<PAGE> 1
AIM BALANCED FUND
CLASS A, CLASS B AND CLASS C SHARES
Supplement dated February 4, 2000
to the Prospectus dated May 3, 1999,
as revised October 5, 1999
At a meeting held on February 3, 2000, the Board of Trustees of AIM Funds Group
(the trust), on behalf of AIM Balanced Fund (the fund), voted to request
shareholders to approve the following items that will affect the fund:
- - A new advisory agreement between the trust and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services and
certain expense limitations that are no longer applicable, and (ii)
clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the fund
(except that the agreement permits the fund to pay a fee to AIM in
connection with any new securities lending program implemented in the
future);
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are
described in a supplement to the fund's statement of additional
information; and
- - Changing the fund's investment objective and making it
non-fundamental. The investment objective of the fund would be changed
by deleting references to the types of securities that the fund will
purchase to achieve its objective. If the investment objective of the
fund becomes non-fundamental, it can be changed in the future by the
Board of Trustees of the trust without further approval by
shareholders. Pursuant to this proposal, the fund's investment
objective would read: "The fund's investment objective is to achieve
as high a total return as possible, consistent with the preservation
of capital."
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be entitled
to vote at the meeting. Proposals that are approved are expected to become
effective on or about May 26, 2000.
<PAGE> 2
AIM GLOBAL UTILITIES FUND
CLASS A, CLASS B AND CLASS C SHARES
Supplement dated February 4, 2000
to the Prospectus dated May 3,1999,
as revised November 23, 1999
At a meeting held on February 3, 2000, the Board of Trustees of AIM Funds Group
(the trust), on behalf of AIM Global Utilities Fund (the fund), voted to
request shareholders to approve the following items that will affect the fund:
- - A new advisory agreement between the trust and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services and
certain expense limitations that are no longer applicable, and (ii)
the clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the fund
(except that the agreement permits the fund to pay a fee to AIM in
connection with any new securities lending program implemented in the
future);
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are
described in a supplement to the fund's statement of additional
information; and
- - Changing the fund's investment objective and making it non-fundamental.
The investment objective of the fund would be changed so that the
primary investment objective is total return, and by deleting
references to the types of securities that the fund will purchase to
achieve its objective. If the investment objective of the fund becomes
non-fundamental, it can be changed in the future by the Board of
Trustees of the trust without further approval by shareholders.
Pursuant to this proposal, the fund's investment objective would read:
The fund's investment objective is to achieve a high total return."
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be entitled
to vote at the meeting. Proposals that are approved are expected to become
effective on or about May 26, 2000.
<PAGE> 3
AIM HIGH YIELD FUND
CLASS A, CLASS B AND CLASS C SHARES
Supplement dated February 4, 2000
to the Prospectus dated May 3,1999,
as supplemented October 15, 1999
This supplement supersedes and replaces in its entirety the supplement dated
October 15, 1999.
At a meeting held on February 3, 2000, the Board of Trustees of AIM Funds Group
(the trust), on behalf of AIM High Yield Fund (the fund), voted to request
shareholders to approve the following items that will affect the fund:
- - An Agreement and Plan of Reorganization which provides for the
reorganization of the fund into a new series portfolio of AIM
Investment Securities Funds having the same investment objective and
policies;
- - A new advisory agreement between the trust and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services and
certain expense limitations that are no longer applicable, and (ii)
the clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the fund
(except that the agreement permits the fund to pay a fee to AIM in
connection with any new securities lending program implemented in the
future); and
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are
described in a supplement to the fund's statement of additional
information.
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be entitled
to vote at the meeting. Proposals that are approved are expected to become
effective on or about May 26, 2000.
In addition, the Board of Trustees of the trust approved on February 3, 2000 a
change to the fund's investment objective. The change would delete references
to the types of securities that the fund will purchase to achieve its
objective. Pursuant to this change, the fund's investment objective will read:
"The fund's investment objective is to achieve a high level of current income."
This change will become effective on or about May 26, 2000.
The following replaces in its entirety the second paragraph appearing under the
heading "INVESTMENT OBJECTIVE AND STRATEGIES" on page 1 of the Prospectus:
"The fund seeks to meet this objective by investing at least 65% of
the value of its assets in lower-quality debt securities, i.e., "junk
bonds." The fund will principally invest in junk bonds rated B or above by
Moody's Investors Service, Inc. or Standard & Poor's Ratings Services or
deemed by the portfolio managers to be of comparable quality. The fund will
invest at least 80% of its total assets in debt securities, including
convertible debt securities and/or cash or cash equivalents. The fund may
also invest in preferred stock. The fund may invest up to 25% of its total
assets in foreign securities."
The following replaces in its entirety the fourth full paragraph appearing
under the heading "INVESTMENT OBJECTIVE AND STRATEGIES" on page 1 of the
Prospectus:
"In anticipation of or in response to adverse market conditions, for
cash management purposes, or for defensive purposes, the fund may
temporarily hold all or a portion of its assets in cash, money market
instruments, shares of affiliated money market funds, bonds or other debt
securities. As a result, the fund may not achieve its investment
objective."
<PAGE> 4
The following new section is added immediately after the section entitled
"SHAREHOLDER INFORMATION--REDEEMING SHARES--REDEMPTION OF AIM CASH RESERVE
SHARES OF AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE" on Page A-4 of the
Prospectus:
"REDEMPTION OF CLASS B SHARES OR CLASS C SHARES ACQUIRED BY EXCHANGE FROM
AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND
We will begin the holding period for purposes of calculating the CDSC on
Class B shares or Class C shares acquired by exchange from AIM Cash Reserve
Shares of AIM Money Market Fund at the time of the exchange into Class B
shares or Class C shares."
The following replaces in its entirety the first paragraph under the heading
"SHAREHOLDER INFORMATION-EXCHANGING SHARES-PERMITTED EXCHANGES" on Page A-6 of
the Prospectus:
"Except as otherwise stated below, you may exchange your shares for
shares of the same class of another AIM Fund. You may exchange AIM Cash
Reserve Shares of AIM Money Market Fund for Class A shares of another AIM
Fund, or vice versa. You also may exchange AIM Cash Reserve Shares of AIM
Money Market Fund for Class B shares or Class C shares of another AIM Fund,
but only if the AIM Cash Reserve Shares were purchased directly and not
acquired by exchange. You may be required to pay an initial sales charge
when exchanging from a Fund with a lower initial sales charge than the one
into which you are exchanging. If you exchange from Class A shares not
subject to a CDSC into Class A shares subject to those charges, you will be
charged a CDSC when you redeem the exchanged shares. The CDSC charged on
redemption of those shares will be calculated starting on the date you
acquired those shares through exchange. "
A new paragraph (5) is added under the heading "SHAREHOLDER
INFORMATION-EXCHANGING SHARES-PERMITTED EXCHANGES-YOU WILL NOT PAY A SALES
CHARGE WHEN EXCHANGING:" on Page A-6 of the Prospectus, and the new paragraph
(5) reads as follows:
"(5) AIM Cash Reserve Shares of AIM Money Market Fund for Class B shares
and Class C shares."
The following replaces in its entirety the information appearing under the
heading "SHAREHOLDER INFORMATION--EXCHANGING SHARES-EXCHANGE CONDITIONS" on
page A-6 of the prospectus:
"The following conditions apply to all exchanges:
o You must meet the minimum purchase requirements for the AIM Fund into
which you are exchanging;
o Shares of the AIM Fund you wish to acquire must be available for sale
in your state of residence;
o Exchanges must be made between accounts with identical registration
information;
o The account you wish to exchange from must have a certified tax
identification number (or the Fund has received an appropriate Form W-8 or
W-9);
o Shares must have been held for at least one day prior to the exchange;
o If you have physical share certificates, you must return them to the
transfer agent prior to the exchange; and
o You are limited to a maximum of 10 exchanges per calendar year, because
excessive short-term trading or market-timing activity can hurt fund
performance. If you exceed that limit, or if an AIM Fund or the
distributor determines, in its sole discretion, that your short-term
trading is excessive or that you are engaging in market-timing activity,
it may reject any additional exchange orders. An exchange is the movement
out of (redemption) one AIM Fund and into (purchase) another AIM Fund."
<PAGE> 5
AIM INCOME FUND
CLASS A, CLASS B AND CLASS C SHARES
Supplement dated February 4, 2000
to the Prospectus dated May 3,1999,
as revised October 7, 1999
At a meeting held on February 3, 2000, the Board of Trustees of AIM Funds Group
(the trust), on behalf of AIM Income Fund (the fund), voted to request
shareholders to approve the following items that will affect the fund:
- - An Agreement and Plan of Reorganization which provides for the
reorganization of the fund into a new series portfolio of AIM
Investment Securities Funds having the same investment objective and
policies;
- - A new advisory agreement between the trust and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services and
certain expense limitations that are no longer applicable, and (ii)
the clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the fund
(except that the agreement permits the fund to pay a fee to AIM in
connection with any new securities lending program implemented in the
future);
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are
described in a supplement to the fund's statement of additional
information; and
- - Changing the fund's investment objective and making it
non-fundamental. The investment objective of the fund would be changed
by deleting references to the types of securities that the fund will
purchase to achieve its objective. If the investment objective of the
fund becomes non-fundamental, it can be changed in the future by the
Board of Trustees of the trust without further approval by
shareholders. Pursuant to this proposal, the fund's investment
objective would read: "The fund's investment objective is to achieve a
high level of current income consistent with reasonable concern for
safety of principal."
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be entitled
to vote at the meeting. Proposals that are approved are expected to become
effective on or about May 26, 2000.
<PAGE> 6
AIM INTERMEDIATE GOVERNMENT FUND
CLASS A, CLASS B AND CLASS C SHARES
Supplement dated February 4, 2000
to the Prospectus dated May 3,1999,
as supplemented October 1, 1999
This supplement supersedes and replaces in its entirety the supplement
dated October 1, 1999.
At a meeting held on February 3, 2000, the Board of Trustees of AIM Funds
Group (the trust), on behalf of AIM Intermediate Government Fund (the
fund), voted to request shareholders to approve the following items that
will affect the fund:
- - An Agreement and Plan of Reorganization which provides for the
reorganization of the fund into a new series portfolio of AIM
Investment Securities Funds having the same investment objective
and policies;
- - A new advisory agreement between the company and A I M Advisors,
Inc. (AIM). The principal changes to the advisory agreement are
(i) the deletion of references to the provision of administrative
services and certain expense limitations that are no longer
applicable, and (ii) the clarification of provisions relating to
delegations of responsibilities and the non-exclusive nature of
AIM's services. The revised advisory agreement does not change
the fees paid by the fund (except that the agreement permits the
fund to pay a fee to AIM in connection with any new securities
lending program implemented in the future);
- - Changing the fund's fundamental investment restrictions. The
proposed revisions to the fund's fundamental investment
restrictions are described in a supplement to the fund's
statement of additional information; and
- - Changing the fund's investment objective and making it
non-fundamental. The investment objective of the fund would be
changed by deleting references to the types of securities that
the fund will purchase to achieve its objective. If the
investment objective of the fund becomes non-fundamental, it can
be changed in the future by the Board of Trustees of the trust
without further approval by shareholders. Pursuant to this
proposal, the fund's investment objective would read: "The fund's
investment objective is to achieve a high level of current income
consistent with reasonable concern for safety of principal."
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be
entitled to vote at the meeting. Proposals that are approved are expected
to become effective on or about May 26, 2000.
Effective October 1, 1999, the following replaced in its entirety the
fourth full paragraph appearing under the heading "INVESTMENT OBJECTIVE AND
STRATEGIES" on page 1 of the Prospectus:
"In anticipation of or in response to adverse market conditions,
for cash management purposes, or for defensive purposes, the fund may
temporarily hold all or a portion of its assets in cash, money market
instruments, shares of affiliated money market funds, bonds or other
debt securities. As a result, the fund may not achieve its investment
objective."
The following replaces in its entirety the information appearing under the
heading "FUND MANAGEMENT-PORTFOLIO MANAGERS" on page 4 of the Prospectus:
"The advisor uses a team approach to investment management. The
individual members of the team who are primarily responsible for the
day-to-day management of the fund's portfolio, all of whom are
officers of A I M Capital Management, Inc., a wholly owned subsidiary
of the advisor, are
o Laurie F. Brignac, Portfolio Manager, who has been responsible for
the fund since 1999 and has been associated with the advisor and/or its
affiliates since 1992.
<PAGE> 7
o Karen Dunn Kelley, Senior Portfolio Manager, who has been
responsible for the fund since 1992 and has been associated with the
advisor and/or its affiliates since 1989.
o Scot W. Johnson, Senior Portfolio Manager, who has been responsible
for the fund since 1998 and has been associated with the advisor and/or
its affiliates since 1994."
The following new section is added immediately after the section entitled
"SHAREHOLDER INFORMATION-REDEEMING SHARES-REDEMPTION OF AIM CASH RESERVE
SHARES OF AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE" on Page A-4 of the
Prospectus:
"REDEMPTION OF CLASS B SHARES OR CLASS C SHARES ACQUIRED BY EXCHANGE
FROM AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND
We will begin the holding period for purposes of calculating the
CDSC on Class B shares or Class C shares acquired by exchange from AIM
Cash Reserve Shares of AIM Money Market Fund at the time of the
exchange into Class B shares or Class C shares."
The following replaces in its entirety the first paragraph under the
heading "SHAREHOLDER INFORMATION-EXCHANGING SHARES-PERMITTED EXCHANGES" on
Page A-6 of the Prospectus:
"Except as otherwise stated below, you may exchange your shares for
shares of the same class of another AIM Fund. You may exchange AIM
Cash Reserve Shares of AIM Money Market Fund for Class A shares of
another AIM Fund, or vice versa. You also may exchange AIM Cash
Reserve Shares of AIM Money Market Fund for Class B shares or Class C
shares of another AIM Fund, but only if the AIM Cash Reserve Shares
were purchased directly and not acquired by exchange. You may be
required to pay an initial sales charge when exchanging from a Fund
with a lower initial sales charge than the one into which you are
exchanging. If you exchange from Class A shares not subject to a CDSC
into Class A shares subject to those charges, you will be charged a
CDSC when you redeem the exchanged shares. The CDSC charged on
redemption of those shares will be calculated starting on the date you
acquired those shares through exchange. "
A new paragraph (5) is added under the heading "SHAREHOLDER
INFORMATION-EXCHANGING SHARES-PERMITTED EXCHANGES-YOU WILL NOT PAY A SALES
CHARGE WHEN EXCHANGING:" on Page A-6 of the Prospectus, and the new
paragraph (5) reads as follows:
"(5)AIM Cash Reserve Shares of AIM Money Market Fund for Class B
shares and Class C shares."
The following replaces in its entirety the information appearing under the
heading "SHAREHOLDER INFORMATION-EXCHANGING SHARES-EXCHANGE CONDITIONS" on
page A-6 of the prospectus:
"The following conditions apply to all exchanges:
o You must meet the minimum purchase requirements for the AIM Fund
into which you are exchanging;
o Shares of the AIM Fund you wish to acquire must be available for
sale in your state of residence;
o Exchanges must be made between accounts with identical registration
information;
o The account you wish to exchange from must have a certified tax
identification number (or the Fund has received an appropriate
Form W-8 or W-9);
o Shares must have been held for at least one day prior to
the exchange;
o If you have physical share certificates, you must return them to the
transfer agent prior to the exchange; and
o You are limited to a maximum of 10 exchanges per calendar year,
because excessive short-term trading or market-timing activity can
hurt fund performance. If you exceed that limit, or if an AIM Fund or
the distributor determines, in its sole discretion, that your
short-term trading is excessive or that you are engaging in
market-timing activity, it may reject any additional exchange orders.
An exchange is the movement out of (redemption) one AIM Fund and into
(purchase) another AIM Fund.
<PAGE> 8
AIM MONEY MARKET FUND
AIM CASH RESERVE SHARES, CLASS B AND CLASS C SHARES
Supplement dated February 4, 2000
to the Prospectus dated May 3, 1999,
as revised November 24, 1999
At a meeting held on February 3, 2000, the Board of Trustees of AIM Funds Group
(the trust), on behalf of AIM Money Market Fund (the fund), voted to request
shareholders to approve the following items that will affect the fund:
- - An Agreement and Plan of Reorganization which provides for the
reorganization of the fund into a new series portfolio of AIM
Investment Securities Funds having the same investment objective and
policies;
- - A new advisory agreement between the trust and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services and
certain expense limitations that are no longer applicable, and (ii)
the clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the fund
(except that the agreement permits the fund to pay a fee to AIM in
connection with any new securities lending program implemented in the
future);
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are
described in a supplement to the fund's statement of additional
information; and
- - Changing the fund's investment objective so that it is
non-fundamental. If the investment objective of the fund becomes
non-fundamental, it can be changed in the future by the Board of
Trustees of the trust without further approval by shareholders.
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be entitled
to vote at the meeting. Proposals that are approved are expected to become
effective on or about May 26, 2000.
<PAGE> 9
AIM MUNICIPAL BOND FUND
CLASS A, CLASS B AND CLASS C SHARES
Supplement dated February 4, 2000
to the Prospectus dated May 3, 1999
At a meeting held on February 3, 2000, the Board of Trustees of AIM Funds Group
(the trust), on behalf of AIM Municipal Bond Fund (the fund), voted to request
shareholders to approve the following items that will affect the fund:
- - An Agreement and Plan of Reorganization which provides for the
reorganization of the fund into a new series portfolio of AIM
Investment Securities Funds having the same investment objective and
policies;
- - A new advisory agreement between the trust and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services and
certain expense limitations that are no longer applicable, and (ii)
the clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the fund
(except that the agreement permits the fund to pay a fee to AIM in
connection with any new securities lending program implemented in the
future);
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are
described in a supplement to the fund's statement of additional
information; and
- - Changing the fund's investment objective and making it non-fundamental.
The investment objective of the fund would be changed by deleting
references to the types of securities that the fund will purchase to
achieve its objective. If the investment objective of the fund becomes
non-fundamental, it can be changed in the future by the Board of
Trustees of the trust without further approval by shareholders.
Pursuant to this proposal, the fund's investment objective would read:
"The fund's investment objective is to achieve a high level of current
income exempt from federal income taxes, consistent with the
preservation of principal."
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be entitled
to vote at the meeting. Proposals that are approved are expected to become
effective on or about May 26, 2000.
<PAGE> 10
AIM SELECT GROWTH FUND
CLASS A, CLASS B AND CLASS C SHARES
Supplement dated February 4, 2000
to the Prospectus dated May 3, 1999
as revised October 12, 1999
At a meeting held on February 3, 2000, the Board of Trustees of AIM Funds Group
(the trust), on behalf of AIM Select Growth Fund (the fund), voted to request
shareholders to approve the following items that will affect the fund:
- - A new advisory agreement between the trust and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services and
certain expense limitations that are no longer applicable, and (ii)
the clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the fund
(except that the agreement permits the fund to pay a fee to AIM in
connection with any new securities lending program implemented in the
future);
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are
described in a supplement to the fund's statement of additional
information; and
- - Changing the fund's investment objective and making it non-fundamental.
The investment objective of the fund would be changed so that the fund
may invest without regard to market capitalization, and by deleting
references to the types of securities that the fund will purchase to
achieve its objective. If the investment objective of the fund becomes
non-fundamental, it can be changed in the future by the Board of
Trustees of the trust without further approval by shareholders.
Pursuant to this proposal, the fund's investment objective would read:
"The fund's investment objective is to achieve long-term growth of
capital."
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be entitled
to vote at the meeting. Proposals that are approved are expected to become
effective on or about May 26, 2000.
<PAGE> 11
AIM VALUE FUND
CLASS A, CLASS B AND CLASS C SHARES
Supplement dated February 4, 2000
to the Prospectus dated May 3, 1999,
as revised October 13, 1999
At a meeting held on February 3, 2000, the Board of Trustees of AIM Funds Group
(the trust), on behalf of AIM Value Fund (the fund), voted to request
shareholders to approve the following items that will affect the fund:
- - A new advisory agreement between the trust and A I M Advisors, Inc.
(AIM). The principal changes to the advisory agreement are (i) the
deletion of references to the provision of administrative services and
certain expense limitations that are no longer applicable, and (ii)
clarification of provisions relating to delegations of
responsibilities and the non-exclusive nature of AIM's services. The
revised advisory agreement does not change the fees paid by the fund
(except that the agreement permits the fund to pay a fee to AIM in
connection with any new securities lending program implemented in the
future);
- - Changing the fund's fundamental investment restrictions. The proposed
revisions to the fund's fundamental investment restrictions are
described in a supplement to the fund's statement of additional
information; and
- - Changing the fund's investment objectives and making them
non-fundamental. The investment objectives of the fund would be
changed by deleting references to the types of securities that the
fund will purchase to achieve its objectives. If the investment
objectives of the fund become non-fundamental, they can be changed in
the future by the Board of Trustees of the trust without further
approval by shareholders. Pursuant to this proposal, the fund's
investment objectives would read: "The fund's investment objective is
to achieve long-term growth of capital. Income is a secondary
objective."
The Board of Trustees of the trust has called a meeting of the fund's
shareholders to be held on or about May 3, 2000 to vote on these and other
proposals. Only shareholders of record as of February 18, 2000 will be entitled
to vote at the meeting. Proposals that are approved are expected to become
effective on or about May 26, 2000.
<PAGE> 12
AIM BALANCED FUND
AIM GLOBAL UTILITIES FUND
AIM HIGH YIELD FUND
AIM INCOME FUND
AIM INTERMEDIATE GOVERNMENT FUND
AIM MONEY MARKET FUND
AIM MUNICIPAL BOND FUND
AIM SELECT GROWTH FUND
AIM VALUE FUND
(SERIES PORTFOLIOS OF AIM FUNDS GROUP)
Supplement dated February 4, 2000 to
the Statement of Additional Information dated May 3, 1999,
as revised October 1, 1999 and supplemented January 24, 2000
At a meeting held on February 3, 2000, the Board of Trustees of AIM Funds Group
(the "Trust"), on behalf of its series portfolios (the "Funds"), voted to
request shareholder approval to amend the Funds' fundamental investment
restrictions. The Board of Trustees has called a meeting of the Funds'
shareholders to be held on or about May 3, 2000. Only shareholders of record as
of February 18, 2000 are entitled to vote at the meeting. Proposals that are
approved are expected to become effective on or about May 26, 2000.
If shareholders approve the proposal to amend the Funds' fundamental investment
restrictions, each of AIM Balanced Fund, AIM Global Utilities Fund, AIM High
Yield Fund, AIM Income Fund, AIM Intermediate Government Fund, AIM Money Market
Fund, AIM Municipal Bond Fund, AIM Select Growth Fund and AIM Value Fund will
operate under the following fundamental investment restrictions:
Each Fund is subject to the following investment restrictions, which may be
changed only by a vote of a majority of such Fund's outstanding shares, except
that AIM Global Utilities Fund is not subject to restrictions (a) or (d):
(a) The Fund is a "diversified company" as defined in the 1940 Act.
The Fund will not purchase the securities of any issuer if, as a result,
the Fund would fail to be a diversified company within the meaning of the
1940 Act, and the rules and regulations promulgated thereunder, as such
statute, rules and regulations are amended from time to time or are
interpreted from time to time by the SEC staff (collectively, the 1940 Act
laws and interpretations) or except to the extent that the Fund may be
permitted to do so by exemptive order or similar relief (collectively, with
the 1940 Act laws and interpretations, the 1940 Act laws, interpretations
and exemptions). In complying with this restriction, however, the Fund may
purchase securities of other investment companies to the extent permitted
by the 1940 Act laws, interpretations and exemptions.
(b) The Fund may not borrow money or issue senior securities, except
as permitted by the 1940 Act laws, interpretations and exemptions.
(c) The Fund may not underwrite the securities of other issuers. This
restriction does not prevent the Fund from engaging in transactions
involving the acquisition, disposition or resale of its portfolio
securities, regardless of whether the Fund may be considered to be an
underwriter under the Securities Act of 1933.
(d) The Fund will not make investments that will result in the
concentration (as that term may be defined or interpreted by the 1940 Act
laws, interpretations and exemptions) of its investments in the securities
of issuers primarily engaged in the same industry. This restriction does
not limit the Fund's investments in (i) obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities, (ii) tax-exempt
obligations issued by governments or political subdivisions of governments,
or (iii) for AIM Money Market Fund, bank instruments. In complying with
this restriction, the Fund will not consider a bank-issued guaranty or
financial guaranty insurance as a separate security.
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(e) The Fund may not purchase real estate or sell real estate unless
acquired as a result of ownership of securities or other instruments. This
restriction does not prevent the Fund from investing in issuers that
invest, deal, or otherwise engage in transactions in real estate or
interests therein, or investing in securities that are secured by real
estate or interests therein.
(f) The Fund may not purchase physical commodities or sell physical
commodities unless acquired as a result of ownership of securities or other
instruments. This restriction does not prevent the Fund from engaging in
transactions involving futures contracts and options thereon or investing
in securities that are secured by physical commodities.
(g) The Fund may not make personal loans or loans of its assets to
persons who control or are under common control with the Fund, except
to the extent permitted by 1940 Act laws, interpretations and exemptions.
This restriction does not prevent the Fund from, among other things,
purchasing debt obligations, entering into repurchase agreements, loaning
its assets to broker-dealers or institutional investors, or investing in
loans, including assignments and participation interests.
(h) The Fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the same
fundamental investment objectives, policies and restrictions as the Fund.
AIM Global Utilities Fund will concentrate (as such term may be
defined or interpreted by the 1940 Act laws, interpretations and exemptions) its
investments in the securities of domestic and foreign public utility companies.
The investment restrictions set forth above provide the Funds with the ability
to operate under new interpretations of the 1940 Act or pursuant to exemptive
relief from the SEC without receiving prior shareholder approval of the change.
Even though the Funds have this flexibility, the Board of Trustees has adopted
internal guidelines for each Fund relating to certain of these restrictions
which the advisor must follow in managing the Funds. Any changes to these
guidelines, which are set forth below, require the approval of the Board of
Trustees.
1. In complying with the fundamental restriction regarding issuer
diversification, the Fund will not, with respect to 75% of its total
assets (and for AIM Money Market Fund with respect to 100% of its
total assets), purchase securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities), if, as a result, (i) more than 5% of
the Fund's total assets would be invested in the securities of that
issuer, except as permitted by Rule 2a-7 under the 1940 Act, or (ii)
the Fund would hold more than 10% of the outstanding voting securities
of that issuer. The Fund may (i) purchase securities of other
investment companies as permitted by Section 12(d)(1) of the 1940 Act
and (ii) invest its assets in securities of other money market funds
and lend money to other investment companies and their series
portfolios that have AIM as an investment advisor, subject to the
terms and conditions of any exemptive orders issued by the SEC.
2. In complying with the fundamental restriction regarding borrowing
money and issuing senior securities, the Fund may borrow money in an
amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). The Fund may
borrow from banks, broker/dealers or other investment companies or
their series portfolios that have AIM or an affiliate of AIM as an
investment advisor (an AIM fund). The Fund may not borrow for
leveraging, but may borrow for temporary or emergency purposes, in
anticipation of or in response to adverse market conditions, or for
cash management purposes. The Fund may not purchase additional
securities when any borrowings from banks exceed 5% of the Fund's
total assets.
3. In complying with the fundamental restriction regarding industry
concentration, the Fund may invest up to 25% of its total assets in
the securities of issuers whose principal business activities are in
the same industry (this guideline does not apply to AIM Global
Utilities Fund).
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4. In complying with the fundamental restriction with regard to making
loans, the Fund may lend up to 33 1/3% of its total assets and may
lend money to another AIM fund, on such terms and conditions as the
SEC may require in an exemptive order.
5. Notwithstanding the fundamental restriction with regard to investing
all assets in an open-end fund, the Fund may not invest all of its
assets in the securities of a single open-end management investment
company with the same fundamental investment objectives, policies and
limitations as the Fund.
If a percentage restriction is adhered to at the time of investment, a later
change in percentage resulting from changes in values of assets will not be
considered a violation of the restriction.
Effective immediately, the following new section is added after the paragraph
appearing under the heading "Investment Strategies and Risks - Borrowing" on
page 24 of the Statement of Additional Information:
"EQUITY-LINKED DERIVATIVES
AIM BALANCED FUND, AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND
AND AIM VALUE FUND may invest in equity-linked derivative products designed
to replicate the composition and performance of particular indices.
Examples of such products include S&P Depositary Receipts ("SPDRs"), World
Equity Benchmark Series ("WEBs"), NASDAQ 100 tracking shares ("QQQs"), Dow
Jones Industrial Average Instruments ("DIAMONDS") and Optomised Portfolios
as Listed Securities ("OPALS"). Investments in equity-linked derivatives
involve the same risks associated with a direct investment in the types of
securities included in the indices such products are designed to track.
There can be no assurance that the trading price of the equity-linked
derivatives will equal the underlying value of the basket of securities
purchased to replicate a particular index or that such basket will
replicate the index. Investments in equity-linked derivatives may
constitute investment in other investment companies. See "Investment in
Other Investment Companies."
Effective immediately, the following paragraph replaces in its entirety the
paragraph appearing under the heading "Investment Strategies and Risks -
Investment in Other Investment Companies" on page 25 of the Statement of
Additional Information:
"Each of the Funds may invest in other investment companies to the
extent permitted by the 1940 Act, and rules and regulations thereunder, and
if applicable, exemptive orders granted by the SEC. The following
restrictions apply to investments in other investment companies other than
Affiliated Money Market Funds (defined below): (i) a Fund may not purchase
more than 3% of the total outstanding voting stock of another investment
company; (ii) a Fund may not invest more than 5% of its total assets in
securities issued by another investment company; and (iii) a Fund may not
invest more than 10% of its total assets in securities issued by other
investment companies other than Affiliated Money Market Funds. With respect
to a Fund's purchase of shares of another investment company, including
Affiliated Money Market Funds, the Fund will indirectly bear its
proportionate share of the advisory fees and other operating expenses of
such investment company. The Funds have obtained an exemptive order from
the SEC allowing them to invest in money market funds that have AIM or an
affiliate of AIM as an investment advisor (the "Affiliated Money Market
Funds"), provided that investments in Affiliated Money Market Funds do not
exceed 25% of the total assets of such Fund. With respect to a Fund's
purchase of shares of the Affiliated Money Market Funds, the Fund will
indirectly pay the advisory fees and other operating expenses of the
Affiliated Money Market Funds."
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