<PAGE> 1
ANNUAL REPORT / DECEMBER 31 1999
AIM GLOBAL UTILITIES FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-------------------------------------
TULIP FIELDS AND WINDMILL IN HOLLAND
BY CLAUDE MONET (1840-1926, FRENCH)
STANDING TALL AGAINST THE HORIZON WITH SAILS WHIRLING IN THE AIR,
WINDMILLS HAVE PLAYED AN IMPORTANT PART IN THE HISTORIC AND ECONOMIC
DEVELOPMENT OF CIVILIZATION THROUGH THE CENTURIES. LIKE
THEIR PREDECESSORS, TODAY'S NETWORK OF GLOBAL UTILITIES ENABLES
OUR CONTINUING ADVANCEMENT.
-------------------------------------
AIM Global Utilities Fund is for shareholders who seek high current income and
capital appreciation through a portfolio primarily of common and preferred
stocks of public utility companies.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Global Utilities Fund's performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B and Class C shares will differ from
that of Class A shares due to differences in sales charge structure and
expenses.
o International investing presents certain risks not associated with investing
solely in the United States. These include risks relating to fluctuations in
the value of the U.S. dollar relative to the value of other currencies, the
custody arrangements made for the fund's foreign holdings, differences in
accounting, political risks and the lesser degree of public information
required to be provided by non-U.S. companies.
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 Lipper Utility Fund Index is an average of the 30 largest utility funds
tracked by Lipper, Inc., an independent mutual fund performance monitor.
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 any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF
YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the fund.
AIM GLOBAL UTILITIES FUND
<PAGE> 3
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
The fiscal year discussed in this report has reconfirmed our
faith in two long-established principles of investing:
portfolio diversification and long-term thinking. We could
[PHOTO OF title this report "What a Difference a Year Makes."
Charles T. An investor surveying conditions when the fiscal year
Bauer, opened on January 1, 1999, would have seen a market
Chairman of dominated by large-capitalization stocks and high-quality
the Board of bonds, especially U.S. Treasuries. During 1998, two
THE FUND well-known indexes of large-capitalization U.S. companies,
APPEARS HERE] 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 GLOBAL UTILITIES FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
AIM GLOBAL UTILITIES FUND
OUTPERFORMS BENCHMARK INDEXES
HOW DID AIM GLOBAL UTILITIES FUND PERFORM DURING THE FISCAL YEAR?
Buoyed by the renewed strength of global economies and favorable sector
positioning, AIM Global Utilities Fund posted sterling returns for the fiscal
year ended December 31, 1999. The fund's Class A shares returned 34.15%, while
Class B and Class C shares gained 33.16% and 33.18%, respectively. These returns
are computed at net asset value, that is, without the effect of sales charges.
Fund performance handily outpaced the 21.03% return of the S&P 500 and the
14.53% return of the Lipper Utility Fund Index for the same period.
WHAT WERE THE MAJOR TRENDS IN FINANCIAL MARKETS DURING THE FISCAL YEAR?
Although there were several prominent shifts in market sentiment during the
fiscal year, the overriding theme for financial markets in 1999 was the
dominance of the technology sector. During the first half of 1999, investors
favored large-cap and cyclical stocks. Then the markets began to broaden into
small- and mid-cap issues during the third quarter, while technology stocks
continued to soar through year-end.
Global equity markets ended 1999 at record levels. Every major index in the
United States, as well as markets across Europe, Asia and Latin America, hit new
highs at year-end. But in the midst of this prosperity we continued to struggle
with a stealth bear market. At the end of 1999, a third of New York Stock
Exchange and over-the-counter stocks were off 20% or more from their previous
12-month highs.
This past year has been a challenging period for bond investors. Throughout
1999, downward pressure on bond prices came from the U.S. economy's continued
strong growth, improving global economies, rising long-term interest rates and
inflation fears. These factors contributed to a market environment in which
investors favored stocks over bonds. The ensuing bond sell-off produced the
worst calendar-year performance for bonds since 1994.
WHAT FACTORS CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE IN 1999?
Our international stake, which represented approximately 30% of total net
assets, boosted fund performance for the year, amid promising signs of recovery
in global economies. A particularly strong performer was Nokia, the world's
number one mobile phone maker. During the year, Nokia stock rose from the low
$60s per share to more than $175 at year-end.
The fund also greatly benefited from its exposure to the telecommunications
sector, which continued to be very strong. The sector's growth has been driven
largely by the explosion in Internet and data-communications traffic. Fund
holdings in this arena, such as Broadwing and Lucent Technologies, provide the
infrastructure for sending data over the Internet. These holdings also allow us
to participate in the growth of Internet traffic, the fastest-growing segment in
these industries, without subjecting the fund to the volatility of pure Internet
investments.
The fund has enjoyed the continuing success of Univision Communications, the
number one Spanish-language television network in the United States. The
company's programming reaches approximately 90% of Hispanic households in the
U.S. through its 21 full-power and low-power television stations. During the
fiscal year, Univision's stock soared from about $35 per share to approximately
$105 per share at year-end.
DID YOU MAKE ANY CHANGES TO THE FUND'S PORTFOLIO?
One change during the fiscal year was our decision to decrease the fund's
holdings in electric utilities. These companies continued to suffer from the
effects of deregulation, which were mostly negative this year because they added
uncertainty to the
FUND OUTPERFORMS INDEXES
One-year cumulative returns,
excluding sales charges
As of 12/31/99
BAR CHART
================================================================================
CLASS A SHARES 34.15%
CLASS B SHARES 33.16%
CLASS C SHARES 33.18%
S&P 500 INDEX 21.03%
LIPPER UTILITY FUND INDEX 14.53%
================================================================================
GROWTH OF NET ASSETS
In millions
BAR CHART
================================================================================
12/31/98 $311.5
12/31/99 $387.8
================================================================================
See important fund and index disclosures inside front cover.
AIM GLOBAL UTILITIES FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
growth rates that analysts forecast. Rising interest rates have also made
electric stocks less attractive by eroding the value of their dividends. On
December 31, electric utilities represented about 15% of the fund's net assets,
down from more than 31% a year ago. In light of the challenges that this
industry is facing, we elected to reduce investments in companies with less
favorable short-term prospects.
We also decreased holdings in the natural- gas industry, which accounted for
5% of the fund's total net assets at year-end. In early 1999 the wholesale
market for natural gas was very expensive and created some pricing concerns. A
large part of the reduction in this industry also came from merger activities.
Given the difficult interest-rate environment for fixed-income issues, we
eliminated about 12% of our bond holdings and rolled the proceeds from these
sales into the stocks of companies with stronger growth prospects. We increased
our holdings in the communications-equipment industry, particularly with
holdings in cellular-equipment companies. We continue to believe these
industries represent attractive value. One notable addition to the fund's
portfolio is Phone.com, which develops software to allow wireless-phone
subscribers access to the Internet and corporate intranets. The company's stock
opened below $30 per share during the second quarter of 1999. By the end of the
fiscal year, the stock had soared to more than $120 per share.
WHAT IS YOUR OUTLOOK FOR 2000?
Given the market volatility that we've seen in 1999, it's apparent that changes
in market and economic conditions cannot be predicted and should always be
expected. Investor concerns over interest rates may continue to hamper market
performance in the coming months. The best way to address these market risks, we
believe, is through diversification. We encourage investors to stay the course
in terms of balancing their portfolios with a variety of investment vehicles.
A key trend that is shaping our financial future is the increasing extent to
which the U.S. economy is blending with those of other countries. In this vein,
investors who include global companies in their portfolios may be successful by
taking advantage of the free flow of business and capital worldwide. AIM Global
Utilities Fund offers this type of diversification through its investments in
successful, growing companies both in the United States and abroad.
PORTFOLIO COMPOSITION
As of 12/31/99, based on total net assets
<TABLE>
<CAPTION>
===========================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. SBC Communications, Inc. 3.88% 1. Telephone 19.89%
2. Redback Networks, Inc. 3.33 2. Electric Companies 15.60
3. Broadwing, Inc. 2.99 3. Telecommunications (Long Distance) 11.43
4. MCI WorldCom, Inc. 2.48 4. Communications Equipment 9.22
5. Nokia Oyj. ADR (Finland) 2.27 5. Telecommunications (Cellular/Wireless) 6.94
6. Lucent Technologies, Inc. 1.97 6. Computers (Networking) 5.11
7. Eircom PLC (United Kingdom) 1.68 7. Natural Gas 4.76
8. Qwest Communications International Inc. 1.66 8. Telecommunications 4.45
9. Univision Communications, Inc.-Class A 1.66 9. Broadcasting (Television, Radio & Cable) 3.94
10. Williams Companies, Inc. (The) 1.65 10. Computers (Software & Services) 2.66
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
===========================================================================================================
</TABLE>
See important fund and index disclosures inside front cover.
AIM GLOBAL UTILITIES FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM GLOBAL UTILITIES FUND VS. BENCHMARK INDEXES
12/31/89-12/31/99
in thousands
================================================================================
Mountain chart
AIM Global
Utilities Lipper
Fund, Utility
Class A S&P 500 Fund
Series Index Index
================================================================================
12/89 9449 10000 10000
12/90 9168 9763 9689
12/91 11336 11865 12634
12/92 12234 12919 13595
12/93 13742 14649 14963
12/94 12152 13289 15159
12/95 15564 16892 20849
12/96 17724 18467 25633
12/97 21925 23216 34182
12/98 25434 27487 43958
12/99 34117 31483 53205
Past performance cannot guarantee comparable future results.
Source: Lipper, Inc.
================================================================================
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS
OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
ABOUT THIS CHART
The chart compares your fund's Class A shares to benchmark indexes. It is
intended to give you a general idea of how your fund performed compared to these
benchmarks over the period 12/31/89 to 12/31/99. It is important to understand
the differences between your fund and these indexes. An index measures the
performance of a hypothetical portfolio. Market indexes such as the S&P 500 are
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. In addition, it is worth noting that the S&P
500 is a broad equities index that does not include many utility stocks. An
index of funds such as the Lipper Utility Fund Index includes a number of mutual
funds grouped by investment objective. Each of those funds interprets that
objective differently, and each employs a different management style and
investment strategy.
AVERAGE ANNUAL TOTAL RETURNS
As of 12/31/99, including sales charges
================================================================================
CLASS A SHARES
10 years 13.06%
5 years 21.55
1 year 26.79
CLASS B SHARES
Inception (9/1/93) 13.61%
5 years 21.83
1 year 28.16
CLASS C SHARES
Inception (8/4/97) 24.10%
1 year 32.18
================================================================================
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 Class A shares due to differing fees and expenses. For fund performance
calculations and descriptions of the indexes cited on this page, please see the
inside front cover.
AIM GLOBAL UTILITIES FUND
4
<PAGE> 7
SCHEDULE OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-53.50%
BROADCASTING (TELEVISION, RADIO & CABLE)-3.30%
UnitedGlobalCom Inc.-Class A(a) 90,000 $ 6,356,250
- --------------------------------------------------------------
Univision Communications,
Inc.-Class A(a) 63,000 6,437,812
- --------------------------------------------------------------
12,794,062
- --------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-6.28%
Aether Systems, Inc.(a) 38,100 2,728,912
- --------------------------------------------------------------
ANTEC Corp.(a) 45,000 1,642,500
- --------------------------------------------------------------
Copper Mountain Networks, Inc.(a) 29,700 1,447,875
- --------------------------------------------------------------
Covad Communications Group, Inc.(a) 14,100 788,719
- --------------------------------------------------------------
JDS Uniphase Corp.(a) 7,000 1,129,187
- --------------------------------------------------------------
Juniper Networks, Inc.(a) 8,100 2,754,000
- --------------------------------------------------------------
Lucent Technologies Inc. 102,200 7,645,837
- --------------------------------------------------------------
Sycamore Networks, Inc.(a) 5,400 1,663,200
- --------------------------------------------------------------
Tellabs, Inc.(a) 45,000 2,888,437
- --------------------------------------------------------------
Williams Communications Group,
Inc.(a) 57,800 1,672,587
- --------------------------------------------------------------
24,361,254
- --------------------------------------------------------------
COMPUTERS (NETWORKING)-5.11%
Cisco Systems, Inc.(a) 25,400 2,720,975
- --------------------------------------------------------------
Foundry Networks, Inc.(a) 11,600 3,499,575
- --------------------------------------------------------------
Redback Networks, Inc.(a) 72,800 12,922,000
- --------------------------------------------------------------
Rhythms NetConnections, Inc.(a) 22,000 682,000
- --------------------------------------------------------------
19,824,550
- --------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-0.36%
GRIC Communications, Inc.(a) 54,900 1,393,087
- --------------------------------------------------------------
ELECTRIC COMPANIES-7.20%
Allegheny Energy, Inc. 82,100 2,211,569
- --------------------------------------------------------------
DQE, Inc. 76,500 2,648,813
- --------------------------------------------------------------
Edison International 143,800 3,765,762
- --------------------------------------------------------------
Energy East Corp. 112,000 2,331,000
- --------------------------------------------------------------
FirstEnergy Corp. 50,000 1,134,375
- --------------------------------------------------------------
FPL Group, Inc. 55,500 2,376,094
- --------------------------------------------------------------
IPALCO Enterprises, Inc. 42,000 716,625
- --------------------------------------------------------------
NiSource, Inc. 101,000 1,805,375
- --------------------------------------------------------------
NSTAR 29,531 1,196,005
- --------------------------------------------------------------
Pinnacle West Capital Corp. 85,500 2,613,094
- --------------------------------------------------------------
Southern Co. (The) 114,400 2,688,400
- --------------------------------------------------------------
Teco Energy, Inc. 115,000 2,134,688
- --------------------------------------------------------------
Texas Utilities Co. 64,800 2,304,450
- --------------------------------------------------------------
27,926,250
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-0.09%
Conexant Systems, Inc.(a) 5,400 $ 358,425
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-0.72%
SDL, Inc.(a) 12,900 2,812,200
- --------------------------------------------------------------
ENTERTAINMENT-0.40%
Time Warner Inc. 21,200 1,535,675
- --------------------------------------------------------------
NATURAL GAS-2.85%
Enron Corp. 75,000 3,328,125
- --------------------------------------------------------------
Public Service Co. of North
Carolina, Inc. 40,000 1,292,500
- --------------------------------------------------------------
Williams Companies, Inc. (The) 209,900 6,415,069
- --------------------------------------------------------------
11,035,694
- --------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-1.32%
AES Corp.(a) 40,000 2,990,000
- --------------------------------------------------------------
MidAmerican Energy Holdings Co.(a) 63,200 2,129,050
- --------------------------------------------------------------
5,119,050
- --------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS-0.43%
Alexandria Real Estate Equities,
Inc. 52,500 1,670,156
- --------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-1.81%
Convergys Corp.(a) 160,000 4,920,000
- --------------------------------------------------------------
Quanta Services, Inc.(a) 74,000 2,090,500
- --------------------------------------------------------------
7,010,500
- --------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-0.74%
Clarent Corp.(a) 36,900 2,868,975
- --------------------------------------------------------------
TELECOMMUNICATIONS-2.99%
Broadwing Inc.(a) 314,344 11,591,435
- --------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-4.20%
Infonet Services Corp.-Class B(a) 65,200 1,711,500
- --------------------------------------------------------------
Phone.com, Inc.(a) 51,400 5,959,188
- --------------------------------------------------------------
TeleCorp PCS, Inc.(a) 56,300 2,139,400
- --------------------------------------------------------------
Tritel, Inc.(a) 82,700 2,620,556
- --------------------------------------------------------------
Triton PCS Holdings, Inc.-Class A(a) 40,800 1,856,400
- --------------------------------------------------------------
Western Wireless Corp.-Class A(a) 30,200 2,015,850
- --------------------------------------------------------------
16,302,894
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-3.59%
AT&T Corp. 58,350 2,961,263
- --------------------------------------------------------------
Global TeleSystems Group, Inc.(a) 38,200 1,322,675
- --------------------------------------------------------------
MCI WorldCom, Inc.(a) 181,389 9,624,954
- --------------------------------------------------------------
13,908,892
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TELEPHONE-12.11%
Bell Atlantic Corp. 49,000 $ 3,016,563
- --------------------------------------------------------------
BellSouth Corp. 41,800 1,956,763
- --------------------------------------------------------------
CenturyTel, Inc. 118,800 5,628,150
- --------------------------------------------------------------
GTE Corp. 31,600 2,229,775
- --------------------------------------------------------------
McLeodUSA Inc.-Class A(a) 80,000 4,710,000
- --------------------------------------------------------------
NEXTLINK Communications, Inc.-Class
A(a) 43,400 3,604,913
- --------------------------------------------------------------
Qwest Communications International,
Inc.(a) 150,000 6,450,000
- --------------------------------------------------------------
SBC Communications, Inc. 308,893 15,058,534
- --------------------------------------------------------------
Time Warner Telecom, Inc.(a) 86,300 4,309,606
- --------------------------------------------------------------
46,964,304
- --------------------------------------------------------------
Total Domestic Common Stocks
(Cost $83,442,776) 207,477,403
- --------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-28.16%
ARGENTINA-0.44%
El Sitio, Inc. (Computers-Software
& Services)(a) 46,000 1,690,500
- --------------------------------------------------------------
AUSTRALIA-0.34%
Telstra Corp. Ltd. (Telephone) 195,000 1,060,792
- --------------------------------------------------------------
Telstra Corp. Ltd.-Installment
Receipts (Telephone)(a) 72,000 254,023
- --------------------------------------------------------------
1,314,815
- --------------------------------------------------------------
AUSTRIA-0.45%
Oesterreichische
Elektrizitactswirtschafts A.G.-
Class A (Electric Companies) 12,500 1,754,997
- --------------------------------------------------------------
BELGIUM-0.40%
Electrabel S.A. (Electric
Companies) 4,700 1,537,352
- --------------------------------------------------------------
BERMUDA-0.91%
Global Crossing Ltd.
(Telecommunications-Long
Distance)(a) 70,523 3,526,150
- --------------------------------------------------------------
CANADA-1.47%
AT&T Canada, Inc. (Telephone)(a) 74,600 3,002,650
- --------------------------------------------------------------
BCT.Telus Communications, Inc.
(Telephone) 55,382 1,348,768
- --------------------------------------------------------------
BCT.Telus Communications,
Inc.-Class A (Telephone) 18,460 445,736
- --------------------------------------------------------------
Westcoast Energy, Inc. (Natural
Gas) 57,400 921,988
- --------------------------------------------------------------
5,719,142
- --------------------------------------------------------------
DENMARK-0.63%
Tele Danmark A.S.-ADR (Telephone) 65,000 2,453,750
- --------------------------------------------------------------
FINLAND-3.24%
Nokia Oyj-ADR (Communications
Equipment) 46,400 8,816,000
- --------------------------------------------------------------
Sonera Group Oyj
(Telecommunications-
Cellular/Wireless) 54,900 3,760,042
- --------------------------------------------------------------
12,576,042
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FRANCE-2.20%
France Telecom S.A.-ADR
(Telecommunications) 39,000 $ 5,206,500
- --------------------------------------------------------------
Suez Lyonnaise des Eaux S.A.
(Manufacturing- Diversified) 10,900 1,745,376
- --------------------------------------------------------------
Vivendi (Manufacturing-Diversified) 17,600 1,588,017
- --------------------------------------------------------------
8,539,893
- --------------------------------------------------------------
GERMANY-1.35%
Mannesmann A.G.
(Machinery-Diversified) 11,391 2,745,766
- --------------------------------------------------------------
RWE A.G. (Electric Companies) 28,100 1,100,140
- --------------------------------------------------------------
Viag A.G.
(Manufacturing-Diversified) 75,400 1,381,131
- --------------------------------------------------------------
5,227,037
- --------------------------------------------------------------
GREECE-0.09%
Panafon Hellenic Telecom S.A.-GDR
(Telecommunications-Cellular/Wireless)
(Acquired 11/20/98; Cost
$244,080)(b) 27,000 348,300
- --------------------------------------------------------------
HUNGARY-0.40%
Magyar Tavkozlesi Rt-ADR
(Telecommunications-Long
Distance) 42,700 1,537,200
- --------------------------------------------------------------
IRELAND-1.68%
eircom PLC (Telecommunications-Long
Distance) 1,499,100 6,532,971
- --------------------------------------------------------------
ISRAEL-0.63%
Partner Communications Co. Ltd.-ADR
(Telecommunications-Cellular/
Wireless)(a) 94,000 2,432,250
- --------------------------------------------------------------
ITALY-2.83%
ACEA S.p.A. (Water Utilities)(a) 388,800 5,400,047
- --------------------------------------------------------------
AEM S.p.A. (Electric Companies) 645,000 2,583,658
- --------------------------------------------------------------
Enel S.p.A. (Electric Companies)(a) 293,100 1,227,161
- --------------------------------------------------------------
Societa Nordelettrica S.p.A.
(Electric Companies) 570,000 1,749,713
- --------------------------------------------------------------
10,960,579
- --------------------------------------------------------------
JAPAN-1.00%
Nippon Telegraph & Telephone Corp.
(Telephone) 125 2,141,983
- --------------------------------------------------------------
Nippon Telegraph & Telephone
Corp.-ADR (Telephone) 20,000 1,722,500
- --------------------------------------------------------------
3,864,483
- --------------------------------------------------------------
MEXICO-0.20%
Nuevo Grupo Iusacell A.A. de
C.V.-ADR
(Telecommunications-Cellular/
Wireless)(a) 51,600 770,775
- --------------------------------------------------------------
NETHERLANDS-3.09%
KPNQWest N.V.
(Telecommunications-Long
Distance)(a) 65,700 4,370,781
- --------------------------------------------------------------
Libertel N.V.
(Telecommunications-Cellular/
Wireless)(a) 79,000 2,067,248
- --------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
NETHERLANDS-(CONTINUED)
Versatel Telecom International N.V.
(Telecommunications-Long
Distance)(a) 158,000 $ 5,565,669
- --------------------------------------------------------------
12,003,698
- --------------------------------------------------------------
SOUTH KOREA-0.86%
Korea Telecom Corp.-ADR (Telephone) 44,800 3,348,800
- --------------------------------------------------------------
SPAIN-3.20%
Autopistas Concesionaria Espanola
S.A. (Services-Commercial &
Consumer) 80,850 785,235
- --------------------------------------------------------------
Endesa S.A. (Electric Companies) 75,000 1,487,785
- --------------------------------------------------------------
Telefonica S.A. (Telephone)(a) 255,738 6,383,210
- --------------------------------------------------------------
Terra Networks, S.A.
(Computers-Software &
Services)(a) 68,500 3,740,094
- --------------------------------------------------------------
12,396,324
- --------------------------------------------------------------
UNITED KINGDOM-2.75%
COLT Telecom Group PLC
(Communications Equipment)(a) 19,000 972,227
- --------------------------------------------------------------
Kelda Group PLC (Water Utilities) 270,407 1,528,192
- --------------------------------------------------------------
National Grid Group PLC (Electric
Companies) 131,526 1,000,286
- --------------------------------------------------------------
PowerGen PLC (Electric Companies) 136,949 984,035
- --------------------------------------------------------------
PowerGen PLC-ADR (Electric
Companies) 47,800 1,511,675
- --------------------------------------------------------------
Scottish Power PLC (Electric
Companies) 223,850 1,695,203
- --------------------------------------------------------------
Thus PLC (Telecommunications-Long
Distance)(a) 218,500 1,379,495
- --------------------------------------------------------------
United Utilities PLC (Water
Utilities) 151,936 1,578,705
- --------------------------------------------------------------
10,649,818
- --------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$58,428,005) 109,184,876
- --------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED
STOCKS-4.34%
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.36%
MediaOne Group, Inc., $3.04 Conv.
Pfd. 29,200 1,401,600
- --------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-0.90%
PSINet, Inc.-Series C, $3.375 Conv.
Pfd. 60,000 3,502,500
- --------------------------------------------------------------
ELECTRIC COMPANIES-0.77%
Calpine Capital Trust, $2.875 Conv.
Pfd. 46,100 2,979,212
- --------------------------------------------------------------
NATURAL GAS-0.97%
El Paso Energy Cap Trust, Inc.,
$2.375 Conv. Pfd. 74,500 3,752,938
- --------------------------------------------------------------
TELECOMMUNICATIONS-0.12%
Broadwing Inc.-Series B, $3.375
Conv. Pfd. 8,000 474,000
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-0.89%
WinStar Communications, Inc.-Series
F, $72.50 Conv. Pfd. 2,600 3,464,500
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TELEPHONE-0.33%
NEXTLINK Communications, Inc.
$3.25 Conv. Pfd. 3,000 $ 575,625
- --------------------------------------------------------------
$3.25 Conv. Pfd. (Acquired
03/26/98; Cost $180,000)(b) 3,600 690,750
- --------------------------------------------------------------
1,266,375
- --------------------------------------------------------------
Total Domestic Convertible
Preferred Stocks (Cost
$14,819,973) 16,841,125
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. DOLLAR DENOMINATED BONDS &
NOTES-5.98%
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.24%
Comcast Corp., Sr. Sub. Deb.,
9.50%, 01/15/08 $ 900,000 925,875
- --------------------------------------------------------------
COMPUTERS (HARDWARE)-0.93%
Candescent Technology Corp., Sr.
Conv. Sub. Deb., 7.00%, 05/01/03
(Acquired 04/17/98-11/30/98; Cost
$4,509,350)(b) 4,605,000 3,591,900
- --------------------------------------------------------------
ELECTRIC COMPANIES-1.96%
El Paso Electric Co.-Series E, Sec.
First Mortgage Bonds, 9.40%,
05/01/11 1,900,000 2,012,917
- --------------------------------------------------------------
Indiana Michigan Power Co.-Series
F, Sec. Lease Obligation Bonds,
9.82%, 12/07/22 3,020,696 3,342,340
- --------------------------------------------------------------
Western Resources, Inc., Sr. Unsec.
Notes,
6.25%, 08/15/03 1,500,000 1,418,250
- --------------------------------------------------------------
7.13%, 08/01/09 900,000 814,338
- --------------------------------------------------------------
7,587,845
- --------------------------------------------------------------
NATURAL GAS-0.32%
Dynegy Inc., Sr. Unsec. Deb.,
7.13%, 05/15/18 1,400,000 1,247,288
- --------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.62%
AES Corp.,
Sr. Notes, 8.00%, 12/31/08 1,500,000 1,376,250
- --------------------------------------------------------------
Sr. Unsec. Sub. Notes, 10.25%,
07/15/06 1,000,000 1,020,000
- --------------------------------------------------------------
2,396,250
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-1.04%
AT&T Corp., Sr. Notes, 7.75%,
03/01/07 1,850,000 1,889,109
- --------------------------------------------------------------
Global TeleSystems Group, Inc.,
Conv. Notes, 8.75%, 06/30/00 620,000 2,152,175
- --------------------------------------------------------------
4,041,284
- --------------------------------------------------------------
TELEPHONE-0.87%
NTL Inc., Conv. Sub. Notes, 5.75%,
12/15/09 (Acquired 12/17/99; Cost
$1,800,000)(b) 1,800,000 1,944,000
- --------------------------------------------------------------
SBC Communications, Inc., Deb.,
7.38%, 07/15/43 1,600,000 1,439,264
- --------------------------------------------------------------
3,383,264
- --------------------------------------------------------------
Total U.S. Dollar Denominated
Bonds & Notes (Cost
$24,349,922) 23,173,706
- --------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
NON-U.S. DOLLAR DENOMINATED BONDS &
NOTES-3.36%
CANADA-1.14%
Clearnet Communications Inc.
(Telecommunications-Cellular/Wireless),
Sr. Unsec. Disc. Notes, 10.75%,
02/15/09(d) CAD 3,000,000 $ 1,215,963
- --------------------------------------------------------------
Teleglobe Canada Inc. (Telephone),
Unsec. Deb., 8.35%, 06/20/03 CAD 2,400,000 1,702,615
- --------------------------------------------------------------
TransCanada Pipelines-Series Q
(Natural Gas), Deb., 10.63%,
10/20/09 CAD 1,750,000 1,496,224
- --------------------------------------------------------------
4,414,802
- --------------------------------------------------------------
FRANCE-0.42%
France Telecom (Telephone), Conv.
Bonds, 2.00%, 01/01/04 FRF 6,455,040 1,641,494
- --------------------------------------------------------------
UNITED KINGDOM-1.80%
COLT Telecom Group PLC
(Communications Equipment), Conv.
Bonds, 2.00%,
12/16/06 (Acquired 12/09/99;
Cost $1,513,645)(b) EUR 1,475,000 1,597,708
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
National Grid Co. PLC (Electric
Companies), Conv. Bonds, 4.25%,
02/17/08 (Acquired 02/05/98; Cost
$4,574,700)(b) GBP 2,760,000 $ 5,375,740
- --------------------------------------------------------------
6,973,448
- --------------------------------------------------------------
Total Non-U.S. Dollar
Denominated Bonds & Notes
(Cost $11,848,786) 13,029,744
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
MONEY MARKET FUNDS-4.66%
STIC Liquid Assets Portfolio(e) 9,033,715 9,033,715
- --------------------------------------------------------------
STIC Prime Portfolio(e) 9,033,715 9,033,715
- --------------------------------------------------------------
Total Money Market Funds (Cost
$18,067,430) 18,067,430
- --------------------------------------------------------------
TOTAL INVESTMENTS-100.00%
(Cost $210,956,892) 387,774,284
- --------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.00%) (8,910)
- --------------------------------------------------------------
NET ASSETS-100.00% $387,765,374
==============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
CAD - Canadian Dollars
Conv. - Convertible
Deb. - Debentures
Disc. - Discounted
EUR - Euro
FRF - French Franc
GBP - British Pound Sterling
GDR - Global Depositary Receipt
Pfd. - Preferred
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) 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 12/31/99 was $13,548,398 which
represented 3.49% of the Fund's net assets.
(c) Foreign denominated security. Par value and coupon are denominated in
currency indicated.
(d) Step bond issued at discount. The interest rate represents the coupon rate
at which the bond will accrue at a specified future date.
(e) 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
$210,956,892) $387,774,284
- ---------------------------------------------------------
Foreign currencies, at value (cost $5,703) 5,723
- ---------------------------------------------------------
Receivables for:
Fund shares sold 634,820
- ---------------------------------------------------------
Dividends and interest 950,990
- ---------------------------------------------------------
Investment for deferred compensation plan 33,815
- ---------------------------------------------------------
Other assets 15,540
- ---------------------------------------------------------
Total assets 389,415,172
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 472,480
- ---------------------------------------------------------
Fund shares reacquired 536,539
- ---------------------------------------------------------
Deferred compensation 33,815
- ---------------------------------------------------------
Accrued advisory fees 175,431
- ---------------------------------------------------------
Accrued administrative services fees 7,144
- ---------------------------------------------------------
Accrued distribution fees 307,833
- ---------------------------------------------------------
Accrued transfer agent fees 40,453
- ---------------------------------------------------------
Accrued operating expenses 76,103
- ---------------------------------------------------------
Total liabilities 1,649,798
- ---------------------------------------------------------
Net assets applicable to shares outstanding $387,765,374
=========================================================
NET ASSETS:
Class A $238,431,599
=========================================================
Class B $142,632,134
=========================================================
Class C $ 6,701,641
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 9,141,304
=========================================================
Class B 5,478,806
=========================================================
Class C 257,525
=========================================================
Class A:
Net asset value and redemption price per
share $ 26.08
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $26.08 / 94.50%) $ 27.60
=========================================================
Class B:
Net asset value and offering price per
share $ 26.03
=========================================================
Class C:
Net asset value and offering price per
share $ 26.02
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $161,589 foreign
withholding tax) $ 4,612,201
- ---------------------------------------------------------
Interest 4,338,134
- ---------------------------------------------------------
Total investment income 8,950,335
- ---------------------------------------------------------
EXPENSES:
Advisory fees 1,802,726
- ---------------------------------------------------------
Administrative services fees 88,999
- ---------------------------------------------------------
Custodian fees 112,375
- ---------------------------------------------------------
Trustees' fees 7,164
- ---------------------------------------------------------
Distribution fees -- Class A 500,106
- ---------------------------------------------------------
Distribution fees -- Class B 1,165,993
- ---------------------------------------------------------
Distribution fees -- Class C 39,036
- ---------------------------------------------------------
Transfer agent fees -- Class A 308,147
- ---------------------------------------------------------
Transfer agent fees -- Class B 179,611
- ---------------------------------------------------------
Transfer agent fees -- Class C 6,013
- ---------------------------------------------------------
Other 207,892
- ---------------------------------------------------------
Total expenses 4,418,062
- ---------------------------------------------------------
Less: Expenses paid indirectly (4,581)
- ---------------------------------------------------------
Net expenses 4,413,481
- ---------------------------------------------------------
Net investment income 4,536,854
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN
CURRENCIES:
Net realized gain (loss) from:
Investment securities 30,857,872
- ---------------------------------------------------------
Foreign currencies (285,335)
- ---------------------------------------------------------
30,572,537
- ---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 64,067,017
- ---------------------------------------------------------
Foreign currencies (3,469)
- ---------------------------------------------------------
64,063,548
- ---------------------------------------------------------
Net gain from investment securities and
foreign currencies 94,636,085
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $99,172,939
=========================================================
</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 $ 4,536,854 $ 6,163,727
- --------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and option contracts 30,572,537 11,466,949
- --------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies and option contracts 64,063,548 25,167,621
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 99,172,939 42,798,297
- --------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A (3,130,474) (4,323,452)
- --------------------------------------------------------------------------------------------
Class B (980,604) (1,627,090)
- --------------------------------------------------------------------------------------------
Class C (28,383) (23,697)
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A (13,462,484) (7,225,608)
- --------------------------------------------------------------------------------------------
Class B (8,054,908) (4,089,137)
- --------------------------------------------------------------------------------------------
Class C (355,717) (109,604)
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A (3,558,143) 865,940
- --------------------------------------------------------------------------------------------
Class B 3,957,825 8,749,835
- --------------------------------------------------------------------------------------------
Class C 2,679,799 1,643,746
- --------------------------------------------------------------------------------------------
Net increase in net assets 76,239,850 36,659,230
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 311,525,524 274,866,294
- --------------------------------------------------------------------------------------------
End of period $387,765,374 $311,525,524
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $203,276,266 $198,796,429
- --------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (41,312) (68,800)
- --------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and option contracts 7,715,300 46,323
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 176,815,120 112,751,572
- --------------------------------------------------------------------------------------------
$387,765,374 $311,525,524
============================================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Utilities 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 objectives are to achieve a high level of current income
and secondarily, growth of capital, by investing primarily in the common and
preferred stocks of public utility companies.
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 decreased by
$369,905, undistributed net realized gains decreased by $1,030,451 and
paid-in capital increased by $1,400,356 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 are recorded on ex-dividend date,
and are declared and paid quarterly. 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 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 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
11
<PAGE> 14
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.
G. Bond Premiums -- It is the policy of the Fund not to amortize market premiums
on bonds for financial reporting purposes.
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 an annual rate of 0.60% on
the first $200 million of the Fund's average daily net assets, plus 0.50% on the
next $300 million of the Fund's average daily net assets, plus 0.40% on the next
$500 million of the Fund's average daily net assets, plus 0.30% on the Fund's
average daily net assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended December 31, 1999, AIM was
paid $88,999 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 $339,533 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 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
$500,106, $1,165,993 and $39,036, respectively, as compensation under the Plans.
AIM Distributors received commissions of $56,996 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 $67,367 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 $4,002
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 $3,537 and $1,044, respectively, under expense offset arrangements. The
effect of the above arrangements resulted in a reduction of the Fund's total
expenses of $4,581 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.
12
<PAGE> 15
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
$111,927,760 and $138,238,897, 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 $182,332,667
- --------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (5,515,275)
- --------------------------------------------------------------------------
Net unrealized appreciation of investment securities $176,817,392
==========================================================================
Investments have the same cost for tax and financial
statement purposes.
</TABLE>
NOTE 7-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 1,548,711 $ 34,438,387 2,025,020 $ 40,729,263
- -------------------------------------------------------------------------------------------------------------------
Class B 884,404 19,574,340 1,124,804 22,635,167
- -------------------------------------------------------------------------------------------------------------------
Class C 183,463 4,121,099 196,103 3,960,554
- -------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 636,523 15,200,629 520,447 10,555,882
- -------------------------------------------------------------------------------------------------------------------
Class B 332,374 7,978,341 246,404 4,994,635
- -------------------------------------------------------------------------------------------------------------------
Class C 14,370 346,523 5,787 117,358
- -------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (2,406,262) (53,197,159) (2,500,981) (50,419,205)
- -------------------------------------------------------------------------------------------------------------------
Class B (1,070,971) (23,594,856) (935,494) (18,879,967)
- -------------------------------------------------------------------------------------------------------------------
Class C (83,100) (1,787,823) (120,588) (2,434,166)
- -------------------------------------------------------------------------------------------------------------------
39,512 $ 3,079,481 561,502 $ 11,259,521
===================================================================================================================
</TABLE>
13
<PAGE> 16
NOTE 8-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 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 21.01 $ 19.26 $ 16.01 $ 14.59 $ 11.85
- --------------------------------------------------------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.38 0.48 0.47 0.55 0.55
- --------------------------------------------------------- -------- -------- -------- -------- --------
Net gains on securities (both realized and unrealized) 6.60 2.53 3.26 1.43 2.71
- --------------------------------------------------------- -------- -------- -------- -------- --------
Total from investment operations 6.98 3.01 3.73 1.98 3.26
- --------------------------------------------------------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.35) (0.46) (0.47) (0.56) (0.52)
- --------------------------------------------------------- -------- -------- -------- -------- --------
Distributions from net realized gains (1.56) (0.80) (0.01) -- --
- --------------------------------------------------------- -------- -------- -------- -------- --------
Total distributions (1.91) (1.26) (0.48) (0.56) (0.52)
- --------------------------------------------------------- -------- -------- -------- -------- --------
Net asset value, end of period $ 26.08 $ 21.01 $ 19.26 $ 16.01 $ 14.59
========================================================= ======== ======== ======== ======== ========
Total return(a) 34.15% 16.01% 23.70% 13.88% 28.07%
========================================================= ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $238,432 $196,665 $179,456 $164,001 $170,624
========================================================= ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.10%(b) 1.06% 1.13% 1.17% 1.21%
========================================================= ======== ======== ======== ======== ========
Ratio of net investment income to average net assets 1.69%(b) 2.39% 2.79% 3.62% 4.20%
========================================================= ======== ======== ======== ======== ========
Portfolio turnover rate 37% 38% 26% 48% 88%
========================================================= ======== ======== ======== ======== ========
</TABLE>
(a) Does not deduct sales charges.
(b) Ratios are based on average net assets of $200,042,322.
<TABLE>
<CAPTION>
Class B Class C
------------------------------------------------- -------------------------
1999 1998 1997 1996 1995 1999(A) 1998 1997
-------- -------- ------- ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 20.98 $ 19.24 $ 16.01 $ 14.60 $ 11.84 $20.97 $19.24 $17.67
- ---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Income from investment operations:
Net investment income 0.21 0.33 0.34 0.42 0.44 0.21 0.33 0.13
- ---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Net gains on securities (both realized and
unrealized) 6.59 2.53 3.25 1.44 2.73 6.59 2.52 1.58
- ---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Total from investment operations 6.80 2.86 3.59 1.86 3.17 6.80 2.85 1.71
- ---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Less distributions:
Dividends from net investment income (0.19) (0.32) (0.35) (0.45) (0.41) (0.19) (0.32) (0.13)
- ---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Distributions from net realized gains (1.56) (0.80) (0.01) -- -- (1.56) (0.80) (0.01)
- ---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Total distributions (1.75) (1.12) (0.36) (0.45) (0.41) (1.75) (1.12) (0.14)
- ---------------------------------------------- -------- -------- ------- ------- ------- ------ ------ ------
Net asset value, end of period $ 26.03 $ 20.98 $ 19.24 $ 16.01 $ 14.60 $26.02 $20.97 $19.24
============================================== ======== ======== ======= ======= ======= ====== ====== ======
Total return(b) 33.16% 15.14% 22.74% 12.98% 27.16% 33.18% 15.09% 9.74%
============================================== ======== ======== ======= ======= ======= ====== ====== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $142,632 $111,866 $94,227 $79,530 $70,693 $6,702 $2,994 $1,183
============================================== ======== ======== ======= ======= ======= ====== ====== ======
Ratio of expenses to average net assets 1.84%(c) 1.81% 1.91% 1.96% 1.97% 1.84%(c) 1.81% 1.90%(d)
============================================== ======== ======== ======= ======= ======= ====== ====== ======
Ratio of net investment income to average net
assets 0.95%(c) 1.64% 2.01% 2.83% 3.44% 0.95%(c) 1.64% 2.02%(d)
============================================== ======== ======== ======= ======= ======= ====== ====== ======
Portfolio turnover rate 37% 38% 26% 48% 88% 37% 38% 26%
============================================== ======== ======== ======= ======= ======= ====== ====== ======
</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 based on average net assets of $116,599,341 and $3,903,633 for
Class B and Class C, respectively.
(d) Annualized.
14
<PAGE> 17
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Global Utilities Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Global Utilities Fund (a portfolio of
AIM Funds Group), including the schedule of investments,
as of December 31, 1999, the related statement of
operations for the year then ended, 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 and brokers. 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 Global
Utilities Fund as of December 31, 1999, the results of
its operations for the year then ended, the changes in
its 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
15
<PAGE> 18
<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 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.; 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 Global Utilities Fund Class A, Class B, and Class C shares paid ordinary
dividends in the amount of $0.56, $0.40, and $0.40 per share, respectively, to
shareholders during its tax year ended December 31, 1999. Of these amounts
24.11% is eligible for the dividends received deduction for corporations.
The Fund also distributed long-term capital gains of $18,887,410 for the Fund's
tax year ended December 31, 1999. Of long-term capital gains distributed, 100%
is 20% rate gain.
16
<PAGE> 19
------------------------------
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AIM GLOBAL UTILITIES FUND
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund AIM Money Market Fund leadership in the mutual-fund industry
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund since 1976 and managed approximately $160
AIM Capital Development Fund billion in assets for more than 6.6 million
AIM Constellation Fund(1) INTERNATIONAL GROWTH FUNDS shareholders, including individual investors,
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund corporate clients and financial institutions,
AIM Large Cap Growth Fund AIM Asian Growth Fund as of December 31, 1999.
AIM Mid Cap Equity Fund AIM Developing Markets Fund The AIM Family of Funds--Registered Trademark--
AIM Mid Cap Growth Fund AIM Euroland Growth Fund(4) is distributed nationwide, and AIM today is the
AIM Mid Cap Opportunities Fund AIM European Development Fund eighth-largest mutual fund complex in the United
AIM Select Growth Fund AIM International Equity Fund States in assets under management, according to
AIM Small Cap Growth Fund(2) AIM Japan Growth Fund Strategic Insight, an independent mutual-fund
AIM Small Cap Opportunities Fund(3) AIM Latin American Growth Fund monitor.
AIM Value Fund AIM New Pacific Growth Fund
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</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.
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