Mac 241,020 13,979,160
- --------------------------------------------------------------
Heller Financial, Inc. 95,300 2,650,531
- --------------------------------------------------------------
MGIC Investment Corp. 149,300 7,259,712
- --------------------------------------------------------------
54,039,295
- --------------------------------------------------------------
FOODS-0.47%
Keebler Foods Co.(a) 135,000 4,100,625
- --------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.45%
Warner-Lambert Co. 180,000 12,487,500
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.85%
Forest Laboratories, Inc.(a) 105,200 $ 4,865,500
- --------------------------------------------------------------
ICN Pharmaceuticals, Inc. 115,750 3,725,703
- --------------------------------------------------------------
Medicis Pharmaceutical Corp.-Class
A(a) 117,000 2,968,875
- --------------------------------------------------------------
Watson Pharmaceuticals, Inc.(a) 125,000 4,382,812
- --------------------------------------------------------------
15,942,890
- --------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-1.29%
Lilly (Eli) & Co. 32,300 2,313,487
- --------------------------------------------------------------
Pfizer, Inc. 80,400 8,823,900
- --------------------------------------------------------------
11,137,387
- --------------------------------------------------------------
HEALTH CARE (LONG TERM CARE)-0.33%
HCR Manor Care, Inc.(a) 118,700 2,871,056
- --------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-1.74%
Express Scripts, Inc.-Class A(a) 34,600 2,082,487
- --------------------------------------------------------------
United Healthcare Corp. 207,100 12,969,637
- --------------------------------------------------------------
15,052,124
- --------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.45%
Beckman Coulter, Inc. 68,500 3,330,812
- --------------------------------------------------------------
Biomet, Inc. 120,600 4,793,850
- --------------------------------------------------------------
Guidant Corp. 173,100 8,903,831
- --------------------------------------------------------------
Sybron International Corp.(a) 149,000 4,106,813
- --------------------------------------------------------------
21,135,306
- --------------------------------------------------------------
HEALTH CARE (SPECIALIZED
SERVICES)-0.70%
Capital Senior Living Corp.(a) 425,000 4,250,000
- --------------------------------------------------------------
Omnicare, Inc. 71,400 901,425
- --------------------------------------------------------------
Quintiles Transnational Corp.(a) 20,400 856,800
- --------------------------------------------------------------
6,008,225
- --------------------------------------------------------------
HOMEBUILDING-0.31%
Clayton Homes, Inc. 235,000 2,687,813
- --------------------------------------------------------------
INSURANCE (MULTI-LINE)-0.30%
Century Business Services, Inc.(a) 100,000 1,450,000
- --------------------------------------------------------------
MONY Group, Inc. (The) 33,900 1,105,988
- --------------------------------------------------------------
2,555,988
- --------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-0.32%
Radian Group, Inc. 57,000 2,782,313
- --------------------------------------------------------------
INVESTMENT MANAGEMENT-3.27%
Affiliated Managers Group, Inc.(a) 54,300 1,639,181
- --------------------------------------------------------------
Knight/Trimark Group, Inc.-Class
A(a) 440,000 26,537,500
- --------------------------------------------------------------
28,176,681
- --------------------------------------------------------------
LEISURE TIME (PRODUCTS)-0.75%
Mattel, Inc. 244,800 6,471,900
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
LODGING-HOTELS-0.52%
Carnival Corp. 91,700 $ 4,447,450
- --------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-1.84%
Tyco International Ltd. 167,700 15,889,575
- --------------------------------------------------------------
NATURAL GAS-0.53%
Enron Corp. 56,000 4,578,000
- --------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-1.34%
ENSCO International, Inc. 344,600 6,870,463
- --------------------------------------------------------------
Schlumberger Ltd. 73,400 4,674,663
- --------------------------------------------------------------
11,545,126
- --------------------------------------------------------------
OIL (DOMESTIC INTEGRATED)-0.51%
Atlantic Richfield Co. 52,900 4,420,456
- --------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.57%
International Paper Co. 96,700 4,883,350
- --------------------------------------------------------------
PERSONAL CARE-0.42%
Steiner Leisure Ltd.(a) 120,000 3,637,500
- --------------------------------------------------------------
RAILROADS-0.76%
Kansas City Southern Industries,
Inc. 103,000 6,572,688
- --------------------------------------------------------------
RESTAURANTS-0.50%
Dave & Buster's, Inc.(a) 148,300 4,300,700
- --------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-1.15%
Home Depot, Inc. (The) 71,200 4,587,950
- --------------------------------------------------------------
Lowe's Companies, Inc. 93,600 5,305,950
- --------------------------------------------------------------
9,893,900
- --------------------------------------------------------------
RETAIL (COMPUTERS &
ELECTRONICS)-0.78%
CDW Computer Centers, Inc.(a) 152,100 6,692,400
- --------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-1.03%
J.C. Penney Co., Inc. 108,500 5,269,031
- --------------------------------------------------------------
Saks, Inc.(a) 124,500 3,594,938
- --------------------------------------------------------------
8,863,969
- --------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.43%
Dollar Tree Stores, Inc.(a) 84,025 3,697,100
- --------------------------------------------------------------
RETAIL (FOOD CHAINS)-1.58%
Kroger Co.(a) 229,800 6,420,038
- --------------------------------------------------------------
Safeway, Inc.(a) 146,000 7,227,000
- --------------------------------------------------------------
13,647,038
- --------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-1.99%
Costco Companies, Inc.(a) 76,000 6,084,750
- --------------------------------------------------------------
Dayton Hudson Corp. 170,000 11,050,000
- --------------------------------------------------------------
17,134,750
- --------------------------------------------------------------
RETAIL (SPECIALTY)-0.53%
Linens 'N Things, Inc.(a) 105,000 4,593,750
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (SPECIALTY-APPAREL)-0.90%
Men's Wearhouse, Inc. (The)(a) 306,000 $ 7,803,000
- --------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.35%
Washington Mutual, Inc. 85,512 3,024,987
- --------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-0.64%
Media Metrix, Inc.(a) 33,000 1,757,250
- --------------------------------------------------------------
Young & Rubicam, Inc. 82,600 3,753,138
- --------------------------------------------------------------
5,510,388
- --------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.15%
Convergys Corp.(a) 98,000 1,886,500
- --------------------------------------------------------------
Galileo International, Inc. 92,000 4,916,250
- --------------------------------------------------------------
Iron Mountain, Inc.(a) 161,000 4,608,625
- --------------------------------------------------------------
Metzler Group, Inc.(a) 130,000 3,591,250
- --------------------------------------------------------------
Stewart Enterprises, Inc.-Class A 210,800 3,069,775
- --------------------------------------------------------------
Trammell Crow Co.(a) 28,400 466,825
- --------------------------------------------------------------
18,539,225
- --------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-1.12%
Brocade Communications Systems,
Inc.(a) 14,500 1,398,344
- --------------------------------------------------------------
Critical Path, Inc.(a) 32,000 1,770,000
- --------------------------------------------------------------
Insight Enterprises, Inc.(a) 126,000 3,118,500
- --------------------------------------------------------------
SunGard Data Systems, Inc.(a) 98,600 3,401,700
- --------------------------------------------------------------
9,688,544
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-2.77%
Affiliated Computer Services,
Inc.(a) 22,600 1,144,125
- --------------------------------------------------------------
Concord EFS, Inc.(a) 116,550 4,931,522
- --------------------------------------------------------------
CSG Systems International, Inc.(a) 180,000 4,713,750
- --------------------------------------------------------------
DST Systems, Inc.(a) 58,100 3,653,038
- --------------------------------------------------------------
Fiserv, Inc.(a) 85,275 2,670,173
- --------------------------------------------------------------
NOVA Corp.(a) 102,233 2,555,813
- --------------------------------------------------------------
Paychex, Inc. 133,500 4,255,313
- --------------------------------------------------------------
23,923,734
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-3.28%
MCI WorldCom, Inc.(a) 327,963 28,286,809
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TOBACCO-0.87%
Philip Morris Companies, Inc. 186,800 $ 7,507,025
- --------------------------------------------------------------
WASTE MANAGEMENT-0.37%
Waste Management, Inc. 59,600 3,203,500
- --------------------------------------------------------------
Total Domestic Common Stocks
(Cost $440,824,073) 747,019,040
- --------------------------------------------------------------
FOREIGN STOCKS-3.00%
BERMUDA-0.39%
Global Crossing Ltd.
(Telecommunications- Long
Distance)(a) 77,942 3,322,278
- --------------------------------------------------------------
FINLAND-1.31%
Nokia Oyj A.B.-ADR (Communications
Equipment) 123,600 11,317,125
- --------------------------------------------------------------
NETHERLANDS-1.30%
Koninklijke (Royal) Phillips
Electronics N.V.- ADR
(Electrical Equipment) 111,136 11,210,844
- --------------------------------------------------------------
Total Foreign Stocks (Cost
$13,428,221) 25,850,247
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. DOLLAR DENOMINATED
CONVERTIBLE NOTES-0.28%
COMPUTERS (PERIPHERALS)-0.28%
EMC Corp., Conv. Sub. Notes,
3.25%, 03/15/02 (Cost $677,145) $ 500,000 $ 2,438,750
- --------------------------------------------------------------
TIME DEPOSIT-5.49%
First Chicago Capital Markets,
Inc., 5.10%, 07/01/99 (Cost
$47,367,986) 47,367,986 47,367,986
- --------------------------------------------------------------
REPURCHASE AGREEMENT-4.87%(B)
Credit Suisse First Boston, 5.10%,
07/01/99 (Cost $41,975,617)(c) 41,975,617 41,975,617
- --------------------------------------------------------------
TOTAL INVESTMENTS-100.23% 864,651,640
- --------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.23%) (1,952,128)
- --------------------------------------------------------------
NET ASSETS-100.00% $862,699,512
==============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Sub. - Subordinated
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(c) Joint repurchase agreement entered into 06/30/99 with a maturing value of
$350,049,583. Collateralized by U.S. Government obligations.
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$544,273,042) $864,651,640
- ---------------------------------------------------------
Receivables for:
Fund shares sold 1,412,054
- ---------------------------------------------------------
Dividends and interest 234,231
- ---------------------------------------------------------
Investment for deferred compensation plan 59,578
- ---------------------------------------------------------
Other assets 54,094
- ---------------------------------------------------------
Total assets 866,411,597
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 1,310,758
- ---------------------------------------------------------
Fund shares reacquired 893,691
- ---------------------------------------------------------
Deferred compensation plan 59,578
- ---------------------------------------------------------
Accrued advisory fees 445,444
- ---------------------------------------------------------
Accrued distribution fees 795,456
- ---------------------------------------------------------
Accrued transfer agent fees 122,322
- ---------------------------------------------------------
Accrued operating expenses 84,836
- ---------------------------------------------------------
Total liabilities 3,712,085
- ---------------------------------------------------------
Net assets applicable to shares outstanding $862,699,512
- ---------------------------------------------------------
NET ASSETS:
Class A $367,131,174
=========================================================
Class B $483,035,900
=========================================================
Class C $ 12,532,438
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 16,673,589
=========================================================
Class B 23,255,511
=========================================================
Class C 603,655
=========================================================
Class A:
Net asset value and redemption price per
share $ 22.02
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $22.02
divided by 94.50%) $ 23.30
=========================================================
Class B:
Net asset value and offering price per
share $ 20.77
=========================================================
Class C:
Net asset value and offering price per
share $ 20.76
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $40,336 foreign
withholding tax) $ 1,683,104
- ---------------------------------------------------------
Interest 1,362,932
- ---------------------------------------------------------
Total investment income 3,046,036
- ---------------------------------------------------------
EXPENSES:
Advisory fees 2,586,298
- ---------------------------------------------------------
Administrative services fees 51,241
- ---------------------------------------------------------
Custodian fees 34,434
- ---------------------------------------------------------
Transfer agent fees-Class A 212,070
- ---------------------------------------------------------
Transfer agent fees-Class B 427,442
- ---------------------------------------------------------
Transfer agent fees-Class C 12,825
- ---------------------------------------------------------
Trustees' fees 5,251
- ---------------------------------------------------------
Distribution fees-Class A 418,188
- ---------------------------------------------------------
Distribution fees-Class B 2,205,862
- ---------------------------------------------------------
Distribution fees-Class C 51,191
- ---------------------------------------------------------
Other 131,067
- ---------------------------------------------------------
Total expenses 6,135,869
- ---------------------------------------------------------
Less: Expenses paid indirectly (5,743)
- ---------------------------------------------------------
Net expenses 6,130,126
- ---------------------------------------------------------
Net investment (loss) (3,084,090)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT
SECURITIES, FOREIGN CURRENCIES AND FUTURES CONTRACTS:
Net realized gain from:
Investment securities 47,928,252
- ---------------------------------------------------------
Futures contracts 1,493,262
- ---------------------------------------------------------
49,421,514
- ---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 54,403,806
- ---------------------------------------------------------
Foreign currencies (116)
- ---------------------------------------------------------
Futures contracts (1,127,100)
- ---------------------------------------------------------
53,276,590
- ---------------------------------------------------------
Net gain from investment securities,
foreign currencies and futures
contracts 102,698,104
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $ 99,614,014
=========================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (3,084,090) $ (4,533,684)
- -------------------------------------------------------------------------------------------
Net realized gain from investment securities, futures and
options contracts 49,421,514 17,616,351
- -------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and futures contracts 53,276,590 148,755,001
- -------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 99,614,014 161,837,668
- -------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (8,360,767)
- -------------------------------------------------------------------------------------------
Class B -- (11,756,791)
- -------------------------------------------------------------------------------------------
Class C -- (234,011)
- -------------------------------------------------------------------------------------------
Share transactions-net:
Class A 3,853,936 (7,618,676)
- -------------------------------------------------------------------------------------------
Class B (169,797) (6,948,989)
- -------------------------------------------------------------------------------------------
Class C 2,754,589 6,185,419
- -------------------------------------------------------------------------------------------
Net increase in net assets 106,052,742 133,103,853
- -------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 756,646,770 623,542,917
- -------------------------------------------------------------------------------------------
End of period $862,699,512 $756,646,770
===========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $500,967,985 $494,529,257
- -------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (3,155,258) (71,168)
- -------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, futures and option contracts 44,508,150 (4,913,364)
- -------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and futures contracts 320,378,635 267,102,045
- -------------------------------------------------------------------------------------------
$862,699,512 $756,646,770
===========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Select Growth Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of nine separate series
portfolios, each having an unlimited number of shares of beneficial interest.
The Fund currently offers 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 shares 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 investment objective is to achieve long-term growth of capital by
investing primarily in the common stocks of established medium-to-large size
companies with prospects for above-average, long-term earnings growth.
Realization of current income is an incidental consideration.
The 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 -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular
day, the security is valued at the closing bid on that day. Each security
reported on the NASDAQ National Market System is valued at the last sales
price on the valuation date or, absent a last sales price, at the closing
bid price. Debt obligations (including convertible bonds) are valued on the
basis of prices provided by an independent
8
<PAGE> 11
pricing service. Prices provided by the pricing service may be determined
without exclusive reliance on quoted prices and may reflect appropriate
factors such as yield, type of issue, coupon rate and maturity date.
Securities for which market prices are not provided by any of the above
methods are valued based upon quotes furnished by independent sources and
are valued at the last bid price in the case of equity securities and in the
case of debt obligations, the mean between the last bid and asked prices.
Securities for which market quotations either are not readily available or
are questionable are valued at fair value as determined in good faith by or
under the supervision of the Trust's officers in a manner specifically
authorized by the Board of Trustees. Short-term obligations having 60 days
or less to maturity are valued at amortized cost which approximates market
value. Generally, trading in foreign securities is substantially completed
each day at various times prior to the close of the New York Stock Exchange.
The values of such securities used in computing the net asset value of the
Fund's shares are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of the New York Stock
Exchange. Occasionally, events affecting the values of such securities and
such exchange rates may occur between the times at which they are determined
and the close of the New York Stock Exchange which will not be reflected in
the computation of the Fund's net asset value. If events materially
affecting the value of such securities occur during such period, then these
securities will be valued at their fair value as determined in good faith by
or under the supervision of the Board of Trustees.
B. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions. The
Fund does not separately account for that portion of the results of
operations resulting from changes in foreign exchange rates on investments
and the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gain or loss from investments.
C. Foreign Currency Contracts -- A foreign currency contract is an obligation
to purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts.
D. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Distributions, if any,
are declared and paid annually.
E. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
F. Stock Index Futures Contracts -- The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities or cash as collateral for the
account of the broker (the Fund's agent in acquiring the futures position).
During the period the futures contracts are open, changes in the value of
the contracts are recognized as unrealized gains or losses by "marking to
market" on a daily basis to reflect the market value of the contracts at the
end of each day's trading. Variation margin payments are made or received
depending upon whether unrealized gains or losses are incurred. When the
contracts are closed, the Fund recognizes a realized gain or loss equal to
the difference between the proceeds from, or cost of, the closing
transaction and the Fund's basis in the contract. Risks include the
possibility of an illiquid market and the change in the value of the
contracts may not correlate with changes in the value of the Fund's
portfolio being hedged.
G. 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 0.80% of
the first $150 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $150 million.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to 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 $51,241 for such services.
The Fund, pursuant to a transfer agency and shareholder service agreement, has
agreed to pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer
agency and shareholder services to the Fund. During the six months ended June
30, 1999, AFS was paid $355,310 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,
9
<PAGE> 12
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 $418,188,
$2,205,862 and $51,191, respectively, as compensation under the Plans.
AIM Distributors received commissions of $89,563 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 $38,062 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 $2,614
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) and reductions in custodian
fees of $4,951 and $792, respectively, under expense offset arrangements. The
effect of the above arrangements resulted in a reduction of the Fund's total
expenses of $5,743 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%.
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
$123,009,396 and $143,089,241, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of June 30, 1999 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $331,514,167
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (11,135,569)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $320,378,598
=========================================================
Cost of investments for tax purposes is
$544,273,042.
</TABLE>
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 6,345,276 $ 127,806,375 31,005,519 $ 526,456,274
- -------------------------------------------------------------------------------
Class B 3,146,879 61,283,208 5,430,217 86,111,821
- -------------------------------------------------------------------------------
Class C 334,341 6,464,445 569,912 9,220,769
- -------------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A -- -- 444,090 7,953,651
- -------------------------------------------------------------------------------
Class B -- -- 649,261 11,017,972
- -------------------------------------------------------------------------------
Class C -- -- 13,022 220,846
- -------------------------------------------------------------------------------
Reacquired:
Class A (6,215,335) (123,952,439) (31,896,692) (542,028,601)
- -------------------------------------------------------------------------------
Class B (3,242,011) (61,453,005) (6,508,718) (104,078,782)
- -------------------------------------------------------------------------------
Class C (194,835) (3,709,856) (198,182) (3,256,196)
- -------------------------------------------------------------------------------
174,315 $ 6,438,728 (491,571) $ (8,382,246)
===============================================================================
</TABLE>
10
<PAGE> 13
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(a) 1996 1995(a) 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.35 $ 15.67 $ 14.78 $ 13.05 $ 10.32 $ 11.32
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (0.03) (0.04) 0.01 0.07 0.02 --
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 2.70 4.24 2.82 2.34 3.50 (0.57)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total from investment operations 2.67 4.20 2.83 2.41 3.52 (0.57)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income -- -- (0.01) -- -- --
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Distributions from net realized gains -- (0.52) (1.93) (0.68) (0.79) (0.43)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total distributions -- (0.52) (1.94) (0.68) (0.79) (0.43)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 22.02 $ 19.35 $ 15.67 $ 14.78 $ 13.05 $ 10.32
====================================================== ======== ======== ======== ======== ======== ========
Total return(b) 13.80% 27.09% 19.54% 18.61% 34.31% (4.99)%
====================================================== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $367,131 $320,143 $266,168 $227,882 $168,217 $123,271
====================================================== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.09%(c) 1.11% (1.13)% 1.18% 1.28% 1.22%
====================================================== ======== ======== ======== ======== ======== ========
Ratio of net investment income (loss) to average net
assets (0.63)%(c) (0.22)% (0.04)% 0.46% 0.20% 0.02%
====================================================== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 34% 68% 110% 97% 87% 201%
====================================================== ======== ======== ======== ======== ======== ========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and is not annualized for periods less than
one year.
(c) Ratios are annualized and based on average net assets of $337,322,540.
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------
DECEMBER 31,
JUNE 30, --------------------------------------------------------
1999 1998 1997(a) 1996 1995(a) 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.33 $ 14.98 $ 14.32 $ 12.77 $ 10.21 $ 11.31
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (0.11) (0.17) (0.13) (0.05) (0.08) (0.06)
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 2.55 4.04 2.72 2.28 3.43 (0.61)
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Total from investment operations 2.44 3.87 2.59 2.23 3.35 (0.67)
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net realized gains -- (0.52) (1.93) (0.68) (0.79) (0.43)
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Total distributions -- (0.52) (1.93) (0.68) (0.79) (0.43)
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 20.77 $ 18.33 $ 14.98 $ 14.32 $ 12.77 $ 10.21
===================================================== ======== ======== ======== ======== ======== ========
Total return(b) 13.31% 26.13% 18.50% 17.60% 33.00% (5.88)%
===================================================== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $483,036 $428,002 $356,186 $280,807 $138,034 $ 38,448
===================================================== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.91%(c) 1.93% 1.99% 2.03% 2.13% 2.18%
===================================================== ======== ======== ======== ======== ======== ========
Ratio of net investment income (loss) to average net
assets (1.44)%(c) (1.04)% (0.82)% (0.39)% (0.65)% (0.94)%
===================================================== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 34% 68% 110% 97% 87% 201%
===================================================== ======== ======== ======== ======== ======== ========
<CAPTION>
CLASS C
--------------------------------
DECEMBER 31,
JUNE 30, --------------------
1999(a) 1998(a) 1997(a)
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period $ 18.32 $ 14.98 $ 17.65
- ----------------------------------------------------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (0.11) (0.17) (0.04)
- ----------------------------------------------------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 2.55 4.03 (0.70)
- ----------------------------------------------------- -------- -------- --------
Total from investment operations 2.44 3.86 (0.74)
- ----------------------------------------------------- -------- -------- --------
Less distributions:
Distributions from net realized gains -- (0.52) (1.93)
- ----------------------------------------------------- -------- -------- --------
Total distributions -- (0.52) (1.93)
- ----------------------------------------------------- -------- -------- --------
Net asset value, end of period $ 20.76 $ 18.32 $ 14.98
===================================================== ======== ======== ========
Total return(b) 13.32% 26.07% (3.86)%
===================================================== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 12,532 $ 8,501 $ 1,189
===================================================== ======== ======== ========
Ratio of expenses to average net assets 1.91%(c) 1.93% 1.95%(d)
===================================================== ======== ======== ========
Ratio of net investment income (loss) to average net
assets (1.44)%(c) (1.04)% (0.77)%(d)
===================================================== ======== ======== ========
Portfolio turnover rate 34% 68% 110%
===================================================== ======== ======== ========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $444,828,469 and
$10,323,074 for Class B and Class C, respectively.
(d) Annualized.
11
<PAGE> 14
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director
ACE Limited; 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 State Street Bank and Trust Company
225 Franklin Street
Jack Fields Melville B. Cox Boston, MA 02110
Chief Executive Officer Vice President
Texana Global, Inc.; COUNSEL TO THE FUND
Formerly Member Karen Dunn Kelley
of the U.S. House of Representatives Vice President Ballard Spahr
Andrews & Ingersoll, LLP
Carl Frischling Edgar M. Larsen 1735 Market Street
Partner Vice President Philadelphia, PA 19103
Kramer, Levin, Naftalis & Frankel LLP
Mary J. Benson COUNSEL TO THE TRUSTEES
Robert H. Graham Assistant Vice President and
President and Chief Executive Officer Assistant Treasurer Kramer, Levin, Naftalis & Frankel LLP
A I M Management Group Inc. 919 Third Avenue
Sheri Morris New York, NY 10022
Prema Mathai-Davis Assistant Vice President and
Chief Executive Officer, YWCA of the U.S.A., Assistant Treasurer DISTRIBUTOR
Commissioner, New York City Dept. for
the Aging; and member of the Board of Directors, Renee A. Friedli A I M Distributors, Inc.
Metropolitan Transportation Authority of Assistant Secretary 11 Greenway Plaza
New York State Suite 100
P. Michelle Grace Houston, TX 77046
Lewis F. Pennock Assistant Secretary
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>
12
<PAGE> 15
AIM FUNDS(SM) KEEPS YOU POSTED ON YOUR INVESTMENT
We inform our shareholders about their investments with regular mailings
throughout the year. Here is a description of the documents you will receive
concerning your account and fund.
o DAILY CONFIRMATION STATEMENTS. A record of the transactions you initiate.
For example, if you transfer part or all of your investment from one AIM
fund to another, you will receive a statement confirming that the
transaction took place.
o QUARTERLY STATEMENTS. These show you how your account has performed over the
fiscal quarter and provide information on any applicable dividend payments.
Statement inserts that sometimes accompany these mailings may give specific
information about your fund or may contain educational information of
general interest.
o PROXY. As a shareholder of an AIM fund, you have the right to vote on any
change to a fund's published bylaws or objectives. If the fund's board of
directors proposes such a change, AIM will send a proxy to the shareholders.
The proxy allows you to direct an authorized person to cast your vote
according to your instructions. You can vote your proxy by mail, phone or
e-mail.
o PROSPECTUS. AIM sends you an updated version of your fund's prospectus every
year. Your prospectus contains valuable information about your fund's
objectives, risks, management and fees. Because this information is
important, you should keep your prospectus with your other fund records.
o ANNUAL AND SEMIANNUAL REPORTS. AIM fund reports are sent to you twice a
year, the semi-annual covering the first six months of the fiscal year for a
fund and the annual covering the entire fiscal year. These reports give you
an idea of how your fund performed compared to the market in general. The
reports also give you information about the holdings in your fund's
portfolio and how market conditions and management decisions have affected
your fund.
o YEAR-END TAX INFORMATION. This includes your year-end account statement,
cost-basis statement and any tax forms pertinent to your AIM account. The
tax forms report distributions you have received from your AIM funds,
redemptions or exchanges you have made and any contributions you have made
to tax-advantaged retirement accounts. It is important to retain the latter,
IRS Form 5498, if you need to track deductible vs. nondeductible IRA
contributions. The cost-basis statements are also important to retain
because they can be very useful for calculating capital gains or losses if
you use the "average basis single category" method of calculating cost
basis. Year-end tax information will be accompanied by tax communications
from AIM to help you fill out your tax forms. Your tax advisor can assist
you in sorting through your year-end statements and other tax
communications.
-------------------------------------
WE INFORM
OUR SHAREHOLDERS ABOUT
THEIR INVESTMENTS
WITH REGULAR MAILINGS
THROUGHOUT THE YEAR.
-------------------------------------
<PAGE> 16
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has
AIM Aggressive Growth Fund(1) AIM Money Market Fund provided leadership in the
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund mutual-fund industry since 1976 and
AIM Capital Development Fund managed approximately $121 billion in
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS assets for more than 6.3 million
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund shareholders, including individual
AIM Large Cap Growth Fund AIM Asian Growth Fund investors, corporate clients and
AIM Mid Cap Equity Fund(A) AIM Developing Markets Fund financial institutions, as of June
AIM Select Growth Fund AIM Europe Growth Fund 30, 1999.
AIM Small Cap Growth Fund(B) AIM European Development Fund
AIM Small Cap Opportunities Fund AIM International Equity Fund The AIM Family of Funds--Registered
AIM Value Fund AIM Japan Growth Fund Trademark-- is distributed
AIM Weingarten Fund AIM Latin American Growth Fund nationwide, and AIM today is the
AIM New Pacific Growth Fund 10th-largest mutual-fund complex in
GROWTH & INCOME FUNDS the United States in assets under
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS management, according to Strategic
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund Insight, an independent mutual-fund
AIM Advisor Real Estate Fund AIM Global Growth Fund monitor.
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--
