<PAGE> 1
SEMIANNUAL REPORT / JUNE 30 2000
AIM BALANCED FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[ COVER IMAGE ]
-------------------------------------
TWO BLUE DANCERS BY EDGAR DEGAS
WHEN SUCCESSFUL PERFORMANCE DEPENDS ON SUPERB BALANCE
AND SMOOTHLY COORDINATED INTERACTION, DISCIPLINE IS PARAMOUNT.
AT AIM, WE CONTINUALLY STRIVE FOR EXCELLENCE BY ADHERING TO A
UNIQUELY DISCIPLINED INVESTMENT STYLE.
-------------------------------------
AIM Balanced Fund is for shareholders who seek a high total return consistent
with preservation of capital.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Balanced Fund's performance figures are historical, and they reflect the
reinvestment of distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 4.75% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B and Class C shares will differ from
that of its Class A shares due to different sales-charge structure and class
expenses.
o Had fees and expenses not been waived in the past, returns for Class A
shares would have been lower.
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.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Standard & Poor's Composite of 500 Stocks (the S&P 500)
represents the performance of the stock market.
o An investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends, and they do not reflect sales charges.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN
INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE
SHOWN.
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/00, including sales charges
================================================================================
CLASS A SHARES
10 years 14.78%
5 years 17.17%
1 year 10.02%*
* 15.49% excluding sales charges
Class B shares
Inception (10/18/93) 13.76%
5 years 17.16%
1 year 9.58%*
* 14.57% excluding sales charges
Class C shares
Inception (8/4/97) 12.28%
1 year 13.56%*
* 14.56% excluding sales charges
================================================================================
Past performance cannot guarantee comparable future results.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF
YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the fund.
AIM BALANCED FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
When we started AIM in 1976, we had only a table, two chairs
[PHOTO OF and a telephone. At the time, Bob Graham, Gary Crum and I
Charles T. had the idea of creating a mutual fund company that put
Bauer, people first. Our slogan, "people are the product," means
Chairman of that people--our employees and our investors--are our
the Board of company.
THE FUND Almost a quarter-century later, we've grown to more than
APPEARS HERE] eight million investors, $176 billion in assets under
management and 55 retail funds. Over that time, the industry
[PHOTO OF as a whole has grown from $51 billion in assets to more than
Robert H. $7 trillion today. I never dreamed we would see such
Graham phenomenal growth. You are the main reason for our success,
APPEARS HERE] and I want you to know how much I appreciate your loyalty
and trust over the past 24 years.
Usually in this letter I review market activity during
the period covered by the report. This time, I'd just like
to say thank you. I am retiring as chairman of the AIM Funds effective September
30, and as chairman of AIM effective December 31, 2000. Bob Graham, whose
picture appears under mine, will succeed me as AIM's chairman and chairman of
the AIM Funds. Gary Crum will remain president of A I M Capital Management,
Inc., leading our investment division. I am enormously proud to leave AIM in
such capable hands.
I'm also very proud of our team of employees, now more than 2,500 strong.
Because of their collective commitment to excellence and ethical business
practices, AIM has earned the trust of investors and financial advisors alike.
And every employee, from portfolio managers to client services representatives,
is dedicated to serving our shareholders.
Rest assured that nothing at AIM will change because of my retirement. You
can still depend on this company to manage your money responsibly and provide
you with top-notch service. As chairman of AIM and chairman of the AIM Funds,
Bob is committed to preserving the things that have made AIM great in the past
and positioning it to succeed in the future. And Gary is dedicated to
maintaining the quality and long-term performance you've come to expect from
AIM.
In the pages that follow, the managers of your fund comment on recent market
activity, how they have managed your fund over the past six months and their
outlook for the coming months. We trust you will find their comments helpful.
If you have any questions or comments, please contact us through our Web
site, www.aimfunds.com, or call our Client Services department at 800-959-4246
during normal business hours. Information about your account is available at our
Web site and on our automated AIM Investor Line, 800-246-5463.
Thank you again for the support and trust you've shown us. I feel privileged
to have helped you with your financial goals, and I wish you success in all your
endeavors.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Advisors, Inc.
AIM BALANCED FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
AIM BALANCED FUND SAILS OVER ROUGH MARKETS
HOW DID THE FUND PERFORM FOR THE FIRST HALF OF 2000?
Despite the turbulent environment that plagued both stocks and bonds, the fund
succeeded in beating the broad stock market, as represented by the S&P 500. That
index dropped into negative numbers, ending the period with a return of -0.43%.
The fund, in contrast, produced cumulative total returns (excluding sales
charges) of 1.89% for Class A shares, 1.51% for Class B shares and 1.47% for
Class C shares. This is impressive performance for a fund that keeps 40% of its
assets in fixed-income securities.
WHAT FACTORS CREATED SUCH A VOLATILE PERIOD IN THE MARKET?
In the stock market, a serious correction occurred in March and April. Though
definitely affected, the fund avoided the worst of the carnage, as it was not
heavily involved with the parts of the technology sector that suffered the worst
declines. The fund's technology holdings had been selected on the basis of good
earnings growth, and while some of them experienced drops in value at the time,
their earnings continued to be strong, and their values have already begun to
bounce back.
For most bonds, the difficulty was rising interest rates. In May, the
Federal Reserve Board (the Fed) raised the federal funds rate to 6.5%, its
highest level in nine years. This marks the sixth time the Fed has raised the
rate since it began its tightening drive in June 1999. As new bonds are issued
at higher interest rates, the value of existing bonds declines, cutting into
portfolio returns. This year the situation was worsened by a very unusual event:
Capitalizing on the recent federal budget surplus, the Treasury Department
initiated a program of buying back 30-year Treasury bonds to reduce the federal
debt. This created a shortage of long-term Treasury bonds, driving their prices
up and their yields below those of shorter-term instruments, a condition called
an inverted yield curve.
HOW DID THE FUND DEAL WITH THE TURBULENCE?
The fund remained focused on its proven strategy of holding 60% stocks and 40%
bonds. Its broadly diversified portfolio helped moderate the effects of market
turbulence. In addition, the flexibility to invest in stocks across all
market-capitalization ranges has bolstered stability, as small- and mid-cap
stocks have been performing better than large-caps since the correction in
technology-oriented stocks.
================================================================================
PORTFOLIO COMPOSITION
As of 6/30/00, based on total net assets
<TABLE>
<CAPTION>
==================================================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 FIXED-INCOME HOLDINGS
----------------------------------------------------------------------------------------------------------------------------------
COUPON MATURITY PERCENT
<S> <C> <C> <C> <C> <C>
1. SDL, Inc. 1.30% 1. Veritas Software Corp., Conv. Unsec. Disc. Notes 1.86% 08/13/06 0.84%
2. EMC Corp. 1.27 2. NBD Bank N.A. Michigan Putable Sub. Deb. 8.25% 11/01/24 0.47%
3. Pfizer Inc. 1.26 3. General Electric Capital Corp.- 7.38% 01/19/10 0.43%
Series A, Medium Term Notes
4. Cisco Systems, Inc. 1.20 4. Continental Cablevision, Inc., Sr. Deb. 9.50% 08/01/13 0.41%
5. Infospace.com, Inc. 1.09 5. Time Warner Inc., Deb. 9.13% 01/15/13 0.40%
6. Sun Microsystems, Inc. 1.04 6. General Motors Acceptance Corp., Notes 5.75% 11/10/03 0.39%
7. Qwest Communications International, Inc. 0.88 7. Niagara Mohawk Holdings, Inc.- 7.75% 10/01/08 0.37%
Ser. G Sr. Unsec. Note
8. Quanta Services, Inc. 0.86 8. British Sky Broadcasting Group PLC 8.20% 07/15/09 0.36%
(United Kingdom) Sr. Unsec. Gtd. Yankee Notes
9. Univision Communications, Inc. - Class A 0.84 9. AT&T Corp., Deb. 8.63% 12/01/31 0.34%
10. Intel Corp. 0.83 10. Beaver Valley Funding Corp., 9.00% 06/01/17 0.33%
Sec. Lease Obligations Deb.
The fund's portfolio is subject to change, and there is no assurance that the fund will continue to hold any particular security.
==================================================================================================================================
</TABLE>
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
================================================================================
See important fund and index disclosures inside front cover.
AIM BALANCED FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
The fixed-income securities in the portfolio are higher-quality bonds (an
average quality rating of A) with intermediate maturities, so they are less
volatile. In the latter half of the reporting period, the fund reduced the
average duration of its bonds to a relatively short 5.2 years in response to the
Fed's continuing rate hikes, especially the half-percent increase in May.
Shortening the duration reduces a portfolio's sensitivity to interest-rate
swings.
The fund moved more heavily into the broadcasting and telephone sectors
while maintaining significant exposure to computer software and services firms.
Producers of semiconductors and other electronics have continued to be important
holdings, as have pharmaceuticals, which have been prospering. In communications
and technology, many stocks experienced declines in price though their earnings
remained very good.
We regarded this as a buying opportunity, and added to our holdings in those
areas.
WHAT STOCKS PERFORMED ESPECIALLY WELL FOR THE FUND?
Many of our holdings have done well.
A few examples:
o SDL designs and produces semiconductor lasers and fiber-optic networks used
in the telecommunications, cable-television and satellite-communication
markets.
o EMC produces information-storage infrastructure used by some very large
companies to manage the accessibility and movement of their data. Major
appeals of their products are real-time access and dependable
network-service availability, as well as the flexibility to adapt to
explosive growth.
o In June, after the completion of its merger with Warner-Lambert, Pfizer
became the world's second-largest drugmaker. Its prescription drugs include
such market-leading names as arthritis pain medicine Celebrex and
cholesterol-lowering Lipitor. Its consumer brands are even better known, and
include Zantac 75, Visine, Sudafed, Benadryl, Dentyne, Certs, Desitin,
Listerine, Schick, Efferdent and Ben Gay.
o Cisco controls more than three-quarters of the global market for products
that link networks and power the Internet, including routers and switches.
Indeed, Cisco has a 60% share of the router market, which is growing 40%
annually. It also makes dial-up access servers and network-management
software. Last year, the company's annual revenues increased by 43.7%, and
its net income increased by 55.2%.
WHAT IS YOUR OUTLOOK FOR THE COMING SIX MONTHS?
We will continue targeting an investment blend of 60% stocks and 40% bonds,
remaining well diversified among industries and market-capitalization ranges.
This is the mix we have found most effective for achieving an optimal
risk/return balance. Because we believe that technology is still the sector that
holds the greatest promise for solid and ongoing growth, we anticipate that
technology stocks will continue to be an important part of the portfolio. We
select only firms with solid earnings and strong growth prospects.
If, as it appears, the economy has begun to moderate its pace to a
sustainable level, then we would anticipate that the Fed would not raise the
federal funds rate further. If it does not, the outlook would be favorable for a
stabilization of interest rates, which would benefit the bond portfolio.
PORTFOLIO COMPOSITION BY INVESTMENT TYPE
========================================================================
CONVERTIBLE PREFERRED STOCKS 2%
CONVERTIBLE BONDS 3%
CASH AND OTHER 6%
GOVERNMENT BONDS 10%
CORPORATE BONDS 31%
COMMON STOCKS (DOMESTIC & FOREIGN) 48%
========================================================================
See important fund and index disclosures inside front cover.
AIM BALANCED FUND
3
<PAGE> 6
SEMIANNUAL REPORT / FOR CONSIDERATION
[IMAGE]
CHOOSE YOUR INVESTMENT PALETTE
No two pieces of art are exactly alike. Just as an artist may use different
paints to create a piece, so does an investor use different kinds of investments
to create a portfolio. And as with art, tastes can change over time--most
investors have different goals at different stages in their lives, as well as
varying tolerance for risk. The biggest advantage mutual funds offer is the
potential for diversification. Providing funds with assorted objectives and
goals allows investors to shape their portfolios to their specific needs and to
spread their risk over several different funds, rather than painting their
portfolios all one color.
GROWTH VS. INCOME
If you look at the list of AIM's retail mutual funds on the back of your fund
report, you'll notice that they are divided into different types. Two that
frequently appear are growth and income. Common stock is normally the growth
component of a mutual fund with growth as a primary or secondary objective.
Bonds are typically the income components of a mutual fund with income as a
primary or secondary objective.
Let's take a closer look at the categories into which AIM's retail mutual
funds are divided. Keep in mind that funds listed under the same category don't
necessarily have the same kind of investment strategy or portfolio, even if they
have the same objective.
DOMESTIC MUTUAL FUNDS
GROWTH FUNDS
Growth funds typically invest in common stocks of companies whose businesses are
growing. Growth companies tend to reinvest their profits toward expansion of
their potential to produce greater returns instead of paying dividends. So
growth mutual funds focus on generating capital gains--increasing the value of
the stocks they hold--rather than current income, which means they generally
don't pay regular income dividends. Growth funds usually do, however, make one
capital-gains distribution per year, when there are gains.
An increase over time in the value of a growth fund's portfolio means the
fund's value, or share price, increases over time also. Shareholders in a growth
fund, then, make money by selling their shares for more than they paid for them.
Of course, the opposite is also true--shareholders can lose money by selling
their shares for less than they paid for them. Growth funds usually range from
moderate to very aggressive, depending on the size and types of companies in
which they invest.
GROWTH AND INCOME FUNDS
A growth and income fund generally invests in common and preferred stocks and
bonds of older, more established companies that have a longer track record of
growth and paying dividends.
A typical growth and income mutual fund will pay quarterly or annual income
dividends to its shareholders. (Monthly dividends are not common.) In this way,
growth and income funds can potentially provide long-term growth of investments
and also current income. These funds tend to be more conservative than growth
funds.
INCOME FUNDS
Income funds are generally designed to provide high current income rather than
long-term growth. To that end, income funds usually invest chiefly in
interest-paying corporate and government bonds. They may also own stocks of
companies that pay regular dividends. Some income funds are more aggressive than
others. The aggressiveness of a particular fund depends not only on the kinds of
securities in which it invests, but also on the fund's sector allocation and
maturity structure.
For example, Treasury securities are considered a relatively safe investment
because they are guaranteed by the U.S. government. However, lower risk also
means lower return potential. On the other hand, lower-rated corporate bonds,
often called junk bonds, involve more risk because they are not guaranteed--they
are only as good as the companies that issue them. But the added risk also means
higher return potential.
Income funds are considered more conservative and are suited for investors
seeking income rather than growth.
[IMAGE]
AIM BALANCED FUND
4
<PAGE> 7
SEMIANNUAL REPORT / FOR CONSIDERATION
TAX-FREE INCOME OR MUNICIPAL FUNDS
These funds provide shareholders with current income that is tax-exempt at some
level, depending on the securities in which they invest. So municipal mutual
funds appeal to investors who are looking to reduce income that would
otherwise be subject to tax. Municipal bonds or notes, which are issued by
state or local governments, are generally exempt from federal taxes. Federal
securities, like Treasury bonds, are usually exempt from state taxes. And then
there are some securities that are exempt from both federal and state taxes.(1)
MONEY MARKET FUNDS
A money market fund is one of the safest types of mutual funds available because
its main goal is preserving your investment while paying current income in the
form of interest. As a result, these funds tend to appeal to investors looking
for safety, liquidity and some income from their investment. Money market funds
invest in high-quality short-term securities such as commercial paper and U.S.
government agency securities. Although money market funds are not guaranteed or
insured by the U.S. government, the securities they hold are less risky than
other types of fixed-income securities. The trade-off for safety of principal
investment is a lower rate of return.(2)
INTERNATIONAL AND GLOBAL MUTUAL FUNDS
INTERNATIONAL GROWTH FUNDS
An international growth fund has the same objective as a domestic growth fund,
except it invests in stocks of companies located outside the United States. Like
their domestic counterparts, international growth funds tend to pay
distributions in the form of capital gains rather than dividends. An
international growth mutual fund might invest in a particular country, region or
continent depending on the investment strategy shown in its prospectus.
International funds carry different risks than domestic funds because most
foreign markets are not as established as the markets in the United States.
Other risks include changes in the value of the U.S. dollar compared to foreign
currencies, accounting differences, political risks and foreign regulatory
differences.
GLOBAL GROWTH, GLOBAL GROWTH AND INCOME, AND GLOBAL INCOME FUNDS
These funds are similar to their domestic equivalents in terms of their goals
and the income distributions they pay. Global funds are comparable to
international funds in that they can invest in stocks of companies outside the
United States. But global funds can also invest substantially in U.S. stocks;
international funds generally do not. The amount of a global fund's portfolio
that can be invested in the United States varies greatly from fund to fund,
according to a fund's prospectus. Global funds carry the same risks as
international funds.
SPECIALIZED FUNDS
THEME FUNDS
Theme or sector funds invest primarily in a particular industry or sector of the
economy, either domestically or globally. Theme funds are required by prospectus
to invest a certain percentage of their assets in their industry or sector of
choice under normal market conditions. As a result, theme funds present greater
risk and potential reward than more diversified funds. The types of securities
held by a theme fund determine its goal of growth and/or income.
--------------------------------------------------------------------------------
TYPES OF FUND DISTRIBUTIONS
INCOME DIVIDENDS are paid from dividends and/or interest from securities in a
fund's portfolio. For example, if a company in which a mutual fund owns stock
distributes some of its earnings to its shareholders as a dividend, the fund
passes on those earnings to its own shareholders. Income dividends are usually
taxed as ordinary income.
CAPITAL GAINS represent the net profit realized from the growth in value of the
holdings in a fund's portfolio. These distributions are usually made once per
year. There are two types of capital gains:
o Short-term capital gains are paid from net profits gained when a mutual fund
sells stocks or bonds it has held for less than a year. Short-term capital
gains are taxed as ordinary income.
o Long-term capital gains are paid from net profits gained when a mutual fund
sells stocks or bonds it has held for more than a year. Long-term capital
gains are usually taxed at the capital-gains rate, which is typically lower
than ordinary income-tax rates.
--------------------------------------------------------------------------------
(1) Investors in tax-free income funds still have a risk of incurring taxes on
capital-gains distributions, for example, so it's wise to see your tax advisor
before investing in such funds.
(2) There is no guarantee that a money market fund will be able to maintain a
stable net asset value of $1.00 per share.
See the back cover for a complete list of AIM's retail mutual funds. For more
information about your fund's objective, read your fund prospectus. For more
complete information about any AIM fund(s), including sales charges and
expenses, ask your financial advisor or securities dealer for a free
prospectus(es). Please read the prospectus(es) carefully before you invest or
send money.
AIM BALANCED FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
U.S. DOLLAR DENOMINATED BONDS & NOTES-31.24%
AIRLINES-1.08%
Airplanes Pass Through
Trust-Series D, Gtd. Sub.
Bonds, 10.88%, 03/15/19 $ 493,850 $ 401,507
---------------------------------------------------------------
America West Airlines,
Inc.,-Series C, Pass Through
Ctfs., 6.86%, 07/02/04 4,010,286 3,875,180
---------------------------------------------------------------
American Airlines, Inc.-Series
87-A, Equipment Trust Ctfs.,
9.90%, 01/15/11 2,955,000 3,290,865
---------------------------------------------------------------
AMR Corp., Deb., 10.00%,
04/15/21 4,300,000 4,590,207
---------------------------------------------------------------
Delta Air Lines, Inc.,
Deb., 9.00%, 05/15/16 4,200,000 4,045,020
---------------------------------------------------------------
Deb., 10.38%, 12/15/22 2,300,000 2,465,048
---------------------------------------------------------------
Unsec. Notes, 7.90%, 12/15/09 5,800,000 5,475,420
---------------------------------------------------------------
Series B, Medium Term Notes,
8.52%, 01/30/04 2,000,000 2,010,880
---------------------------------------------------------------
Series C, Medium Term Notes,
6.65%, 03/15/04 2,900,000 2,741,399
---------------------------------------------------------------
Northwest Airlines Inc.-Series
971B, Pass Through Ctfs.,
7.25%, 07/02/14 4,390,716 3,946,309
---------------------------------------------------------------
United Air Lines, Inc.,
Deb., 9.75%, 08/15/21 3,600,000 3,473,820
---------------------------------------------------------------
Series 95A2, Pass Through
Ctfs., 9.56%, 10/19/18 3,750,000 4,138,425
---------------------------------------------------------------
40,454,080
---------------------------------------------------------------
AUTOMOBILES-0.50%
DaimlerChrysler N.A. Holding
Corp., Gtd. Notes, 8.00%,
06/15/10 5,400,000 5,495,580
---------------------------------------------------------------
Notes, 7.40%, 01/20/05 5,750,000 5,725,275
---------------------------------------------------------------
Ford Motor Co., Bonds 6.63%,
10/01/28 4,000,000 3,389,720
---------------------------------------------------------------
ROCS Chrysler Corp.-Series
1998-1, Collateral Trust,
6.50%, 08/01/18 4,748,500 4,159,662
---------------------------------------------------------------
18,770,237
---------------------------------------------------------------
BANKS (MAJOR REGIONAL)-1.31%
BB&T Corp., Putable Sub. Notes,
6.38%, 06/30/05 6,110,000 5,716,822
---------------------------------------------------------------
Crestar Financial Corp., Sub.
Notes, 8.75%, 11/15/04 3,750,000 3,890,100
---------------------------------------------------------------
Midland Bank PLC (United
Kingdom), Yankee Sub. Notes,
7.65%, 05/01/25 2,105,000 2,098,496
---------------------------------------------------------------
Regions Financial Corp., Putable
Sub. Notes, 7.75%, 09/15/24 6,300,000 6,330,492
---------------------------------------------------------------
Republic New York Corp., Sub.
Deb., 9.50%, 04/15/14 5,400,000 5,977,314
---------------------------------------------------------------
Sub. Notes, 9.70%, 02/01/09 4,600,000 5,033,826
---------------------------------------------------------------
Skandinaviska Enskilda Banken
(Sweden), Sub. Yankee Notes,
6.88%, 02/15/09 8,500,000 7,859,780
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
BANKS (MAJOR REGIONAL)-(CONTINUED)
Union Planters Bank N.A., Unsec.
Sub. Notes, 6.50%, 03/15/08 $ 14,000,000 $ 12,258,680
---------------------------------------------------------------
49,165,510
---------------------------------------------------------------
BANKS (MONEY CENTER)-0.91%
Bank of Tokyo-Mitsubishi Ltd.
(The) (Japan), Sr. Sub. Yankee
Notes, 8.40%, 04/15/10 1,700,000 1,719,135
---------------------------------------------------------------
First Union Corp., Putable Sub.
Deb., 6.55%, 10/15/35 11,100,000 10,474,071
---------------------------------------------------------------
7.50%, 04/15/35 4,200,000 4,142,586
---------------------------------------------------------------
NCNB Corp., Sub. Notes, 9.38%,
09/15/09 9,750,000 10,642,905
---------------------------------------------------------------
Santander Financial Issuances
Ltd. (Cayman Islands), Unsec.
Gtd. Yankee Sub. Notes, 7.25%,
11/01/15 5,000,000 4,638,950
---------------------------------------------------------------
Sanwa Finance Aruba AEC (Aruba),
Gtd. Unsec. Sub. Notes, 8.35%,
07/15/09 2,550,000 2,543,528
---------------------------------------------------------------
34,161,175
---------------------------------------------------------------
BANKS (REGIONAL)-1.39%
Banponce Trust I-Series A, Gtd.
Notes, 8.33%, 02/01/27 9,225,000 8,181,837
---------------------------------------------------------------
Mercantile Bancorp., Inc.,
Unsec. Sub. Notes, 7.30%,
06/15/07 10,405,000 10,047,276
---------------------------------------------------------------
NBD Bank N.A. Michigan, Putable
Sub. Deb., 8.25%, 11/01/24 17,150,000 17,675,476
---------------------------------------------------------------
Riggs Capital Trust II-Series C,
Gtd. Sec. Bonds, 8.88%,
03/15/27 9,550,000 7,845,229
---------------------------------------------------------------
US Bancorp, Sub. Deb., 7.50%,
06/01/26 8,400,000 8,263,668
---------------------------------------------------------------
52,013,486
---------------------------------------------------------------
BEVERAGES (ALCOHOLIC)-0.26%
J Seagram & Sons, Gtd. Deb.,
9.65%, 08/15/18 8,500,000 9,657,955
---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-2.54%
AT&T Corp.-Liberty Media Group,
Bonds, 7.88%, 07/15/09 2,150,000 2,074,793
---------------------------------------------------------------
Sr. Unsec. Deb., 8.25%,
02/01/30 8,600,000 7,944,250
---------------------------------------------------------------
British Sky Broadcasting Group
PLC (United Kingdom), Sr.
Unsec. Gtd. Yankee Notes,
8.20%, 07/15/09 14,370,000 13,556,227
---------------------------------------------------------------
Comcast Cable Communications,
Unsec. Notes, 8.50%, 05/01/27 3,400,000 3,564,424
---------------------------------------------------------------
Continental Cablevision, Inc.,
Sr. Deb., 9.50%, 08/01/13 14,000,000 15,306,060
---------------------------------------------------------------
Cox Communications, Inc., Unsec.
Notes, 7.75%, 08/15/06 6,300,000 6,296,661
---------------------------------------------------------------
Cox Enterprises, Inc., Notes,
8.00%, 02/15/07 (Acquired
02/16/00-03/23/00; Cost
$6,530,542)(a) 6,550,000 6,517,970
---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
BROADCASTING (TELEVISION, RADIO & CABLE)-(CONTINUED)
CSC Holdings Inc.,
Sr. Unsec. Deb., 7.88%,
02/15/18 $ 7,100,000 $ 6,552,874
---------------------------------------------------------------
Sr. Unsec. Notes, 7.88%,
12/15/07 10,320,000 10,005,550
---------------------------------------------------------------
Lenfest Communications, Inc.,
Sr. Unsec. Notes, 8.38%,
11/01/05 7,400,000 7,536,678
---------------------------------------------------------------
Sr. Unsec. Sub. Notes, 8.25%,
02/15/08 2,550,000 2,526,208
---------------------------------------------------------------
TCI Communications, Inc., Sr.
Deb., 8.75%, 08/01/15 2,100,000 2,253,888
---------------------------------------------------------------
Tele-Communications, Inc., Sr.
Deb., 9.80%, 02/01/12 9,650,000 10,980,156
---------------------------------------------------------------
95,115,739
---------------------------------------------------------------
CHEMICALS-0.35%
Airgas, Inc., Medium Term Notes,
7.14%, 03/08/04 6,700,000 6,364,464
---------------------------------------------------------------
Union Carbide Corp., Deb.,
6.79%, 06/01/25 6,750,000 6,597,787
---------------------------------------------------------------
12,962,251
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-0.89%
Comverse Technology, Inc., Conv.
Unsec. Sub. Deb., 4.50%,
07/01/05 7,700,000 33,562,375
---------------------------------------------------------------
COMPUTERS (HARDWARE)-0.31%
Candescent Technology Corp., Sr.
Conv. Sub. Deb., 8.00%,
05/01/03 (Acquired
04/17/98-03/07/00; Cost
$14,461,350)(a) 15,870,000 11,505,750
---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-0.84%
VERITAS Software Corp., Conv.
Unsec. Disc. Notes, 1.86%,
08/13/06(b) 10,000,000 31,550,000
---------------------------------------------------------------
CONSUMER FINANCE-1.65%
Capital One Financial Corp.,
Unsec. Notes, 7.25%, 05/01/06 11,640,000 10,737,434
---------------------------------------------------------------
CitiFinancial Credit Co.,
Putable Notes,
6.63%, 06/01/15 2,000,000 1,963,040
---------------------------------------------------------------
7.88%, 02/01/25 4,000,000 4,030,680
---------------------------------------------------------------
Countrywide Home Loans,
Inc.-Series H, Unsec. Gtd.
Medium Term Sub. Notes, 6.25%,
04/15/09 13,700,000 11,967,909
---------------------------------------------------------------
General Motors Acceptance Corp.,
Notes, 5.75%, 11/10/03 15,500,000 14,793,820
---------------------------------------------------------------
Putable Notes, 9.00%,
10/15/02(b) 4,175,000 4,314,737
---------------------------------------------------------------
Household Finance Corp., Sr.
Unsec. Notes, 8.00%, 05/09/05 3,825,000 3,854,261
---------------------------------------------------------------
MBNA Capital I-Series A, Gtd.
Bonds, 8.28%, 12/01/26 12,415,000 10,406,998
---------------------------------------------------------------
62,068,879
---------------------------------------------------------------
ELECTRIC COMPANIES-2.51%
Arizona Public Service Co.,
Unsec. Notes, 6.25%, 01/15/05 5,000,000 4,710,100
---------------------------------------------------------------
CMS Energy Corp., Sr. Unsec.
Notes, 8.13%, 05/15/02 4,950,000 4,932,724
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
ELECTRIC COMPANIES-(CONTINUED)
Commonwealth Edison Co.-Series
94, First Mortgage Notes,
7.50%, 07/01/13 $ 9,300,000 $ 8,979,987
---------------------------------------------------------------
El Paso Electric Co.,
Series D, Sec. First Mortgage
Bonds, 8.90%, 02/01/06 6,050,000 6,298,655
---------------------------------------------------------------
Series E, Sec. First Mortgage
Bonds, 9.40%, 05/01/11 2,600,000 2,741,752
---------------------------------------------------------------
Empire District Electric Co.
(The), Sr. Notes, 7.70%,
11/15/04 8,550,000 8,545,127
---------------------------------------------------------------
Indiana Michigan Power
Co.-Series F, Sec. Lease
Obligation Bonds, 9.82%,
12/07/22 1,357,082 1,468,172
---------------------------------------------------------------
Niagara Mohawk Holdings Inc.,
Series G, Sr. Unsec. Notes,
7.75%, 10/01/08 14,300,000 13,997,126
---------------------------------------------------------------
Series H, Sr. Unsec. Disc.
Notes, 8.50%, 07/01/10(b) 12,000,000 9,179,160
---------------------------------------------------------------
Public Service Company of New
Mexico-Series A, Sr. Unsec.
Notes, 7.10%, 08/01/05 7,850,000 7,630,279
---------------------------------------------------------------
Southern Energy, Inc., Sr.
Notes, 7.90%, 07/15/09
(Acquired 07/21/99-02/11/00;
Cost $10,065,817)(a) 10,225,000 9,460,375
---------------------------------------------------------------
Texas-New Mexico Power Co., Sr.
Sec. Notes, 6.25%, 01/15/09 5,800,000 4,978,430
---------------------------------------------------------------
UtiliCorp United, Inc., Sr.
Unsec. Putable Notes, 6.70%,
10/15/06 6,350,000 6,194,362
---------------------------------------------------------------
Western Resources, Inc., Sr.
Unsec. Notes, 7.13%, 08/01/09 6,000,000 4,915,440
---------------------------------------------------------------
94,031,689
---------------------------------------------------------------
ELECTRONICS (COMPONENT DISTRIBUTORS)-0.23%
Israel Electric Corp. Ltd.
(Israel), Yankee Deb., 7.75%,
12/15/27 (Acquired 06/09/00;
$3,819,213)(a) 4,350,000 3,810,861
---------------------------------------------------------------
Series E, Sr. Sec. Medium Term
Yankee Notes, 7.75%,
03/01/09 (Acquired 04/13/00;
Cost $4,859,400)(a) 5,000,000 4,830,000
---------------------------------------------------------------
8,640,861
---------------------------------------------------------------
ENTERTAINMENT-0.63%
Time Warner Inc., Deb.,
9.13%, 01/15/13 13,640,000 14,826,407
---------------------------------------------------------------
9.15%, 02/01/23 7,850,000 8,615,218
---------------------------------------------------------------
23,441,625
---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-2.34%
Associates Corp. of North
America, Sr. Deb., 6.95%,
11/01/18 13,000,000 11,496,940
---------------------------------------------------------------
Beaver Valley Funding Corp.,
Sec. Lease Obligations Deb.,
9.00%, 06/01/17 12,500,000 12,363,875
---------------------------------------------------------------
Citicorp Lease-Class A2, Series
1999-1, Pass Through Ctfs.,
8.04%, 12/15/19 (Acquired
06/01/00; Cost $5,432,185)(a) 5,500,000 5,483,940
---------------------------------------------------------------
Dow Capital B.V. (Netherlands),
Gtd. Yankee Deb., 9.20%,
06/01/10 10,250,000 11,374,527
---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
FINANCIAL (DIVERSIFIED)-(CONTINUED)
General Electric Capital
Corp.-Series A, Medium Term
Notes, 7.38%, 01/19/10 $ 16,160,000 $ 16,304,470
---------------------------------------------------------------
Heller Financial, Inc., Sr.
Unsec. Notes,
7.38%, 11/01/09 11,600,000 10,920,704
---------------------------------------------------------------
8.00%, 06/15/05 9,700,000 9,678,951
---------------------------------------------------------------
Hutchison Delta Finance
Ltd.-Series REGS (Cayman
Islands), Conv. Unsec. Euro
Notes, 7.00%, 11/08/02 2,250,000 2,643,750
---------------------------------------------------------------
Source One Mortgage Services
Corp., Deb., 9.00%, 06/01/12 5,700,000 6,056,261
---------------------------------------------------------------
Sun Canada Financial Co., Gtd.
Sub. Notes, 6.63%, 12/15/07
(Acquired 10/14/99; Cost
$1,402,095)(a) 1,500,000 1,430,427
---------------------------------------------------------------
87,753,845
---------------------------------------------------------------
FOODS-0.62%
ConAgra, Inc.,
Sr. Putable Notes, 6.70%,
08/01/27 7,500,000 6,903,975
---------------------------------------------------------------
Sr. Unsec. Putable Notes,
7.13%, 10/01/26 12,755,000 12,316,993
---------------------------------------------------------------
Grand Metropolitan Investment
Corp., Gtd. Bonds, 7.45%,
04/15/35 4,000,000 4,004,800
---------------------------------------------------------------
23,225,768
---------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.16%
Procter & Gamble Co. (The),
Putable Deb., 8.00%, 09/01/24 5,650,000 5,980,243
---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.73%
American General Finance Corp.,
Sr. Notes, 8.45%, 10/15/09 10,900,000 11,208,688
---------------------------------------------------------------
John Hancock Global Funding II,
Sec., Medium Term Notes,
7.90%, 07/02/10 (Acquired
06/23/00; Cost $5,686,377)(a) 5,700,000 5,739,330
---------------------------------------------------------------
Torchmark Corp., Notes,
7.38%, 08/01/13 3,000,000 2,643,840
---------------------------------------------------------------
7.88%, 05/15/23 9,200,000 7,829,844
---------------------------------------------------------------
27,421,702
---------------------------------------------------------------
INSURANCE (MULTI-LINE)-0.24%
AIG SunAmerica Global Financing
II, Sr. Sec. Notes, 7.60%,
06/15/05 (Acquired 06/08/00;
Cost $9,100,000)(a) 9,100,000 9,165,611
---------------------------------------------------------------
INSURANCE (PROPERTY & CASUALTY)-0.42%
GE Global Insurance Holdings
Corp., Notes, 7.75%, 06/15/30 7,000,000 6,941,830
---------------------------------------------------------------
Terra Nova Insurance PLC (United
Kingdom), Sr. Unsec. Gtd.
Yankee Notes,
7.00%, 05/15/08 2,350,000 2,201,339
---------------------------------------------------------------
7.20%, 08/15/07 7,000,000 6,664,210
---------------------------------------------------------------
15,807,379
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
INVESTMENT BANKING/BROKERAGE-1.19%
Bear Stearns Cos., Inc., Sr.
Unsec. Notes, 7.63%, 12/07/09 $ 8,600,000 $ 8,253,506
---------------------------------------------------------------
E*Trade Group Inc.,
Conv. Sub Notes, 6.00%,
02/01/07 (Acquired
04/17/00-05/24/00; Cost
$5,407,526)(a) 6,100,000 5,566,250
---------------------------------------------------------------
Conv. Unsec. Sub. Notes,
6.00%, 02/01/07 4,400,000 4,015,000
---------------------------------------------------------------
Lehman Brothers Holdings Inc.,
Notes, 8.50%, 08/01/15 11,945,000 11,776,576
---------------------------------------------------------------
Sr. Sub. Notes, 7.38%,
01/15/07 5,300,000 5,030,972
---------------------------------------------------------------
Putable Sr. Notes, 8.80%,
03/01/15 9,855,000 9,959,660
---------------------------------------------------------------
44,601,964
---------------------------------------------------------------
NATURAL GAS-1.96%
CMS Panhandle Holding Co., Sr.
Notes, 6.13%, 03/15/04 6,600,000 6,212,646
---------------------------------------------------------------
Enron Corp.,
Sr. Sub. Deb., 8.25%, 09/15/12 4,300,000 4,389,010
---------------------------------------------------------------
Series A, Medium Term Notes,
8.38%, 05/23/05 2,550,000 2,618,774
---------------------------------------------------------------
Ferrellgas Partners L.P.,-Series
B, Sr. Sec. Gtd. Notes, 9.38%,
06/15/06 4,950,000 4,801,500
---------------------------------------------------------------
Kinder Morgan Energy Partners,
L.P., Sr. Unsec. Notes, 6.30%,
02/01/09 8,400,000 7,581,924
---------------------------------------------------------------
Kinder Morgan, Inc., Unsec.
Deb., 7.35%, 08/01/26 7,800,000 7,675,824
---------------------------------------------------------------
KN Capital Trust III, Gtd. Sub.
Bonds, 7.63%, 04/15/28 8,500,000 7,311,615
---------------------------------------------------------------
National Fuel Gas Co.-Series D,
Medium Term Notes, 6.30%,
05/27/08 8,600,000 7,778,614
---------------------------------------------------------------
Nova Gas Transmission Ltd.
(Canada), Yankee Deb., 8.50%,
12/15/12 5,015,000 5,239,722
---------------------------------------------------------------
Panhandle Eastern Pipe Line,
Notes, 7.88%, 08/15/04 1,500,000 1,489,980
---------------------------------------------------------------
Sonat Inc., Unsec. Notes, 7.63%,
07/15/11 6,335,000 6,210,581
---------------------------------------------------------------
Tennessee Gas Pipeline Co.,
Unsec. Deb., 7.50%, 04/01/17 12,800,000 12,319,360
---------------------------------------------------------------
73,629,550
---------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-0.13%
NRG Energy, Inc., Sr. Unsec.
Notes, 7.50%, 06/01/09 5,000,000 4,710,800
---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.46%
ONEOK, Inc., Unsec. Notes,
7.75%, 08/15/06 3,100,000 3,092,064
---------------------------------------------------------------
Den Norske Stats Oljeselskap
(Norway), Yankee Deb., 7.38%,
05/01/16 (Acquired 06/01/00;
Cost $5,161,695)(a) 5,500,000 5,204,650
---------------------------------------------------------------
Talisman Energy Inc. (Canada),
Yankee Deb., 7.13%, 06/01/07 1,500,000 1,432,935
---------------------------------------------------------------
Union Pacific Resources Group
Inc., Unsec. Deb., 7.50%,
10/15/26 8,100,000 7,612,947
---------------------------------------------------------------
17,342,596
---------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
OIL & GAS (REFINING & MARKETING)-0.30%
Quaker State Corp., Unsec.
Notes, 6.63%, 10/15/05 $ 2,840,000 $ 2,526,010
---------------------------------------------------------------
Tosco Corp., Unsec. Deb., 7.80%,
01/01/27 8,950,000 8,665,480
---------------------------------------------------------------
11,191,490
---------------------------------------------------------------
OIL (DOMESTIC INTEGRATED)-0.47%
Amerada Hess Corp., Bonds,
7.88%, 10/01/29 4,400,000 4,302,056
---------------------------------------------------------------
Occidental Petroleum Corp.,
Sr. Deb., 9.25%, 08/01/19 7,340,000 8,007,500
---------------------------------------------------------------
Sr. Unsec. Notes, 7.38%,
11/15/08 5,590,000 5,394,126
---------------------------------------------------------------
17,703,682
---------------------------------------------------------------
OIL (INTERNATIONAL INTEGRATED)-0.12%
YPF Sociedad Anonima
(Argentina), Yankee Bonds,
9.13%, 02/24/09 4,550,000 4,627,578
---------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.40%
AES Corp. (The),
Sr. Notes, 8.00%, 12/31/08 220,000 190,300
---------------------------------------------------------------
Sr. Unsec. Sub. Notes, 8.38%,
08/15/07 3,000,000 2,752,500
---------------------------------------------------------------
Sr. Unsec. Sub. Notes, 10.25%,
07/15/06 1,800,000 1,804,500
---------------------------------------------------------------
CE Generation LLC, Sr. Sec. Sub.
Deb., 7.42%, 12/15/18 7,698,600 7,080,325
---------------------------------------------------------------
Kincaid Generation LLC, Sec.
Bonds, 7.33%, 06/15/20
(Acquired 04/30/98; Cost
$3,468,546)(a) 3,460,000 3,148,704
---------------------------------------------------------------
14,976,329
---------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-0.55%
News America Holdings, Inc.,
Putable Notes, 8.45%, 08/01/34 4,325,000 4,399,952
---------------------------------------------------------------
Sr. Gtd. Deb., 9.25%, 02/01/13 10,150,000 10,867,605
---------------------------------------------------------------
Sr. Unsec. Gtd. Putable Bonds,
7.43%, 10/01/26 5,450,000 5,240,393
---------------------------------------------------------------
20,507,950
---------------------------------------------------------------
RAILROADS-0.45%
CSX Corp., Deb., 9.00%, 08/15/06 6,750,000 6,997,590
---------------------------------------------------------------
Norfolk Southern Corp., Notes,
7.05%, 05/01/37 10,000,000 9,811,800
---------------------------------------------------------------
16,809,390
---------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS-0.20%
ERP Operating L.P., Unsec.
Notes, 7.13%, 10/15/17 3,250,000 2,691,910
---------------------------------------------------------------
Health Care REIT, Inc., Sr.
Unsec. Notes, 7.63%, 03/15/08 1,150,000 953,189
---------------------------------------------------------------
Spieker Properties, Inc., Unsec.
Deb., 7.35%, 12/01/17 4,600,000 4,028,634
---------------------------------------------------------------
7,673,733
---------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.13%
Great Atlantic & Pacific Tea
Co., Inc. (Canada), Gtd.
Yankee Notes, 7.78%,
11/01/00(c) 5,000,000 5,029,650
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
SAVINGS & LOAN COMPANIES-0.77%
Dime Capital Trust I-Series A,
Gtd. Bonds, 9.33%, 05/06/27 $ 10,700,000 $ 9,785,685
---------------------------------------------------------------
Sovereign Bancorp, Inc., Medium
Term Sub. Notes, 8.00%,
03/15/03 5,330,000 5,055,505
---------------------------------------------------------------
St. Paul Bancorp, Inc., Sr.
Unsec. Notes, 7.13%, 02/15/04 5,500,000 5,303,265
---------------------------------------------------------------
Washington Mutual Cap I,
Sec. Gtd. Bonds, 8.38%,
06/01/27 4,285,000 3,842,874
---------------------------------------------------------------
Sub. Notes, 8.25%, 04/01/10 5,000,000 4,969,800
---------------------------------------------------------------
28,957,129
---------------------------------------------------------------
SOVEREIGN DEBT-0.97%
British Columbia (Province of)
(Canada), Unsec. Unsub. Yankee
Notes, 5.38%, 10/29/08 2,750,000 2,427,975
---------------------------------------------------------------
Hydro-Quebec-Series B (Canada),
Gtd. Medium Term Yankee Notes,
8.62%, 12/15/11 5,000,000 5,453,650
---------------------------------------------------------------
Manitoba (Province of)-Series AZ
(Canada), Putable Yankee Deb.,
7.75%, 07/17/16 9,850,000 10,143,333
---------------------------------------------------------------
Newfoundland (Province of)
(Canada), Unsec. Yankee Deb.,
9.00%, 06/01/19 3,960,000 4,465,969
---------------------------------------------------------------
Quebec (Province of) (Canada),
Series A, Medium Term Putable
Yankee Notes, 6.29%,
03/06/26(d) 9,300,000 9,075,963
---------------------------------------------------------------
Unsec. Yankee Deb., 6.50%,
01/17/06 4,900,000 4,705,029
---------------------------------------------------------------
36,271,919
---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.22%
Vodafone AirTouch PLC (United
Kingdom), Unsec. Unsub. Yankee
Notes, 7.75%, 02/15/10
(Acquired 02/07/00; Cost
$8,298,314)(a) 8,350,000 8,305,077
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-1.19%
AT&T Corp., Deb., 8.63%,
12/01/31 12,700,000 12,649,073
---------------------------------------------------------------
MCI Communications Corp.,
Sr. Unsec. Notes, 6.50%,
04/15/10 7,900,000 7,181,574
---------------------------------------------------------------
Sr. Unsec. Putable Deb.,
7.13%, 06/15/27 10,150,000 10,047,790
---------------------------------------------------------------
Sprint Corp., Putable Deb.,
9.00%, 10/15/19 2,400,000 2,727,504
---------------------------------------------------------------
WorldCom, Inc., Notes, 8.00%,
05/15/06 12,000,000 12,176,040
---------------------------------------------------------------
44,781,981
---------------------------------------------------------------
TELEPHONE-1.50%
AT&T Canada Inc. (Canada),
Sr. Unsec. Yankee Notes 7.65%,
09/15/06 4,200,000 4,163,943
---------------------------------------------------------------
Sr. Unsec. Yankee Sub Notes,
7.63%, 03/15/05 10,100,000 10,067,862
---------------------------------------------------------------
BellSouth Capital Funding,
Putable Deb., 6.04%, 11/15/26 4,000,000 3,925,080
---------------------------------------------------------------
Deutsche Telekom International
Finance B.V. (Netherlands),
Unsec. Unsub. Yankee Bonds,
8.00%, 06/15/10 6,700,000 6,774,169
---------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
TELEPHONE-(CONTINUED)
Electric Lightwave, Inc., Notes,
6.05%, 05/15/04 (Acquired
04/21/99; Cost $9,792,846)(a) $ 9,800,000 $ 9,249,436
---------------------------------------------------------------
GTE Corp., Unsec. Deb., 6.84%,
04/15/18 5,500,000 4,937,735
---------------------------------------------------------------
NTL Inc., Conv. Sub. Notes,
5.75%, 12/15/09 (Acquired
12/17/99-03/01/00; Cost
$11,765,664)(a) 11,700,000 9,345,375
---------------------------------------------------------------
Qwest Communications
International Inc., Sr. Unsec.
Notes, 7.50%, 11/01/08 7,900,000 7,633,375
---------------------------------------------------------------
56,096,975
---------------------------------------------------------------
WASTE MANAGEMENT-0.32%
Browning-Ferris Industries,
Inc., Deb., 7.40%, 09/15/35 4,170,000 2,606,250
---------------------------------------------------------------
Waste Management, Inc., Sr.
Unsec. Notes,
7.13%, 10/01/07 850,000 777,903
---------------------------------------------------------------
7.13%, 12/15/17 520,000 429,889
---------------------------------------------------------------
Unsec. Putable Notes, 7.10%,
08/01/26 8,550,000 8,137,206
---------------------------------------------------------------
11,951,248
---------------------------------------------------------------
Total U.S. Dollar
Denominated Bonds & Notes
(Cost $1,166,510,664) 1,171,625,201
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
DOMESTIC COMMON STOCKS-43.44%
AUTO PARTS & EQUIPMENT-0.01%
Visteon Corp.(e) 24,223 293,699
---------------------------------------------------------------
AUTOMOBILES-0.21%
Ford Motor Co. 185,000 7,955,000
---------------------------------------------------------------
BANKS (MONEY CENTER)-0.54%
Chase Manhattan Corp. (The) 442,500 20,382,656
---------------------------------------------------------------
BIOTECHNOLOGY-0.65%
Genzyme Corp.(e) 412,000 24,488,250
---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-3.38%
Clear Channel Communications,
Inc.(e) 251,000 18,825,000
---------------------------------------------------------------
Comcast Corp.-Class A(e) 303,000 12,271,500
---------------------------------------------------------------
Hispanic Broadcasting Corp.(e) 452,000 14,972,500
---------------------------------------------------------------
Infinity Broadcasting
Corp.-Class A(e) 526,250 19,175,234
---------------------------------------------------------------
UnitedGlobalCom Inc.-Class A(e) 67,000 3,132,250
---------------------------------------------------------------
Univision Communications,
Inc.-Class A(e) 305,000 31,567,500
---------------------------------------------------------------
Viacom Inc.-Class B(e) 392,119 26,737,614
---------------------------------------------------------------
126,681,598
---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-3.92%
Copper Mountain Networks,
Inc.(e) 142,000 12,513,750
---------------------------------------------------------------
Corning Inc. 66,300 17,892,712
---------------------------------------------------------------
JDS Uniphase Corp.(e) 131,000 15,703,625
---------------------------------------------------------------
Juniper Networks, Inc.(e) 165,000 24,017,812
---------------------------------------------------------------
Lucent Technologies Inc. 470,000 27,847,500
---------------------------------------------------------------
Redback Networks Inc.(e) 120,000 21,360,000
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMUNICATIONS EQUIPMENT-(CONTINUED)
Sycamore Networks, Inc.(e) 250,000 $ 27,593,750
---------------------------------------------------------------
146,929,149
---------------------------------------------------------------
COMPUTERS (HARDWARE)-1.33%
International Business Machines
Corp. 100,000 10,956,250
---------------------------------------------------------------
Sun Microsystems, Inc.(e) 428,000 38,921,250
---------------------------------------------------------------
49,877,500
---------------------------------------------------------------
COMPUTERS (NETWORKING)-1.87%
Cisco Systems, Inc.(e) 710,000 45,129,375
---------------------------------------------------------------
Foundry Networks, Inc.(e) 66,000 7,293,000
---------------------------------------------------------------
VeriSign, Inc.(e) 100,200 17,685,300
---------------------------------------------------------------
70,107,675
---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-2.16%
Brocade Communications Systems,
Inc.(e) 154,700 28,385,033
---------------------------------------------------------------
EMC Corp.(e) 618,000 47,547,375
---------------------------------------------------------------
Immersion Corp.(e) 173,200 5,196,000
---------------------------------------------------------------
81,128,408
---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-4.09%
America Online, Inc.(e) 499,200 26,332,800
---------------------------------------------------------------
BEA Systems, Inc.(e) 380,500 18,810,969
---------------------------------------------------------------
InfoSpace, Inc.(e) 739,200 40,840,800
---------------------------------------------------------------
ISS Group, Inc.(e) 220,000 21,721,562
---------------------------------------------------------------
Microsoft Corp.(e) 235,000 18,800,000
---------------------------------------------------------------
Oracle Corp.(e) 198,000 16,644,375
---------------------------------------------------------------
PSINet Inc.(e) 135,000 3,391,875
---------------------------------------------------------------
VERITAS Software Corp.(e) 59,100 6,679,223
---------------------------------------------------------------
153,221,604
---------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.53%
General Electric Co. 375,000 19,875,000
---------------------------------------------------------------
ELECTRONICS (DEFENSE)-0.44%
General Motors Corp.-Class H(e) 189,000 16,584,750
---------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-3.79%
Analog Devices, Inc.(e)(f) 392,000 29,792,000
---------------------------------------------------------------
Intel Corp. 233,500 31,216,031
---------------------------------------------------------------
Microchip Technology Inc.(e) 204,000 11,886,187
---------------------------------------------------------------
SDL, Inc.(e) 170,400 48,595,950
---------------------------------------------------------------
Vitesse Semiconductor Corp.(e) 279,200 20,538,650
---------------------------------------------------------------
142,028,818
---------------------------------------------------------------
ENGINEERING & CONSTRUCTION-0.86%
Quanta Services, Inc.(e) 588,000 32,340,000
---------------------------------------------------------------
ENTERTAINMENT-0.33%
Time Warner Inc. 165,000 12,540,000
---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-0.60%
Applied Materials, Inc.(e) 250,000 22,656,250
---------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FINANCIAL (DIVERSIFIED)-0.98%
American Express Co. 225,000 $ 11,728,125
---------------------------------------------------------------
Citigroup Inc. 254,200 15,315,550
---------------------------------------------------------------
MGIC Investment Corp. 210,000 9,555,000
---------------------------------------------------------------
36,598,675
---------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-0.54%
American Home Products Corp. 342,000 20,092,500
---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC & OTHER)-0.42%
Forest Laboratories, Inc.(e) 156,000 15,756,000
---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)-1.76%
Merck & Co., Inc. 244,000 18,696,500
---------------------------------------------------------------
Pfizer Inc. 982,500 47,160,000
---------------------------------------------------------------
65,856,500
---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-1.48%
Baxter International, Inc. 288,400 20,278,125
---------------------------------------------------------------
Guidant Corp.(e) 220,000 10,890,000
---------------------------------------------------------------
Medtronic, Inc. 490,000 24,408,125
---------------------------------------------------------------
55,576,250
---------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.12%
MAXIMUS, Inc.(e) 200,000 4,425,000
---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.28%
AXA Financial, Inc. 314,000 10,676,000
---------------------------------------------------------------
INSURANCE (MULTI-LINE)-0.55%
American International Group,
Inc. 175,000 20,562,500
---------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-1.77%
Merrill Lynch & Co., Inc. 196,000 22,540,000
---------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 300,000 24,975,000
---------------------------------------------------------------
Schwab (Charles) Corp. (The) 556,750 18,720,719
---------------------------------------------------------------
66,235,719
---------------------------------------------------------------
NATURAL GAS-0.90%
Enron Corp. 295,000 19,027,500
---------------------------------------------------------------
Williams Cos., Inc. (The) 353,000 14,715,687
---------------------------------------------------------------
33,743,187
---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.53%
Apache Corp. 103,900 6,110,619
---------------------------------------------------------------
Kerr-McGee Corp. 234,900 13,844,419
---------------------------------------------------------------
19,955,038
---------------------------------------------------------------
OIL (INTERNATIONAL INTEGRATED)-0.21%
Exxon Mobil Corp. 100,644 7,900,554
---------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.52%
AES Corp. (The)(e) 430,000 19,618,750
---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-0.39%
Home Depot, Inc. (The) 295,500 14,756,531
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (FOOD CHAINS)-0.32%
Safeway Inc.(e) 266,000 $ 12,003,250
---------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-0.51%
Target Corp. 329,100 19,087,800
---------------------------------------------------------------
RETAIL (SPECIALTY)-0.69%
Amazon.com, Inc.(e) 115,000 4,175,938
---------------------------------------------------------------
Bed Bath & Beyond, Inc.(e) 374,500 13,575,625
---------------------------------------------------------------
Linens 'n Things, Inc.(e) 305,200 8,278,550
---------------------------------------------------------------
26,030,113
---------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-0.82%
Lamar Advertising Co.(e) 387,000 16,761,938
---------------------------------------------------------------
Omnicom Group Inc. 158,000 14,071,875
---------------------------------------------------------------
30,833,813
---------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-0.59%
Critical Path, Inc.(e) 241,100 14,059,144
---------------------------------------------------------------
MarchFirst, Inc.(e) 432,500 7,893,125
---------------------------------------------------------------
21,952,269
---------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.22%
DST Systems, Inc.(e) 106,000 8,069,250
---------------------------------------------------------------
TELECOMMUNICATIONS-0.29%
Williams Communications Group,
Inc.(e) 331,700 11,008,294
---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-1.11%
Level 3 Communications, Inc.(e) 136,140 11,980,320
---------------------------------------------------------------
Phone.com, Inc.(e) 248,000 16,151,000
---------------------------------------------------------------
Western Wireless Corp.-Class
A(e) 247,300 13,477,850
---------------------------------------------------------------
41,609,170
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.40%
Winstar Communications, Inc.(e) 15,600 528,450
---------------------------------------------------------------
WorldCom, Inc.(e) 318,000 14,588,250
---------------------------------------------------------------
15,116,700
---------------------------------------------------------------
TELEPHONE-3.33%
Bell Atlantic Corp. 215,000 10,924,688
---------------------------------------------------------------
Broadwing Inc.(e) 489,520 12,696,925
---------------------------------------------------------------
McLeodUSA, Inc.-Class A(e) 967,000 20,004,813
---------------------------------------------------------------
NEXTLINK Communications,
Inc.-Class A(e) 449,600 17,056,700
---------------------------------------------------------------
Qwest Communications
International Inc.(e) 665,000 33,042,188
---------------------------------------------------------------
SBC Communications Inc. 243,000 10,509,750
---------------------------------------------------------------
Time Warner Telecom, Inc.-Class
A(e) 319,900 20,593,563
---------------------------------------------------------------
124,828,627
---------------------------------------------------------------
Total Domestic Common Stocks
(Cost $917,344,283) 1,629,382,847
---------------------------------------------------------------
DOMESTIC PREFERRED STOCKS & OTHER EQUITY INTERESTS-1.79%
OIL & GAS (EXPLORATION & PRODUCTION)-0.28%
Kerr-McGee Corp.-$1.83 Pfd. DECS 209,800 10,437,550
---------------------------------------------------------------
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
POWER PRODUCERS (INDEPENDENT)-0.54%
Calpine Capital Trust-$2.88
Conv. Pfd. 170,000 $ 20,102,500
---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-0.02%
Cendant Corp.-Rts., expiring
02/14/01 110,000 928,125
---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.45%
Winstar Communications,
Inc.-Series F, $72.50 Conv.
Pfd. 16,950 16,772,025
---------------------------------------------------------------
TELEPHONE-0.30%
Broadwing Inc.-Series B, $3.38
Conv. Pfd. 70,000 3,290,000
---------------------------------------------------------------
NEXTLINK Communications, Inc.
$3.25 Conv. Pfd. 24,200 4,271,300
---------------------------------------------------------------
$3.25 Conv. Pfd. (Acquired
03/26/98-06/02/98; Cost
$975,188)(a) 20,800 3,671,200
---------------------------------------------------------------
11,232,500
---------------------------------------------------------------
WATER UTILITIES-0.20%
AES Trust III-$3.38 Conv. Pfd. 108,600 7,493,400
---------------------------------------------------------------
Total Domestic Preferred
Stocks & Other Equity
Interests (Cost
$50,960,247) 66,966,100
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT(g)
<S> <C> <C>
NON-U.S. DOLLAR DENOMINATED
BONDS & NOTES-0.97%
AUSTRALIA-0.10%
State Bank New South
Wales-Series E (Banks-Major
Regional), Sr. Unsec. Gtd.
Medium Term Notes, 8.63%,
08/20/01 AUD 6,125,000 3,744,462
---------------------------------------------------------------
CANADA-0.47%
AT&T Canada Inc. (Telephone),
Sr. Unsec. Notes, 7.15%,
09/23/04 CAD 1,700,000 1,161,808
---------------------------------------------------------------
Bell Mobility Cellular Inc.
(Telecommunications-(Cellular/
Wireless), Deb., 6.55%,
06/02/08 CAD 2,500,000 1,656,774
---------------------------------------------------------------
Canadian Oil Debco Inc. (Oil &
Gas-Exploration &
Production), Deb., 11.00%,
10/31/00 CAD 2,500,000 1,715,454
---------------------------------------------------------------
Clearnet Communications Inc.
(Telecommunications-
Cellular/Wireless),
Sr. Unsec. Disc. Notes,
10.75%, 02/15/09(b) CAD 5,000,000 1,892,915
---------------------------------------------------------------
Export Development Corp.
(Sovereign Debt), Sr. Unsec.
Unsub. Notes, 6.50%,
12/21/04 NZD 6,000,000 2,680,223
---------------------------------------------------------------
Poco Petroleums Ltd. (Oil & Gas-
Exploration & Production),
Medium Term Notes, 6.60%,
09/11/07 CAD 4,800,000 3,162,672
---------------------------------------------------------------
Ontario (Province of) (Sovereign
Debt), Unsec. Unsub. Notes,
6.25%, 12/03/08 NZD 3,750,000 1,567,148
---------------------------------------------------------------
Teleglobe Canada Inc.
(Telecommunications-Long
Distance), Unsec. Deb., 8.35%,
06/20/03 CAD 1,000,000 695,106
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(g) VALUE
<S> <C> <C>
CANADA-(CONTINUED)
TransCanada Pipelines-Series Q
(Natural Gas), Deb., 10.63%,
10/20/09 CAD 1,100,000 $ 916,506
---------------------------------------------------------------
Westcoast Energy Inc.-Series V
(Natural Gas), Unsec. Deb.,
6.45%, 12/18/06 CAD 3,000,000 2,010,215
---------------------------------------------------------------
17,458,821
---------------------------------------------------------------
CAYMAN ISLANDS-0.12%
Sutton Bridge Financial Ltd.
(Power Producers-Independent),
Gtd. Euro Bonds, 8.63%,
06/30/22(c) GBP 3,000,000 4,659,511
---------------------------------------------------------------
NETHERLANDS-0.10%
Mannesmann Finance B.V.
(Machinery-Diversified), Gtd.
Unsec. Unsub. Notes, 4.75%,
05/27/09 EUR 1,300,000 1,083,541
---------------------------------------------------------------
Tecnost International
N.V.-Series E (Telephone),
Gtd. Medium Term Notes, 6.13%,
07/30/09 EUR 3,210,000 2,746,238
---------------------------------------------------------------
3,829,779
---------------------------------------------------------------
NEW ZEALAND-0.10%
International Bank for
Reconstruction &
Development-Class E
(Banks-Money Center), Unsec.
Medium Term Notes, 5.50%,
04/15/04 NZD 8,500,000 3,716,833
---------------------------------------------------------------
UNITED KINGDOM-0.08%
British Sky Broadcasting Group
PLC (Broadcasting-Television,
Radio & Cable), Sr. Gtd.
Unsec. Unsub. Notes, 7.75%,
07/09/09 GBP 2,100,000 3,062,721
---------------------------------------------------------------
Total Non-U.S. Dollar
Denominated Bonds & Notes
(Cost $40,917,768) 36,472,127
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
FOREIGN STOCKS & OTHER
EQUITY INTERESTS-4.97%
BERMUDA-0.63%
Global Crossing Ltd.
(Telecommunications-Long
Distance)(e) 393,852 10,363,231
---------------------------------------------------------------
Tyco International Ltd.
(Manufacturing-Diversified) 284,000 13,454,500
---------------------------------------------------------------
23,817,731
---------------------------------------------------------------
CANADA-1.14%
360networks Inc.
(Telecommunications-Long
Distance)(e) 641,600 9,784,400
---------------------------------------------------------------
AT&T Canada Inc. (Telephone)(e) 350,000 11,615,625
---------------------------------------------------------------
Nortel Networks Corp.
(Communications Equipment) 310,600 21,198,450
---------------------------------------------------------------
42,598,475
---------------------------------------------------------------
FINLAND-1.20%
Nokia Oyj-ADR (Communications
Equipment) 600,000 29,962,500
---------------------------------------------------------------
Sonera Oyj
(Telecommunications-Cellular/
Wireless) 333,900 15,191,978
---------------------------------------------------------------
45,154,478
---------------------------------------------------------------
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FRANCE-0.39%
AXA (Insurance-Multi-Line) 36,800 $ 5,785,705
---------------------------------------------------------------
AXA-ADR (Insurance-Multi-Line) 110,000 8,751,875
---------------------------------------------------------------
14,537,580
---------------------------------------------------------------
JAPAN-0.17%
NTT DoCoMo, Inc.
(Telecommunications-
Cellular/Wireless) 242 6,542,081
---------------------------------------------------------------
MEXICO-0.28%
Grupo Televisa S.A.-GDR
(Entertainment)(e) 150,000 10,340,625
---------------------------------------------------------------
NETHERLANDS-0.19%
Libertel N.V.
(Telecommunications-Cellular/
Wireless)(e) 467,200 7,100,486
---------------------------------------------------------------
SOUTH KOREA-0.24%
Korea Telecom Corp.-ADR
(Telephone) 189,796 9,181,381
---------------------------------------------------------------
SPAIN-0.36%
Telefonica S.A. (Telephone)(e) 628,000 13,463,771
---------------------------------------------------------------
UNITED KINGDOM-0.37%
Vodafone AirTouch PLC
(Telecommunications-
Cellular/Wireless) 3,410,805 13,777,752
---------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$123,619,308) 186,514,360
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. TREASURY SECURITIES-9.16%
U.S. TREASURY NOTES-9.16%
6.63%, 05/31/02 $ 39,500,000 39,674,985
---------------------------------------------------------------
7.25%, 08/15/04 35,000,000 36,194,550
---------------------------------------------------------------
5.88%, 11/15/04 13,000,000(h) 12,818,130
---------------------------------------------------------------
6.75%, 05/15/05 43,500,000 44,540,085
---------------------------------------------------------------
6.50%, 08/15/05 to 02/15/10 149,500,000(h) 151,908,120
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
U.S. TREASURY SECURITIES-(CONTINUED)
9.38%, 02/15/06 $ 20,000,000 $ 22,895,200
---------------------------------------------------------------
6.88%, 05/15/06 34,500,000 35,526,375
---------------------------------------------------------------
Total U.S. Treasury
Securities (Cost
$343,555,096) 343,557,445
---------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-1.74%
FEDERAL HOME LOAN MORTGAGE CORP.
("FHLMC")-0.34%
Pass through ctfs., 6.50%,
12/01/28 13,516,235 12,760,136
---------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION ("FNMA")-0.93%
Pass through ctfs.,
7.00%, 05/01/28 19,381,870 18,703,505
---------------------------------------------------------------
6.50%, 11/01/28 to 12/01/28 17,194,857 16,206,153
---------------------------------------------------------------
34,909,658
---------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION ("GNMA")-0.47%
Pass through ctfs., 6.50%,
09/15/28 to 03/15/29 18,592,611 17,645,503
---------------------------------------------------------------
Total U.S. Government Agency
Securities (Cost
$68,947,331) 65,315,297
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
MONEY MARKET FUNDS-5.91%
STIC Liquid Assets Portfolio(i) 110,725,582 110,725,582
---------------------------------------------------------------
STIC Prime Portfolio(i) 110,725,582 110,725,582
---------------------------------------------------------------
Total Money Market Funds
(Cost $221,451,164) 221,451,164
---------------------------------------------------------------
TOTAL INVESTMENTS-99.22%
(Cost $2,933,305,861) 3,721,284,541
---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.78% 29,346,161
===============================================================
NET ASSETS-100.00% $3,750,630,702
===============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
AUD - Australian Dollar
CAD - Canadian Dollar
Conv. - Convertible
Ctfs. - Certificates
Deb. - Debentures
DECS - Dividend Enhanced Convertible Stock
Disc. - Discounted
EUR - Euro
GBP - British Pound Sterling
GDR - Global Depositary Receipt
Gtd. - Guaranteed
NZD - New Zealand Dollar
Pfd. - Preferred
REIT - Real Estate Investment Trust
ROCS - Receipts on Corporate Securities
Rts. - Rights
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
Unsub. - Unsubordinated
Notes to Schedule of Investments:
(a) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The
aggregate market value of these securities at 06/30/00 was $102,434,956
which represented 2.73% of the Fund's net assets.
(b) Discounted bond at purchase. The interest rate represents the coupon rate at
which the bond will accrue at a specified future date.
(c) Represents a security sold under Rule 144A, which is exempt from
registration and may be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1993, as amended.
(d) Step-up bond. The interest rate represents the coupon rate at which the bond
will accrue at a specified future date.
(e) Non-income producing security.
(f) A portion of this security is subject to call options written. See Note 7.
(g) Foreign denominated security. Par value is denominated in currency
indicated.
(h) A portion of the principal balance was pledged as collateral to cover margin
requirements for open futures contracts. See Note 8.
(i) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
13
<PAGE> 16
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$2,933,305,861) $3,721,284,541
---------------------------------------------------------
Foreign currencies at value (cost
$94,411) 93,632
---------------------------------------------------------
Receivables for:
Foreign currency contracts closed 175,200
---------------------------------------------------------
Investments sold 13,060,724
---------------------------------------------------------
Variation margin 2,347,900
---------------------------------------------------------
Fund shares sold 16,554,327
---------------------------------------------------------
Dividends and interest 31,636,862
---------------------------------------------------------
Investment for deferred compensation plan 45,094
---------------------------------------------------------
Other assets 259,079
---------------------------------------------------------
Total assets 3,785,457,359
---------------------------------------------------------
LIABILITIES:
Payables for:
---------------------------------------------------------
Investments purchased 22,833,965
---------------------------------------------------------
Fund shares reacquired 6,969,919
---------------------------------------------------------
Foreign currency contracts outstanding 48,960
---------------------------------------------------------
Options written (premiums received
$698,102) 23,438
---------------------------------------------------------
Deferred compensation plan 45,094
---------------------------------------------------------
Accrued advisory fees 1,542,469
---------------------------------------------------------
Accrued administrative services fees 17,652
---------------------------------------------------------
Accrued distribution fees 3,074,166
---------------------------------------------------------
Accrued trustees' fees 3,739
---------------------------------------------------------
Accrued transfer agent fees 213,479
---------------------------------------------------------
Accrued operating expenses 53,776
---------------------------------------------------------
Total liabilities 34,826,657
---------------------------------------------------------
Net assets applicable to shares
outstanding $3,750,630,702
=========================================================
NET ASSETS:
Class A $2,121,436,680
=========================================================
Class B $1,326,870,596
=========================================================
Class C $ 302,323,426
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 64,377,369
=========================================================
Class B 40,371,335
=========================================================
Class C 9,188,207
=========================================================
Class A:
Net asset value and redemption price
per share $ 32.95
---------------------------------------------------------
Offering price per share:
(Net asset value of $32.95 divided
by 95.25%) $ 34.59
=========================================================
Class B:
Net asset value and offering price per
share $ 32.87
=========================================================
Class C:
Net asset value and offering price per
share $ 32.90
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 50,585,986
---------------------------------------------------------
Dividends (net of foreign withholding tax
$67,343) 10,910,329
---------------------------------------------------------
Total investment income 61,496,315
---------------------------------------------------------
EXPENSES:
Advisory fees 8,679,593
---------------------------------------------------------
Administrative services fee 104,148
---------------------------------------------------------
Custodian fees 147,478
---------------------------------------------------------
Distribution fees-Class A 2,384,739
---------------------------------------------------------
Distribution fees-Class B 6,179,107
---------------------------------------------------------
Distribution fees-Class C 1,238,933
---------------------------------------------------------
Transfer agent fees-Class A 1,191,239
---------------------------------------------------------
Transfer agent fees-Class B 1,155,925
---------------------------------------------------------
Transfer agent fees-Class C 231,866
---------------------------------------------------------
Trustees' fees 8,297
---------------------------------------------------------
Other 355,008
---------------------------------------------------------
Total expenses 21,676,333
---------------------------------------------------------
Less: Expenses paid indirectly (24,610)
---------------------------------------------------------
Net expenses 21,651,723
---------------------------------------------------------
Net investment income 39,844,592
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FOREIGN CURRENCY CONTRACTS,
FUTURES AND OPTION CONTRACTS
Net realized gain (loss) from:
Investment securities 3,906,222
---------------------------------------------------------
Foreign currencies (780,040)
---------------------------------------------------------
Foreign currency contracts 2,677,793
---------------------------------------------------------
Futures contracts 1,638,951
---------------------------------------------------------
Option contracts written 822,091
---------------------------------------------------------
8,265,017
---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 19,312,806
---------------------------------------------------------
Foreign currencies (51,117)
---------------------------------------------------------
Foreign currency contracts (704,602)
---------------------------------------------------------
Futures contracts (4,728,431)
---------------------------------------------------------
Option contracts written 348,117
---------------------------------------------------------
14,176,773
---------------------------------------------------------
Net gain from investment securities,
foreign currencies, foreign currency
contracts, futures and option contracts 22,441,790
---------------------------------------------------------
Net increase in net assets resulting from
operations $ 62,286,382
=========================================================
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 17
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 and the year ended December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 39,844,592 $ 65,090,620
---------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, foreign currency contracts, futures and
option contracts 8,265,017 46,845,306
---------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, foreign currency
contracts, futures and option contracts 14,176,773 374,938,596
---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 62,286,382 486,874,522
---------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (22,078,942) (42,749,278)
---------------------------------------------------------------------------------------------
Class B (9,212,097) (20,909,084)
---------------------------------------------------------------------------------------------
Class C (1,945,200) (3,188,689)
---------------------------------------------------------------------------------------------
Share transactions-net:
Class A 303,485,670 243,729,476
---------------------------------------------------------------------------------------------
Class B 133,575,699 132,034,584
---------------------------------------------------------------------------------------------
Class C 100,369,018 61,800,642
---------------------------------------------------------------------------------------------
Net increase in net assets 566,480,530 857,592,173
---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 3,184,150,172 2,326,557,999
---------------------------------------------------------------------------------------------
End of period $3,750,630,702 $3,184,150,172
=============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $2,932,591,776 $2,395,161,389
---------------------------------------------------------------------------------------------
Undistributed net investment income 7,013,280 404,927
---------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, foreign currency
contracts, futures and option contracts 23,217,672 14,952,655
---------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, foreign currency contracts, futures and
option contracts 787,807,974 773,631,201
---------------------------------------------------------------------------------------------
$3,750,630,702 $3,184,150,172
=============================================================================================
</TABLE>
See Notes to Financial Statements.
15
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Balanced 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 four separate 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 will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve as high a total return as possible, consistent with preservation
of capital.
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 the 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 as of the close of the
customary trading session 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 price on that day. Each security reported on the NASDAQ
National Market System is valued at the last sales price as of the close of
the customary trading session 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 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 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. For purposes of determining
net asset value per share, futures and option contracts generally will be
valued 15 minutes after the close of the customary trading session of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. 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 NYSE. 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 customary
trading session of the NYSE which would 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. Securities Transactions and Investment Income -- 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 on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
C. Distributions -- Distributions from income are declared and paid quarterly
and are recorded on ex-dividend date. Distributions from net realized capital
gains, if any, are generally paid annually and recorded on ex-dividend date.
The Fund may elect to use a portion of the proceeds from redemptions as
distributions for federal income tax purposes.
D. 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.
E. 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 the 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.
16
<PAGE> 19
F. 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 or if the value of the foreign currency changes
unfavorably.
Outstanding foreign currency contracts at June 30, 2000 were as follows:
<TABLE>
<CAPTION>
CONTRACT TO UNREALIZED
SETTLEMENT ---------------------- APPRECIATION
DATE DELIVER RECEIVE VALUE (DEPRECIATION)
---------- --------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
07/26/00 EUR 4,000,000 $3,769,200 $3,818,160 $(48,960)
</TABLE>
G. Futures Contracts -- The Fund may purchase or sell 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 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 that a change in value of
the contracts may not correlate with changes in the value of the securities
being hedged.
H. Covered Call Options -- The Fund may write call options, on a covered basis;
that is, the Fund will own the underlying security. Options written by the
Fund normally will have expiration dates between three and nine months from
the date written. The exercise price of a call option may be below, equal to,
or above the current market value of the underlying security at the time the
option is written. When the Fund writes a covered call option, an amount
equal to the premium received by the Fund is recorded as an asset and an
equivalent liability. The amount of the liability is subsequently
"marked-to-market" to reflect the current market value of the option written.
The current market value of a written option is the mean between the last bid
and asked prices on that day. If a written call option expires on the
stipulated expiration date, or if the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or a loss if the closing purchase
transaction exceeds the premium received when the option was written) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. If a written option is
exercised, the Fund realizes a gain or a loss from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written.
I. Bond Premiums -- It is the policy of the Fund not to amortize
market premiums on bonds for financial reporting purposes.
J. Expenses -- Distribution expenses and certain transfer agency expenses
directly attributable to a class of shares are charged to those classes'
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 investment advisory agreement,
the Fund pays an advisory fee to AIM at the annual rate of 0.75% of the first
$150 million of the Fund's average daily net assets, plus 0.50% 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. For the six months ended June 30, 2000, AIM was
paid $104,148 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the six months ended June 30, 2000, AFS
was paid $1,068,615 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 plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the
17
<PAGE> 20
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. For the six months ended June 30, 2000, the Class A, Class B
and Class C shares paid AIM Distributors $2,384,739, $6,179,107 and $1,238,933,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $712,451 from sales of the Class A
shares of the Fund during the six months ended June 30, 2000. 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,
2000, AIM Distributors received $167,847 in contingent deferred sales charges
imposed on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the six months ended June 30, 2000, the Fund paid legal fees of $4,020
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
For the six months ended June 30, 2000, the Fund received reductions in transfer
agency fees from AFS (an affiliate of AIM) and reductions in custodian fees of
$18,173 and $6,437, respectively, under expense offset arrangements which
resulted in a reduction of the Fund's total expenses of $24,610.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an
"interested person" of AIM. The Trust invests 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 Citibank, N.A. The Fund may borrow up to the lesser of
(i) $1,000,000,000 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,
2000, the Fund did not borrow under the line of credit agreement. The funds
which are party 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
the funds based on their respective average net assets for the period.
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, 2000 was
$1,461,631,934 and $881,066,300, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of June 30, 2000 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $871,595,938
---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (84,000,599)
---------------------------------------------------------
Net unrealized appreciation of investment
securities $787,595,339
---------------------------------------------------------
Cost of investments for tax purposes is $2,933,689,202.
</TABLE>
18
<PAGE> 21
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the six months ended June 30, 2000
are summarized as follows:
<TABLE>
<CAPTION>
CALL OPTION CONTRACTS
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ----------
<S> <C> <C>
Beginning of period 3,490 $1,494,360
------------------------------------------------------------------------------------
Written 1,250 698,102
------------------------------------------------------------------------------------
Closed (2,210) (851,926)
------------------------------------------------------------------------------------
Exercised (1,280) (642,434)
------------------------------------------------------------------------------------
End of period 1,250 $ 698,102
------------------------------------------------------------------------------------
</TABLE>
Open call option contract written at June 30, 2000 was as follows:
<TABLE>
<CAPTION>
JUNE 30,
CONTRACT STRIKE NUMBER OF PREMIUMS 2000 MARKET UNREALIZED
ISSUE MONTH PRICE CONTRACTS RECEIVED VALUE APPRECIATION
----- -------- ------ --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Analog Devices, Inc. Jul-00 $105 1,250 $698,102 $23,438 $674,664
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 8-FUTURES CONTRACTS
On June 30, 2000, $13,160,000 principal amount of U.S. Treasury obligations was
pledged as collateral to cover margin requirements for open futures contracts.
Open futures contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
NO. OF MONTH/ APPRECIATION
CONTRACT CONTRACTS COMMITMENT MARKET VALUE (DEPRECIATION)
-------- --------- ---------- ------------ --------------
<S> <C> <C> <C> <C>
NASDAQ 100 Index 246 Sep-00/Buy $ 93,898,200 $(307,079)
--------------------------------------------------------------------------------------------------------------------
S&P 500 Index 92 Sep-00/Buy 33,766,300 (443,900)
--------------------------------------------------------------------------------------------------------------------
$127,664,500 $(750,979)
--------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE 9-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2000 and the
year ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31, 1999
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 16,962,853 $ 555,650,374 24,207,279 $ 705,353,097
----------------------------------------------------------------------------------------------------------------------
Class B 6,894,100 225,853,854 9,923,280 287,877,047
----------------------------------------------------------------------------------------------------------------------
Class C 3,754,968 123,721,814 3,295,250 96,614,771
----------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 557,012 18,976,415 1,334,538 39,562,999
----------------------------------------------------------------------------------------------------------------------
Class B 226,957 7,718,800 652,505 19,306,388
----------------------------------------------------------------------------------------------------------------------
Class C 41,665 1,417,176 92,159 2,744,998
----------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (8,217,331) (271,141,119) (17,165,067) (501,186,620)
----------------------------------------------------------------------------------------------------------------------
Class B (3,032,190) (99,996,955) (6,020,681) (175,148,851)
----------------------------------------------------------------------------------------------------------------------
Class C (752,816) (24,769,972) (1,289,864) (37,559,127)
----------------------------------------------------------------------------------------------------------------------
16,435,218 $ 537,430,387 15,029,399 $ 437,564,702
======================================================================================================================
</TABLE>
19
<PAGE> 22
NOTE 10-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------
DECEMBER 31,
JUNE 30, ------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997 1996 1995
---------- ---------- ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 32.69 $ 28.23 $ 25.78 $ 21.84 $ 19.22 $ 14.62
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Income from investment operations:
Net investment income 0.44 0.82 0.71 0.60 0.66 0.49
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Net gains on securities (both realized and unrealized) 0.19 4.46 2.45 4.66 2.99 4.57
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Total from investment operations 0.63 5.28 3.16 5.26 3.65 5.06
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Less distributions:
Dividends from net investment income (0.37) (0.82) (0.65) (0.55) (0.55) (0.46)
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Distributions from net realized gains -- -- (0.06) (0.77) (0.48) --
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Total distributions (0.37) (0.82) (0.71) (1.32) (1.03) (0.46)
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Net asset value, end of period(d) $ 32.95 $ 32.69 $ 28.23 $ 25.78 $ 21.84 $ 19.22
======================================================== ========== ========== ========== ======== ======== =======
Total return(b) 1.89% 19.04% 12.46% 24.41% 19.25% 34.97%
======================================================== ========== ========== ========== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $2,121,437 $1,800,350 $1,318,230 $683,633 $334,189 $92,241
======================================================== ========== ========== ========== ======== ======== =======
Ratio of expenses to average net assets 0.92%(c) 0.94% 0.95% 0.98% 1.15% 1.43%(d)
======================================================== ========== ========== ========== ======== ======== =======
Ratio of net investment income to average net assets 2.71%(c) 2.81% 2.81% 2.48% 2.97% 2.81%
======================================================== ========== ========== ========== ======== ======== =======
Portfolio turnover rate 27% 65% 43% 66% 72% 77%
======================================================== ========== ========== ========== ======== ======== =======
</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 $1,918,273,271.
(d) After fee waivers and/or expenses reimbursements. The ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
1.46% for 1995.
<TABLE>
<CAPTION>
Class B
-----------------------------------------------------------------------
DECEMBER 31,
JUNE 30, -------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997 1996 1995
---------- ---------- ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 32.61 $ 28.18 $ 25.75 $ 21.83 $ 19.22 $ 14.62
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Income from investment operations:
Net investment income 0.31 0.58 0.42 0.38 0.48 0.31
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Net gains on securities (both realized and unrealized) 0.19 4.45 2.51 4.68 2.99 4.61
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Total from investment operations 0.50 5.03 2.93 5.06 3.47 4.92
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Less distributions:
Dividends from net investment income (0.24) (0.60) (0.44) (0.37) (0.38) (0.32)
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Distributions from net realized gains -- -- (0.06) (0.77) (0.48) --
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Total distributions (0.24) (0.60) (0.50) (1.14) (0.86) (0.32)
-------------------------------------------------------- ---------- ---------- ---------- -------- -------- -------
Net asset value, end of period $ 32.87 $ 32.61 $ 28.18 $ 25.75 $ 21.83 $ 19.22
======================================================== ========== ========== ========== ======== ======== =======
Total return(b) 1.51% 18.08% 11.53% 23.42% 18.28% 33.93%
======================================================== ========== ========== ========== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,326,871 $1,183,215 $ 894,165 $486,506 $237,082 $72,634
======================================================== ========== ========== ========== ======== ======== =======
Ratio of expenses to average net assets 1.74%(c) 1.75% 1.76% 1.79% 1.97% 2.21%
======================================================== ========== ========== ========== ======== ======== =======
Ratio of net investment income to average net assets 1.89%(c) 2.00% 2.00% 1.67% 2.15% 2.03%
======================================================== ========== ========== ========== ======== ======== =======
Portfolio turnover rate 27% 65% 43% 66% 72% 77%
======================================================== ========== ========== ========== ======== ======== =======
</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 $1,242,611,708.
(d) After fee waivers and/or expenses reimbursements. The ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
2.23% for 1995.
20
<PAGE> 23
NOTE 10-FINANCIAL HIGHLIGHTS-(CONTINUED)
<TABLE>
<CAPTION>
AUGUST 4,
1997
CLASS C (DATE SALES
----------------------------------- COMMENCED)
DECEMBER 31, TO
JUNE 30, -------------------- DECEMBER 31,
2000(a) 1999(a) 1998(a) 1997
-------- -------- -------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 32.65 $ 28.21 $ 25.76 $ 25.55
------------------------------------------------------------ -------- -------- -------- ------------
Income from investment operations:
Net investment income 0.31 0.58 0.42 0.16
------------------------------------------------------------ -------- -------- -------- ------------
Net gains on securities (both realized and unrealized) 0.18 4.46 2.53 1.01
------------------------------------------------------------ -------- -------- -------- ------------
Total from investment operations 0.49 5.04 2.95 1.17
------------------------------------------------------------ -------- -------- -------- ------------
Less distributions:
Dividends from net investment income (0.24) (0.60) (0.44) (0.19)
------------------------------------------------------------ -------- -------- -------- ------------
Distributions from net realized gains -- -- (0.06) (0.77)
------------------------------------------------------------ -------- -------- -------- ------------
Total distributions (0.24) (0.60) (0.50) (0.96)
------------------------------------------------------------ -------- -------- -------- ------------
Net asset value, end of period $ 32.90 $ 32.65 $ 28.21 $ 25.76
============================================================ ======== ======== ======== ============
Total return(b) 1.47% 18.09% 11.60% 4.67%
============================================================ ======== ======== ======== ============
Ratios/supplemental data:
Net assets, end of period (000s omitted) $302,323 $200,585 $114,163 $ 9,394
============================================================ ======== ======== ======== ============
Ratio of expenses to average net assets 1.74%(c) 1.75% 1.73% 1.78%(d)
============================================================ ======== ======== ======== ============
Ratio of net investment income to average net assets 1.89%(c) 2.00% 2.03% 1.68%(d)
============================================================ ======== ======== ======== ============
Portfolio turnover rate 27% 65% 43% 66%
============================================================ ======== ======== ======== ============
</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 $249,147,984.
(d) Annualized.
21
<PAGE> 24
PROXY RESULTS (UNAUDITED)
A Special Meeting of Shareholders of AIM Funds Group, a Delaware business trust
(the "Trust"), was held on May 3, 2000. The meeting was held for the following
purposes:
(1) To elect Trustees as follows: Charles T. Bauer, Bruce L. Crockett, Owen Daly
II, Edward K. Dunn, Jr., Jack M. Fields, Carl Frischling, Robert H. Graham,
Prema Mathai-Davis, Lewis F. Pennock and Louis S. Sklar.
(2) To approve a new Master Investment Advisory Agreement for AIM Balanced Fund
(the "Fund").
(3) To approve changing the fundamental investment restrictions of the Fund.
(4) To approve changing the investment objective of the Fund and making it
non-fundamental.
(5) To ratify the selection of KPMG LLP as independent accountants of the Fund
for the fiscal year ending in 2000.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
VOTES WITHHELD/
TRUSTEES/MATTER VOTES FOR AGAINST ABSTENTIONS
--------------- ------------- ------- -----------
<S> <C> <C> <C> <C>
(1) Charles T. Bauer............................................ 1,514,464,534 N/A 46,493,668
Bruce L. Crockett........................................... 1,516,486,806 N/A 44,471,396
Owen Daly II................................................ 1,515,115,325 N/A 45,842,877
Edward K. Dunn, Jr. ........................................ 1,516,300,879 N/A 44,657,323
Jack M. Fields.............................................. 1,516,328,985 N/A 44,629,217
Carl Frischling............................................. 1,515,733,560 N/A 45,224,642
Robert H. Graham............................................ 1,516,470,809 N/A 44,487,393
Prema Mathai-Davis.......................................... 1,515,583,756 N/A 45,374,446
Lewis F. Pennock............................................ 1,516,458,889 N/A 44,499,313
Louis S. Sklar.............................................. 1,516,220,167 N/A 44,738,035
(2) Adjournment of approval of a new Investment Advisory
Agreement................................................... 34,593,906 487,772 17,953,971*
(3)(a) Adjournment of approval of changing the Fundamental
Restriction on Issuer Diversification....................... 34,116,165 656,991 18,262,493*
(3)(b) Adjournment of approval of changing the Fundamental
Restriction on Borrowing Money and Issuing Senior
Securities.................................................. 33,923,529 857,077 18,255,043*
(3)(c) Adjournment of changing or adding the Fundamental
Restriction on Underwriting Securities...................... 34,111,021 669,623 18,255,005*
(3)(d) Adjournment of changing or adding the Fundamental
Restriction on Industry Concentration....................... 34,110,121 666,758 18,258,770*
(3)(e) Adjournment of approval of changing the Fundamental
Restriction on Purchasing or Selling Real Estate............ 33,895,130 889,699 18,250,820*
(3)(f) Adjournment of approval of changing the Fundamental
Restriction on Purchasing or Selling Commodities and
Elimination of Fundamental Restriction on Puts and Calls.... 33,850,670 911,613 18,273,366*
(3)(g) Adjournment of approval of changing the Fundamental
Restriction on Making Loans................................. 33,769,910 921,974 18,343,765*
(3)(h) Adjournment of approval of a new Fundamental Investment
Restriction on Investing all of the Fund's assets in an
Open-End Fund............................................... 33,902,131 777,127 18,356,391*
(3)(i) Adjournment of approval of the Elimination of the
Fundamental Restriction on Short Sales of Securities........ 33,696,700 961,584 18,377,365*
(4) Adjournment of approval of changing the Investment Objective
and Making it Non-Fundamental............................... 33,666,539 958,519 18,410,591*
(5) Ratification of the selection of KPMG LLP as Independent
Accountants of the Fund..................................... 50,706,856 276,785 2,052,008
</TABLE>
22
<PAGE> 25
The Special Meeting of Shareholders of the Trust was reconvened on May 31,
2000. The following matters were then considered:
<TABLE>
<CAPTION>
VOTES WITHHELD/
MATTER VOTES FOR AGAINST ABSTENTIONS
------ ------------- --------- -----------
<S> <C> <C> <C> <C>
(2) Approval of a new Investment Advisory Agreement............. 43,783,995 1,340,207 14,923,198*
(3)(a) Change to Fundamental Restriction on Issuer
Diversification............................................. 43,937,220 844,115 15,266,065*
(3)(b) Change to Fundamental Restriction on Borrowing Money and
Issuing Senior Securities................................... 43,725,158 1,069,614 15,252,628*
(3)(c) Change to or Addition of Fundamental Restriction on
Underwriting Securities..................................... 43,934,817 852,930 15,259,653*
(3)(d) Change to or Addition of Fundamental Restriction on Industry
Concentration............................................... 43,940,399 849,973 15,257,028*
(3)(e) Change to Fundamental Restriction on Purchasing or Selling
Real Estate................................................. 43,692,085 1,104,425 15,250,890*
(3)(f) Change to Fundamental Restriction on Purchasing or Selling
Commodities and Elimination of Fundamental Restriction on
Puts and Calls.............................................. 43,552,319 1,223,365 15,271,716*
(3)(g) Change to Fundamental Restriction on Making Loans........... 43,542,325 1,166,776 15,338,299*
(3)(h) Approval of a new Fundamental Investment Restriction on
Investing all of the Fund's assets in an Open-End Fund...... 43,638,489 1,045,495 15,363,416*
(3)(i) Elimination of the Fundamental Restriction on Short Sales of
Securities.................................................. 43,476,785 1,186,248 15,384,367*
(4) Approval of Changing the Investment Objective and Making it
Non-Fundamental............................................. 42,349,558 2,267,737 15,430,105*
</TABLE>
----------
* Includes Broker Non-Votes.
23
<PAGE> 26
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Director and 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
Formerly 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, President CUSTODIAN
and Chief Operating Officer, Stuart W. Coco
Mercantile-Safe Deposit & Trust Co.; and Vice President State Street Bank and Trust Company
President, Mercantile Bankshares 225 Franklin Street
Melville B. Cox Boston, MA 02110
Jack Fields Vice President
Chief Executive Officer COUNSEL TO THE FUND
Texana Global, Inc. and Karen Dunn Kelley
Twenty First Century Group, Inc.; Vice President Ballard Spahr
Formerly Member Andrews & Ingersoll, LLP
of the U.S. House of Representatives Edgar M. Larsen 1735 Market Street
Vice President Philadelphia, PA 19103
Carl Frischling
Partner Mary J. Benson COUNSEL TO THE TRUSTEES
Kramer, Levin, Naftalis & Frankel LLP Assistant Vice President and
Assistant Treasurer Kramer, Levin, Naftalis & Frankel LLP
Robert H. Graham 919 Third Avenue
Director, President and Chief Executive Officer Sheri Morris New York, NY 10022
A I M Management Group Inc. Assistant Vice President and
Assistant Treasurer DISTRIBUTOR
Prema Mathai-Davis
Formerly, Chief Executive Officer, YWCA of the U.S.A. Renee A. Friedli A I M Distributors, Inc.
Assistant Secretary 11 Greenway Plaza
Lewis F. Pennock Suite 100
Attorney P. Michelle Grace Houston, TX 77046
Assistant Secretary
Louis S. Sklar
Executive Vice President, Development and Operations, Nancy L. Martin
Hines Interests Assistant Secretary
Limited Partnership
Ofelia M. Mayo
Assistant Secretary
Lisa A. Moss
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
</TABLE>
24
<PAGE> 27
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OUR AUTOMATED
AIM INVESTOR LINE,
800-246-5463,
PROVIDES CURRENT ACCOUNT
INFORMATION AND THE PRICE,
YIELD AND TOTAL RETURN
ON ALL AIM FUNDS
24 HOURS A DAY.
YOU CAN ALSO ORDER
A YEAR-TO-DATE STATEMENT
OF YOUR ACCOUNT.
-------------------------------------
AIM FUNDS--Registered Trademark-- MAKES INVESTING EASY
o AIM BANK CONNECTION(SM). You can invest in your AIM account in amounts from
$50 to $100,000 without writing a check. Once you set up this convenient
feature, AIM will draw the funds from your pre-authorized checking account
at your request.
o AIM INTERNET CONNECT(SM). Sign up for this service and you can buy, redeem
or exchange shares of AIM funds in your AIM account simply by visiting our
Web site at www.aimfunds.com. For a retirement account, such as an IRA or a
403(b), only exchanges are allowed over the Internet because of the
tax-reporting and record-keeping requirements these accounts involve.
o AUTOMATIC REINVESTMENT OF DIVIDENDS AND/OR CAPITAL GAINS. You can receive
distributions in cash, or you can reinvest them in your account without
paying a sales charge. Over time, the power of compounding can significantly
increase the value of your account.
o AUTOMATIC INVESTMENT PLAN. You can add to your account by authorizing your
AIM fund to withdraw a specified amount, minimum $50, from your bank account
on a regular schedule.
o EASY ACCESS TO YOUR MONEY. You can redeem shares of your AIM fund any day
the New York Stock Exchange is open. The value of the shares may be more or
less than their original cost depending on market conditions.
o EXCHANGE PRIVILEGE. As your investment goals change, you may exchange part
or all of your shares of one fund for shares of a different AIM fund within
the same share class. You may make up to 10 such exchanges per calendar
year.
o TAX-ADVANTAGED RETIREMENT PLANS. You can enjoy the tax advantages offered by
a variety of investment plans, including Traditional IRAs, Roth IRAs and
education IRAs, among others.
o E-MAIL ACCESS. You can contact us at [email protected] for general
information. For account information, contact us at
[email protected].
o www.aimfunds.com. our award-winning Web site provides account information,
shareholder education and fund-performance information.
<PAGE> 28
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
EQUITY FUNDS
DOMESTIC EQUITY FUNDS INTERNATIONAL/GLOBAL EQUITY FUNDS A I M Management Group Inc. has
provided leadership in the mutual
MORE AGGRESSIVE MORE AGGRESSIVE fund industry since 1976 and
AIM Small Cap Opportunities(1) AIM Latin American Growth managed approximately $176 billion
AIM Mid Cap Opportunities(2) AIM Developing Markets in assets for more than 8 million
AIM Large Cap Opportunities AIM Asian Growth shareholders, including individual
AIM Emerging Growth AIM Japan Growth investors, corporate clients and
AIM Small Cap Growth(3) AIM European Development financial institutions, as of
AIM Aggressive Growth AIM EurolandGrowth(5) June 30, 2000.
AIM Mid Cap Growth AIM Global Aggressive Growth The AIM Family of
AIM Capital Development AIM International Equity Funds--Registered Trademark-- is
AIM Constellation(4) AIM Advisor International Value distributed nationwide, and AIM
AIM Dent Demographic Trends AIM Global Trends(6) today is the eighth-largest mutual
AIM Select Growth AIM Global Growth fund complex in the United States
AIM Large Cap Growth in assets under management,
AIM Weingarten MORE CONSERVATIVE according to Strategic Insight, an
AIM Mid Cap Equity SECTOR EQUITY FUNDS independent mutual fund monitor.
AIM Charter AIM is a subsidiary of AMVESCAP
AIM Value MORE AGGRESSIVE PLC, one of the world's largest
AIM Blue Chip AIM Global Telecommunications and Technology independent financial services
AIM Basic Value AIM Global Resources companies with $389 billion in
AIM Large Cap Basic Value AIM Global Financial Services assets under management as of
AIM Balanced AIM Global Health Care June 30, 2000.
AIM Advisor Flex AIM Global Consumer Products and Services
AIM Global Infrastructure
MORE CONSERVATIVE AIM Advisor Real Estate
AIM Global Utilities
MORE CONSERVATIVE
FIXED-INCOME FUNDS
TAXABLE FIXED-INCOME FUNDS TAX-FREE FIXED-INCOME FUNDS
MORE AGGRESSIVE MORE AGGRESSIVE
AIM Strategic Income AIM High Income Municipal
AIM High Yield II AIM Tax-Exempt Bond of Connecticut
AIM High Yield AIM Municipal Bond
AIM Income AIM Tax-Free Intermediate
AIM Global Income AIM Tax-Exempt Cash
AIM Floating Rate(7)
AIM Intermediate Government MORE CONSERVATIVE
AIM Limited Maturity Treasury
AIM Money Market
MORE CONSERVATIVE
</TABLE>
The AIM Risk Spectrum illustrates equity and fixed-income funds from most
aggressive to most conservative. When assessing the degree of risk, three
factors were considered: the funds' portfolio holdings, volatility patterns over
time and diversification permitted within the fund. Fund rankings are relative
to one another within The AIM Family of Funds--Registered Trademark-- and should
not be compared with other investments. There is no guarantee that any one AIM
fund will be less volatile than any other. (1) AIM Small Cap Opportunities Fund
closed to new investors Nov. 4, 1999. (2) AIM Mid Cap Opportunities Fund closed
to new investors March 21, 2000. (3) AIM Small Cap Growth Fund closed to new
investors Nov. 8, 1999. (4) AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations Dec. 1, 1999.
(5) AIM Europe Growth Fund was renamed AIM Euroland Growth Fund Sept. 1, 1999.
(6) AIM Global Trends Fund was restructured to operate as a traditional mutual
fund Aug. 27, 1999. Previously, the fund operated as a fund of funds. (7)AIM
Floating Rate Fund was restructured to offer multiple share classes April 3,
2000. Existing shares were converted to Class B shares, and Class C shares
commenced offering.
FOR MORE COMPLETE INFORMATION ABOUT ANY AIM FUND, INCLUDING SALES CHARGES
AND EXPENSES, OBTAIN THE APPROPRIATE PROSPECTUS(ES) FROM YOUR FINANCIAL ADVISOR.
PLEASE READ THE PROSPECTUS(ES) CAREFULLY BEFORE YOU INVEST OR SEND MONEY. This
brochure is not authorized for distribution to prospective investors unless
preceded or accompanied by a currently effective fund prospectus. If used after
Oct. 20, 2000, this brochure must be accompanied by a fund Performance &
Commentary or by an AIM Quarterly Review of Performance for the most recent
quarter end.
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INVEST WITH DISCIPLINE
--Registered Trademark--
A I M Distributors, Inc. BAL-SAR-1
