<PAGE> 1
ANNUAL REPORT / DECEMBER 31 1999
AIM VALUE FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-------------------------------------
THE ANTIQUE DEALER
BY HEINRICH EDE (1846)
ANTIQUE DEALERS SEARCH FOR RARE, HISTORIC PIECES THAT MAY
APPRECIATE IN VALUE. FINE ANTIQUES DEVELOP A PATINA THAT CANNOT
BE DUPLICATED, BUT BUILDS ONLY WITH TIME. LIKE ANTIQUE COLLECTING,
INVESTING ALSO TAKES PATIENCE AND AN EYE FOR INTRINSIC VALUE.
-------------------------------------
AIM Value Fund seeks long-term growth of capital by investing primarily in
stocks that are considered by the fund's investment advisor to be undervalued
relative to the stock market as a whole.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Value Fund performance figures are historical, and they reflect changes
in net asset value and reinvestment of distributions.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B and Class C shares will differ from
that of its Class A shares due to different sales-charge structure and
expenses.
o During the fiscal year ended 12/31/99, the fund paid distributions of $3.25
per share for Class A, Class B and Class C shares.
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 Index of 500 Stocks (S&P 500) is
generally considered representative of the stock market in general.
o An investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends and do not reflect sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF
YOUR MONEY.
This report may be distributed only to current shareholders or to persons who
have received a current prospectus of the fund.
AIM VALUE FUND
<PAGE> 3
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
The fiscal year discussed in this report has reconfirmed our
[PHOTO OF faith in two long-established principles of investing:
Charles T. portfolio diversification and long-term thinking. We could
Bauer, title this report "What a Difference a Year Makes."
Chairman of An investor surveying conditions when the fiscal year
the Board of opened on January 1, 1999, would have seen a market
THE FUND dominated by large-capitalization stocks and high-quality
APPEARS HERE] bonds, especially U.S. Treasuries. During 1998, two
well-known indexes of large-capitalization U.S. companies,
the S&P 500 and the Dow Jones Industrial Average, were up
28.60% and 18.15%, respectively. By contrast,
smaller-company stocks in the Russell 2000 had lost 2.55%.
Overseas, many markets were languishing, especially in Asia,
where so many financial difficulties had originated in 1997.
In bond markets as well, name-brand quality was the
place to be. The Lehman Government/Corporate Bond Index,
which follows sovereign issues and investment-grade debt, was up 9.47%, while
the Lehman High Yield Index, which tracks riskier "junk bonds," had risen only
1.60%.
It would be easy for an investor to conclude that blue-chip issues, whether
equity or fixed-income, were the place to be, that it was time to divest himself
of everything else and put all his eggs in the blue-chip basket. The investor,
of course, would be wrong.
MARKETS TURN
While large-capitalization stocks continued to do very well, during 1999
markets broadened dramatically with many investment sectors performing a
complete turnaround. For example, the small-cap stocks in the Russell 2000 were
up 21.26% for calendar year 1999, and many Asian markets, particularly Japan,
had staged a comeback.
The same holds true of bonds. The higher-quality Lehman index was down 2.15%
during 1999 while the Lehman High Yield index was up 2.39%.
The point, at the risk of sounding repetitive to those of you who have
invested with us for a long time, is that this is why diversification is a
fundamental investing principle. Market sectors and asset classes go in and out
of favor, but over the long run--and the long run is several years--the
markets' overall trend has been upward. Selecting an asset class or a market
sector on the basis of a short-term snapshot of conditions is usually unwise,
as is concentrating your portfolio in one asset class. Staying fully invested
in a diversified portfolio remains a compelling strategy and one of your best
prospects for long-term gain. We also continue to remind you that the past few
years have seen extraordinary gains in some markets, and there is no assurance
that this trend will continue.
LOOKING AHEAD
As we look about at the close of this fiscal year, we are encouraged by
multiple signs of economic health in Europe and Asia, not to mention the
prolonged U.S. economic expansion. However, we are aware of how easily an
investor could have been misled by conditions just 12 months ago. For our
shareholders, we therefore reiterate our commitment to investing through a
financial advisor. In addition to helping you select investments appropriate to
your time horizon and risk tolerance, a financial advisor can keep you informed
about how changing market conditions affect you and your portfolio--and help
ensure that when you do alter your investments, there's a logical reason for
doing so. AIM believes every investor should be guided by a financial
professional.
FUND MANAGERS COMMENT
In the pages that follow, your fund's portfolio managers discuss how they
managed your fund during the year ended December 31, how the markets behaved
and what they foresee for the near future. We trust you will find their
discussion informative. If you have any questions or comments, we invite you to
contact us, either at our Web site, aimfunds.com, or through our Client
Services department at 800-959-4246. Information about your account is also
available through our automated AIM Investor Line, 800-246-5463.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Advisors, Inc.
-------------------------------------
STAYING FULLY
INVESTED IN A DIVERSIFIED
PORTFOLIO REMAINS
A COMPELLING STRATEGY
AND ONE OF YOUR
BEST PROSPECTS FOR
LONG-TERM GAIN.
-------------------------------------
AIM VALUE FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
TECHNOLOGY BUOYS AIM VALUE FUND
HOW DID AIM VALUE FUND PERFORM OVER THE FISCAL YEAR?
AIM Value Fund reported strong results for the fiscal year ended December 31,
1999. The fund's Class A shares returned 29.95%, Class B shares 28.94%, and
Class C shares 28.92%. These returns are at net asset value and exclude sales
charges. This performance outpaced the S&P 500, which rose 21.03% over the
reporting period.
The fund's net assets grew substantially from $18.7 billion as of December
31, 1998, to $27.8 billion at the end of the fiscal year, solidifying its
position as AIM's largest fund.
WHAT WERE MARKET CONDITIONS LIKE OVER THE FISCAL YEAR?
If the 1998 market could be considered a flight to quality, the 1999 market
could be characterized as a stampede to growth. The bull market in technology
stocks sent the stock market to new heights in 1999, but this tide did not lift
all boats. While the S&P 500 reached new levels, many stocks suffered down or
flat years. Among the S&P 500 stocks, 256 declined, 241 rose and three were
unchanged.
The best-performing stocks were those with the most perceived growth
potential: technology, telecommunications and broadcasting stocks. Computers,
e-commerce and the Internet are changing the way the world communicates and
conducts business, and investors sought to capitalize on this revolution.
Technology stocks dominated the market; in fact, while the S&P 500 as a whole
returned 21.03% in 1999, the index's technology sector returned 75.21%.
Stocks with no ties to information technology faced a volatile year.
Investors worried about interest rates throughout 1999. In June and August, the
Federal Reserve Board (the Fed) raised rates in two quarter-point moves. The Fed
chose to leave rates unchanged in October but increased them by another
quarter-point in November. In December, a Fed decision to leave rates unchanged
sparked a market rally.
HOW DID YOU MANAGE THE FUND DURING THESE CONDITIONS?
We maintained our investment discipline: growth at a reasonable price, or GARP.
For a stock to be included in our portfolio, it must meet the following
criteria:
o Earnings-- we believe earnings drive stock prices.
o Momentum-- we analyze a company's growth rate to determine whether it is
accelerating or slowing.
o Value -- we look for stocks with relatively low prices compared to their
earnings and projected growth rates.
Many stocks offered growth in 1999, but did not sell at a reasonable price.
Some sold at low prices but didn't offer the growth we require. Because it was
harder to find stocks that met our criteria, we trimmed the number of holdings
in the portfolio from 90 to 54 over the fiscal year. This allowed us to
concentrate on the best-performing stocks.
NET ASSETS GROW
in billions
================================================================================
12/31/98 $18.7
6/30/99 $23.2
12/31/99 $27.8
================================================================================
AIM VALUE FUND VS. BENCHMARK INDEX
Total returns, excluding sales charges,
for the year ended 12/31/99
================================================================================
FUND FUND FUND S&P 500
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
- --------------------------------------------------------------------------------
29.95% 28.94% 28.92% 21.03%
================================================================================
See important fund and index disclosures inside front cover.
AIM VALUE FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 12/31/99, based on total net assets
<TABLE>
<CAPTION>
=============================================================================================================================
TOP 10 HOLDINGS TOP 10 INDUSTRIES
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Nokia Oyj-ADR (Finland) 7.51% 1. Communications Equipment 10.06%
2. Dayton-Hudson Corp. 4.86 2. Computers (Hardware) 9.05
3. Nextel Communications, Inc.-Class A 4.82 3. Broadcasting (Television, Radio & Cable) 8.83
4. Comcast Corp.-Class A 4.80 4. Retail (General Merchandise) 6.71
5. Cox Communications Inc.-Class A 3.34 5. Computers (Software & Services) 6.15
6. American International Group, Inc. 3.15 6. Telecommunications (Cellular/Wireless) 4.82
7. Time Warner Inc. 3.12 7. Insurance (Multi-Line) 3.66
8. Apple Computer, Inc. 2.95 8. Financial (Diversified) 3.62
9. Gateway Inc. 2.94 9. Entertainment 3.12
10. Tyco International Ltd. 2.69 10. Equipment (Semiconductors) 2.89
Please keep in mind that the fund's portfolio composition is subject to change,
and there is no assurance that the fund will continue to hold any particular
security.
=============================================================================================================================
</TABLE>
WHAT CHANGES DID YOU MAKE TO THE PORTFOLIO?
We boosted the fund's holdings in technology stocks throughout the year and
were overweighted in this area compared to the S&P 500. As of December 31,
1999, technology stocks made up 32.1% of the fund's portfolio. Our holdings
included the stocks of companies involved in Internet infrastructure, such as
telecommunications, wireless communications, cable-TV firms and
computer-hardware makers.
At the same time, we reduced the fund's exposure in financial stocks as
interest rate concerns caused substantial volatility in that sector. The fund
also trimmed its holdings in pharmaceutical stocks because of regulatory
concerns clouding the industry in 1999.
WHAT STOCKS DID YOU LIKE?
Nokia remained a core holding for the fund. The Finnish cellular-phone maker,
the world-wide leader in the wireless market, is a pioneer in delivering
Internet content over cellular phones.
Time Warner, another long-time holding for the fund, announced a $166
billion merger with America Online after the close of the fiscal year. This
record-breaking deal combines the world's largest media and entertainment
company with the world's top Internet provider. We believe this merger further
establishes the Internet as a communications powerhouse.
New to the portfolio are Nextel and Apple Computer. Nextel is a national
wireless-phone company covering 92 of the top U.S. metropolitan areas. The
company is launching Nextel Online, which allows customers to use their
cellular phones for Internet access and e-mail.
Apple Computer is a turn-around story that perfectly met our investment
criteria: a relatively low stock price, attractive new products and good
earnings momentum. Its co-founder Steve Jobs has resumed control of the
once-foundering company and won back many consumers with products like the iMac,
iBook and G4 computers.
WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
We believe the long-term outlook is positive for equities. The United States is
experiencing one of the longest expansion periods in its history. The economy
remains strong, inflation is low and the country is enjoying a budget surplus.
After the close of the fiscal year, the Fed raised rates again. This
triggered more market volatility, which could persist for the near term. In
this type of environment, it pays to maintain our disciplined investment
strategy. The fund will continue to look for buying opportunities during market
troughs and selling opportunities at peaks.
See important fund and index disclosures inside front cover.
AIM VALUE FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM VALUE FUND VS. BENCHMARK INDEX
5/1/84-12/31/99
in thousands
================================================================================
AIM Value
Fund Class A
Shares S&P 500
- --------------------------------------------------------------------------------
12/84 10,000 10,785
12/85 12,744 14,207
12/86 13,865 16,859
12/87 14,692 17,745
12/88 17,719 20,684
12/89 23,307 27,226
12/90 23,746 26,380
12/91 34,064 34,399
12/92 39,648 37,017
12/93 47,065 40,739
12/94 48,606 41,275
12/95 65,545 56,767
12/96 75,061 69,792
12/97 93,038 93,068
12/98 123,521 119,685
12/99 160,512 144,859
Source: Lipper, Inc.
Past performance cannot guarantee comparable future results.
================================================================================
ABOUT THIS CHART
The chart compares your fund's Class A shares to a benchmark index. It is
intended to give you an idea of how your fund performed compared to these
indexes over the period 5/1/84-12/31/99. (Data for the indexes is for the
period 4/30/84- 12/31/99.)
It is important to understand the differences between your fund and this
index. An index measures the performance of a hypothetical portfolio. A
market index such as the S&P 500 is not managed, incurring no sales charges,
expenses or fees. If you could buy all the securities that make up a market
index, you would incur expenses that would affect your investment's return.
AVERAGE ANNUAL TOTAL RETURNS
As of 12/31/99, including sales charges
================================================================================
CLASS A SHARES
Inception (5/1/84) 19.38%
10 years 20.60
5 years 25.56
1 year 22.80*
*29.95% excluding sales charges
CLASS B SHARES
Inception (10/18/93) 20.78%
5 years 25.80
1 year 23.94*
*28.94% excluding CDSC
CLASS C SHARES
Inception (8/4/97) 24.55%
1 year 27.92*
*28.92% excluding CDSC
================================================================================
Your fund's total return includes sales charges, expenses and management fees.
The performance of the fund's Class B and Class C shares will differ from that
of its Class A shares due to differing fees and expenses. For fund performance
calculations and description of the index cited on this page, please see the
inside front cover.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. THE
RESULTS OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
AIM VALUE FUND
4
<PAGE> 7
ANNUAL REPORT / FOR CONSIDERATION
[ART WORK] 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 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
[ART WORK]
A I M VALUE FUND
5
<PAGE> 8
ANNUAL REPORT / FOR CONSIDERATION
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.
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.
A I M VALUE FUND
6
<PAGE> 9
SCHEDULE OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY
INTERESTS-90.13%
BANKS (MONEY CENTER)-1.21%
Chase Manhattan Corp. (The) 4,350,000 $ 337,940,625
- ----------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO
& CABLE)-8.83%
Comcast Corp.-Class A 26,600,000 1,336,650,000
- ----------------------------------------------------------------
Cox Communications, Inc.-Class
A(a) 18,075,600 930,893,400
- ----------------------------------------------------------------
MediaOne Group, Inc. 2,500,000 192,031,250
- ----------------------------------------------------------------
2,459,574,650
- ----------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-10.06%
Comverse Technology, Inc.(a) 725,000 104,943,750
- ----------------------------------------------------------------
Lucent Technologies Inc. 1,800,000 134,662,500
- ----------------------------------------------------------------
Motorola, Inc. 3,200,000 471,200,000
- ----------------------------------------------------------------
Nokia Oyj-ADR (Finland) 11,000,000 2,090,000,000
- ----------------------------------------------------------------
2,800,806,250
- ----------------------------------------------------------------
COMPUTERS (HARDWARE)-9.05%
Apple Computer, Inc.(a) 8,000,000 822,500,000
- ----------------------------------------------------------------
Gateway Inc.(a) 11,361,100 818,709,269
- ----------------------------------------------------------------
International Business Machines
Corp. 4,257,400 459,799,200
- ----------------------------------------------------------------
Sun Microsystems, Inc.(a) 5,400,000 418,162,500
- ----------------------------------------------------------------
2,519,170,969
- ----------------------------------------------------------------
COMPUTERS (PERIPHERALS)-2.44%
EMC Corp.(a) 987,400 107,873,450
- ----------------------------------------------------------------
Lexmark International Group,
Inc.- Class A(a) 6,300,000 570,150,000
- ----------------------------------------------------------------
678,023,450
- ----------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-6.15%
At Home Corp.-Series A(a) 12,000,000 514,500,000
- ----------------------------------------------------------------
BMC Software, Inc.(a) 2,200,000 175,862,500
- ----------------------------------------------------------------
Citrix Systems, Inc.(a) 656,000 80,688,000
- ----------------------------------------------------------------
Microsoft Corp.(a) 4,200,000 490,350,000
- ----------------------------------------------------------------
Unisys Corp.(a) 14,108,100 450,577,444
- ----------------------------------------------------------------
1,711,977,944
- ----------------------------------------------------------------
CONSUMER FINANCE-0.20%
Providian Financial Corp. 600,000 54,637,500
- ----------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.48%
Solectron Corp.(a) 1,400,000 133,175,000
- ----------------------------------------------------------------
ELECTRONICS
(INSTRUMENTATION)-0.09%
Waters Corp.(a) 500,000 26,500,000
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRONICS
(SEMICONDUCTORS)-1.47%
Analog Devices, Inc.(a) 1,600,000 $ 148,800,000
- ----------------------------------------------------------------
Texas Instruments Inc. 2,700,000 261,562,500
- ----------------------------------------------------------------
410,362,500
- ----------------------------------------------------------------
ENTERTAINMENT-3.12%
Time Warner Inc. 12,000,000 869,250,000
- ----------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-2.89%
Applied Materials, Inc.(a) 5,000,000 633,437,500
- ----------------------------------------------------------------
Teradyne, Inc.(a) 2,584,100 170,550,600
- ----------------------------------------------------------------
803,988,100
- ----------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-3.62%
American Express Co. 1,638,800 272,450,500
- ----------------------------------------------------------------
Associates First Capital
Corp.-Class A 10,600,000 290,837,500
- ----------------------------------------------------------------
Citigroup Inc. 6,500,000 361,156,250
- ----------------------------------------------------------------
Freddie Mac 1,800,000 84,712,500
- ----------------------------------------------------------------
1,009,156,750
- ----------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.62%
Bristol-Myers Squibb Co. 6,000,000 385,125,000
- ----------------------------------------------------------------
Warner-Lambert Co. 800,000 65,550,000
- ----------------------------------------------------------------
450,675,000
- ----------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-1.82%
Pharmacia & Upjohn, Inc. 11,266,600 506,997,000
- ----------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.55%
Guidant Corp. 15,100,000 709,700,000
- ----------------------------------------------------------------
HOUSEHOLD PRODUCTS
(NON-DURABLES)-1.39%
Colgate-Palmolive Co. 3,925,500 255,157,500
- ----------------------------------------------------------------
Kimberly-Clark Corp. 2,000,000 130,500,000
- ----------------------------------------------------------------
385,657,500
- ----------------------------------------------------------------
INSURANCE (MULTI-LINE)-3.66%
American International Group,
Inc. 8,100,000 875,812,500
- ----------------------------------------------------------------
Hartford Financial Services
Group, Inc. (The) 3,000,000 142,125,000
- ----------------------------------------------------------------
1,017,937,500
- ----------------------------------------------------------------
INVESTMENT
BANKING/BROKERAGE-2.46%
Morgan Stanley Dean Witter &
Co. 4,801,500 685,414,125
- ----------------------------------------------------------------
LODGING-HOTELS-1.48%
Carnival Corp. 8,600,000 411,187,500
- ----------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MANUFACTURING
(DIVERSIFIED)-2.69%
Tyco International Ltd. 19,241,100 $ 747,997,762
- ----------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.79%
Weyerhaeuser Co. 3,076,300 220,916,794
- ----------------------------------------------------------------
RESTAURANTS-0.38%
McDonald's Corp. 2,600,000 104,812,500
- ----------------------------------------------------------------
RETAIL (BUILDING
SUPPLIES)-0.79%
Lowe's Cos., Inc. 3,700,000 221,075,000
- ----------------------------------------------------------------
RETAIL (COMPUTERS &
ELECTRONICS)-1.84%
Best Buy Co., Inc.(a) 10,190,300 511,425,681
- ----------------------------------------------------------------
RETAIL (FOOD CHAINS)-1.90%
Kroger Co. (The)(a) 18,232,200 344,132,775
- ----------------------------------------------------------------
Safeway Inc.(a) 5,200,000 184,925,000
- ----------------------------------------------------------------
529,057,775
- ----------------------------------------------------------------
RETAIL (GENERAL
MERCHANDISE)-6.71%
Costco Wholesale Corp.(a) 5,650,000 515,562,500
- ----------------------------------------------------------------
Dayton Hudson Corp. 18,428,100 1,353,313,594
- ----------------------------------------------------------------
1,868,876,094
- ----------------------------------------------------------------
SERVICES (ADVERTISING/
MARKETING)-1.80%
Omnicom Group, Inc. 5,000,000 500,000,000
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SERVICES (DATA
PROCESSING)-1.88%
First Data Corp. 10,600,000 $ 522,712,500
- ----------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-4.82%
Nextel Communications,
Inc.-Class A(a) 13,000,000 1,340,625,000
- ----------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-1.94%
MCI WorldCom, Inc.(a) 10,200,000 541,237,500
- ----------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$15,946,920,824) 25,090,868,969
- ----------------------------------------------------------------
MONEY MARKET FUNDS-9.74%
STIC Liquid Assets Portfolio(b) 1,356,024,528 1,356,024,528
- ----------------------------------------------------------------
STIC Prime Portfolio(b) 1,356,024,528 1,356,024,528
- ----------------------------------------------------------------
Total Money Market Funds
(Cost $2,712,049,056) 2,712,049,056
- ----------------------------------------------------------------
TOTAL INVESTMENTS-99.87% (Cost
$18,658,969,880) 27,802,918,025
- ----------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.13% 36,100,295
- ----------------------------------------------------------------
NET ASSETS-100.00% $27,839,018,320
================================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$18,658,969,880) $27,802,918,025
- ----------------------------------------------------------
Receivables for:
Fund shares sold 84,271,237
- ----------------------------------------------------------
Dividends and interest 16,004,305
- ----------------------------------------------------------
Foreign currency contracts 68,948,977
- ----------------------------------------------------------
Investment for deferred compensation plan 206,592
- ----------------------------------------------------------
Other assets 308,310
- ----------------------------------------------------------
Total assets 27,972,657,446
- ----------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 90,605,579
- ----------------------------------------------------------
Deferred compensation plan 206,592
- ----------------------------------------------------------
Accrued advisory fees 13,810,980
- ----------------------------------------------------------
Accrued distribution fees 24,487,687
- ----------------------------------------------------------
Accrued transfer agent fees 2,563,943
- ----------------------------------------------------------
Accrued trustees' fees 15,000
- ----------------------------------------------------------
Accrued operating expenses 1,949,345
- ----------------------------------------------------------
Total liabilities 133,639,126
- ----------------------------------------------------------
Net assets applicable to shares
outstanding $27,839,018,320
==========================================================
NET ASSETS:
Class A $12,640,072,795
==========================================================
Class B $14,338,086,751
==========================================================
Class C $ 860,858,774
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 258,850,990
==========================================================
Class B 303,769,322
==========================================================
Class C 18,231,480
==========================================================
Class A:
Net asset value and redemption price
per share $ 48.83
- ----------------------------------------------------------
Offering price per share:
(Net asset value of $48.83 divided by
94.50%) $ 51.67
==========================================================
Class B:
Net asset value and offering price per
share $ 47.20
==========================================================
Class C:
Net asset value and offering price per
share $ 47.22
==========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $1,003,035 foreign
withholding tax) $ 131,189,187
- ----------------------------------------------------------
Interest 74,202,959
- ----------------------------------------------------------
Total investment income 205,392,146
- ----------------------------------------------------------
EXPENSES:
Advisory fees 141,196,457
- ----------------------------------------------------------
Administrative services fees 631,457
- ----------------------------------------------------------
Custodian fees 1,130,367
- ----------------------------------------------------------
Distribution fees -- Class A 26,140,479
- ----------------------------------------------------------
Distribution fees -- Class B 116,152,779
- ----------------------------------------------------------
Distribution fees -- Class C 4,781,281
- ----------------------------------------------------------
Trustees' fees 122,469
- ----------------------------------------------------------
Transfer agent fees -- Class A 12,324,007
- ----------------------------------------------------------
Transfer agent fees -- Class B 19,092,344
- ----------------------------------------------------------
Transfer agent fees -- Class C 785,923
- ----------------------------------------------------------
Other 4,391,436
- ----------------------------------------------------------
Total expenses 326,748,999
- ----------------------------------------------------------
Less: Expenses paid indirectly (274,174)
- ----------------------------------------------------------
Fees waived by advisor (5,137,356)
- ----------------------------------------------------------
Net expenses 321,337,469
- ----------------------------------------------------------
Net investment income (loss) (115,945,323)
- ----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FOREIGN CURRENCY CONTRACTS
AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 2,503,452,928
- ----------------------------------------------------------
Foreign currencies (312,317)
- ----------------------------------------------------------
Foreign currency contracts 51,130,896
- ----------------------------------------------------------
Option contracts written 26,312,201
- ----------------------------------------------------------
2,580,583,708
- ----------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 3,495,072,669
- ----------------------------------------------------------
Foreign currencies (2,929)
- ----------------------------------------------------------
Foreign currency contracts 64,405,814
- ----------------------------------------------------------
Option contracts written (112,630)
- ----------------------------------------------------------
3,559,362,924
- ----------------------------------------------------------
Net gain from investment securities,
foreign currencies, foreign currency
contracts and option contracts 6,139,946,632
- ----------------------------------------------------------
Net increase in net assets resulting from
operations $6,024,001,309
==========================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (115,945,323) $ (24,044,585)
- --------------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, foreign currency contracts, futures and
option contracts 2,580,583,708 1,197,383,660
- --------------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, foreign currency
contracts, futures and option contracts 3,559,362,924 3,328,905,060
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 6,024,001,309 4,502,244,135
- --------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A -- (18,008,475)
- --------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (788,853,278) (539,610,813)
- --------------------------------------------------------------------------------------------------
Class B (918,638,257) (602,045,865)
- --------------------------------------------------------------------------------------------------
Class C (52,550,069) (12,727,398)
- --------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,781,344,407 439,374,153
- --------------------------------------------------------------------------------------------------
Class B 2,515,709,918 1,179,878,726
- --------------------------------------------------------------------------------------------------
Class C 562,747,820 156,203,496
- --------------------------------------------------------------------------------------------------
Net increase in net assets 9,123,761,850 5,105,307,959
- --------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 18,715,256,470 13,609,948,511
- --------------------------------------------------------------------------------------------------
End of period $27,839,018,320 $18,715,256,470
==================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $17,884,938,370 $12,965,142,636
- --------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (577,334) (391,429)
- --------------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign
currencies, foreign currency contracts, futures and
option contracts 741,760,162 96,971,065
- --------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies, foreign currency contracts, futures and
option contracts 9,212,897,122 5,653,534,198
- --------------------------------------------------------------------------------------------------
$27,839,018,320 $18,715,256,470
==================================================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Value Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of nine separate 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 long-term growth of capital by investing primarily in equity
securities judged by the Fund's investment advisor to be undervalued relative to
the investment advisor's appraisal of the current or projected earnings of the
companies issuing the securities, or relative to current market values of assets
owned by the companies issuing the securities or relative to the equity markets
generally. Income is a secondary objective.
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 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 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 trading 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 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 as earned from settlement date and is recorded on
the accrual basis. Dividend income is recorded on the ex-dividend date. On
December 31, 1999, undistributed net investment income was increased by
$115,759,418, undistributed net realized gains decreased by $175,753,007 and
paid-in capital increased by $59,993,589 as a result of differing book/tax
treatment of foreign currency transactions, equalization credits and other
reclassifications. Net assets of the Fund were unaffected by the
reclassifications.
C. Distributions -- Distributions from income and 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 of fund share 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
11
<PAGE> 14
transactions. The Fund does not separately account for that portion of the
results of operations resulting from changes in foreign exchange rates on
investments and the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
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 December 31, 1999 were as follows:
<TABLE>
<CAPTION>
CONTRACT TO
SETTLEMENT ------------------------------ UNREALIZED
DATE CURRENCY DELIVER RECEIVE VALUE APPRECIATION
--------------------- -------- ------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
01/20/00 EUR 690,000,000 $ 730,747,420 $ 695,508,498 $35,238,922
--------------------- -------- ------------- -------------- -------------- ------------
01/21/00 EUR 237,000,000 251,193,790 238,910,220 12,283,570
--------------------- -------- ------------- -------------- -------------- ------------
01/24/00 EUR 404,000,000 428,775,645 407,349,160 21,426,485
--------------------- -------- ------------- -------------- -------------- ------------
1,331,000,000 $1,410,716,855 $1,341,767,878 $68,948,977
===================== ======== ============= ============== ============== ============
</TABLE>
G. 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.
H. Expenses -- Distribution expenses and transfer agency expenses directly
attributable to a class of shares are charged to that class' operations. All
other expenses which are attributable to more than one class are allocated
among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.80% of
the first $150 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $150 million. AIM has
contractually agreed to waive a portion of its advisory fees paid by the Fund to
AIM to the extent necessary to reduce the fees paid by the Fund at net asset
levels higher than those currently incorporated in the present advisory fee
schedule. Under the contractual waiver, AIM will receive a fee calculated at the
annual rate of 0.80% of the first $150 million of the Fund's average daily net
assets, plus 0.625% of the Fund's average daily net assets in excess of $150
million to and including $2 billion, plus 0.60% of the Fund's average daily net
assets in excess of $2 billion. The waiver is contractual and may not be
terminated without approval of the Board of Trustees. During the year ended
December 31, 1999, AIM waived fees of $5,137,356.
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 year ended December 31, 1999, AIM was
paid $631,457 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 year ended December 31, 1999, AFS was
paid $20,339,409 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.
12
<PAGE> 15
Of these amounts, the Fund may pay a service fee of 0.25% of the average daily
net assets of the Class A, Class B or Class C shares to selected dealers and
financial institutions who furnish continuing personal shareholder services to
their customers who purchase and own the appropriate class of shares of the
Fund. Any amounts not paid as a service fee under the Plans would constitute an
asset-based sales charge. The Plans also impose a cap on the total sales
charges, including asset-based sales charges that may be paid by the respective
classes. For the year ended December 31, 1999, the Class A, Class B and Class C
shares paid AIM Distributors $26,140,479, $116,152,779 and $4,781,281,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $7,218,373 from sales of the Class A
shares of the Fund during the year ended December 31, 1999. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1999,
AIM Distributors received $1,053,955 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 year ended December 31, 1999, the Fund paid legal fees of $48,355
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
During the year ended December 31, 1999, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian
fees of $246,830 and $27,344, respectively, under expense offset arrangements.
The effect of the above arrangements resulted in a reduction of the Fund's total
expenses of $274,174 during the year ended December 31, 1999.
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 The Chase Manhattan Bank. 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 year
ended December 31, 1999, 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. Prior to
May 28, 1999, the commitment fee rate was 0.05%. 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 year ended December 31, 1999 was
$15,678,784,868 and $13,551,728,590, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 1999 was as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $9,404,563,463
- ----------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (341,731,444)
- ----------------------------------------------------------
Net unrealized appreciation of investment
securities $9,062,832,019
==========================================================
</TABLE>
Cost of investments for tax purposes is $18,740,086,006.
NOTE 7-CALL OPTION CONTRACTS
Transactions in call options written during the year ended December 31, 1999 are
summarized as follows:
<TABLE>
<CAPTION>
CALL OPTION CONTRACTS
------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ------------
<S> <C> <C>
Beginning of period 2,995 $ 1,254,474
- ---------------------------- --------- ------------
Written 127,809 94,367,695
- ---------------------------- --------- ------------
Closed (17,839) (9,759,499)
- ---------------------------- --------- ------------
Exercised (60,465) (51,484,198)
- ---------------------------- --------- ------------
Expired (52,500) (34,378,472)
- ---------------------------- --------- ------------
End of period -- $ --
============================ ========= ============
</TABLE>
13
<PAGE> 16
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1999 and 1998
were as follows:
<TABLE>
<CAPTION>
1999 1998
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Sold:
Class A 65,309,195 $ 2,905,872,208 61,939,114 $ 2,232,305,973
- ---------------------------------------------------------------------------------------------------------------------------
Class B 67,138,813 2,915,628,481 44,964,399 1,587,327,551
- ---------------------------------------------------------------------------------------------------------------------------
Class C 13,738,072 600,569,156 4,634,085 164,861,278
- ---------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 16,150,747 754,887,097 13,921,013 529,914,065
- ---------------------------------------------------------------------------------------------------------------------------
Class B 19,043,747 860,577,418 15,274,620 567,695,520
- ---------------------------------------------------------------------------------------------------------------------------
Class C 1,098,977 49,675,082 327,964 12,197,171
- ---------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (42,137,878) (1,879,414,898) (64,405,244) (2,322,845,885)
- ---------------------------------------------------------------------------------------------------------------------------
Class B (29,076,106) (1,260,495,981) (27,805,340) (975,144,345)
- ---------------------------------------------------------------------------------------------------------------------------
Class C (2,008,443) (87,496,418) (590,550) (20,854,953)
- ---------------------------------------------------------------------------------------------------------------------------
109,257,124 $ 4,859,802,145 48,260,061 $ 1,775,456,375
===========================================================================================================================
</TABLE>
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A and a share of
Class B outstanding during each of the years in the five-year period ended
December 31, 1999 and for a share of Class C outstanding during each of the
years in the two-year period ended December 31, 1999 and the period August 4,
1997 (date sales commenced) through December 31, 1997.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
1999 1998 1997 1996(a) 1995
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 40.19 $ 32.42 $ 29.15 $ 26.81 $ 21.14
- ----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss) (0.04) 0.09 0.17 0.43 0.14
- ----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Net gains on securities (both realized and
unrealized) 11.93 10.38 6.78 3.42 7.21
- ----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Total from investment operations 11.89 10.47 6.95 3.85 7.35
- ----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income -- (0.09) (0.04) (0.41) (0.09)
- ----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Distributions from net realized gains (3.25) (2.61) (3.64) (1.10) (1.59)
- ----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Total distributions (3.25) (2.70) (3.68) (1.51) (1.68)
- ----------------------------------------------------- ----------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 48.83 $ 40.19 $ 32.42 $ 29.15 $ 26.81
===================================================== =========== ========== ========== ========== ==========
Total return(b) 29.95% 32.76% 23.95% 14.52% 34.85%
===================================================== =========== ========== ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $12,640,073 $8,823,094 $6,745,253 $5,100,061 $3,408,952
===================================================== =========== ========== ========== ========== ==========
Ratio of expenses to average net assets(c) 1.00%(d) 1.00% 1.04% 1.11% 1.12%
===================================================== =========== ========== ========== ========== ==========
Ratio of net investment income (loss) to average net
assets(e) (0.09)%(d) 0.26% 0.57% 1.65% 0.74%
===================================================== =========== ========== ========== ========== ==========
Portfolio turnover rate 66% 113% 137% 126% 151%
===================================================== =========== ========== ========== ========== ==========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges.
(c) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.02%, 1.02%, 1.06%, 1.13% and 1.13% for 1999-1995, respectively.
(d) Ratios are based on average net assets of $10,456,191,563.
(e) After fee waivers and/or expense reimbursements. Ratios of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements were (0.11)%, 0.24%, 0.55%, 1.63% and 0.73% for 1999-1995,
respectively.
14
<PAGE> 17
NOTE 9-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------------------------- --------
1999(a) 1998 1997 1996(a) 1995 1999(a)
----------- ----------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 39.24 $ 31.89 $ 28.92 $ 26.65 $ 21.13 $ 39.26
- ------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Income from investment operations:
Net investment income (loss) (0.39) (0.18) (0.07) 0.20 (0.01) (0.39)
- ------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Net gains (losses) on securities (both
realized and unrealized) 11.60 10.14 6.68 3.38 7.12 11.60
- ------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Total from investment operations 11.21 9.96 6.61 3.58 7.11 11.21
- ------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Less distributions:
Dividends from net investment income -- -- -- (0.21) -- --
- ------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Distributions from net realized gains (3.25) (2.61) (3.64) (1.10) (1.59) (3.25)
- ------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Total distributions (3.25) (2.61) (3.64) (1.31) (1.59) (3.25)
- ------------------------------------------- ----------- ----------- ---------- ---------- ---------- --------
Net asset value, end of period $ 47.20 $ 39.24 $ 31.89 $ 28.92 $ 26.65 $ 47.22
=========================================== =========== =========== ========== ========== ========== ========
Total return(b) 28.94% 31.70% 22.96% 13.57% 33.73% 28.92%
=========================================== =========== =========== ========== ========== ========== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $14,338,087 $19,680,068 $6,831,796 $4,875,933 $2,860,531 $860,859
=========================================== =========== =========== ========== ========== ========== ========
Ratio of expenses to average net assets(c) 1.79%(d) 1.80% 1.85% 1.94% 1.94% 1.79%(d)
=========================================== =========== =========== ========== ========== ========== ========
Ratio of net investment income (loss) to
average net assets(e) (0.88)%(d) (0.54)% (0.24)% 0.82% (0.08)% (0.88)%(d)
=========================================== =========== =========== ========== ========== ========== ========
Portfolio turnover rate 66% 113% 137% 126% 151% 66%
=========================================== =========== =========== ========== ========== ========== ========
<CAPTION>
CLASS C
------------------------
1998(a) 1997
-------- ------------
<S> <C> <C>
Net asset value, beginning of period $ 31.90 $ 35.60
- ------------------------------------------- -------- -------
Income from investment operations:
Net investment income (loss) (0.19) (0.01)
- ------------------------------------------- -------- -------
Net gains (losses) on securities (both
realized and unrealized) 10.16 (0.05)
- ------------------------------------------- -------- -------
Total from investment operations 9.97 (0.06)
- ------------------------------------------- -------- -------
Less distributions:
Dividends from net investment income -- --
- ------------------------------------------- -------- -------
Distributions from net realized gains (2.61) (3.64)
- ------------------------------------------- -------- -------
Total distributions (2.61) (3.64)
- ------------------------------------------- -------- -------
Net asset value, end of period $ 39.26 $ 31.90
=========================================== ======== =======
Total return(b) 31.72% (0.08)%
=========================================== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $212,095 $32,900
=========================================== ======== =======
Ratio of expenses to average net assets(c) 1.80% 1.84%(f)
=========================================== ======== =======
Ratio of net investment income (loss) to
average net assets(e) (0.54)% (0.23)%(f)
=========================================== ======== =======
Portfolio turnover rate 113% 137%
=========================================== ======== =======
</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) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.81%, 1.82%, 1.87%, 1.96% and 1.96% for 1999-1995 for Class B,
respectively, and 1.81%, 1.82% and 1.86% (annualized) for 1999-1997,
respectively, for Class C.
(d) Ratios are based on average net assets of $11,615,113,487 and $478,128,084
for Class B and Class C, respectively.
(e) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were (0.90)%, (0.56)%, (0.26)%, 0.81% and (0.09)% for
1999-1995, respectively, for Class B, and (0.90)%, (0.56)% and (0.25)%
(annualized) for 1999-1997, respectively, for Class C.
(f) Annualized.
15
<PAGE> 18
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders of
AIM Value Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Value Fund (a portfolio of AIM Funds
Group), including the schedule of investments, as of
December 31, 1999, and the related statement of
operations for the year then ended, and the statement of
changes in net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years in the five-year period then ended.
These financial statements and financial highlights are
the responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of December 31, 1999, by
correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Value
Fund as of December 31, 1999, the results of its
operations for the year then ended, the changes in net
assets for each of the years in the two-year period then
ended and the financial highlights for each of the years
in the five-year period then ended, in conformity with
generally accepted accounting principles.
KPMG LLP
February 4, 2000
Houston, Texas
16
<PAGE> 19
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director
ACE Limited; Carol F. Relihan A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Secretary 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Gary T. Crum Houston, TX 77046
Senior Vice President
Owen Daly II TRANSFER AGENT
Director Dana R. Sutton
Cortland Trust Inc. Vice President and Treasurer A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn Jr. Robert G. Alley Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President
Formerly Vice Chairman, President and CUSTODIAN
Chief Operating Officer, Mercantile-Safe Stuart W. Coco
Deposit & Trust Co.; and President, Vice President State Street Bank and Trust Company
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.; Karen Dunn Kelley
Formerly Member Vice President Ballard Spahr
of the U.S. House of Representatives Andrews & Ingersoll, LLP
Edgar M. Larsen 1735 Market Street
Carl Frischling Vice President Philadelphia, PA 19103
Partner
Kramer, Levin, Naftalis & Frankel LLP Mary J. Benson COUNSEL TO THE TRUSTEES
Assistant Vice President and
Robert H. Graham Assistant Treasurer Kramer, Levin, Naftalis & Frankel LLP
President and Chief Executive Officer 919 Third Avenue
A I M Management Group Inc. Sheri Morris New York, NY 10022
Assistant Vice President and
Prema Mathai-Davis Assistant Treasurer DISTRIBUTOR
Chief Executive Officer, YWCA of the U.S.A.
Renee A. Friedli A I M Distributors, Inc.
Lewis F. Pennock Assistant Secretary 11 Greenway Plaza
Attorney Suite 100
P. Michelle Grace Houston, TX 77046
Louis S. Sklar Assistant Secretary
Executive Vice President AUDITORS
Hines Interests Nancy L. Martin
Limited Partnership Assistant Secretary KPMG LLP
700 Louisiana
Ofelia M. Mayo Houston, TX 77002
Assistant Secretary
Lisa A. Moss
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION (UNAUDITED)
AIM Value Fund paid ordinary dividends in the amount of $0.8852 per share to
shareholders during its tax year ended December 31, 1999. Of these amounts
20.98% is eligible for the dividends received deduction for corporations.
The Fund also distributed long-term capital gains of $1,280,676,380 for the
Fund's tax year ended December 31, 1999. Of long-term capital gains distributed,
100% is 20% rate gain.
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc.
AIM Aggressive Growth Fund AIM Money Market Fund has provided leadership in
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund the mutual fund industry since
AIM Capital Development 1976 and managed approximately
Fund AIM Constellation Fund(1) INTERNATIONAL GROWTH FUNDS $160 billion in assets for
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund more than 6.6 million
AIM Large Cap Growth Fund AIM Asian Growth Fund shareholders, including
AIM Mid Cap Equity Fund AIM Developing Markets Fund individual investors,
AIM Mid Cap Growth Fund AIM Euroland Growth Fund(4) corporate clients and
AIM Mid Cap Opportunities Fund AIM European Development Fund financial institutions, as of
AIM Select Growth Fund AIM International Equity Fund December 31, 1999.
AIM Small Cap Growth Fund(2) AIM Japan Growth Fund The AIM Family of
AIM Small Cap Opportunities Fund(3) AIM Latin American Growth Fund Funds--Registered Trademark--
AIM Value Fund AIM New Pacific Growth Fund is distributed nationwide, and
AIM Weingarten Fund AIM today is the eighth largest
GLOBAL GROWTH FUNDS mutual fund complex in the
GROWTH & INCOME FUNDS AIM Global Aggressive Growth Fund United States in assets under
AIM Advisor Flex Fund AIM Global Growth Fund management, according to
AIM Advisor Large Cap Value Fund Strategic Insight, an
AIM Advisor Real Estate Fund GLOBAL GROWTH & INCOME FUNDS independent mutual fund
AIM Balanced Fund AIM Global Growth & Income Fund monitor.
AIM Basic Value Fund AIM Global Utilities Fund
AIM Charter Fund
GLOBAL INCOME FUNDS
INCOME FUNDS AIM Emerging Markets Debt Fund
AIM Floating Rate Fund AIM Global Government Income Fund
AIM High Yield Fund AIM Global Income Fund
AIM High Yield Fund II AIM Strategic Income Fund
AIM Income Fund
AIM Intermediate Government Fund THEME FUNDS
AIM Limited Maturity Treasury Fund AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
TAX-FREE INCOME FUNDS AIM Global Health Care Fund
AIM High Income Municipal Fund AIM Global Infrastructure Fund
AIM Municipal Bond Fund AIM Global Resources Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Telecommunications and Technology Fund(5)
AIM Tax-Free Intermediate Fund AIM Global Trends Fund(6)
</TABLE>
(1) Effective December 1, 1999, AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations. (2) AIM Small
Cap Growth Fund closed to new investors on November 8, 1999. (3) AIM Small Cap
Opportunities Fund closed to new investors on November 4, 1999. (4) On September
1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund.
Previously the fund invested in all size companies in most areas of Europe. The
fund now seeks to invest at least 65% of its assets in large-cap companies
within countries using the euro as their currency (EMU-member countries). (5) On
June 1, 1999, AIM Global Telecommunications Fund was renamed AIM Global
Telecommunications and Technology Fund. (6) Effective August 27, 1999, AIM
Global Trends Fund was restructured to operate as a traditional mutual fund.
Before that date, the fund operated as a fund of funds. 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. If used as
sales material after April 20, 2000, this report must be accompanied by a
current Quarterly Review of Performance for AIM Funds.
[AIM LOGO APPEARS HERE]
INVEST WITH DISCIPLINE
--Registered Trademark--
A I M Distributors, Inc. VAL-AR-1
