<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 7, 1998
1933 ACT REGISTRATION NO. 2-57526
1940 ACT REGISTRATION NO. 811-2699
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 44
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 40
------------------------
AIM GROWTH SERIES
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
50 CALIFORNIA STREET, 27TH FLOOR,
SAN FRANCISCO, CALIFORNIA 94111
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(415) 392-6181
------------------------
<TABLE>
<S> <C> <C>
MICHAEL A. SILVER, ESQ. SAMUEL D. SIRKO, ESQ. ARTHUR J. BROWN, ESQ.
INVESCO (NY), INC. A I M ADVISORS, INC. R. DARRELL MOUNTS, ESQ.
50 CALIFORNIA STREET, 11 GREENWAY PLAZA, KIRKPATRICK & LOCKHART LLP
27TH FLOOR SUITE 100 1800 MASSACHUSETTS AVENUE, N.W.,
SAN FRANCISCO, CA 94111 HOUSTON, TEXAS 77046 (713) 2ND FLOOR
(NAME AND ADDRESS OF AGENT 626-1919 WASHINGTON, D.C. 20036
FOR SERVICE) (202) 778-9000
</TABLE>
------------------------
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
/ / IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (b) OF RULE 485.
/ / ON PURSUANT TO PARAGRAPH (b) OF RULE 485 OR SUCH OTHER
DATE AS IT MAY BE DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE
COMMISSION.
/ / 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (a)(1) OF RULE 485.
/X/ ON SEPTEMBER 8, 1998 PURSUANT TO PARAGRAPH (a)(1) OF RULE 485.
/ / 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (a)(2) OF RULE 485.
/ / ON PURSUANT TO PARAGRAPH (a)(2) OF RULE 485.
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
/ / THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
CERTAIN SERIES OF THE AIM GROWTH SERIES ARE "FEEDER FUNDS" IN A
"MASTER/FEEDER" FUND ARRANGEMENT. THIS POST-EFFECTIVE AMENDMENT NO. 44 INCLUDES
A MANUALLY EXECUTED SIGNATURE PAGE FOR ONE MASTER TRUST, GROWTH PORTFOLIO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
AIM GROWTH SERIES
CONTENTS OF POST-EFFECTIVE AMENDMENT
THIS POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT OF AIM GROWTH
SERIES CONTAINS THE FOLLOWING DOCUMENTS:
<TABLE>
<S> <C> <C>
Facing Sheet
Contents of Post-Effective Amendment
Cross-Reference Sheet
Part A Prospectuses
-- AIM America Value Fund
-- AIM Europe Growth Fund
-- AIM International Growth Fund
-- AIM Japan Growth Fund
-- AIM Mid Cap Growth Fund
-- AIM New Pacific Growth Fund
-- AIM Small Cap Equity Fund
-- AIM Worldwide Growth Fund
Prospectuses -- Advisor Class
-- AIM America Value Fund
-- AIM Europe Growth Fund
-- AIM International Growth Fund
-- AIM Japan Growth Fund
-- AIM Mid Cap Growth Fund
-- AIM New Pacific Growth Fund
-- AIM Small Cap Equity Fund
-- AIM Worldwide Growth Fund
Part B Statements of Additional Information
-- AIM Equity Funds
-- AIM Small Cap Equity Fund and AIM America Value Fund
Statements of Additional Information -- Advisor Class
-- AIM Equity Funds
-- AIM Small Cap Equity Fund and AIM America Value Fund
Part C Other Information
Signature Pages
-- AIM Growth Series
-- Growth Portfolio
Exhibits
</TABLE>
<PAGE>
AIM GROWTH SERIES
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN FORM N-1A AND THIS AMENDMENT
PROSPECTUS -- CLASS A AND CLASS B
<TABLE>
<CAPTION>
ITEM NO. OF
PART A OF FORM N-1A CAPTIONS IN PROSPECTUS
- -------------------------------------------- -----------------------------------------------------------------
<S> <C> <C>
1. Cover Page....................... Cover Page
2. Synopsis......................... Summary
3. Condensed Financial
Information..................... Financial Highlights
4. General Description of
Registrant...................... Investment Objectives and Policies; Risk Factors; Management;
General Information
5. Management of the Fund........... Management
5A. Management's Discussion of Fund
Performance..................... See Annual Report
6. Capital Stock and Other
Securities...................... Dividends, Distributions and Tax Matters; General Information
7. Purchase of Securities Being
Offered......................... How to Purchase Shares; Exchange Privilege; Determination of Net
Asset Value; Management; Terms and Conditions of Purchase of the
AIM Funds; Special Plans
8. Redemption or Repurchase......... How to Redeem Shares; Determination of Net Asset Value
9. Pending Legal Proceedings........ Not applicable
</TABLE>
<PAGE>
AIM GROWTH SERIES
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN FORM N-1A AND THIS AMENDMENT
PROSPECTUS -- ADVISOR CLASS
<TABLE>
<CAPTION>
ITEM NO. OF
PART A OF FORM N-1A CAPTIONS IN PROSPECTUS
- -------------------------------------------- -----------------------------------------------------------------
<S> <C> <C>
1. Cover Page....................... Cover Page
2. Synopsis......................... Summary
3. Condensed Financial
Information..................... Financial Highlights
4. General Description of
Registrant...................... Investment Objectives and Policies; Risk Factors; Management;
General Information
5. Management of the Fund........... Management
5A. Management's Discussion of Fund
Performance..................... See Annual Report
6. Capital Stock and Other
Securities...................... Dividends, Distributions and Tax Matters; General Information
7. Purchase of Securities Being
Offered......................... How to Purchase Shares; Exchange Privilege; Determination of Net
Asset Value; Management; Terms and Conditions of Purchase of the
AIM Funds; Special Plans
8. Redemption or Repurchase......... How to Redeem Shares; Determination of Net Asset Value
9. Pending Legal Proceedings........ Not applicable
</TABLE>
<PAGE>
AIM GROWTH SERIES
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN FORM N-1A AND THIS AMENDMENT
STATEMENT OF ADDITIONAL INFORMATION -- CLASS A AND CLASS B
<TABLE>
<CAPTION>
ITEM NO. OF
PART B OF FORM N-1A CAPTIONS IN STATEMENT OF ADDITIONAL INFORMATION
- -------------------------------------------- -----------------------------------------------------------------
<S> <C> <C>
10. Cover Page....................... Cover Page
11. Table of Contents................ Table of Contents
12. General Information and
History......................... Cover Page
13. Investment Objectives and
Policies........................ Investment Objectives and Policies; Investment Limitations;
Options and Futures; Risk Factors
14. Management of the Fund........... Trustees and Executive Officers; Management
15. Control Persons and Principal
Holders of Securities........... Trustees and Executive Officers; Management
16. Investment Advisory and Other
Services........................ Management; Additional Information
17. Brokerage Allocation and Other
Practices....................... Execution of Portfolio Transactions
18. Capital Stock and Other
Securities...................... Additional Information
19. Purchase, Redemption and Pricing
of Securities Being Offered..... Valuation of Shares; How to Purchase and Redeem Shares
20. Tax Status....................... Taxes
21. Underwriters..................... Management
22. Calculation of Performance
Data............................ Investment Results
23. Financial Statements............. Financial Statements
</TABLE>
<PAGE>
AIM GROWTH SERIES
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN FORM N-1A AND THIS AMENDMENT
STATEMENT OF ADDITIONAL INFORMATION -- ADVISOR CLASS
<TABLE>
<CAPTION>
ITEM NO. OF
PART B OF FORM N-1A CAPTIONS IN STATEMENT OF ADDITIONAL INFORMATION
- ------------------------------------------- ---------------------------------------------------------------
<S> <C> <C>
10. Cover Page...................... Cover Page
11. Table of Contents............... Table of Contents
12. General Information and
History........................ Cover Page
13. Investment Objectives and
Policies....................... Investment Objectives and Policies; Investment Limitations;
Options and Futures; Risk Factors
14. Management of the Fund.......... Trustees and Executive Officers; Management
15. Control Persons and Principal
Holders of Securities.......... Trustees and Executive Officers; Management
16. Investment Advisory and Other
Services....................... Management; Additional Information
17. Brokerage Allocation and Other
Practices...................... Execution of Portfolio Transactions
18. Capital Stock and Other
Securities..................... Additional Information
19. Purchase, Redemption and Pricing
of Securities Being Offered.... Valuation of Shares; How to Purchase and Redeem Shares
20. Tax Status...................... Taxes
21. Underwriters.................... Management
22. Calculation of Performance
Data........................... Investment Results
23. Financial Statements............ Financial Statements
</TABLE>
<PAGE>
[LOGO]
AIM AMERICA VALUE FUND
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM America Value Fund (the "Fund"),
which is one of several series investment portfolios comprising AIM Growth
Series (the "Trust"), an open-end, series, management investment company.
The Fund is a diversified portfolio which seeks long-term capital appreciation
by investing all of its investable assets in the Value Portfolio (the
"Portfolio"), which, in turn, invests primarily in equity securities of
companies domiciled in the United States that, at the time of purchase, have
market capitalizations of greater than $500 million and that INVESCO (NY), Inc.
(the "Sub-adviser") believes to be undervalued in relation to long-term earning
power or other factors.
The Portfolio's investment objective is identical to that of the Fund. The
investment experience of the Fund will correspond directly with the investment
experience of the Portfolio.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM AMERICA VALUE FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 6
Investment Objective and Policies......................................................... 7
Risk Factors.............................................................................. 10
Management................................................................................ 11
Other Information......................................................................... 15
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund and the Portfolio: The Fund is a diversified series of the Trust. The Portfolio is a diversified series of Growth
Portfolio. The Fund seeks long-term capital appreciation. The Fund invests all of its investable
assets in the Portfolio, which, in turn, invests primarily in equity securities of companies
domiciled in the United States that, at the time of purchase, have market capitalizations of greater
than $500 million and that the Sub-adviser believes to be undervalued in relation to long-term
earning power or other factors.
Investment Managers: The Portfolio is managed by A I M Advisors, Inc. ("AIM") and is sub-advised and sub-administered by
INVESCO (NY), Inc. (the "Sub-Adviser"). AIM and the Sub-adviser and their worldwide asset management
affiliates provide investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment
management group that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing presence in Asia. AIM was
organized in 1976 and, together with its subsidiaries, currently advises approximately 90 investment
company portfolios.
Purchasing Shares: Investors may select Class A or Class B shares of the Fund which are offered by this Prospectus at an
offering price that reflects differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to a separate
prospectus, the Fund also offers Advisor Class shares, which represent interests in the Fund. The
Advisor Class has different distribution arrangements.
Class A Shares: Shares are offered at net asset value plus any applicable initial sales charge.
</TABLE>
Prospectus Page 2
<PAGE>
AIM AMERICA VALUE FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B Shares: Shares are offered at net asset value without an initial sales charge, and are subject to a maximum
contingent deferred sales charge of 5% on certain redemptions made within six years from the date
such shares were purchased. Class B shares automatically convert to Class A shares of the Fund eight
years following the end of the calendar month in which a purchase was made. Class B shares are
subject to higher expenses than Class A shares.
Initial investments in any class of shares must be at least $500 and additional investments must be
at least $50. The minimum initial investment is modified for investments through tax-qualified
retirement plans and accounts initially established with an Automatic Investment Plan. The
distributor of the Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
Suitability for Investors: An investor in Class A or Class B shares of the Fund should consider the method of purchasing shares
that is most beneficial given the amount of the purchase, the length of time the shares are expected
to be held and other circumstances. Investors should consider whether, during the anticipated life of
their investment in the Fund, the accumulated distribution fees and any applicable contingent
deferred sales charges on Class B shares prior to conversion would be less than the initial sales
charge and accumulated distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares. To assist investors
in making this determination, the table under the caption "Table of Fees and Expenses" sets forth
examples of the charges applicable to each class of shares. Class A shares will normally be more
beneficial than Class B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase of more than $250,000
for Class B shares.
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Class A and Class B shares of the Fund may be exchanged for shares of other funds in The
AIM Family of Funds in the manner and subject to the policies and charges set forth herein. See
"Exchange Privilege."
Redeeming Shares: Class A shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, generally without charge. A contingent deferred sales charge of 1% may apply to
certain redemptions where a purchase of more than $1 million is made at net asset value. See "How to
Redeem Shares -- Contingent Deferred Sales Charge Program for Large Purchases."
</TABLE>
Prospectus Page 3
<PAGE>
AIM AMERICA VALUE FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, less a contingent deferred sales charge for redemptions made within six years from
the date such shares were purchased. Class B shares redeemed after six years from the date such
shares were purchased will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on a monthly
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters" and "Special Plans."
Risk Factors: There is no assurance that the Fund or the Portfolio will achieve its investment objective. The
Fund's net asset value will fluctuate, reflecting fluctuations in the market value of the Portfolio's
securities.
The Portfolio may engage in certain options and futures transactions to attempt to hedge against the
overall level of investment risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 4
<PAGE>
AIM AMERICA VALUE FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Class A and Class B shares of the Fund are
reflected in the following table (1):
<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION COSTS (2):
Maximum sales charge on purchases (as a % of
offering price).................................. 5.50% None
Sales charges on reinvested distributions to
shareholders..................................... None None
Maximum deferred sales charge (as a % of net asset
value at time of purchase or sale, whichever is
less)............................................ None 5.00%
Redemption charges................................ None None
Exchange fees..................................... None None
ANNUAL FUND OPERATING EXPENSES (3):
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees..... 0.73% 0.73%
12b-1 distribution and service fees............... 0.35% 1.00%
Other expenses (after reimbursement (includes
interest expense not subject to
reimbursement),.................................. 0.70% 0.70%
------- -------
Total Fund Operating Expenses..................... 1.78% 2.43%
------- -------
------- -------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (7):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS(6)
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A shares (4)....................................................... $ 72 $108 $ 145 $ 251
Class B shares
Assuming a complete redemption at end of period (5).................... $ 76 $108 $ 152 $ 263
Assuming no redemption................................................. $ 25 $ 76 $ 129 $ 263
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. rules regarding investment companies.
(2) Sales charge waivers are available for Class A and Class B shares, and
reduced sales charge purchase plans are available for Class A shares. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase. The charge generally
declines by 1% annually thereafter, reaching zero after six years. See
"Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
Sales Charges."
(3) Expenses are based on the Fund's fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 1.75% and 2.40% of the average daily net
assets of the Fund's Class A and Class B shares, respectively. "Other
expenses" include custody, transfer agency, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information. With respect to Class A shares, without
reimbursements, "Other expenses" and "Total Fund Operating Expenses" would
have been 1.92% and 3.00%, respectively, for the Fund (including its share
of the expenses of the Portfolio). With respect to Class B shares, without
reimbursements, "Other expenses" and "Total Fund Operating Expenses" would
have been 1.92% and 3.65%, respectively, for the Fund and the Portfolio. The
Board of Trustees of the Trust believes that the aggregate per share
expenses of the Fund and the Portfolio will be approximately equal to the
expenses the Fund would incur if its assets were invested directly in the
type of securities being held by the Portfolio.
(4) Assumes payment of maximum sales charge by the investor.
(5) Assumes deduction of the applicable contingent deferred sales charge.
(6) For Class B shares, this number reflects the conversion to Class A shares
eight years following the end of the calendar month in which a purchase was
made.
(7) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S
DIRECT AND INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The
table and the assumption in the Hypothetical Example of a 5% annual return
are required by regulations of the SEC applicable to all mutual funds. The
5% annual return is not a prediction of and does not represent the Fund's or
the Portfolio's projected or actual performance.
Prospectus Page 5
<PAGE>
AIM AMERICA VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information.
AIM AMERICA VALUE FUND
(FORMERLY GT GLOBAL AMERICA VALUE FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. Standardized total return for Class
A shares reflects the deduction of the Fund's maximum front-end sales charge at
the time of purchase. Standardized total return for Class B shares reflects the
deduction of the maximum applicable contingent deferred sales charge on a
redemption of shares held for the period.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 6
<PAGE>
AIM AMERICA VALUE FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Fund is long term capital appreciation. The Fund
seeks its investment objective by investing all of its investable assets in the
Portfolio, which, in turn, normally invests at least 65% of its total assets in
equity securities, including common stocks, preferred stocks, convertible debt
securities and warrants of companies domiciled in the United States that, at the
time of purchase, have market capitalizations of greater than $500 million and
that the Sub-adviser believes to be undervalued in relation to long-term earning
power or other factors. The remainder of the Portfolio's assets may be invested
in common stocks, preferred stocks, convertible debt securities and warrants of
companies domiciled in the United States that are smaller than those defined
above and non-convertible debt securities, U.S. government securities and high
quality money market instruments, such as U.S. government obligations, high
grade commercial paper, bank certificates of deposit and bankers' acceptances,
of issuers domiciled in the United States. The Portfolio also may invest up to
10% of its total assets in securities of foreign issuers in the form of ADRs or
other similar securities convertible into securities of foreign issuers. There
can be no assurance that the Fund or the Portfolio will achieve its investment
objective.
The debt obligations that the Portfolio may invest in are limited to U.S.
government securities and corporate debt securities of issuers domiciled in the
United States. The Portfolio will limit its purchases of debt securities to
investment grade obligations, as defined above.
For purposes of this Prospectus, market capitalization means the total market
value of a company's outstanding common stock. There is no necessary correlation
between market capitalization and the financial attributes (such as level of
assets, revenues or income) often used to measure a company's size.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In selecting issuers for the Portfolio, the Sub-adviser attempts to identify
securities of issuers whose prospects and growth potential, in the Sub-adviser's
opinion, are currently undervalued by investors. In the Sub-adviser's view, an
issuer may show favorable prospects as a result of many factors, including
changes in management, shifts in supply and demand conditions in the industry in
which it operates, technological advances, new products or product cycles, or
changes in macroeconomic trends. The securities of such issuers may be
undervalued by the market due to many factors, including market decline,
tax-loss selling, poor economic conditions, limited coverage by the investment
community, investors' reluctance to overlook perceived financial, operational,
managerial or other problems affecting the issuer or the industry in which it
operates and other factors. The Sub-adviser will attempt to identify those
undervalued issuers with the potential for attractive returns.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
Prospectus Page 7
<PAGE>
AIM AMERICA VALUE FUND
currency units (such as Euros) are evaluated on the strength of the particular
currency against the U.S. dollar as well as on the current and expected levels
of interest rates in the country or countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Portfolio may invest less than 65% of
its total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Portfolio may hold U.S. dollars and/or
may invest any portion of its assets in high quality domestic debt securities or
high quality money market instruments. To the extent the Portfolio adopts a
temporary defensive position, it will not be invested so as to achieve directly
its investment objective.
In addition, the Portfolio may hold U.S. dollars and may invest in domestic debt
securities or high quality money market instruments pending investment of
proceeds from new sales of Fund shares, or to meet its ordinary daily cash
needs. For a description of money market instruments, see "Temporary Defensive
Strategies" in the "Investment Objectives and Policies" section of the Statement
of Additional Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Portfolio may invest up to
10% of its total assets in other investment companies. As a shareholder in an
investment company, the Portfolio would bear its ratable share of that
investment company's expenses, including its advisory and administration fees.
At the same time, the Portfolio would continue to pay its own management fees
and other expenses. AIM and the Sub-adviser will waive their advisory fees to
the extent that the Portfolio invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Portfolio
may be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemption of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of the Fund's shares than would be the case if the Portfolio did
not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Portfolio
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Portfolio's sale of securities together with
its commitment (for which the Portfolio may receive a fee) to purchase similar,
but not identical, securities at a future date.
SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolio to retain ownership of the securities loaned and, at the same
time, enhance the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Fund's investment program and
regulatory agencies, and as approved
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AIM AMERICA VALUE FUND
by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
OPTIONS AND FUTURES TRANSACTIONS. The Portfolio may use options on securities,
options on indices, futures contracts and options on futures contracts to
attempt to hedge against the overall level of investment risk normally
associated with its portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk Factors --
Options and Futures Strategies" herein and "Options, Futures and Currency
Strategies" in the Statement of Additional Information.
In addition, the Portfolio may purchase and sell put and call options on equity
and debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Portfolio or that the Sub-adviser intends to include in
the Portfolio's holdings. The Portfolio also may buy and sell put and call
options on stock indexes to hedge against overall fluctuations in the securities
markets or market sectors generally or in a specific market sector.
Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Portfolio's holdings. The Portfolio also may purchase stock index futures
contracts and purchase call options or write put options on such contracts to
hedge against a general stock market or market sector advance and thereby
attempt to lessen the cost of future securities acquisitions. The Portfolio may
use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolio against changes in the general level of interest rates.
AMERICAN DEPOSITORY RECEIPTS. The Portfolio may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in U.S. securities markets. See "Investment
Objectives and Policies -- Depository Receipts" in the Statement of Additional
Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Trust's Board of Trustees, without shareholder approval. The investment policies
of the
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AIM AMERICA VALUE FUND
Fund are identical to the investment policies of the Portfolio.
The approval of the Fund and of other investors in the Portfolio, if any, is not
required to change the investment objective, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objective. If a percentage restriction on investment or utilization
of assets in an investment policy or restriction is adhered to at the time an
investment is made, a later change in percentage ownership of a security or kind
of securities resulting from changing market values or a similar type of event
will not be considered a violation of the Fund's or Portfolio's investment
policies or restrictions.
OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
The Fund may each redeem its investment in the Portfolio at any time, if the
Board of Trustees of the Trust determines that it is in the best interests of
the Fund and its shareholders to do so. A change in the Portfolio's investment
objective, policies or limitations that is not approved by the Board or
shareholders of the Fund could require the Fund to redeem its interest in the
Portfolio. Any such redemption could result in a distribution in kind of
portfolio securities (as opposed to a cash distribution) by the Portfolio. In
addition, a distribution in kind could result in a less diversified portfolio of
investments for the Fund and could adversely affect its liquidity. Should such a
distribution occur, the Fund could incur brokerage fees or other transaction
costs in converting such securities to cash. Upon redemption, the Board would
consider what action might be taken, including the investment of all the
investable assets of the Fund in another pooled investment entity having
substantially the same investment objective as the Fund or the direct retention
by the Fund of its own investment adviser and/or subadviser to manage its assets
in accordance with its investment objective, policies and limitations discussed
herein.
In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
The Fund may be materially affected by the actions of other large investors, if
any, in the Portfolio. For example, as with all open-end investment companies,
if a large investor were to redeem its interest in the Portfolio, (1) the
Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns, and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
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RISK FACTORS
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GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset value will fluctuate, reflecting
fluctuations in the market value of the Portfolio's securities. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. In addition, the value of debt securities
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AIM AMERICA VALUE FUND
held by the Portfolio will fluctuate with changes in the perceived
creditworthiness of the issuers of such securities and interest rates.
OPTIONS AND FUTURES TRANSACTIONS. Although the Portfolio is authorized to enter
into options and futures transactions, the Portfolio might not enter into any
such transactions. Options and futures transactions involve certain risks, which
include: (1) dependence on the Sub-adviser's ability to predict movements in the
prices of individual securities, fluctuations in the general securities markets
or in the appropriate market sector and movements in interest rates; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, futures contracts or options thereon and movements in the price of the
security hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts or options thereon are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
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MANAGEMENT
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The Trust's and the Portfolio's Boards of Trustees have overall responsibility
for the operation of the Fund and the Portfolio, respectively. The Trust's and
the Portfolio's Boards of Trustees have approved all significant agreements
between the Trust and the Portfolio on the one side and persons or companies
furnishing services to the Fund and the Portfolio on the other, including the
investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund and the Portfolio are delegated to the officers of the
Trust and the Portfolio, subject always to the investment objective and policies
of the Fund and the Portfolio and to the general supervision of the Boards. See
"Trustees and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Portfolio include, but are not
limited to, determining the composition of the investment holdings of the
Portfolio and placing orders to buy, sell or hold particular securities. In
addition, AIM and the Sub-adviser provide the following administrative services
to the Fund and the Portfolio: furnishing corporate officers and clerical staff;
providing office space, services and equipment; and supervising all matters
relating to the Fund's and the Portfolio's operations.
The Fund pays AIM administration fees, computed daily and paid monthly, at the
annualized rate of 0.25% of the Fund's average daily net assets. AIM has
appointed the Sub-adviser as the Fund's sub-administrator. In addition, the Fund
bears its pro rata portion of the investment management and administration fees
paid by the Portfolio to AIM and the Sub-adviser. The Portfolio pays AIM such
fees, computed daily and paid monthly, based on the average daily net assets of
the Portfolio, at the annualized rate of .475% on the first $500 million, .45%
on the next $500 million, .425% on the next $500 million and .40% on all amounts
thereafter. Out of its aggregate fees payable by the Fund and the
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AIM AMERICA VALUE FUND
Portfolio, AIM pays the Sub-adviser sub-advisory and sub-administration fees
equal to 40% of the aggregate fees AIM receives from the Fund and the Portfolio.
The investment management and administration fees paid by the Fund and the
Portfolio are higher than those paid by most mutual funds. The Fund and
Portfolio pay all expenses not assumed by AIM, the Sub-adviser, AIM Distributors
or other agents. AIM has undertaken to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest and extraordinary expenses) to the
maximum annual rate of 1.75% and 2.40% of the average daily net assets of the
Fund's Class A and Class B shares, respectively.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement, dated as of May 29, 1998 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises approximately 90 investment company portfolios encompassing a
broad range of investment objectives. The Sub-adviser, 50 California Street,
27th Floor, San Francisco, California 94111, and 1166 Avenue of the Americas,
New York, New York 10036, serves as the sub-adviser to the Portfolio pursuant to
an investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Portfolio, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
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AIM AMERICA VALUE FUND
The investment professionals primarily responsible for the portfolio management
of the Portfolio are as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE PORTFOLIO PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Ted J. Ujazdowski Portfolio Manager since Portfolio Manager for the Sub-adviser since 1983. Director of the
New York 1997 Sub-adviser's Value Group since 1987. Employed by Chancellor Capital
Management, Inc. ("Chancellor Capital"), a predecessor of the
Sub-adviser, from 1983 to October 1996.
Adam D. Scheiner Portfolio Manager since Portfolio Manager and Analyst of the Sub-adviser's Value Group since
New York 1997 June 1993. Employed by Chancellor Capital from June 1993 to October
1996.
Richard K. Collins Portfolio Manager since Senior Equity Portfolio Manager and Managing Director for the
New York 1997 Sub-adviser since April 1993. Employed by Chancellor Capital from
1982 to October 1996. Chartered Financial Analyst and member of the
Association of Investment Management Research (AIMR) and the New
York Society of Securities Analysts.
</TABLE>
------------------------
With respect to the Portfolio, the Sub-adviser utilizes a team approach that
relies on its bottom-up, research-intensive, process-driven stock selection
capability to build various investment portfolios. The Sub-adviser's disciplined
process combines the inputs of analysts performing fundamental and quantitative
research, various committees that set the Sub-adviser's firmwide economic
forecasts and sector and industry allocations and portfolio management teams
responsible for stock selection decisions. While individual members of the Sub-
adviser's investment team are assigned primary responsibility for the day-to-day
management of the Portfolio along with similarly managed accounts, the Portfolio
is reviewed on a regular basis by the applicable investment team to monitor
compliance with applicable investment guidelines.
In placing orders for the Portfolio's portfolio securities transactions, the
Sub-adviser seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-adviser may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions for the
Portfolio may be executed through affiliates of AIM or the Sub-adviser. High
portfolio turnover (over 100%) involves correspondingly greater brokerage
commissions and other transaction costs that the Portfolio will bear directly
and could result in the realization of net capital gains that would be taxable
when distributed to shareholders. See "Dividends, Distributions and Tax
Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 on behalf of Class A shares of the Fund, and has entered into a
Master Distribution Agreement, dated May 29, 1998, on behalf of Class B shares
of the Fund (individually referred to as a "Distribution Agreement" or
collectively as the "Distribution Agreements.") with AIM Distributors, a
registered broker-dealer and a wholly owned subsidiary of AIM, to act as the
distributor of Class A and Class B shares of the Fund. Certain Trustees and
officers of the Trust are affiliated with AIM Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right to
distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would
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AIM AMERICA VALUE FUND
continue to receive payments of asset based sales charges in respect of the
outstanding Class B shares attributable to the distribution efforts of AIM
Distributors; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments to AIM Distributors. Termination of the Class B shares distribution
plan or Distribution Agreement does not affect the obligation of Class B
shareholders to pay contingent deferred sales charges.
DISTRIBUTION PLANS. CLASS A PLAN. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
Of the aggregate amount payable under the Class A Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee. Payments pursuant to the
Plans are subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
CLASS B PLAN. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
BOTH PLANS. Activities that may be financed under the Class A Plan and the Class
B Plan (collectively, the "Plans") include, but are not limited to: printing of
prospectuses and statements of additional information and reports for other than
existing shareholders, overhead, preparation and distribution of advertising
material and sales literature, expense of organizing and conducting sales
seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust
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AIM AMERICA VALUE FUND
will not be obligated to pay more than that fee, and if AIM Distributors'
expenses are less than the fee it receives, AIM Distributors will retain the
full amount of the fee. Payments pursuant to the Plans are subject to any
applicable limitations imposed by rules of the National Association of
Securities Dealers, Inc.
Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
Under the Plans, AIM Distributors may in its discretion from time to time agree
to waive voluntarily all or any portion of its 12b-1 fee, while retaining its
ability to be reimbursed for such fee prior to the end of each fiscal year.
Under the Plans, certain financial institutions which have entered into service
agreements and which sell shares of the Fund on an agency basis, may receive
payments from the Fund pursuant to the respective Plans. AIM Distributors does
not act as principal, but rather as agent, for the Fund in making such payments.
The Fund will obtain a representation from such financial institutions that they
will either be licensed as dealers as required under applicable state law, or
that they will not engage in activities which would constitute acting as a
"dealer" as defined under applicable state law. Financial intermediaries and any
other person entitled to receive compensation for selling Fund shares may
receive different compensation for selling shares of one class over another.
For additional information concerning the operation of the Plans see the
Statement of Additional Information.
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OTHER INFORMATION
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ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of G.T. Global Growth Series, a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series portfolios of
the Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of a fund may
vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and
Prospectus Page 15
<PAGE>
AIM AMERICA VALUE FUND
distributions out of the income earned and gain realized on the assets belonging
to the Fund as may be declared by the Board of Trustees. Each share of the Fund
is equal as to earnings, assets and voting privileges to each other share in the
Fund, except that each normally has exclusive voting rights with respect to its
distribution plan and bears the expenses, if any, related to the distribution of
its shares. Shares of the Fund, when issued, are fully paid and nonassessable.
ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Growth Portfolio, a Delaware business trust. Under Delaware law, the Fund and
other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However, the
Growth Portfolio's Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Portfolio and requires that notice of
such disclaimer be given in each agreement, obligation or instrument entered
into or executed by the Portfolio or a trustee. The Agreement and Declaration of
Trust also provides for indemnification from the Portfolio property for all
losses and expenses of any shareholder held personally liable for the
Portfolio's obligations. Thus the risk of an investor incurring financial loss
on account of such liability is limited to circumstances in which the Portfolio
itself would be unable to meet its obligations and where the other party was
held not to be bound by the disclaimer.
Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust, to the Fund and
to the Portfolio.
Prospectus Page 16
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND AIM GLOBAL RESOURCES FUND
AIM ADVISOR INTERNATIONAL VALUE FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM ADVISOR LARGE CAP VALUE FUND AIM GLOBAL TRENDS FUND
AIM ADVISOR MULTIFLEX FUND AIM GLOBAL UTILITIES FUND
AIM ADVISOR REAL ESTATE FUND AIM HIGH INCOME MUNICIPAL FUND
AIM AGGRESSIVE GROWTH FUND AIM HIGH YIELD FUND
AIM AMERICA VALUE FUND AIM INCOME FUND
AIM ASIAN GROWTH FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM BALANCED FUND AIM INTERNATIONAL EQUITY FUND
AIM BLUE CHIP FUND AIM INTERNATIONAL GROWTH FUND
AIM CAPITAL DEVELOPMENT FUND AIM JAPAN GROWTH FUND
AIM CHARTER FUND AIM LATIN AMERICAN GROWTH FUND
AIM CONSTELLATION FUND AIM LIMITED MATURITY TREASURY FUND
AIM DEVELOPING MARKETS FUND AIM MID CAP GROWTH FUND
AIM DOLLAR FUND(*) AIM MONEY MARKET FUND(*)
AIM EMERGING MARKETS FUND AIM MUNICIPAL BOND FUND
AIM EUROPEAN DEVELOPMENT FUND AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND AIM SELECT GROWTH FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM SMALL CAP OPPORTUNITIES FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM GLOBAL GROWTH FUND AIM TAX-EXEMPT CASH FUND(*)
AIM GLOBAL GROWTH & INCOME FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL HEALTH CARE FUND AIM VALUE FUND
AIM GLOBAL HIGH INCOME FUND AIM WEINGARTEN FUND
AIM GLOBAL INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
asset value, without payment of a sales charge, as described below. Other
funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
FUND, are sold with an initial sales charge or subject to a contingent
deferred sales charge upon redemption, as described below.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM
Family of Funds ("AIM Funds"), an investor must submit a fully completed new
Account Application form directly to A I M Fund Services, Inc. ("AFS" or the
"Transfer Agent") or through any dealer authorized by A I M Distributors, Inc.
("AIM Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
is $500, except for accounts initially established through an Automatic
Investment Plan, which requires a special authorization form (see "Special
Plans") and for certain retirement accounts. The minimum initial investment for
accounts established with an Automatic Investment Plan is $50. The minimum
initial investment for an Individual Retirement Arrangement ("IRA") or Roth IRA
is $250. There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such
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<PAGE>
AIM INVESTOR'S GUIDE
plans is $25), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM Funds account.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Shares of any AIM Funds not named on the cover of this Prospectus, as well
as Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>
HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased
directly through AIM Distributors or through any dealer who has entered into an
agreement with AIM Distributors. The minimum investment for subsequent purchases
is $50. The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. There are no such minimum investment requirements for investment of
dividends and distributions of any of the AIM Funds into any other existing AIM
Funds account.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION-SM-: To purchase additional shares by electronic
funds transfer, please contact the Client Services Department of AFS for
details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN GROWTH FUND, AIM
BALANCED FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER
FUND, AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP GROWTH FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT
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AIM INVESTOR'S GUIDE
CASH FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without
a sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over another class in the same Multiple Class Fund. Factors an investor
should consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH
FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP EQUITY
FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
SALES CHARGES AND DEALER CONCESSIONS
GROUP I. Certain AIM Funds are currently sold with a sales charge ranging
from 5.50% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM
ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
GROWTH FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $25,000................................................................ 5.50 % 5.82 % 4.75 %
$25,000 but less than $50,000.................................................... 5.25 5.54 4.50
$50,000 but less than $100,000................................................... 4.75 4.99 4.00
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 3.00 3.09 2.50
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
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AIM INVESTOR'S GUIDE
GROUP II. Certain AIM Funds are currently sold with a sales charge ranging
from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND,
AIM BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND,
AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL HIGH INCOME FUND,
AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES
FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND FUND, AIM
STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $50,000................................................................ 4.75 % 4.99 % 4.00 %
$50,000 but less than $100,000................................................... 4.00 4.17 3.25
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 2.50 2.56 2.00
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $100,000............................................................... 1.00 % 1.01 % 0.75 %
$100,000 but less than $250,000.................................................. 0.75 0.76 0.50
$250,000 but less than $1,000,000................................................ 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus
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AIM INVESTOR'S GUIDE
payments or other consideration shall not exceed 0.25% of the public offering
price of the shares sold. Any such bonus or incentive programs will not change
the price paid by investors for the purchase of the applicable AIM Fund's shares
or the amount that any particular AIM Fund will receive as proceeds from such
sales. Dealers may not use sales of the AIM Funds' shares to qualify for any
incentives to the extent that such incentives may be prohibited by the laws of
any state.
AIM Distributors may make payments to dealers and institutions who are
dealers of record for purchases of $1 million of more of Class A shares (or
shares which normally involve payment of initial sales charges), which are sold
at net asset value and are subject to a contingent deferred sales charge, for
all AIM Funds other than Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND as follows: 1% of the first $2 million
of such purchases, plus 0.80% of the next $1 million of such purchases, plus
0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess
of $20 million of such purchases. See "Contingent Deferred Sales Charge Program
for Large Purchases." AIM Distributors may make payments to dealers and
institutions who are dealers of record for purchases of $1 million or more of
Class A shares (or shares which normally involve payment of initial sales
charges), and which are sold at net asset value and are not subject to a
contingent deferred sales charge, in an amount up to 0.10% of such purchases of
Class A shares of AIM LIMITED MATURITY TREASURY FUND, and in an amount up to
0.25% of such purchases of Class A shares of AIM TAX-FREE INTERMEDIATE FUND.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed
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<PAGE>
AIM INVESTOR'S GUIDE
during the next twelve months on Saturdays and Sundays and on the days on which
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class
Funds currently offer two or more classes of shares through separate
distribution systems (the "Multiple Distribution System"). Although each class
of shares of a particular Multiple Class Fund represents an interest in the same
portfolio of investments, each class is subject to a different distribution
structure and, as a result, differing expenses. This Multiple Distribution
System allows investors to select the class that is best suited to the
investor's needs and objectives. In considering the options afforded by the
Multiple Distribution System, investors should consider both the applicable
initial sales charge or contingent deferred sales charge, as well as the ongoing
expenses borne by each class of shares and other relevant factors, such as
whether his or her investment goals are long-term or short-term.
CLASS A SHARES generally are sold subject to the initial sales charges
described above and are subject to the other fees and expenses described
herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
needs of an investor who wishes to establish a dollar cost averaging
program, pursuant to which Class A shares an investor owns may be exchanged
at net asset value for Class A shares of another Multiple Class Fund or
shares of another AIM Fund which is not a Multiple Class Fund, subject to
the terms and conditions described under the caption "Exchange Privilege --
Terms and Conditions of Exchanges."
CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made within
the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."
Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and other distributions)
eight years from the end of the calendar month in which the purchase of
Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
outstanding on May 29, 1998 and which are continuously held by the
shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
FUND seven years from the end of the calendar month in which the purchase of
such Class B shares was made. If a shareholder exchanges Class B shares of
AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
shares will be subject to the eight year conversion feature applicable to
Class B shares of all other AIM Funds. Following such conversion of their
Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
payments associated with Class B shares. See "Management -- Distribution
Plans."
AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an initial
sales charge and are not subject to a contingent deferred sales charge;
however, they are subject to the other fees and expenses described in the
prospectus for AIM MONEY MARKET FUND.
TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon
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Eastern Time or NYSE Close on any business day of the Fund will be confirmed at
the price next determined. Net asset value is normally determined at 12:00 noon
Eastern Time and NYSE Close on each business day of AIM MONEY MARKET FUND.
SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
The term "purchaser" means:
- - an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the benefit
of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
plan (unless such 403(b) plan qualifies as the purchaser as defined below);
- - a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), provided that:
a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will
not accept contributions submitted with respect to individual
participants);
b. each transmittal must be accompanied by a single check or wire
transfer; and
c. all new participants must be added to the 403(b) plan by submitting an
application on behalf of each new participant with the contribution
transmittal;
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- - a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;
- - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or SIMPLE
IRA accounts should be linked;
- - any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or
- - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").
Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge
made during the 13-month period will be made at the public offering price
applicable to a single transaction of the total dollar amount indicated by the
LOI, as described under "Sales Charges and Dealer Concessions." It is the
purchaser's responsibility at the time of purchase to specify the account
numbers that should be considered in determining the appropriate sales charge.
The offering price may be further reduced as described under "Rights of
Accumulation" if the Transfer Agent is advised of all other accounts at the time
of the investment. Shares acquired through reinvestment of dividends and capital
gain distributions will not be applied to the LOI. At any time during the
13-month period after meeting the original obligation, a purchaser may revise
his intended investment amount upward by submitting a written and signed
request. Such a revision will not change the original expiration date. By
signing an LOI, a purchaser is not making a binding commitment to purchase
additional shares, but if purchases made within the 13-month period do not total
the amount specified, the investor will pay the increased amount of sales charge
as described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase with the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
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irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds
at net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase Class A shares of the AIM Funds through
AIM Distributors without payment of an initial sales charge: (a) A I M
Management Group Inc. ("AIM Management") and its affiliated companies; (b) any
current or retired officer, director, trustee or employee, or any member of the
immediate family (including spouse, children, parents and parents of spouse) of
any such person, of AIM Management or its affiliates or of certain mutual funds
which are advised or managed by AIM; or any trust established exclusively for
the benefit of such persons; (c) any employee benefit plan established for
employees of AIM Management or its affiliates; (d) any current or retired
officer, director, trustee or employee, or any member of
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AIM INVESTOR'S GUIDE
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, or of CIGNA Corporation or of any of its affiliated
companies, or of First Data Investor Services Group (formerly The Shareholder
Services Group, Inc.); (e) any investment company sponsored by CIGNA
Investments, Inc. or any of its affiliated companies for the benefit of its
directors' deferred compensation plans; (f) discretionary advised clients of AIM
or AIM Capital; (g) registered representatives and employees of dealers who have
entered into agreements with AIM Distributors (or financial institutions that
have arrangements with such dealers with respect to the sale of shares of the
AIM Funds) and any member of the immediate family (including spouse, children,
parents and parents of spouse) of any such person, provided that purchases at
net asset value are permitted by the policies of such person's employer; (h)
certain broker-dealers, investment advisers or bank trust departments that
provide asset allocation, similar specialized investment services or investment
company transaction services for their customers, that charge a minimum annual
fee for such services, and that have entered into an agreement with AIM
Distributors with respect to their use of the AIM Funds in connection with such
services; (i) any employee or any member of the immediate family (including
spouse, children, parents and parents of spouse) of any employee, of Triformis
Inc.; (j) shareholders of the AIM/GT Funds as of April 30, 1987 who since that
date continually have owned shares of one or more of the AIM/GT Funds; and (k)
certain former AMA Investment Advisers' shareholders who became shareholders of
the AIM Global Health Care Fund in October 1989, and who have continuously held
shares in the AIM/GT Funds since that time.
In addition, shares of any AIM Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the total amount invested in the
plan is at least $1,000,000, (2) the sponsor signs a $1,000,000 LOI, (3) such
shares are purchased by an employer-sponsored plan with at least 100 eligible
employees, or (4) all of the plan's transactions are executed through a single
financial institution or service organization who has entered into an agreement
with AIM Distributors with respect to their use of the AIM Funds in connection
with such accounts. Section 403(b) plans sponsored by public educational
institutions will not be eligible for net asset value purchases based on the
aggregate investment made by the plan or the number of eligible employees.
Participants in such plans will be eligible for reduced sales charges based
solely on the aggregate value of their individual investments in the applicable
AIM Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms for share purchases of the Load Funds (as defined under the
caption "Exchange Privilege") sold at net asset value to an employee benefit
plan in accordance with this paragraph as follows: 1% of the first $2 million of
such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50%
of the next $17 million of such purchases, plus 0.25% of amounts in excess of
$20 million of such purchases and up to 0.10% of the net asset value of any
Class A shares of AIM LIMITED MATURITY TREASURY FUND sold at net asset value to
an employee benefit plan in accordance with this paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone
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number of the dealer who sold to the unit holder the units to be redeemed or
repurchased; and (ii) states that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by the
proceeds from the redemption or repurchase of units of such trusts.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
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SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a
shareholder who owns shares which are not subject to a contingent deferred sales
charge, can arrange for monthly, quarterly or annual amounts (but not less than
$50) to be drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that exceed on an annual
basis 12% of such account will be subject to a contingent deferred sales charge
on the amounts exceeding 12% of the account value at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the
Transfer Agent and all dividends and distributions are reinvested to shares of
the applicable AIM Fund by the Transfer Agent. To provide funds for payments
made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient
full and fractional shares at their net asset value in effect at the time of
each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in
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the amount specified by the shareholder (minimum $50 per investment, per
account) and on a day or date(s) specified by the shareholder. The proceeds are
invested in shares of the designated AIM Fund at the applicable offering price
determined on the date of the withdrawal. An Automatic Investment Plan may be
discontinued upon 10 days' prior notice to the Transfer Agent or AIM
Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination money-
purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans; SARSEP
plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement accounts").
Information concerning these plans, including the custodian's fees and the forms
necessary to adopt such plans, can be obtained by calling or writing the AIM
Funds or AIM Distributors. Shares of the AIM Funds are also available for
investment through existing 401(k) plans (for both individuals and employers)
adopted under the Code. The plan custodian currently imposes an annual $10
maintenance fee with respect to each retirement account for which it serves as
the custodian. This fee is generally charged in December. Each AIM Fund and/or
the custodian reserve the right to change this maintenance fee and to initiate
an establishment fee (not to exceed its cost).
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of AIM Funds. The Program automatically rebalances
holdings of AIM Funds to the established allocation on a periodic basis. Under
the Program, a shareholder may predesignate, on a percentage basis, how the
total value of his or her holdings in a minimum of two, and a maximum of ten,
AIM Funds ("Personal Portfolio") is to be rebalanced on a quarterly, semiannual,
or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more AIM Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other AIM Funds in the
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AIM INVESTOR'S GUIDE
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the AIM
Fund(s) in a shareholder's Personal Portfolio have appreciated during a
rebalancing period, the Program will result in shares of AIM Fund(s) that have
appreciated most during the period being exchanged for shares of AIM Fund(s)
that have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular AIM Fund would
be 2% or less. In predesignating percentages, shareholders must use whole
percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an AIM
Fund's shares. The AIM Funds and AIM Distributors reserve the right to modify,
suspend, or terminate the Program at any time on 60 days' prior written notice
to shareholders. A request to participate in the Program must be received in
good order at least five business days prior to the next rebalancing date. Once
a shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
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AIM INVESTOR'S GUIDE
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM Funds --
Sales Charges and Dealer Concessions," shares of certain of the AIM Funds,
including the Class A shares of the Multiple Class Funds, listed below and
referred to herein as the "Load Funds," are sold at a public offering price that
includes a maximum sales charge of 5.50% or 4.75% of the public offering price
of such shares; Class A shares (or shares which normally involve the payment of
initial sales charges) of certain of the AIM Funds, listed below and referred to
herein as the "Lower Load Funds," are sold at a public offering price that
includes a maximum sales charge of 1.00% of the public offering price of such
shares; and Class A shares or shares of certain other funds, listed below and
referred to herein as the "No Load Funds," are sold at net asset value, without
payment of a sales charge.
LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM ADVISOR FLEX FUND -- CLASS A
AIM ADVISOR INTERNATIONAL VALUE FUND -- CLASS A
AIM ADVISOR LARGE CAP VALUE FUND -- CLASS A
AIM ADVISOR MULTIFLEX FUND -- CLASS A
AIM ADVISOR REAL ESTATE FUND -- CLASS A
AIM AGGRESSIVE GROWTH FUND -- CLASS A
AIM AMERICA VALUE FUND -- CLASS A
AIM ASIAN GROWTH FUND -- CLASS A
AIM BALANCED FUND -- CLASS A
AIM BLUE CHIP FUND -- CLASS A
AIM CAPITAL DEVELOPMENT FUND -- CLASS A
AIM CHARTER FUND -- CLASS A
AIM CONSTELLATION FUND -- CLASS A
AIM DEVELOPING MARKETS FUND -- CLASS A
AIM EMERGING MARKETS FUND -- CLASS A
AIM EUROPE GROWTH FUND -- CLASS A
AIM EUROPEAN DEVELOPMENT FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH FUND -- CLASS A
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND -- CLASS A
AIM GLOBAL FINANCIAL SERVICES FUND -- CLASS A
AIM GLOBAL GOVERNMENT INCOME FUND -- CLASS A
AIM GLOBAL GROWTH FUND -- CLASS A
AIM GLOBAL GROWTH & INCOME FUND -- CLASS A
AIM GLOBAL HEALTH CARE FUND -- CLASS A
AIM GLOBAL HIGH INCOME FUND -- CLASS A
AIM GLOBAL INCOME FUND -- CLASS A
AIM GLOBAL INFRASTRUCTURE FUND -- CLASS A
AIM GLOBAL RESOURCES FUND -- CLASS A
AIM GLOBAL TELECOMMUNICATIONS FUND -- CLASS A
AIM GLOBAL TRENDS FUND -- CLASS A
AIM GLOBAL UTILITIES FUND -- CLASS A
AIM HIGH INCOME MUNICIPAL FUND -- CLASS A
AIM HIGH YIELD FUND -- CLASS A
AIM INCOME FUND -- CLASS A
AIM INTERMEDIATE GOVERNMENT FUND -- CLASS A
AIM INTERNATIONAL EQUITY FUND -- CLASS A
AIM INTERNATIONAL GROWTH FUND -- CLASS A
AIM JAPAN GROWTH FUND -- CLASS A
AIM LATIN AMERICAN GROWTH FUND -- CLASS A
AIM MID CAP GROWTH FUND -- CLASS A
AIM MONEY MARKET FUND -- CLASS A
AIM MUNICIPAL BOND FUND -- CLASS A
AIM NEW PACIFIC GROWTH FUND -- CLASS A
AIM SELECT GROWTH FUND -- CLASS A
AIM SMALL CAP EQUITY FUND -- CLASS A
AIM SMALL CAP OPPORTUNITIES FUND -- CLASS A
AIM STRATEGIC INCOME FUND -- CLASS A
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT -- CLASS A
AIM VALUE FUND -- CLASS A
AIM WEINGARTEN FUND -- CLASS A
AIM WORLDWIDE GROWTH FUND -- CLASS A
LOWER LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM LIMITED MATURITY TREASURY FUND -- CLASS A
AIM TAX-FREE INTERMEDIATE FUND -- CLASS A
NO LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM MONEY MARKET FUND -- AIM CASH RESERVE SHARES
AIM TAX-EXEMPT CASH FUND -- CLASS A
AIM DOLLAR FUND -- CLASS A
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE, (iii) Class A shares
may be exchanged for Class A shares, (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A shares of AIM MONEY MARKET FUND or for Class B or Class C shares.
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AIM INVESTOR'S GUIDE
DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund or acquired upon
any Lower Load Fund. exchange of
shares of any
Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
</TABLE>
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE
IS REVISED AS FOLLOWS:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value if shares were acquired Net Asset Value Net Asset Value Not Applicable Not Applicable
upon exchange of any Load Fund.
Otherwise, difference in sales charge
will apply.
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund. acquired upon
Difference in sales charge will apply if exchange of
No Load shares were acquired upon shares of any
exchange of Lower Load Fund shares. Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C.............. Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>
An exchange is permitted only in the following circumstances: (a) if the
funds offer more than one class of shares, the exchange must be between the same
class of shares (e.g., Class A, Class B and Class C shares of a Multiple Class
Fund cannot be exchanged for each other) except that AIM Cash Reserve Shares of
AIM MONEY MARKET FUND may be exchanged for Class A shares of another Multiple
Class Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten business days, and all other shares are held
in an account for at least one day, prior to the exchange; and (h) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the AIM Funds.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
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AIM INVESTOR'S GUIDE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged
are redeemed at their net asset value as determined at NYSE Close on the day
that an exchange request in proper form (described below) is received. Exchange
requests received after NYSE Close will result in the redemption of shares at
their net asset value at NYSE Close on the next business day. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase, Exchange and
Redemption Orders (AIM MONEY MARKET FUND only)" for information regarding the
timing of exchange orders for AIM MONEY MARKET FUND. Normally, shares of an AIM
Fund to be acquired by exchange are purchased at their net asset value or
applicable offering price, as the case may be, determined on the date that such
request is received, but under unusual market conditions such purchases may be
delayed for up to five business days if it is determined that a fund would be
materially disadvantaged by an immediate transfer of the proceeds of the
exchange. If a shareholder is exchanging into a fund paying daily dividends
("Dividends, Distributions and Tax Matters -- Dividends and Distributions,"
below), and the release of the exchange proceeds is delayed for the foregoing
five-day period, such shareholder will not begin to accrue dividends until the
sixth business day after the exchange. Shares purchased by check may not be
exchanged until it is determined that the check has cleared, which may take up
to ten business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. If a shareholder does not wish to allow telephone
exchanges by any person in his account, he should decline that option on the
account application. AIM Distributors has made arrangements with certain dealers
and investment advisory firms to accept telephone instructions to exchange
shares between any of the AIM Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the funds, including the condition that any such dealer or
investment advisor enter into an agreement (which contains additional conditions
with respect to exchanges of shares) with AIM Distributors. To exchange shares
by telephone, a shareholder, dealer or investment advisor who has satisfied the
foregoing conditions must call AFS at (800) 959-4246. If a shareholder is unable
to reach AFS by telephone, he may also request exchanges by telegraph or use
overnight courier services to expedite exchanges by mail, which will be
effective on the business day received by the Transfer Agent as long as such
request is received prior to NYSE Close. The Transfer Agent and AIM Distributors
will not be liable for any loss, expense or cost arising out of any telephone
exchange request that they reasonably believe to be genuine, but may in certain
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's Social Security Number and current address, and mailings of
confirmations promptly after the transaction.
EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
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AIM INVESTOR'S GUIDE
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
MULTIPLE DISTRIBUTION SYSTEM. CLASS B SHARES. Class B shares purchased
under the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS % OF DOLLAR
YEARS SINCE PURCHASE MADE AMOUNT SUBJECT TO CHARGE
- ------------------------------------------------------------------------------------------ ---------------------------
<S> <C>
First..................................................................................... 5%
Second.................................................................................... 4%
Third..................................................................................... 3%
Fourth.................................................................................... 3%
Fifth..................................................................................... 2%
Sixth..................................................................................... 1%
Seventh and Following..................................................................... None
</TABLE>
In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
CLASS C SHARES. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
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AIM INVESTOR'S GUIDE
WAIVERS. Contingent deferred sales charges on Class B and Class C shares
will be waived on redemptions (1) following the death or post-purchase
disability, as defined in Section 72(m)(7) of the Code, of a shareholder or a
settlor of a living trust (provided AIM Distributors is notified of such death
or post-purchase disability at the time of the redemption request and is
provided with satisfactory evidence of such death or post-purchase disability),
(2) in connection with certain distributions from IRAs, custodial accounts
maintained pursuant to Code Section 403(b), deferred compensation plans
qualified under Code Section 457 and plans qualified under Code Section 401
(collectively, "Retirement Plans"), (3) pursuant to a Systematic Withdrawal
Plan, provided that amounts withdrawn under such plan do not exceed on an annual
basis 12% of the value of the shareholder's investment in Class B or Class C
shares at the time the shareholder elects to participate in the Systematic
Withdrawal Plan, (4) effected pursuant to the right of a Multiple Class Fund to
liquidate a shareholder's account if the aggregate net asset value of shares
held in the account is less than the designated minimum account size described
in the prospectus of such Multiple Class Fund, (5) effected by AIM of its
investment in Class B or Class C shares and (6) of Class C shares where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payment otherwise payable to the dealer described in the last paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds."
Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
Waiver category (2) above applies only to redemptions resulting from:
(i) required minimum distributions to plan participants or beneficiaries who
are age 70 1/2 or older, and only with respect to that portion of such
distributions which does not exceed 12% annually of the participant's or
beneficiary's account value in a particular AIM Fund;
(ii) in-kind transfers of assets where the participant or beneficiary notifies
AIM Distributors of such transfer no later than the time such transfer
occurs;
(iii) tax-free rollovers or transfers of assets to another Retirement Plan
invested in Class B or Class C shares of one or more Multiple Class Funds;
(iv) tax-free returns of excess contributions or returns of excess deferral
amounts; and
(v) distributions upon the death or disability (as defined in the Code) of the
participant or beneficiary.
Shareholders who purchased Class B shares of the AIM/GT Funds or Class C
shares of AIM GLOBAL TRENDS FUND prior to June 1, 1998 are entitled to certain
additional waivers of the contingent deferred sales charge on those shares as
described in the Statement of Additional Information of each respective fund
under "How to Purchase and Redeem Shares."
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND [or Class A shares
of AIM DOLLAR FUND] which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code,
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<PAGE>
AIM INVESTOR'S GUIDE
or Plans created under Section 403(b) of the Code and sponsored by nonprofit
organizations as defined under Section 501(c)(3) of the Code, where shares are
being redeemed in connection with employee terminations or withdrawals, and (a)
the total amount invested in a Plan is at least $1,000,000, (b) the sponsor of a
Plan signs a letter of intent to invest at least $1,000,000 in one or more of
the AIM Funds, or (c) the shares being redeemed were purchased by an
employer-sponsored Plan with at least 100 eligible employees; provided, however,
that Plans created under Section 403(b) of the Code which are sponsored by
public educational institutions shall qualify under (a), (b) or (c) above on the
basis of the value of each Plan participant's aggregate investment in the AIM
Funds, and not on the aggregate investment made by the Plan or on the number of
eligible employees; (2) redemptions of shares following the death or
post-purchase disability, as defined in Section 72(m)(7) of the Code, of a
shareholder or a settlor of a living trust; (3) redemptions of shares purchased
at net asset value by private foundations or endowment funds where the initial
amount invested was at least $1,000,000; (4) redemptions of shares purchased by
an investor in amounts of $1,000,000 or more where such investor's dealer of
record, due to the nature of the investor's account, notifies AIM Distributors
prior to the time of investment that the dealer waives the payments otherwise
payable to the dealer as described in the third paragraph under the caption
"Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM Funds;"
and (5) pursuant to a Systematic Withdrawal Plan, provided that amounts
withdrawn under such plan do not exceed on an annual basis 12% of the value of
the shareholder's investment in Class A shares at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund
to establish as IRA, should include the following information along with a
written request for either partial or full liquidation of fund shares; (a) a
statement as to whether or not the shareholder has attained age 59 1/2, and (b)
a statement as to whether or not the shareholder elects to have federal income
tax withheld from the proceeds of the liquidation.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in this account, he should decline that option on the account
application. The telephone redemption feature can be used only if: (a) the
redemption proceeds are to be mailed to the address of record or transferred
electronically or wired to the pre-authorized bank account; (b) there has been
no change of address of record on the account within the preceding 30 days; (c)
the shares to be redeemed are not in certificate form; (d) the person requesting
the redemption can provide proper identification information, and (e) the
proceeds of the redemption do not exceed $50,000. Accounts in AIM Distributors'
prototype retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not
eligible for the telephone redemption option. AIM Distributors has made
arrangements with certain dealers and investment advisors to accept telephone
instructions for the redemption of shares. AIM Distributors reserves the right
to impose conditions on these dealers and investment advisors, including the
condition that they enter into agreements (which contain additional conditions
with respect to the redemption of shares) with AIM Distributors. The Transfer
Agent and AIM Distributors will not be liable for any loss, expense or cost
arising out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain
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AIM INVESTOR'S GUIDE
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's taxpayer identification number and current address, and mailings
of confirmations promptly after the transaction.
EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order
is received prior to 11:30 a.m. Eastern Time, the redemption will be effective
on that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next business day.
REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of
AIM MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing
the appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an
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AIM INVESTOR'S GUIDE
address that has been changed within the past 30 days; (5) requests to transfer
the registration of shares to another owner, (6) telephone exchange and
telephone redemption authorization forms; (7) changes in previously designated
wiring or electronic funds transfer instructions, and (8) written redemptions or
exchanges of shares previously reported as lost, whether or not the redemption
amount is under $50,000 or the proceeds are to be sent to the address of record.
These requirements may be waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within 90 days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment may alter any capital gains payable. If
there has been a loss on the redemption and shares of the same fund are
repurchased, all of the loss may not be tax deductible, depending on the timing
and amount reinvested. Under the Code, if the redemption proceeds of fund shares
on which a sales charge was paid are reinvested in shares of the same fund, or
exchanged for shares of another AIM Fund, at a reduced sales charge within 90
days of the payment of the sales charge, the shareholder's basis in the fund
shares redeemed may not include the amount of the sales charge paid, thereby
reducing the loss or increasing the gain recognized from the redemption;
however, the shareholder's basis in the fund shares purchased will include the
sales charge. Each AIM Fund may amend, suspend or cease offering the privilege
at any time as to shares redeemed after the date of such amendment, suspension
or cessation. This privilege may only be exercised once each year by a
shareholder with respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in
connection with the redemption of Class A shares and who subsequently reinvest a
portion or all of the value of the redeemed shares in Class A shares of any AIM
Fund within 90 days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is
determined as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close
with respect to AIM MONEY MARKET FUND) on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an AIM Fund's share
will be determined as of the close of the NYSE on such day. For purposes of
defining net asset value per share, futures and options contracts generally will
be valued 15 minutes after the close of trading of the NYSE. The net asset value
per share is calculated by subtracting a class' liabilities from its assets and
dividing the result by the total number of class shares outstanding. The
determination of net asset value per share is made in accordance with generally
accepted accounting principles. Among other items, liabilities include accrued
expenses and dividends payable, and total assets include portfolio securities
valued at their market value, as well as income accrued but
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AIM INVESTOR'S GUIDE
not yet received. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
supervision of the fund's officers and in accordance with methods which are
specifically authorized by its governing Board of Directors or Trustees.
Short-term obligations with maturities of 60 days or less, and the securities
held by the Money Market Funds, are valued at amortized cost as reflecting fair
value. AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOARD FUND, AIM TAX-EXEMPT
BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund's policy regarding the payment of dividends and distributions
is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND............................. declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND.............. declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.................. declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND........................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND...................... declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND........................ declared and paid annually annually annually
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND............................. declared and paid annually annually annually
AIM BALANCED FUND................................. declared and paid quarterly annually annually
AIM BLUE CHIP FUND................................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND...................... declared and paid annually annually annually
AIM CHARTER FUND.................................. declared and paid quarterly annually annually
AIM CONSTELLATION FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND..................... declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND................. declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INCOME FUND............................ declared daily; paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM GLOBAL UTILITIES FUND......................... declared daily; paid monthly annually annually
AIM HIGH INCOME MUNICIPAL FUND.................... declared daily; paid monthly annually annually
AIM HIGH YIELD FUND............................... declared daily; paid monthly annually annually
AIM INCOME FUND................................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.................. declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND..................... declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND................ declared daily; paid monthly annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM MONEY MARKET FUND............................. declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND........................... declared daily; paid monthly annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SELECT GROWTH FUND............................ declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM SMALL CAP OPPORTUNITIES FUND.................. declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT........... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.......................... declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND.................... declared daily; paid monthly annually annually
AIM VALUE FUND.................................... declared and paid annually annually annually
AIM WEINGARTEN FUND............................... declared and paid annually annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in
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AIM INVESTOR'S GUIDE
like shares of another Multiple Class Fund, to the extent permitted. For funds
that do not declare a dividend daily, such dividends and distributions will be
reinvested at the net asset value per share determined on the ex-dividend date.
For funds that declare a dividend daily, such dividends and distributions will
be reinvested at the net asset value per share determined on the payable date.
Shareholders may elect, by written notice to the Transfer Agent, to receive such
distributions, or the dividend portion thereof, in cash, or to invest such
dividends and distributions in shares of another fund in the AIM Funds; provided
that (i) dividends and distributions attributable to Class B shares may only be
reinvested in Class B shares, (ii) dividends and distributions attributable to
Class C shares may only be reinvested in Class C shares, (iii) dividends and
distributions attributable to Class A shares may not be reinvested in Class B or
Class C shares, and (iv) dividends and distributions attributable to the AIM
Cash Reserve Shares of AIM MONEY MARKET FUND may not be reinvested in the Class
A shares of that Fund or in any Class B or Class C shares. Investors who have
not previously selected such a reinvestment option on the account application
form may contact the Transfer Agent at any time to obtain a form to authorize
such reinvestments in another AIM Fund. Such reinvestments into the AIM Funds
are not subject to sales charges, and shares so purchased are automatically
credited to the account of the shareholder.
Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS--GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares, except for "exempt-interest dividends" paid by AIM HIGH INCOME MUNICIPAL
FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND (the "Tax-Exempt
Funds"), which are exempt from federal income tax. With respect to tax-exempt
shareholders, dividends and distributions from the AIM Funds are not subject to
federal income taxation to the extent permitted under the applicable tax
exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
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AIM INVESTOR'S GUIDE
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HIGH
INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH YIELD
FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be
required to include the "exempt-interest" portion of dividends paid by the
Tax-Exempt Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other
A-25
<PAGE>
AIM INVESTOR'S GUIDE
taxable securities. For additional information concerning the alternative
minimum tax and certain collateral tax consequences of the receipt of
exempt-interest dividends, see the Statements of Additional Information
applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP GROWTH FUND,
AIM SMALL CAP EQUITY FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH FUND --
SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do so,
each of these funds may elect to pass through to its shareholders credits for
foreign taxes paid. If a fund makes such an election, a shareholder who receives
a distribution (1) will be required to include in gross income his proportionate
share of foreign taxes allocable to the distribution and (2) may claim a credit
or deduction for such share for his taxable year in which the distribution is
received, subject to the general limitations imposed on the allowance of foreign
tax credits and deductions. Shareholders should also note that certain gains or
losses attributable to fluctuations in exchange rates or foreign currency
forward contracts may increase or decrease the amount of income of the fund
available for distribution to shareholders and should note that if, for any
fund, such losses exceed other income during a taxable year, the fund would not
be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each AIM Fund's transfer agent and
dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
A-26
<PAGE>
AIM INVESTOR'S GUIDE
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If several members of a household own shares of the same fund,
only one annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
A-27
<PAGE>
AIM AMERICA VALUE FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM EUROPE GROWTH FUND
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM Europe Growth Fund (the "Fund"),
which is one of several series investment portfolios comprising AIM Growth
Series (the "Trust"), an open-end, series, management investment company. The
Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of issuers domiciled in its Primary
Investment Area (as defined herein).
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM EUROPE GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 6
Investment Objective and Policies......................................................... 7
Risk Factors.............................................................................. 10
Management................................................................................ 12
Other Information......................................................................... 16
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of the Trust. The Fund seeks long-term growth of capital. The Fund
invests primarily in equity securities of issuers domiciled in its Primary Investment Area (as
defined herein).
Investment Managers: The Fund is managed by AIM Advisers, Inc. ("AIM") and is sub-advised and sub-administered by INVESCO
(NY), Inc., (the "Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management
affiliates provide investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment
management group that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing presence in Asia. AIM was
organized in 1976 and, together with its subsidiaries, currently advises approximately 90 investment
company portfolios.
Purchasing Shares: Investors may select Class A or Class B shares of the Fund which are offered by this Prospectus at an
offering price that reflects differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to a separate
prospectus, the Fund also offers Advisor Class shares, which represent interests in the Fund. The
Advisor Class has different distribution arrangements.
Class A Shares: Shares are offered at net asset value plus any applicable initial sales charge.
</TABLE>
Prospectus Page 2
<PAGE>
AIM EUROPE GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B Shares: Shares are offered at net asset value without an initial sales charge, and are subject to a maximum
contingent deferred sales charge of 5% on certain redemptions made within six years from the date
such shares were purchased. Class B shares automatically convert to Class A shares of the Fund eight
years following the end of the calendar month in which a purchase was made. Class B shares are
subject to higher expenses than Class A shares.
Initial investments in any class of shares must be at least $500 and additional investments must be
at least $50. The minimum initial investment is modified for investments through tax-qualified
retirement plans and accounts initially established with an Automatic Investment Plan. The
distributor of the Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
Suitability for Investors An investor in Class A or Class B shares of the Fund should consider the method of purchasing shares
that is most beneficial given the amount of the purchase, the length of time the shares are expected
to be held, and other circumstances. Investors should consider whether, during the anticipated life
of their investment in the Fund, the accumulated distribution fees and any applicable contingent
deferred sales charges on Class B shares prior to conversion would be less than the initial sales
charge and accumulated distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares. To assist investors
in making this determination, the table under the caption "Table of Fees and Expenses" sets forth
examples of the charges applicable to each class of shares. Class A shares will normally be more
beneficial than Class B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase of more than $250,000
for Class B shares.
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Class A and Class B shares of the Fund may be exchanged for shares of other funds in The
AIM Family of Funds in the manner and subject to the policies and charges set forth herein. See
"Exchange Privilege."
</TABLE>
Prospectus Page 3
<PAGE>
AIM EUROPE GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Redeeming Shares: Class A shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, generally without charge. A contingent deferred sales charge of 1% may apply to
certain redemptions where a purchase of more than $1 million is made at net asset value. See "How to
Redeem Shares -- Contingent Deferred Sales Charge Program for Large Purchases." Class B shareholders
of the Fund may redeem all or a portion of their shares at net asset value on any business day, less
a contingent deferred sales charge for redemptions made within six years from the date such shares
were purchased. Class B shares redeemed after six years from the date such shares were purchased will
not be subject to any contingent deferred sales charge. See "How to Redeem Shares -- Multiple
Distribution System."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters" and "Special Plans."
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
The Fund invests primarily in foreign securities. Investments in foreign securities involve risks
relating to political and economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates also may affect the
Fund's net asset value, earnings and gains and losses realized on sales of securities.
The Fund invests a significant portion of its assets in issuers in a particular country or region of
the world. As a result, the Fund may be subject to greater risks and may experience greater
volatility than a fund that is more broadly diversified geographically.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 4
<PAGE>
AIM EUROPE GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Class A and Class B shares of the Fund are
reflected in the following table (1):
<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION COSTS (2):
Maximum sales charge on purchases
(as a % of offering price)....................... 5.50% None
Sales charges on reinvested distributions to
shareholders..................................... None None
Maximum deferred sales charge (as a % of net asset
value at time of purchase or sale, whichever is
less)............................................ None 5.00%
Redemption charges................................ None None
Exchange fees..................................... None None
ANNUAL FUND OPERATING EXPENSES (3):
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees..... 0.97% 0.97%
12b-1 distribution and service fees............... 0.35% 1.00%
Other expenses.................................... 0.57% 0.57%
------- -------
Total Fund Operating Expenses..................... 1.89% 2.54%
------- -------
------- -------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (7):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Funds, assuming a 5%
annual return:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS(6)
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A shares (4)....................................................... $ 73 $112 $ 152 $ 265
Class B shares
Assuming a complete redemption at end of period (5).................... $ 77 $112 $ 159 $ 274
Assuming no redemption................................................. $ 26 $ 80 $ 137 $ 274
</TABLE>
- ------------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. rules regarding investment companies.
(2) Sales charge waivers are available for Class A and Class B shares, and
reduced sales charge purchase plans are available for Class A shares. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase. The charge generally
declines by 1% annually thereafter, reaching zero after six years. See
"Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
Sales Charges."
(3) Expenses are based on the Fund's fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 2.00% and 2.65% of the average daily net
assets of the Fund's Class A and Class B shares, respectively. "Other
expenses" include custody, transfer agency, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information.
(4) Assumes payment of maximum sales charge by the investor.
(5) Assumes deduction of the applicable contingent deferred sales charge.
(6) For Class B shares, this number reflects the conversion to Class A shares
eight years following the end of the calendar month in which a purchase was
made.
(7) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT
EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the assumption
in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 5
<PAGE>
AIM EUROPE GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information.
AIM EUROPE GROWTH FUND
(FORMERLY GT GLOBAL EUROPE GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Funds will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Funds. Further information regarding the Fund's
performance is contained in that Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. Standardized total return for Class
A shares reflects the deduction of a Fund's maximum front-end sales charge at
the time of purchase. Standardized total return for Class B shares reflects the
deduction of the maximum applicable contingent deferred sales charge on a
redemption of shares held for the period.
A Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, a
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of any Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of each
Fund will vary from time to time and past results are not necessarily
representative of future results. A Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 6
<PAGE>
AIM EUROPE GROWTH FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
THE EUROPE FUND
The Fund seeks long-term growth of capital. It seeks its objective by investing,
under normal circumstances, at least 65% of its total assets in equity
securities of issuers domiciled in its Primary Investment Area, as described
below. There can be no assurance that the Fund will achieve its investment
objective. Equity securities in which the Fund may invest include common stocks,
preferred stocks, convertible debt securities and warrants to acquire such
securities. The Fund's Primary Investment Area includes the following countries:
Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland,
Turkey and the United Kingdom.
Because the development of the world's economies and stock markets is rapidly
evolving, from time to time the Board of Trustees may add or delete countries
from the Fund's Primary Investment Area.
The Fund is a regional fund for investors interested in a more geographically
concentrated investment but still desiring to diversify across multiple markets.
The Fund may invest up to 35% of its total assets in the equity securities of
issuers domiciled outside of its Primary Investment Area. Such investments may
include: (a) securities of issuers in countries that are not located in the
Primary Investment Area but are linked by tradition, economic markets, cultural
similarities or geography to the countries in such Primary Investment Area; and
(b) securities of issuers located elsewhere in the world that have operations in
the Primary Investment Area or that stand to benefit from political and economic
events in the Primary Investment Area.
The Fund may invest up to 35% of its total assets in debt securities, including
U.S. and foreign government securities and corporate debt securities, Samurai
and Yankee bonds, Eurobonds and Depository Receipts. The Fund will limit its
purchases of debt securities to investment grade obligations. "Investment grade"
debt refers to those securities rated within one of the four highest ratings
categories by Moody's Investors Service, Inc. ("Moody's") or by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or, if not
similarly rated by any other nationally recognized statistical rating
organization ("NRSRO"), deemed by the Sub-adviser to be of equivalent quality.
Debt rated Baa by Moody's, which is the lowest category of investment grade
debt, is considered by Moody's to have speculative characteristics. See the
Statement of Additional Information for a description of Moody's and S&P
ratings.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Fund, the Sub-adviser seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth rates. The Sub-adviser further
attempts to identify those companies in such countries and industries that are
best positioned and managed to take advantage of these economic and political
factors. The Sub-adviser intends to invest in such markets only after balancing
the potential for growth of selected companies in each market relative to the
risks of investing in each such country. Among the factors to be considered are
that several of the markets are so-called developing countries, and their
economies and markets are less developed and more prone to uncertainty,
instability and risk than those of the other markets in which the Fund invests.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has it
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
Prospectus Page 7
<PAGE>
AIM EUROPE GROWTH FUND
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
currency units are evaluated on the strength of the particular currency against
the U.S. dollar as well as on the current and expected levels of interest rates
in the country or countries. In addition to the foregoing, the Fund may seek to
take advantage of differences in relative values of fixed income securities
among various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency units
such as Euros) and/or high quality debt securities or money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, most or all investments of the Fund may be made in
the United States and denominated in U.S. dollars. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units) and may invest in high
quality foreign or domestic money market instruments. For a description of money
market instruments, see "Temporary Defensive Strategies" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions. The Fund may
borrow up to 33 1/3% of its total assets. However, no additional investments
will be made if the Fund's borrowings exceed 5% of its total assets. Any
borrowing by the Fund may cause greater fluctuation in the value of its shares
than would be the case if the Fund did not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's
Prospectus Page 8
<PAGE>
AIM EUROPE GROWTH FUND
sale of securities together with its commitment (for which the Fund may receive
a fee) to purchase similar, but not identical, securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is made. While a loan is outstanding, the borrower must maintain with the
Fund's custodian collateral consisting of cash, U.S. government securities or
certain irrevocable letters of credit equal to at least the value of the
borrowed securities, plus any accrued interest or such other collateral as
permitted by the Fund's investment program and regulatory agencies, and as
approved by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Currency Strategies" herein and the Statement of Additional Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Funds also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate
Prospectus Page 9
<PAGE>
AIM EUROPE GROWTH FUND
futures contracts and options thereon to hedge the debt portion of its portfolio
against changes in the general level of interest rates.
AMERICAN DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in U.S. securities markets. See "Investment
Objectives and Policies -- Depository Receipts" in the Statement of Additional
Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Company's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
FOREIGN INVESTING. The Fund invests primarily in foreign securities. Investing
in foreign securities entails certain risks. The securities of non-U.S. issuers
generally will not be registered with, nor will the issuers thereof be subject
to, the reporting requirements of the SEC. Accordingly, there may be less
publicly available information about foreign securities and issuers than is
available about domestic securities and issuers. Foreign companies generally are
not subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
Securities of some foreign companies are less liquid and their prices may be
more volatile than securities of comparable domestic companies. In addition,
certain costs attributable to foreign investing, such as custody charges, are
higher than those attributable to domestic investing. The Fund's interest and
dividends from foreign issuers may be subject to non-U.S. withholding taxes,
thereby reducing its net investment income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the repatriation of
assets of the Fund, political or social instability, or diplomatic developments
that could affect their investments in those countries. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, rate of
savings and capital reinvestment, resource self-sufficiency and balance of
payments positions.
Prospectus Page 10
<PAGE>
AIM EUROPE GROWTH FUND
Because the Fund may invest substantially in securities denominated in
currencies other than the U.S. dollar, and because it may hold foreign
currencies, it will be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between such currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Fund's shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund. Currencies generally are
evaluated on the basis of fundamental economic criteria (e.g., relative
inflation and interest rate levels and trends, growth rate forecasts, balance of
payments status and economic policies) as well as technical and political data.
The exchange rates between the U.S. dollar and other currencies are determined
by supply and demand in the currency exchange markets, the international balance
of payments, governmental intervention, speculation and other economic and
political conditions. If the currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, a decline in the exchange rate of the currency would
adversely affect the value of the security expressed in U.S. dollars.
CONCENTRATION. The Fund invests a significant portion of its assets in a
particular region of the world. As a result the Fund may be subject to greater
risks and may experience greater volatility than a fund that is more broadly
diversified geographically.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions, the Fund involve certain risks, which include: (1)
dependence on the Sub-adviser's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
or options thereon or to use forward currency contracts are different from those
needed to select the securities in which the Fund invests; (4) lack of assurance
that a liquid secondary market will exist for any particular option, futures
contract or option thereon at any particular time; (5) the possible loss of
principal under certain conditions; and (6) the possible inability of the Fund
to purchase or sell a portfolio security at a time when it would otherwise be
favorable for it to do so, or the possible need for the Fund to sell a security
at a disadvantageous time, due to the need for the Fund to maintain "cover" or
to set aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund including the
investment advisory and administrative services agreement with AIM, the
investment sub-advisory and sub-administration agreement between AIM and the
Sub-adviser, the agreements with AIM Distributors regarding distribution of the
Fund's shares, the custody agreement and the transfer agency agreement. The
day-to-day operations of the Fund are delegated to the officers of the Trust,
subject always to the investment objective and policies of the Fund and to the
general supervision of the Trust's Board. See "Trustees and Executive
Prospectus Page 11
<PAGE>
AIM EUROPE GROWTH FUND
Officers" in the Statement of Additional Information for information on the
Trustees of the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million and .90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund and the
Portfolio are higher than those paid by most mutual funds. The Fund pays all
expenses not assumed by AIM, the Sub-adviser, AIM Distributors or other agents.
AIM has undertaken to limit the Fund's expenses (exclusive of brokerage
commissions, taxes, interest and extraordinary expenses) to the maximum annual
rate of 2.00% and 2.65% of the average daily net assets of the Fund's Class A
and Class B shares, respectively.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Europe Fund pursuant to a master investment management
and administration agreement, dated as of May 29, 1998 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises approximately 90 investment company portfolios encompassing a
broad range of investment objectives. The Sub-adviser, 50 California Street,
27th Floor, San Francisco, California 94111, and 1166 Avenue of the Americas,
New York, New York 10036, serves as the sub-adviser to the above Fund pursuant
to an investment sub-advisory and sub-administration agreement dated as of May
29, 1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT
Asset Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"),
the former indirect parent organization of the Sub-adviser, consummated a
purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired
LGT's Asset Management Division, which included the Sub-adviser and certain
other affiliates. As a result of this transaction, the Sub-adviser is now an
indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-adviser and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Fund, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
Prospectus Page 12
<PAGE>
AIM EUROPE GROWTH FUND
The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Nicholas J. Ford Portfolio Manager since Portfolio Manager for the Sub-adviser since February 1998 and
London 1998 Portfolio Manager for INVESCO GT Asset Management PLC (London), an
affiliate of the Sub-adviser since 1996. Director of Equities for
Lehman Brothers Global Asset Management PLC (London) from 1994 to
1996. Portfolio Manager and Head of European Equities for Hill
Samuel Investment Management PLC (London) from 1990 to 1994.
</TABLE>
------------------------
In placing orders for the Fund's portfolio transactions, the Sub-adviser seeks
to obtain the best net results. Consistent with its obligation to obtain the
best net results, the Sub-adviser may consider a broker/dealer's sale of shares
of the AIM Funds as a factor in considering through whom portfolio transactions
will be effected. Brokerage transactions for the Fund may be executed through
affiliates of AIM or the Sub-adviser. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Fund will bear directly and could result in the realization of
net capital gains that would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 on behalf of Class A shares of the Fund, and has entered into a
Master Distribution Agreement, dated May 29, 1998, on behalf of Class B shares
of the Fund (individually referred to as a "Distribution Agreement" or
collectively as the "Distribution Agreements") with AIM Distributors, a
registered broker-dealer and a wholly owned subsidiary of AIM, to act as the
distributor of Class A and Class B shares of the Fund. Certain Trustees and
officers of the Trust are affiliated with AIM Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right to
distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset based
sales charges in respect of the outstanding Class B shares attributable to the
distribution efforts of AIM Distributors; provided, however, that a complete
termination of the Class B shares master distribution plan (as defined in the
plan) would terminate all payments to AIM Distributors. Termination of the Class
B shares distribution plan or Distribution Agreement does not affect the
obligation of Class B shareholders to pay contingent deferred sales charges.
DISTRIBUTION PLANS. CLASS A PLAN. The Company has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are
Prospectus Page 13
<PAGE>
AIM EUROPE GROWTH FUND
calculated at the annual rate of 0.25% of the average daily net asset value of
those Fund shares that are held in such institution's customers' accounts which
were purchased on or after a prescribed date set forth in the Plan.
Of the aggregate amount payable under the Class A Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee. Payments pursuant to the
Plans are subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
CLASS B PLAN. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
BOTH PLANS. Activities that may be financed under the Class A Plan and the Class
B Plan (collectively, the "Plans") include, but are not limited to: printing of
prospectuses and statements of additional information and reports for other than
existing shareholders, overhead, preparation and distribution of advertising
material and sales literature, expense of organizing and conducting sales
seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
Under the Plans, AIM Distributors may in its discretion from time to time agree
to waive voluntarily all or any portion of its 12b-1 fee, while retaining its
ability to be reimbursed for such fee prior to the end of each fiscal year.
Under the Plans, certain financial institutions which have entered into service
agreements and which sell shares of the Fund on an agency basis, may receive
payments from the Fund pursuant to the respective Plans. AIM Distributors does
not act as principal, but rather as agent, for the Fund in making such payments.
The Fund will obtain a representation from such financial institutions that they
will either be licensed as dealers as required under applicable state law, or
that they will not engage in activities which would constitute acting as a
"dealer" as defined under applicable state law. Financial intermediaries and any
other person entitled to receive compensation for selling Fund shares may
receive different compensation for selling shares of one class over another.
For additional information concerning the operation of the Plans see the
Statement of Additional Information.
Prospectus Page 14
<PAGE>
AIM EUROPE GROWTH FUND
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of G.T. Global Growth Series, a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series or portfolios
of the Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 15
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND AIM GLOBAL RESOURCES FUND
AIM ADVISOR INTERNATIONAL VALUE FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM ADVISOR LARGE CAP VALUE FUND AIM GLOBAL TRENDS FUND
AIM ADVISOR MULTIFLEX FUND AIM GLOBAL UTILITIES FUND
AIM ADVISOR REAL ESTATE FUND AIM HIGH INCOME MUNICIPAL FUND
AIM AGGRESSIVE GROWTH FUND AIM HIGH YIELD FUND
AIM AMERICA VALUE FUND AIM INCOME FUND
AIM ASIAN GROWTH FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM BALANCED FUND AIM INTERNATIONAL EQUITY FUND
AIM BLUE CHIP FUND AIM INTERNATIONAL GROWTH FUND
AIM CAPITAL DEVELOPMENT FUND AIM JAPAN GROWTH FUND
AIM CHARTER FUND AIM LATIN AMERICAN GROWTH FUND
AIM CONSTELLATION FUND AIM LIMITED MATURITY TREASURY FUND
AIM DEVELOPING MARKETS FUND AIM MID CAP GROWTH FUND
AIM DOLLAR FUND(*) AIM MONEY MARKET FUND(*)
AIM EMERGING MARKETS FUND AIM MUNICIPAL BOND FUND
AIM EUROPEAN DEVELOPMENT FUND AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND AIM SELECT GROWTH FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM SMALL CAP OPPORTUNITIES FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM GLOBAL GROWTH FUND AIM TAX-EXEMPT CASH FUND(*)
AIM GLOBAL GROWTH & INCOME FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL HEALTH CARE FUND AIM VALUE FUND
AIM GLOBAL HIGH INCOME FUND AIM WEINGARTEN FUND
AIM GLOBAL INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
asset value, without payment of a sales charge, as described below. Other
funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
FUND, are sold with an initial sales charge or subject to a contingent
deferred sales charge upon redemption, as described below.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM
Family of Funds ("AIM Funds"), an investor must submit a fully completed new
Account Application form directly to A I M Fund Services, Inc. ("AFS" or the
"Transfer Agent") or through any dealer authorized by A I M Distributors, Inc.
("AIM Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
is $500, except for accounts initially established through an Automatic
Investment Plan, which requires a special authorization form (see "Special
Plans") and for certain retirement accounts. The minimum initial investment for
accounts established with an Automatic Investment Plan is $50. The minimum
initial investment for an Individual Retirement Arrangement ("IRA") or Roth IRA
is $250. There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such
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AIM INVESTOR'S GUIDE
plans is $25), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM Funds account.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Shares of any AIM Funds not named on the cover of this Prospectus, as well
as Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>
HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased
directly through AIM Distributors or through any dealer who has entered into an
agreement with AIM Distributors. The minimum investment for subsequent purchases
is $50. The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. There are no such minimum investment requirements for investment of
dividends and distributions of any of the AIM Funds into any other existing AIM
Funds account.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION-SM-: To purchase additional shares by electronic
funds transfer, please contact the Client Services Department of AFS for
details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN GROWTH FUND, AIM
BALANCED FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER
FUND, AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP GROWTH FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT
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AIM INVESTOR'S GUIDE
CASH FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without
a sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over another class in the same Multiple Class Fund. Factors an investor
should consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH
FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP EQUITY
FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
SALES CHARGES AND DEALER CONCESSIONS
GROUP I. Certain AIM Funds are currently sold with a sales charge ranging
from 5.50% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM
ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
GROWTH FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $25,000................................................................ 5.50 % 5.82 % 4.75 %
$25,000 but less than $50,000.................................................... 5.25 5.54 4.50
$50,000 but less than $100,000................................................... 4.75 4.99 4.00
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 3.00 3.09 2.50
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
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AIM INVESTOR'S GUIDE
GROUP II. Certain AIM Funds are currently sold with a sales charge ranging
from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND,
AIM BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND,
AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL HIGH INCOME FUND,
AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES
FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND FUND, AIM
STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $50,000................................................................ 4.75 % 4.99 % 4.00 %
$50,000 but less than $100,000................................................... 4.00 4.17 3.25
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 2.50 2.56 2.00
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $100,000............................................................... 1.00 % 1.01 % 0.75 %
$100,000 but less than $250,000.................................................. 0.75 0.76 0.50
$250,000 but less than $1,000,000................................................ 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus
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AIM INVESTOR'S GUIDE
payments or other consideration shall not exceed 0.25% of the public offering
price of the shares sold. Any such bonus or incentive programs will not change
the price paid by investors for the purchase of the applicable AIM Fund's shares
or the amount that any particular AIM Fund will receive as proceeds from such
sales. Dealers may not use sales of the AIM Funds' shares to qualify for any
incentives to the extent that such incentives may be prohibited by the laws of
any state.
AIM Distributors may make payments to dealers and institutions who are
dealers of record for purchases of $1 million of more of Class A shares (or
shares which normally involve payment of initial sales charges), which are sold
at net asset value and are subject to a contingent deferred sales charge, for
all AIM Funds other than Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND as follows: 1% of the first $2 million
of such purchases, plus 0.80% of the next $1 million of such purchases, plus
0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess
of $20 million of such purchases. See "Contingent Deferred Sales Charge Program
for Large Purchases." AIM Distributors may make payments to dealers and
institutions who are dealers of record for purchases of $1 million or more of
Class A shares (or shares which normally involve payment of initial sales
charges), and which are sold at net asset value and are not subject to a
contingent deferred sales charge, in an amount up to 0.10% of such purchases of
Class A shares of AIM LIMITED MATURITY TREASURY FUND, and in an amount up to
0.25% of such purchases of Class A shares of AIM TAX-FREE INTERMEDIATE FUND.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed
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AIM INVESTOR'S GUIDE
during the next twelve months on Saturdays and Sundays and on the days on which
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class
Funds currently offer two or more classes of shares through separate
distribution systems (the "Multiple Distribution System"). Although each class
of shares of a particular Multiple Class Fund represents an interest in the same
portfolio of investments, each class is subject to a different distribution
structure and, as a result, differing expenses. This Multiple Distribution
System allows investors to select the class that is best suited to the
investor's needs and objectives. In considering the options afforded by the
Multiple Distribution System, investors should consider both the applicable
initial sales charge or contingent deferred sales charge, as well as the ongoing
expenses borne by each class of shares and other relevant factors, such as
whether his or her investment goals are long-term or short-term.
CLASS A SHARES generally are sold subject to the initial sales charges
described above and are subject to the other fees and expenses described
herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
needs of an investor who wishes to establish a dollar cost averaging
program, pursuant to which Class A shares an investor owns may be exchanged
at net asset value for Class A shares of another Multiple Class Fund or
shares of another AIM Fund which is not a Multiple Class Fund, subject to
the terms and conditions described under the caption "Exchange Privilege --
Terms and Conditions of Exchanges."
CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made within
the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."
Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and other distributions)
eight years from the end of the calendar month in which the purchase of
Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
outstanding on May 29, 1998 and which are continuously held by the
shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
FUND seven years from the end of the calendar month in which the purchase of
such Class B shares was made. If a shareholder exchanges Class B shares of
AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
shares will be subject to the eight year conversion feature applicable to
Class B shares of all other AIM Funds. Following such conversion of their
Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
payments associated with Class B shares. See "Management -- Distribution
Plans."
AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an initial
sales charge and are not subject to a contingent deferred sales charge;
however, they are subject to the other fees and expenses described in the
prospectus for AIM MONEY MARKET FUND.
TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon
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Eastern Time or NYSE Close on any business day of the Fund will be confirmed at
the price next determined. Net asset value is normally determined at 12:00 noon
Eastern Time and NYSE Close on each business day of AIM MONEY MARKET FUND.
SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
The term "purchaser" means:
- - an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the benefit
of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
plan (unless such 403(b) plan qualifies as the purchaser as defined below);
- - a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), provided that:
a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will
not accept contributions submitted with respect to individual
participants);
b. each transmittal must be accompanied by a single check or wire
transfer; and
c. all new participants must be added to the 403(b) plan by submitting an
application on behalf of each new participant with the contribution
transmittal;
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- - a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;
- - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or SIMPLE
IRA accounts should be linked;
- - any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or
- - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").
Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge
made during the 13-month period will be made at the public offering price
applicable to a single transaction of the total dollar amount indicated by the
LOI, as described under "Sales Charges and Dealer Concessions." It is the
purchaser's responsibility at the time of purchase to specify the account
numbers that should be considered in determining the appropriate sales charge.
The offering price may be further reduced as described under "Rights of
Accumulation" if the Transfer Agent is advised of all other accounts at the time
of the investment. Shares acquired through reinvestment of dividends and capital
gain distributions will not be applied to the LOI. At any time during the
13-month period after meeting the original obligation, a purchaser may revise
his intended investment amount upward by submitting a written and signed
request. Such a revision will not change the original expiration date. By
signing an LOI, a purchaser is not making a binding commitment to purchase
additional shares, but if purchases made within the 13-month period do not total
the amount specified, the investor will pay the increased amount of sales charge
as described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase with the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
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irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds
at net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase Class A shares of the AIM Funds through
AIM Distributors without payment of an initial sales charge: (a) A I M
Management Group Inc. ("AIM Management") and its affiliated companies; (b) any
current or retired officer, director, trustee or employee, or any member of the
immediate family (including spouse, children, parents and parents of spouse) of
any such person, of AIM Management or its affiliates or of certain mutual funds
which are advised or managed by AIM; or any trust established exclusively for
the benefit of such persons; (c) any employee benefit plan established for
employees of AIM Management or its affiliates; (d) any current or retired
officer, director, trustee or employee, or any member of
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AIM INVESTOR'S GUIDE
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, or of CIGNA Corporation or of any of its affiliated
companies, or of First Data Investor Services Group (formerly The Shareholder
Services Group, Inc.); (e) any investment company sponsored by CIGNA
Investments, Inc. or any of its affiliated companies for the benefit of its
directors' deferred compensation plans; (f) discretionary advised clients of AIM
or AIM Capital; (g) registered representatives and employees of dealers who have
entered into agreements with AIM Distributors (or financial institutions that
have arrangements with such dealers with respect to the sale of shares of the
AIM Funds) and any member of the immediate family (including spouse, children,
parents and parents of spouse) of any such person, provided that purchases at
net asset value are permitted by the policies of such person's employer; (h)
certain broker-dealers, investment advisers or bank trust departments that
provide asset allocation, similar specialized investment services or investment
company transaction services for their customers, that charge a minimum annual
fee for such services, and that have entered into an agreement with AIM
Distributors with respect to their use of the AIM Funds in connection with such
services; (i) any employee or any member of the immediate family (including
spouse, children, parents and parents of spouse) of any employee, of Triformis
Inc.; (j) shareholders of the AIM/GT Funds as of April 30, 1987 who since that
date continually have owned shares of one or more of the AIM/GT Funds; and (k)
certain former AMA Investment Advisers' shareholders who became shareholders of
the AIM Global Health Care Fund in October 1989, and who have continuously held
shares in the AIM/GT Funds since that time.
In addition, shares of any AIM Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the total amount invested in the
plan is at least $1,000,000, (2) the sponsor signs a $1,000,000 LOI, (3) such
shares are purchased by an employer-sponsored plan with at least 100 eligible
employees, or (4) all of the plan's transactions are executed through a single
financial institution or service organization who has entered into an agreement
with AIM Distributors with respect to their use of the AIM Funds in connection
with such accounts. Section 403(b) plans sponsored by public educational
institutions will not be eligible for net asset value purchases based on the
aggregate investment made by the plan or the number of eligible employees.
Participants in such plans will be eligible for reduced sales charges based
solely on the aggregate value of their individual investments in the applicable
AIM Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms for share purchases of the Load Funds (as defined under the
caption "Exchange Privilege") sold at net asset value to an employee benefit
plan in accordance with this paragraph as follows: 1% of the first $2 million of
such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50%
of the next $17 million of such purchases, plus 0.25% of amounts in excess of
$20 million of such purchases and up to 0.10% of the net asset value of any
Class A shares of AIM LIMITED MATURITY TREASURY FUND sold at net asset value to
an employee benefit plan in accordance with this paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone
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number of the dealer who sold to the unit holder the units to be redeemed or
repurchased; and (ii) states that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by the
proceeds from the redemption or repurchase of units of such trusts.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a
shareholder who owns shares which are not subject to a contingent deferred sales
charge, can arrange for monthly, quarterly or annual amounts (but not less than
$50) to be drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that exceed on an annual
basis 12% of such account will be subject to a contingent deferred sales charge
on the amounts exceeding 12% of the account value at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the
Transfer Agent and all dividends and distributions are reinvested to shares of
the applicable AIM Fund by the Transfer Agent. To provide funds for payments
made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient
full and fractional shares at their net asset value in effect at the time of
each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in
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the amount specified by the shareholder (minimum $50 per investment, per
account) and on a day or date(s) specified by the shareholder. The proceeds are
invested in shares of the designated AIM Fund at the applicable offering price
determined on the date of the withdrawal. An Automatic Investment Plan may be
discontinued upon 10 days' prior notice to the Transfer Agent or AIM
Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination money-
purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans; SARSEP
plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement accounts").
Information concerning these plans, including the custodian's fees and the forms
necessary to adopt such plans, can be obtained by calling or writing the AIM
Funds or AIM Distributors. Shares of the AIM Funds are also available for
investment through existing 401(k) plans (for both individuals and employers)
adopted under the Code. The plan custodian currently imposes an annual $10
maintenance fee with respect to each retirement account for which it serves as
the custodian. This fee is generally charged in December. Each AIM Fund and/or
the custodian reserve the right to change this maintenance fee and to initiate
an establishment fee (not to exceed its cost).
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of AIM Funds. The Program automatically rebalances
holdings of AIM Funds to the established allocation on a periodic basis. Under
the Program, a shareholder may predesignate, on a percentage basis, how the
total value of his or her holdings in a minimum of two, and a maximum of ten,
AIM Funds ("Personal Portfolio") is to be rebalanced on a quarterly, semiannual,
or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more AIM Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other AIM Funds in the
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shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the AIM
Fund(s) in a shareholder's Personal Portfolio have appreciated during a
rebalancing period, the Program will result in shares of AIM Fund(s) that have
appreciated most during the period being exchanged for shares of AIM Fund(s)
that have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular AIM Fund would
be 2% or less. In predesignating percentages, shareholders must use whole
percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an AIM
Fund's shares. The AIM Funds and AIM Distributors reserve the right to modify,
suspend, or terminate the Program at any time on 60 days' prior written notice
to shareholders. A request to participate in the Program must be received in
good order at least five business days prior to the next rebalancing date. Once
a shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
A-13
<PAGE>
AIM INVESTOR'S GUIDE
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM Funds --
Sales Charges and Dealer Concessions," shares of certain of the AIM Funds,
including the Class A shares of the Multiple Class Funds, listed below and
referred to herein as the "Load Funds," are sold at a public offering price that
includes a maximum sales charge of 5.50% or 4.75% of the public offering price
of such shares; Class A shares (or shares which normally involve the payment of
initial sales charges) of certain of the AIM Funds, listed below and referred to
herein as the "Lower Load Funds," are sold at a public offering price that
includes a maximum sales charge of 1.00% of the public offering price of such
shares; and Class A shares or shares of certain other funds, listed below and
referred to herein as the "No Load Funds," are sold at net asset value, without
payment of a sales charge.
LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM ADVISOR FLEX FUND -- CLASS A
AIM ADVISOR INTERNATIONAL VALUE FUND -- CLASS A
AIM ADVISOR LARGE CAP VALUE FUND -- CLASS A
AIM ADVISOR MULTIFLEX FUND -- CLASS A
AIM ADVISOR REAL ESTATE FUND -- CLASS A
AIM AGGRESSIVE GROWTH FUND -- CLASS A
AIM AMERICA VALUE FUND -- CLASS A
AIM ASIAN GROWTH FUND -- CLASS A
AIM BALANCED FUND -- CLASS A
AIM BLUE CHIP FUND -- CLASS A
AIM CAPITAL DEVELOPMENT FUND -- CLASS A
AIM CHARTER FUND -- CLASS A
AIM CONSTELLATION FUND -- CLASS A
AIM DEVELOPING MARKETS FUND -- CLASS A
AIM EMERGING MARKETS FUND -- CLASS A
AIM EUROPE GROWTH FUND -- CLASS A
AIM EUROPEAN DEVELOPMENT FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH FUND -- CLASS A
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND -- CLASS A
AIM GLOBAL FINANCIAL SERVICES FUND -- CLASS A
AIM GLOBAL GOVERNMENT INCOME FUND -- CLASS A
AIM GLOBAL GROWTH FUND -- CLASS A
AIM GLOBAL GROWTH & INCOME FUND -- CLASS A
AIM GLOBAL HEALTH CARE FUND -- CLASS A
AIM GLOBAL HIGH INCOME FUND -- CLASS A
AIM GLOBAL INCOME FUND -- CLASS A
AIM GLOBAL INFRASTRUCTURE FUND -- CLASS A
AIM GLOBAL RESOURCES FUND -- CLASS A
AIM GLOBAL TELECOMMUNICATIONS FUND -- CLASS A
AIM GLOBAL TRENDS FUND -- CLASS A
AIM GLOBAL UTILITIES FUND -- CLASS A
AIM HIGH INCOME MUNICIPAL FUND -- CLASS A
AIM HIGH YIELD FUND -- CLASS A
AIM INCOME FUND -- CLASS A
AIM INTERMEDIATE GOVERNMENT FUND -- CLASS A
AIM INTERNATIONAL EQUITY FUND -- CLASS A
AIM INTERNATIONAL GROWTH FUND -- CLASS A
AIM JAPAN GROWTH FUND -- CLASS A
AIM LATIN AMERICAN GROWTH FUND -- CLASS A
AIM MID CAP GROWTH FUND -- CLASS A
AIM MONEY MARKET FUND -- CLASS A
AIM MUNICIPAL BOND FUND -- CLASS A
AIM NEW PACIFIC GROWTH FUND -- CLASS A
AIM SELECT GROWTH FUND -- CLASS A
AIM SMALL CAP EQUITY FUND -- CLASS A
AIM SMALL CAP OPPORTUNITIES FUND -- CLASS A
AIM STRATEGIC INCOME FUND -- CLASS A
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT -- CLASS A
AIM VALUE FUND -- CLASS A
AIM WEINGARTEN FUND -- CLASS A
AIM WORLDWIDE GROWTH FUND -- CLASS A
LOWER LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM LIMITED MATURITY TREASURY FUND -- CLASS A
AIM TAX-FREE INTERMEDIATE FUND -- CLASS A
NO LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM MONEY MARKET FUND -- AIM CASH RESERVE SHARES
AIM TAX-EXEMPT CASH FUND -- CLASS A
AIM DOLLAR FUND -- CLASS A
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE, (iii) Class A shares
may be exchanged for Class A shares, (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A shares of AIM MONEY MARKET FUND or for Class B or Class C shares.
A-14
<PAGE>
AIM INVESTOR'S GUIDE
DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund or acquired upon
any Lower Load Fund. exchange of
shares of any
Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
</TABLE>
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE
IS REVISED AS FOLLOWS:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value if shares were acquired Net Asset Value Net Asset Value Not Applicable Not Applicable
upon exchange of any Load Fund.
Otherwise, difference in sales charge
will apply.
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund. acquired upon
Difference in sales charge will apply if exchange of
No Load shares were acquired upon shares of any
exchange of Lower Load Fund shares. Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C.............. Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>
An exchange is permitted only in the following circumstances: (a) if the
funds offer more than one class of shares, the exchange must be between the same
class of shares (e.g., Class A, Class B and Class C shares of a Multiple Class
Fund cannot be exchanged for each other) except that AIM Cash Reserve Shares of
AIM MONEY MARKET FUND may be exchanged for Class A shares of another Multiple
Class Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten business days, and all other shares are held
in an account for at least one day, prior to the exchange; and (h) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the AIM Funds.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
A-15
<PAGE>
AIM INVESTOR'S GUIDE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged
are redeemed at their net asset value as determined at NYSE Close on the day
that an exchange request in proper form (described below) is received. Exchange
requests received after NYSE Close will result in the redemption of shares at
their net asset value at NYSE Close on the next business day. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase, Exchange and
Redemption Orders (AIM MONEY MARKET FUND only)" for information regarding the
timing of exchange orders for AIM MONEY MARKET FUND. Normally, shares of an AIM
Fund to be acquired by exchange are purchased at their net asset value or
applicable offering price, as the case may be, determined on the date that such
request is received, but under unusual market conditions such purchases may be
delayed for up to five business days if it is determined that a fund would be
materially disadvantaged by an immediate transfer of the proceeds of the
exchange. If a shareholder is exchanging into a fund paying daily dividends
("Dividends, Distributions and Tax Matters -- Dividends and Distributions,"
below), and the release of the exchange proceeds is delayed for the foregoing
five-day period, such shareholder will not begin to accrue dividends until the
sixth business day after the exchange. Shares purchased by check may not be
exchanged until it is determined that the check has cleared, which may take up
to ten business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. If a shareholder does not wish to allow telephone
exchanges by any person in his account, he should decline that option on the
account application. AIM Distributors has made arrangements with certain dealers
and investment advisory firms to accept telephone instructions to exchange
shares between any of the AIM Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the funds, including the condition that any such dealer or
investment advisor enter into an agreement (which contains additional conditions
with respect to exchanges of shares) with AIM Distributors. To exchange shares
by telephone, a shareholder, dealer or investment advisor who has satisfied the
foregoing conditions must call AFS at (800) 959-4246. If a shareholder is unable
to reach AFS by telephone, he may also request exchanges by telegraph or use
overnight courier services to expedite exchanges by mail, which will be
effective on the business day received by the Transfer Agent as long as such
request is received prior to NYSE Close. The Transfer Agent and AIM Distributors
will not be liable for any loss, expense or cost arising out of any telephone
exchange request that they reasonably believe to be genuine, but may in certain
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's Social Security Number and current address, and mailings of
confirmations promptly after the transaction.
EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
A-16
<PAGE>
AIM INVESTOR'S GUIDE
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
MULTIPLE DISTRIBUTION SYSTEM. CLASS B SHARES. Class B shares purchased
under the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS % OF DOLLAR
YEARS SINCE PURCHASE MADE AMOUNT SUBJECT TO CHARGE
- ------------------------------------------------------------------------------------------ ---------------------------
<S> <C>
First..................................................................................... 5%
Second.................................................................................... 4%
Third..................................................................................... 3%
Fourth.................................................................................... 3%
Fifth..................................................................................... 2%
Sixth..................................................................................... 1%
Seventh and Following..................................................................... None
</TABLE>
In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
CLASS C SHARES. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
A-17
<PAGE>
AIM INVESTOR'S GUIDE
WAIVERS. Contingent deferred sales charges on Class B and Class C shares
will be waived on redemptions (1) following the death or post-purchase
disability, as defined in Section 72(m)(7) of the Code, of a shareholder or a
settlor of a living trust (provided AIM Distributors is notified of such death
or post-purchase disability at the time of the redemption request and is
provided with satisfactory evidence of such death or post-purchase disability),
(2) in connection with certain distributions from IRAs, custodial accounts
maintained pursuant to Code Section 403(b), deferred compensation plans
qualified under Code Section 457 and plans qualified under Code Section 401
(collectively, "Retirement Plans"), (3) pursuant to a Systematic Withdrawal
Plan, provided that amounts withdrawn under such plan do not exceed on an annual
basis 12% of the value of the shareholder's investment in Class B or Class C
shares at the time the shareholder elects to participate in the Systematic
Withdrawal Plan, (4) effected pursuant to the right of a Multiple Class Fund to
liquidate a shareholder's account if the aggregate net asset value of shares
held in the account is less than the designated minimum account size described
in the prospectus of such Multiple Class Fund, (5) effected by AIM of its
investment in Class B or Class C shares and (6) of Class C shares where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payment otherwise payable to the dealer described in the last paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds."
Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
Waiver category (2) above applies only to redemptions resulting from:
(i) required minimum distributions to plan participants or beneficiaries who
are age 70 1/2 or older, and only with respect to that portion of such
distributions which does not exceed 12% annually of the participant's or
beneficiary's account value in a particular AIM Fund;
(ii) in-kind transfers of assets where the participant or beneficiary notifies
AIM Distributors of such transfer no later than the time such transfer
occurs;
(iii) tax-free rollovers or transfers of assets to another Retirement Plan
invested in Class B or Class C shares of one or more Multiple Class Funds;
(iv) tax-free returns of excess contributions or returns of excess deferral
amounts; and
(v) distributions upon the death or disability (as defined in the Code) of the
participant or beneficiary.
Shareholders who purchased Class B shares of the AIM/GT Funds or Class C
shares of AIM GLOBAL TRENDS FUND prior to June 1, 1998 are entitled to certain
additional waivers of the contingent deferred sales charge on those shares as
described in the Statement of Additional Information of each respective fund
under "How to Purchase and Redeem Shares."
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND [or Class A shares
of AIM DOLLAR FUND] which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code,
A-18
<PAGE>
AIM INVESTOR'S GUIDE
or Plans created under Section 403(b) of the Code and sponsored by nonprofit
organizations as defined under Section 501(c)(3) of the Code, where shares are
being redeemed in connection with employee terminations or withdrawals, and (a)
the total amount invested in a Plan is at least $1,000,000, (b) the sponsor of a
Plan signs a letter of intent to invest at least $1,000,000 in one or more of
the AIM Funds, or (c) the shares being redeemed were purchased by an
employer-sponsored Plan with at least 100 eligible employees; provided, however,
that Plans created under Section 403(b) of the Code which are sponsored by
public educational institutions shall qualify under (a), (b) or (c) above on the
basis of the value of each Plan participant's aggregate investment in the AIM
Funds, and not on the aggregate investment made by the Plan or on the number of
eligible employees; (2) redemptions of shares following the death or
post-purchase disability, as defined in Section 72(m)(7) of the Code, of a
shareholder or a settlor of a living trust; (3) redemptions of shares purchased
at net asset value by private foundations or endowment funds where the initial
amount invested was at least $1,000,000; (4) redemptions of shares purchased by
an investor in amounts of $1,000,000 or more where such investor's dealer of
record, due to the nature of the investor's account, notifies AIM Distributors
prior to the time of investment that the dealer waives the payments otherwise
payable to the dealer as described in the third paragraph under the caption
"Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM Funds;"
and (5) pursuant to a Systematic Withdrawal Plan, provided that amounts
withdrawn under such plan do not exceed on an annual basis 12% of the value of
the shareholder's investment in Class A shares at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund
to establish as IRA, should include the following information along with a
written request for either partial or full liquidation of fund shares; (a) a
statement as to whether or not the shareholder has attained age 59 1/2, and (b)
a statement as to whether or not the shareholder elects to have federal income
tax withheld from the proceeds of the liquidation.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in this account, he should decline that option on the account
application. The telephone redemption feature can be used only if: (a) the
redemption proceeds are to be mailed to the address of record or transferred
electronically or wired to the pre-authorized bank account; (b) there has been
no change of address of record on the account within the preceding 30 days; (c)
the shares to be redeemed are not in certificate form; (d) the person requesting
the redemption can provide proper identification information, and (e) the
proceeds of the redemption do not exceed $50,000. Accounts in AIM Distributors'
prototype retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not
eligible for the telephone redemption option. AIM Distributors has made
arrangements with certain dealers and investment advisors to accept telephone
instructions for the redemption of shares. AIM Distributors reserves the right
to impose conditions on these dealers and investment advisors, including the
condition that they enter into agreements (which contain additional conditions
with respect to the redemption of shares) with AIM Distributors. The Transfer
Agent and AIM Distributors will not be liable for any loss, expense or cost
arising out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain
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AIM INVESTOR'S GUIDE
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's taxpayer identification number and current address, and mailings
of confirmations promptly after the transaction.
EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order
is received prior to 11:30 a.m. Eastern Time, the redemption will be effective
on that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next business day.
REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of
AIM MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing
the appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an
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AIM INVESTOR'S GUIDE
address that has been changed within the past 30 days; (5) requests to transfer
the registration of shares to another owner, (6) telephone exchange and
telephone redemption authorization forms; (7) changes in previously designated
wiring or electronic funds transfer instructions, and (8) written redemptions or
exchanges of shares previously reported as lost, whether or not the redemption
amount is under $50,000 or the proceeds are to be sent to the address of record.
These requirements may be waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within 90 days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment may alter any capital gains payable. If
there has been a loss on the redemption and shares of the same fund are
repurchased, all of the loss may not be tax deductible, depending on the timing
and amount reinvested. Under the Code, if the redemption proceeds of fund shares
on which a sales charge was paid are reinvested in shares of the same fund, or
exchanged for shares of another AIM Fund, at a reduced sales charge within 90
days of the payment of the sales charge, the shareholder's basis in the fund
shares redeemed may not include the amount of the sales charge paid, thereby
reducing the loss or increasing the gain recognized from the redemption;
however, the shareholder's basis in the fund shares purchased will include the
sales charge. Each AIM Fund may amend, suspend or cease offering the privilege
at any time as to shares redeemed after the date of such amendment, suspension
or cessation. This privilege may only be exercised once each year by a
shareholder with respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in
connection with the redemption of Class A shares and who subsequently reinvest a
portion or all of the value of the redeemed shares in Class A shares of any AIM
Fund within 90 days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is
determined as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close
with respect to AIM MONEY MARKET FUND) on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an AIM Fund's share
will be determined as of the close of the NYSE on such day. For purposes of
defining net asset value per share, futures and options contracts generally will
be valued 15 minutes after the close of trading of the NYSE. The net asset value
per share is calculated by subtracting a class' liabilities from its assets and
dividing the result by the total number of class shares outstanding. The
determination of net asset value per share is made in accordance with generally
accepted accounting principles. Among other items, liabilities include accrued
expenses and dividends payable, and total assets include portfolio securities
valued at their market value, as well as income accrued but
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AIM INVESTOR'S GUIDE
not yet received. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
supervision of the fund's officers and in accordance with methods which are
specifically authorized by its governing Board of Directors or Trustees.
Short-term obligations with maturities of 60 days or less, and the securities
held by the Money Market Funds, are valued at amortized cost as reflecting fair
value. AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOARD FUND, AIM TAX-EXEMPT
BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund's policy regarding the payment of dividends and distributions
is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND............................. declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND.............. declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.................. declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND........................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND...................... declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND........................ declared and paid annually annually annually
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND............................. declared and paid annually annually annually
AIM BALANCED FUND................................. declared and paid quarterly annually annually
AIM BLUE CHIP FUND................................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND...................... declared and paid annually annually annually
AIM CHARTER FUND.................................. declared and paid quarterly annually annually
AIM CONSTELLATION FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND..................... declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND................. declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INCOME FUND............................ declared daily; paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM GLOBAL UTILITIES FUND......................... declared daily; paid monthly annually annually
AIM HIGH INCOME MUNICIPAL FUND.................... declared daily; paid monthly annually annually
AIM HIGH YIELD FUND............................... declared daily; paid monthly annually annually
AIM INCOME FUND................................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.................. declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND..................... declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND................ declared daily; paid monthly annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM MONEY MARKET FUND............................. declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND........................... declared daily; paid monthly annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SELECT GROWTH FUND............................ declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM SMALL CAP OPPORTUNITIES FUND.................. declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT........... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.......................... declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND.................... declared daily; paid monthly annually annually
AIM VALUE FUND.................................... declared and paid annually annually annually
AIM WEINGARTEN FUND............................... declared and paid annually annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in
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AIM INVESTOR'S GUIDE
like shares of another Multiple Class Fund, to the extent permitted. For funds
that do not declare a dividend daily, such dividends and distributions will be
reinvested at the net asset value per share determined on the ex-dividend date.
For funds that declare a dividend daily, such dividends and distributions will
be reinvested at the net asset value per share determined on the payable date.
Shareholders may elect, by written notice to the Transfer Agent, to receive such
distributions, or the dividend portion thereof, in cash, or to invest such
dividends and distributions in shares of another fund in the AIM Funds; provided
that (i) dividends and distributions attributable to Class B shares may only be
reinvested in Class B shares, (ii) dividends and distributions attributable to
Class C shares may only be reinvested in Class C shares, (iii) dividends and
distributions attributable to Class A shares may not be reinvested in Class B or
Class C shares, and (iv) dividends and distributions attributable to the AIM
Cash Reserve Shares of AIM MONEY MARKET FUND may not be reinvested in the Class
A shares of that Fund or in any Class B or Class C shares. Investors who have
not previously selected such a reinvestment option on the account application
form may contact the Transfer Agent at any time to obtain a form to authorize
such reinvestments in another AIM Fund. Such reinvestments into the AIM Funds
are not subject to sales charges, and shares so purchased are automatically
credited to the account of the shareholder.
Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS--GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares, except for "exempt-interest dividends" paid by AIM HIGH INCOME MUNICIPAL
FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND (the "Tax-Exempt
Funds"), which are exempt from federal income tax. With respect to tax-exempt
shareholders, dividends and distributions from the AIM Funds are not subject to
federal income taxation to the extent permitted under the applicable tax
exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
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AIM INVESTOR'S GUIDE
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HIGH
INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH YIELD
FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be
required to include the "exempt-interest" portion of dividends paid by the
Tax-Exempt Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other
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AIM INVESTOR'S GUIDE
taxable securities. For additional information concerning the alternative
minimum tax and certain collateral tax consequences of the receipt of
exempt-interest dividends, see the Statements of Additional Information
applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP GROWTH FUND,
AIM SMALL CAP EQUITY FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH FUND --
SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do so,
each of these funds may elect to pass through to its shareholders credits for
foreign taxes paid. If a fund makes such an election, a shareholder who receives
a distribution (1) will be required to include in gross income his proportionate
share of foreign taxes allocable to the distribution and (2) may claim a credit
or deduction for such share for his taxable year in which the distribution is
received, subject to the general limitations imposed on the allowance of foreign
tax credits and deductions. Shareholders should also note that certain gains or
losses attributable to fluctuations in exchange rates or foreign currency
forward contracts may increase or decrease the amount of income of the fund
available for distribution to shareholders and should note that if, for any
fund, such losses exceed other income during a taxable year, the fund would not
be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each AIM Fund's transfer agent and
dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
A-26
<PAGE>
AIM INVESTOR'S GUIDE
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If several members of a household own shares of the same fund,
only one annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
A-27
<PAGE>
AIM EUROPE GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>
[LOGO]
AIM INTERNATIONAL GROWTH FUND
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM International Growth Fund (the
"Fund"), which is one of several series investment portfolios comprising AIM
Growth Series (the "Trust"), an open-end, series, management investment company.
The Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of issuers domiciled in its Primary
Investment Area (as defined herein).
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information about the Fund. Additional information about the Fund may also
be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM INTERNATIONAL GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 6
Investment Objective and Policies......................................................... 7
Risk Factors.............................................................................. 10
Management................................................................................ 13
Other Information......................................................................... 16
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of issuers domiciled in its Primary Investment Area
(as defined herein).
Investment Managers: The Fund is managed by AIM Advisors, Inc. ("AIM") and is sub-advised and sub-administered by INVESCO
(NY), Inc. (the "sub-adviser"). AIM and the Sub-adviser and their worldwide asset management
affiliates provide investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment
management group that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing presence in Asia. AIM was
organized in 1976 and, together with its subsidiaries, currently advises approximately 90 investment
company portfolios.
Purchasing Shares: Investors may select Class A or Class B shares of the Fund which are offered by this Prospectus at an
offering price that reflects differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to a separate
prospectus, the Fund also offers Advisor Class Shares, which represent interests in the Fund. The
Advisor Class has different distribution arrangements.
Class A Shares: Shares are offered at net asset value plus any applicable initial sales charge.
</TABLE>
Prospectus Page 2
<PAGE>
AIM INTERNATIONAL GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B Shares: Shares are offered at net asset value without an initial sales charge, and are subject to (a maximum
contingent deferred sales charge of 5% on certain redemptions made within six years from the date
such shares were purchased. Class B shares automatically convert to Class A shares of the Fund eight
years following the end of the calendar month in which a purchase was made. Class B shares are
subject to higher expenses than Class A shares.
Initial investments in any class of shares must be at least $500 and additional investments must be
at least $50. The minimum initial investment is modified for investments through tax-qualified
retirement plans and accounts initially established with an Automatic Investment Plan. The
distributor of the Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
Suitability for Investors: An investor in Class A or Class B shares of the Fund should consider the method of purchasing shares
that is most beneficial given the amount of the purchase, the length of time the shares are expected
to be held, and other circumstances. Investors should consider whether, during the anticipated life
of their investment in the Fund, the accumulated distribution fees and any applicable contingent
deferred sales charges on Class B shares prior to conversion would be less than the initial sales
charge and accumulated distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares. To assist investors
in making this determination, the table under the caption "Table of Fees and Expenses" sets forth
examples of the charges applicable to each class of shares. Class A shares will normally be more
beneficial than Class B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase of more than $250,000
for Class B shares.
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Class A and Class B shares of the Fund may be exchanged for shares of other funds in The
AIM Family of Funds in the manner and subject to the policies and charges set forth herein. See
"Exchange Privilege."
Redeeming Shares: Class A shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, generally without charge. A contingent deferred sales charge of 1% may apply to
certain redemptions where a purchase of more than $1 million is made at net asset value. See "How to
Redeem Shares -- Contingent Deferred Sales Charge Program for Large Purchases."
</TABLE>
Prospectus Page 3
<PAGE>
AIM INTERNATIONAL GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, less a contingent deferred sales charge for redemptions made within six years from
the date such shares were purchased. Class B shares redeemed after six years from the date such
shares were purchased will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters" and "Special Plans."
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
The Fund invests primarily in foreign securities. Investments in foreign securities involve risks
relating to political and economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates also may affect the
Fund's net asset value, earnings and gains and losses realized on sales of securities.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 4
<PAGE>
AIM INTERNATIONAL GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Class A and Class B shares of the Fund are
reflected in the following table (1):
<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION COSTS (2):
Maximum sales charge on purchases
(as a % of offering price)....................... 5.50% None
Sales charges on reinvested distributions to
shareholders..................................... None None
Maximum deferred sales charge (as a % of net asset
value at time of purchase or sale, whichever is
less)............................................ None 5.00%
Redemption charges................................ None None
Exchange fees..................................... None None
ANNUAL FUND OPERATING EXPENSES (3):
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees..... 0.98% 0.98%
12b-1 distribution and service fees............... 0.35% 1.00%
Other expenses.................................... 0.49% 0.49%
------- -------
Total Fund Operating Expenses..................... 1.82% 2.47%
------- -------
------- -------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (7):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Funds, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS(6)
------ ------- ------- -----------
<S> <C> <C> <C> <C>
Class A shares (4).......................... $73 $110 $149 $ 258
Class B shares
Assuming a complete redemption at end of
period (5)............................... $77 $110 $156 $ 267
Assuming no redemption.................... $25 $ 78 $133 $ 267
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. rules regarding investment companies.
(2) Sales charge waivers are available for Class A and Class B shares, and
reduced sales charge purchase plans are available for Class A shares. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase. The charge generally
declines by 1% annually thereafter, reaching zero after six years. See
"Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
Sales Charges."
(3) Expenses are based on the Fund's fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's, expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 2.00% and 2.65% of the average daily net
assets of the Fund's Class A and Class B shares, respectively. "Other
expenses" include custody, transfer agency, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information.
(4) Assumes payment of maximum sales charge by the investor.
(5) Assumes deduction of the applicable contingent deferred sales charge.
(6) For Class B shares, this number reflects the conversion to Class A shares
eight years following the end of the calendar month in which a purchase was
made.
(7) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT
EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the assumption
in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 5
<PAGE>
AIM INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information.
AIM INTERNATIONAL GROWTH FUND
(FORMERLY GT GLOBAL INTERNATIONAL GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. Standardized total return for Class
A shares reflects the deduction of the Fund's maximum front-end sales charge at
the time of purchase. Standardized total return for Class B shares reflects the
deduction of the maximum applicable contingent deferred sales charge on a
redemption of shares held for the period.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 6
<PAGE>
AIM INTERNATIONAL GROWTH FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The Fund seeks long-term growth of capital. The Fund seeks its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of issuers domiciled in its Primary Investment Area, as
described below. Equity securities in which the Fund may invest include common
stocks, preferred stocks, convertible debt securities and warrants to acquire
such securities. The Fund's Primary Investment Area includes the following
countries: Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile,
Colombia, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India,
Indonesia, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, the
Netherlands, New Zealand, Norway, Pakistan, Peru, the Philippines, Portugal,
Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan,
Thailand, Turkey, the United Kingdom and Venezuela but not the United States.
There can be no assurance that the Fund will achieve its investment objective.
Because the development of the world's economies and stock markets is rapidly
evolving, from time to time the Board of Trustees may add or delete countries
from the Fund's Primary Investment Area.
The Fund is intended for investors seeking to complement their U.S. equity
investments with a professionally managed non-U.S. portfolio. The Fund may
invest up to 35% of its total assets in the equity securities of issuers
domiciled outside of its Primary Investment Area. Such investments may include:
(a) securities of issuers in countries that are not located in the Primary
Investment Area but are linked by tradition, economic markets, cultural
similarities or geography to the countries in such Primary Investment Area; and
(b) securities of issuers located elsewhere in the world that have operations in
the Primary Investment Area or that stand to benefit from political and economic
events in the Primary Investment Area.
Under normal circumstances, the assets of the Fund are invested in the equity
securities of issuers domiciled in at least three different countries.
The Fund may invest up to 35% of its total assets in debt securities, including
U.S. and foreign government securities and corporate debt securities, Samurai
and Yankee bonds, Eurobonds and Depository Receipts. The issuers of such debt
securities may or may not be domiciled in the primary Investment Area of the
Fund. The Fund will limit its purchases of debt securities to investment grade
obligations. "Investment grade" debt refers to those securities rated within one
of the four highest ratings categories by Moody's Investors Service, Inc.
("Moody's") or by Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. ("S&P"), or, if not similarly rated by any other nationally recognized
statistical rating organization ("NRSRO"), deemed by the Sub-adviser to be of
equivalent quality. Debt rated Baa by Moody's, which is the lowest category of
investment grade debt, is considered by Moody's to have speculative
characteristics. See the Statement of Additional Information for a description
of Moody's and S&P ratings.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Fund, the Sub-adviser seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth rates. The Sub-adviser further
attempts to identify those companies in such countries and industries that are
best positioned and managed to take advantage of these economic and political
factors. The Sub-adviser intends to invest in such markets only after balancing
the potential for growth of selected companies in each market relative to the
risks of investing in each such country. Among the factors to be considered are
that several of the markets are so-called developing countries, and their
economies and markets are less developed and more prone to uncertainty,
instability and risk than those of the other markets in which the Fund invests.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
Prospectus Page 7
<PAGE>
AIM INTERNATIONAL GROWTH FUND
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
currency units are evaluated on the strength of the particular currency against
the U.S. dollar as well as on the current and expected levels of interest rates
in the country or countries. In addition to the foregoing, the Fund may seek to
take advantage of differences in relative values of fixed income securities
among various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency units
such as Euros) and/or high quality debt securities or money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, most or all investments of the Fund may be made in
the United States and denominated in U.S. dollars. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units such as Euros) and may invest
in high quality foreign or domestic money market instruments. For a description
of money market instruments, see "Temporary Defensive Strategies" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Fund may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Fund's borrowings
Prospectus Page 8
<PAGE>
AIM INTERNATIONAL GROWTH FUND
exceed 5% of its total assets. Any borrowing by the Fund may cause greater
fluctuation in the value of its shares than would be the case if the Fund did
not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is made. While a loan is outstanding, the borrower must maintain with the
Fund's custodian collateral consisting of cash, U.S. government securities or
certain irrevocable letters of credit equal to at least the value of the
borrowed securities, plus any accrued interest or such other collateral as
permitted by the Fund's investment program and regulatory agencies, and as
approved by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Forward Currency Contract" herein and the Statement of Additional
Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Prospectus Page 9
<PAGE>
AIM INTERNATIONAL GROWTH FUND
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Fund also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
AMERICAN DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in U.S. securities markets. See "Investment
Objectives and Policies -- Depository Receipts" in the Statement of Additional
Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Trust's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
FOREIGN INVESTING. The Fund invests primarily in foreign securities. Investing
in foreign securities entails certain risks. The securities of non-U.S. issuers
generally will not be registered with, nor will the issuers thereof be subject
to, the reporting requirements of the SEC. Accordingly, there may be less
publicly available information about foreign securities and issuers than is
available about domestic securities and issuers. Foreign companies generally are
not subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
Securities of some foreign companies are less liquid and their prices may be
more volatile than securities of comparable domestic companies. In addition,
certain costs attributable to foreign investing, such as custody charges, are
higher than those attributable to domestic investing. The Fund's interest and
dividends from foreign issuers may be subject to non-U.S. withholding taxes,
thereby reducing its net investment income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the repatriation of
Prospectus Page 10
<PAGE>
AIM INTERNATIONAL GROWTH FUND
assets of the Fund, political or social instability, or diplomatic developments
that could affect their investments in those countries. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, rate of
savings and capital reinvestment, resource self-sufficiency and balance of
payments positions.
Because the Fund may invest substantially in securities denominated in
currencies other than the U.S. dollar, and because it may hold foreign
currencies, it will be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between such currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Fund's shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund. Currencies generally are
evaluated on the basis of fundamental economic criteria (e.g., relative
inflation and interest rate levels and trends, growth rate forecasts, balance of
payments status and economic policies) as well as technical and political data.
The exchange rates between the U.S. dollar and other currencies are determined
by supply and demand in the currency exchange markets, the international balance
of payments, governmental intervention, speculation and other economic and
political conditions. If the currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, a decline in the exchange rate of the currency would
adversely affect the value of the security expressed in U.S. dollars.
INVESTING IN EMERGING MARKETS. Because of the special risks associated with
investing in emerging markets, an investment in the Fund, should be considered
speculative. Investors are strongly advised to consider carefully the special
risks involved in emerging markets, which are in addition to the usual risks of
investing in developed foreign markets around the world.
Investing in emerging markets involves risks relating to potential political and
economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation in any
emerging market, the Fund could lose its entire investment in that market.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
Economies in emerging markets generally are dependent heavily upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by the countries
with which they trade. These economies also have been and may continue to be
affected adversely by economic conditions in the countries in which they trade.
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
In addition, brokerage commissions, custodial services and other costs relating
to investment in foreign markets generally are more expensive than in the United
States, particularly with respect to emerging markets. Such markets have
different settlement and clearance procedures. In certain markets there have
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the Fund to make intended securities purchases due to settlement
problems could cause the Fund to forego attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, in possible liability to the purchaser.
In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occurred in certain countries.
Prospectus Page 11
<PAGE>
AIM INTERNATIONAL GROWTH FUND
The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Fund's portfolio securities in such
markets may not be readily available. Section 22(e) of the 1940 Act permits a
registered investment company to suspend redemption of its shares for any period
during which an emergency exists, as determined by the SEC. Accordingly, when
the Fund believes that appropriate circumstances warrant, it will promptly apply
to the SEC for a determination that an emergency exists within the meaning of
Section 22(e). During the period commencing from the Fund's identification of
such conditions until the date of SEC action, the portfolio securities of the
Fund in the affected markets will be valued at fair value as determined in good
faith by or under the direction of the Trust's Board of Trustees.
PACIFIC REGION COUNTRIES. The Fund may invest significantly in equity securities
of issuers located in Pacific region countries. Certain of the risks associated
with international investments are heightened for investments in Pacific region
countries. For example, some of the currencies of Pacific region countries have
experienced steady devaluations relative to the U.S. dollar, and major
adjustments have been made periodically in certain such currencies. Moreover,
recent currency devaluations in some Pacific region countries have resulted in
high interest rate levels and sharp reductions in economic activity and have
diminished prospects for short-term growth in corporate earnings. Certain
countries, such as India, face serious exchange constraints. Jurisdictional
disputes also exist between South Korea and North Korea.
In addition, Hong Kong reverted to Chinese administration on July 1, 1997. The
long-term effects of this reversion are not known at this time. However, the
Fund's investments in Hong Kong may now be subject to the same or similar risks
as any investment in China. Investments in Hong Kong may be subject to
expropriation, nationalization or confiscation, in which case the Fund could
lose its entire investment in Hong Kong, if any. In addition, the reversion of
Hong Kong also presents a risk that the Hong Kong dollar will be devalued and a
risk of possible loss of investor confidence in Hong Kong's currency, stock
market and economy.
OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACTS. Although the Fund is authorized
to enter into options, futures and forward currency transactions, the Fund might
not enter into any such transactions. Options, futures and foreign currency
transactions involve certain risks, which include: (1) dependence on the
Sub-adviser's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts or options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
Prospectus Page 12
<PAGE>
AIM INTERNATIONAL GROWTH FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund, including
the investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund are delegated to the officers of the Trust, subject
always to the investment objective and policies of the Fund and to the general
supervision of the Trust's Board. See "Trustees and Executive Officers" in the
Statement of Additional Information for information on the Trustees of the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million and .90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 2.00%
and 2.65% of the average daily net assets of the Fund's Class A and Class B
shares, respectively.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement, dated as of May 29, 1998 (the "Advisory Agreement").
AIM was organized in 1976 and, together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. The Sub-adviser, 50 California Street, 27th
Floor, San Francisco, California 94111, and 1166 Avenue of the Americas, New
York, New York 10036, serves as the sub-adviser to the Fund pursuant to an
investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP
Prospectus Page 13
<PAGE>
AIM INTERNATIONAL GROWTH FUND
PLC. AMVESCAP PLC and its subsidiaries are an independent investment management
group that has a significant presence in the institutional and retail segment of
the investment management industry in North America and Europe, and a growing
presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Fund, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professionals primarily responsible for the portfolio management
of the Fund are follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Roger Yates Portfolio Manager since Global Chief Investment Officer for the Sub-adviser and INVESCO GT
London 1996 Asset Management PLC (London) ("GT Asset Management"), an affiliate
of the Sub-adviser, since October 1997. International Chief
Investment Officer for the Sub-adviser and GT Asset Management from
September 1996 to October 1997. Chief Investment Officer and
Portfolio Manager for Europe and the United Kingdom for the
Sub-adviser and GT Asset Management from 1994 to September 1996.
Investment Manager for Morgan Grenfell Asset Management from 1988 to
1994.
Michael Lindsell Portfolio Manager since Head of Investment Strategy for Global Equities for the Sub-adviser
London 1992 and GT Asset Management since 1996. Chief Investment Officer for
Japan for INVESCO GT Asset Management Asia Ltd. (Hong Kong) and
Portfolio Manager for the Sub-adviser from 1992 to 1996. Director of
Warburg Asset Management (Tokyo) prior thereto.
</TABLE>
------------------------
In placing orders for the Fund's portfolio securities transactions, the
Sub-adviser seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-adviser may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions for the Fund may
be executed through affiliates of AIM or the Sub-adviser. High portfolio
turnover (over 100%) involves correspondingly greater brokerage commissions and
other transaction costs that the Fund will bear directly and could result in the
realization of net capital gains that would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 on behalf of Class A shares of the Fund, and has entered into a
Master Distribution Agreement, dated May 29, 1998, on behalf of Class B shares
of the Fund (individually referred to as a "Distribution Agreement" or
collectively as the "Distribution Agreements") with AIM Distributors, a
registered broker-dealer and a wholly owned subsidiary of AIM, to act as the
distributor of Class A and Class B shares of the Fund. Certain Trustees and
officers of the Trust are affiliated with AIM Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right to
distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors. In
Prospectus Page 14
<PAGE>
AIM INTERNATIONAL GROWTH FUND
the event the Class B shares Distribution Agreement is terminated, AIM
Distributors would continue to receive payments of asset based sales charges in
respect of the outstanding Class B shares attributable to the distribution
efforts of AIM Distributors; provided, however, that a complete termination of
the Class B shares master distribution plan (as defined in the plan) would
terminate all payments to AIM Distributors. Termination of the Class B shares
distribution plan or Distribution Agreement does not affect the obligation of
Class B shareholders to pay contingent deferred sales charges.
DISTRIBUTION PLANS. CLASS A PLAN. The Company has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
Of the aggregate amount payable under the Class A Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee. Payments pursuant to the
Plans are subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
CLASS B PLAN. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
BOTH PLANS. Activities that may be financed under the Class A Plan and the Class
B Plan (collectively, the "Plans") include, but are not limited to: printing of
prospectuses and statements of additional information and reports for other than
existing shareholders, overhead, preparation and distribution of advertising
material and sales literature, expense of organizing and conducting sales
seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors'
Prospectus Page 15
<PAGE>
AIM INTERNATIONAL GROWTH FUND
actual expenses exceed the fee payable to AIM Distributors thereunder at any
given time, the Trust will not be obligated to pay more than that fee, and if
AIM Distributors' expenses are less than the fee it receives, AIM Distributors
will retain the full amount of the fee. Payments pursuant to the Plans are
subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
Under the Plans, AIM Distributors may in its discretion from time to time agree
to waive voluntarily all or any portion of its 12b-1 fee, while retaining its
ability to be reimbursed for such fee prior to the end of each fiscal year.
Under the Plans, certain financial institutions which have entered into service
agreements and which sell shares of the Fund on an agency basis, may receive
payments from the Fund pursuant to the respective Plans. AIM Distributors does
not act as principal, but rather as agent, for the Fund in making such payments.
The Fund will obtain a representation from such financial institutions that they
will either be licensed as dealers as required under applicable state law, or
that they will not engage in activities which would constitute acting as a
"dealer" as defined under applicable state law. Financial intermediaries and any
other person entitled to receive compensation for selling Fund shares may
receive different compensation for selling shares of one class over another.
For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of "G.T. Global Growth Series," a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series or portfolios
of the Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and
Prospectus Page 16
<PAGE>
AIM INTERNATIONAL GROWTH FUND
distributions out of the income earned and gain realized on the assets belonging
to the Fund as may be declared by the Board of Trustees. Each share of the Fund
is equal as to earnings, assets and voting privileges to each other share in the
Fund, except that each normally has exclusive voting rights with respect to its
distribution plan and bears the expenses, if any, related to the distribution of
its shares. Shares of the Fund, when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 17
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND AIM GLOBAL RESOURCES FUND
AIM ADVISOR INTERNATIONAL VALUE FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM ADVISOR LARGE CAP VALUE FUND AIM GLOBAL TRENDS FUND
AIM ADVISOR MULTIFLEX FUND AIM GLOBAL UTILITIES FUND
AIM ADVISOR REAL ESTATE FUND AIM HIGH INCOME MUNICIPAL FUND
AIM AGGRESSIVE GROWTH FUND AIM HIGH YIELD FUND
AIM AMERICA VALUE FUND AIM INCOME FUND
AIM ASIAN GROWTH FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM BALANCED FUND AIM INTERNATIONAL EQUITY FUND
AIM BLUE CHIP FUND AIM INTERNATIONAL GROWTH FUND
AIM CAPITAL DEVELOPMENT FUND AIM JAPAN GROWTH FUND
AIM CHARTER FUND AIM LATIN AMERICAN GROWTH FUND
AIM CONSTELLATION FUND AIM LIMITED MATURITY TREASURY FUND
AIM DEVELOPING MARKETS FUND AIM MID CAP GROWTH FUND
AIM DOLLAR FUND(*) AIM MONEY MARKET FUND(*)
AIM EMERGING MARKETS FUND AIM MUNICIPAL BOND FUND
AIM EUROPEAN DEVELOPMENT FUND AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND AIM SELECT GROWTH FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM SMALL CAP OPPORTUNITIES FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM GLOBAL GROWTH FUND AIM TAX-EXEMPT CASH FUND(*)
AIM GLOBAL GROWTH & INCOME FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL HEALTH CARE FUND AIM VALUE FUND
AIM GLOBAL HIGH INCOME FUND AIM WEINGARTEN FUND
AIM GLOBAL INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
asset value, without payment of a sales charge, as described below. Other
funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
FUND, are sold with an initial sales charge or subject to a contingent
deferred sales charge upon redemption, as described below.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM
Family of Funds ("AIM Funds"), an investor must submit a fully completed new
Account Application form directly to A I M Fund Services, Inc. ("AFS" or the
"Transfer Agent") or through any dealer authorized by A I M Distributors, Inc.
("AIM Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
is $500, except for accounts initially established through an Automatic
Investment Plan, which requires a special authorization form (see "Special
Plans") and for certain retirement accounts. The minimum initial investment for
accounts established with an Automatic Investment Plan is $50. The minimum
initial investment for an Individual Retirement Arrangement ("IRA") or Roth IRA
is $250. There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such
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<PAGE>
AIM INVESTOR'S GUIDE
plans is $25), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM Funds account.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Shares of any AIM Funds not named on the cover of this Prospectus, as well
as Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>
HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased
directly through AIM Distributors or through any dealer who has entered into an
agreement with AIM Distributors. The minimum investment for subsequent purchases
is $50. The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. There are no such minimum investment requirements for investment of
dividends and distributions of any of the AIM Funds into any other existing AIM
Funds account.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION-SM-: To purchase additional shares by electronic
funds transfer, please contact the Client Services Department of AFS for
details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN GROWTH FUND, AIM
BALANCED FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER
FUND, AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP GROWTH FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT
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AIM INVESTOR'S GUIDE
CASH FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without
a sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over another class in the same Multiple Class Fund. Factors an investor
should consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH
FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP EQUITY
FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
SALES CHARGES AND DEALER CONCESSIONS
GROUP I. Certain AIM Funds are currently sold with a sales charge ranging
from 5.50% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM
ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
GROWTH FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $25,000................................................................ 5.50 % 5.82 % 4.75 %
$25,000 but less than $50,000.................................................... 5.25 5.54 4.50
$50,000 but less than $100,000................................................... 4.75 4.99 4.00
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 3.00 3.09 2.50
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
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AIM INVESTOR'S GUIDE
GROUP II. Certain AIM Funds are currently sold with a sales charge ranging
from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND,
AIM BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND,
AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL HIGH INCOME FUND,
AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES
FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND FUND, AIM
STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $50,000................................................................ 4.75 % 4.99 % 4.00 %
$50,000 but less than $100,000................................................... 4.00 4.17 3.25
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 2.50 2.56 2.00
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $100,000............................................................... 1.00 % 1.01 % 0.75 %
$100,000 but less than $250,000.................................................. 0.75 0.76 0.50
$250,000 but less than $1,000,000................................................ 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus
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AIM INVESTOR'S GUIDE
payments or other consideration shall not exceed 0.25% of the public offering
price of the shares sold. Any such bonus or incentive programs will not change
the price paid by investors for the purchase of the applicable AIM Fund's shares
or the amount that any particular AIM Fund will receive as proceeds from such
sales. Dealers may not use sales of the AIM Funds' shares to qualify for any
incentives to the extent that such incentives may be prohibited by the laws of
any state.
AIM Distributors may make payments to dealers and institutions who are
dealers of record for purchases of $1 million of more of Class A shares (or
shares which normally involve payment of initial sales charges), which are sold
at net asset value and are subject to a contingent deferred sales charge, for
all AIM Funds other than Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND as follows: 1% of the first $2 million
of such purchases, plus 0.80% of the next $1 million of such purchases, plus
0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess
of $20 million of such purchases. See "Contingent Deferred Sales Charge Program
for Large Purchases." AIM Distributors may make payments to dealers and
institutions who are dealers of record for purchases of $1 million or more of
Class A shares (or shares which normally involve payment of initial sales
charges), and which are sold at net asset value and are not subject to a
contingent deferred sales charge, in an amount up to 0.10% of such purchases of
Class A shares of AIM LIMITED MATURITY TREASURY FUND, and in an amount up to
0.25% of such purchases of Class A shares of AIM TAX-FREE INTERMEDIATE FUND.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed
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<PAGE>
AIM INVESTOR'S GUIDE
during the next twelve months on Saturdays and Sundays and on the days on which
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class
Funds currently offer two or more classes of shares through separate
distribution systems (the "Multiple Distribution System"). Although each class
of shares of a particular Multiple Class Fund represents an interest in the same
portfolio of investments, each class is subject to a different distribution
structure and, as a result, differing expenses. This Multiple Distribution
System allows investors to select the class that is best suited to the
investor's needs and objectives. In considering the options afforded by the
Multiple Distribution System, investors should consider both the applicable
initial sales charge or contingent deferred sales charge, as well as the ongoing
expenses borne by each class of shares and other relevant factors, such as
whether his or her investment goals are long-term or short-term.
CLASS A SHARES generally are sold subject to the initial sales charges
described above and are subject to the other fees and expenses described
herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
needs of an investor who wishes to establish a dollar cost averaging
program, pursuant to which Class A shares an investor owns may be exchanged
at net asset value for Class A shares of another Multiple Class Fund or
shares of another AIM Fund which is not a Multiple Class Fund, subject to
the terms and conditions described under the caption "Exchange Privilege --
Terms and Conditions of Exchanges."
CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made within
the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."
Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and other distributions)
eight years from the end of the calendar month in which the purchase of
Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
outstanding on May 29, 1998 and which are continuously held by the
shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
FUND seven years from the end of the calendar month in which the purchase of
such Class B shares was made. If a shareholder exchanges Class B shares of
AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
shares will be subject to the eight year conversion feature applicable to
Class B shares of all other AIM Funds. Following such conversion of their
Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
payments associated with Class B shares. See "Management -- Distribution
Plans."
AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an initial
sales charge and are not subject to a contingent deferred sales charge;
however, they are subject to the other fees and expenses described in the
prospectus for AIM MONEY MARKET FUND.
TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon
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Eastern Time or NYSE Close on any business day of the Fund will be confirmed at
the price next determined. Net asset value is normally determined at 12:00 noon
Eastern Time and NYSE Close on each business day of AIM MONEY MARKET FUND.
SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
The term "purchaser" means:
- - an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the benefit
of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
plan (unless such 403(b) plan qualifies as the purchaser as defined below);
- - a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), provided that:
a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will
not accept contributions submitted with respect to individual
participants);
b. each transmittal must be accompanied by a single check or wire
transfer; and
c. all new participants must be added to the 403(b) plan by submitting an
application on behalf of each new participant with the contribution
transmittal;
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- - a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;
- - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or SIMPLE
IRA accounts should be linked;
- - any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or
- - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").
Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge
made during the 13-month period will be made at the public offering price
applicable to a single transaction of the total dollar amount indicated by the
LOI, as described under "Sales Charges and Dealer Concessions." It is the
purchaser's responsibility at the time of purchase to specify the account
numbers that should be considered in determining the appropriate sales charge.
The offering price may be further reduced as described under "Rights of
Accumulation" if the Transfer Agent is advised of all other accounts at the time
of the investment. Shares acquired through reinvestment of dividends and capital
gain distributions will not be applied to the LOI. At any time during the
13-month period after meeting the original obligation, a purchaser may revise
his intended investment amount upward by submitting a written and signed
request. Such a revision will not change the original expiration date. By
signing an LOI, a purchaser is not making a binding commitment to purchase
additional shares, but if purchases made within the 13-month period do not total
the amount specified, the investor will pay the increased amount of sales charge
as described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase with the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
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irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds
at net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase Class A shares of the AIM Funds through
AIM Distributors without payment of an initial sales charge: (a) A I M
Management Group Inc. ("AIM Management") and its affiliated companies; (b) any
current or retired officer, director, trustee or employee, or any member of the
immediate family (including spouse, children, parents and parents of spouse) of
any such person, of AIM Management or its affiliates or of certain mutual funds
which are advised or managed by AIM; or any trust established exclusively for
the benefit of such persons; (c) any employee benefit plan established for
employees of AIM Management or its affiliates; (d) any current or retired
officer, director, trustee or employee, or any member of
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AIM INVESTOR'S GUIDE
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, or of CIGNA Corporation or of any of its affiliated
companies, or of First Data Investor Services Group (formerly The Shareholder
Services Group, Inc.); (e) any investment company sponsored by CIGNA
Investments, Inc. or any of its affiliated companies for the benefit of its
directors' deferred compensation plans; (f) discretionary advised clients of AIM
or AIM Capital; (g) registered representatives and employees of dealers who have
entered into agreements with AIM Distributors (or financial institutions that
have arrangements with such dealers with respect to the sale of shares of the
AIM Funds) and any member of the immediate family (including spouse, children,
parents and parents of spouse) of any such person, provided that purchases at
net asset value are permitted by the policies of such person's employer; (h)
certain broker-dealers, investment advisers or bank trust departments that
provide asset allocation, similar specialized investment services or investment
company transaction services for their customers, that charge a minimum annual
fee for such services, and that have entered into an agreement with AIM
Distributors with respect to their use of the AIM Funds in connection with such
services; (i) any employee or any member of the immediate family (including
spouse, children, parents and parents of spouse) of any employee, of Triformis
Inc.; (j) shareholders of the AIM/GT Funds as of April 30, 1987 who since that
date continually have owned shares of one or more of the AIM/GT Funds; and (k)
certain former AMA Investment Advisers' shareholders who became shareholders of
the AIM Global Health Care Fund in October 1989, and who have continuously held
shares in the AIM/GT Funds since that time.
In addition, shares of any AIM Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the total amount invested in the
plan is at least $1,000,000, (2) the sponsor signs a $1,000,000 LOI, (3) such
shares are purchased by an employer-sponsored plan with at least 100 eligible
employees, or (4) all of the plan's transactions are executed through a single
financial institution or service organization who has entered into an agreement
with AIM Distributors with respect to their use of the AIM Funds in connection
with such accounts. Section 403(b) plans sponsored by public educational
institutions will not be eligible for net asset value purchases based on the
aggregate investment made by the plan or the number of eligible employees.
Participants in such plans will be eligible for reduced sales charges based
solely on the aggregate value of their individual investments in the applicable
AIM Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms for share purchases of the Load Funds (as defined under the
caption "Exchange Privilege") sold at net asset value to an employee benefit
plan in accordance with this paragraph as follows: 1% of the first $2 million of
such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50%
of the next $17 million of such purchases, plus 0.25% of amounts in excess of
$20 million of such purchases and up to 0.10% of the net asset value of any
Class A shares of AIM LIMITED MATURITY TREASURY FUND sold at net asset value to
an employee benefit plan in accordance with this paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone
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number of the dealer who sold to the unit holder the units to be redeemed or
repurchased; and (ii) states that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by the
proceeds from the redemption or repurchase of units of such trusts.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
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SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a
shareholder who owns shares which are not subject to a contingent deferred sales
charge, can arrange for monthly, quarterly or annual amounts (but not less than
$50) to be drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that exceed on an annual
basis 12% of such account will be subject to a contingent deferred sales charge
on the amounts exceeding 12% of the account value at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the
Transfer Agent and all dividends and distributions are reinvested to shares of
the applicable AIM Fund by the Transfer Agent. To provide funds for payments
made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient
full and fractional shares at their net asset value in effect at the time of
each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in
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the amount specified by the shareholder (minimum $50 per investment, per
account) and on a day or date(s) specified by the shareholder. The proceeds are
invested in shares of the designated AIM Fund at the applicable offering price
determined on the date of the withdrawal. An Automatic Investment Plan may be
discontinued upon 10 days' prior notice to the Transfer Agent or AIM
Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination money-
purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans; SARSEP
plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement accounts").
Information concerning these plans, including the custodian's fees and the forms
necessary to adopt such plans, can be obtained by calling or writing the AIM
Funds or AIM Distributors. Shares of the AIM Funds are also available for
investment through existing 401(k) plans (for both individuals and employers)
adopted under the Code. The plan custodian currently imposes an annual $10
maintenance fee with respect to each retirement account for which it serves as
the custodian. This fee is generally charged in December. Each AIM Fund and/or
the custodian reserve the right to change this maintenance fee and to initiate
an establishment fee (not to exceed its cost).
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of AIM Funds. The Program automatically rebalances
holdings of AIM Funds to the established allocation on a periodic basis. Under
the Program, a shareholder may predesignate, on a percentage basis, how the
total value of his or her holdings in a minimum of two, and a maximum of ten,
AIM Funds ("Personal Portfolio") is to be rebalanced on a quarterly, semiannual,
or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more AIM Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other AIM Funds in the
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AIM INVESTOR'S GUIDE
shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the AIM
Fund(s) in a shareholder's Personal Portfolio have appreciated during a
rebalancing period, the Program will result in shares of AIM Fund(s) that have
appreciated most during the period being exchanged for shares of AIM Fund(s)
that have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular AIM Fund would
be 2% or less. In predesignating percentages, shareholders must use whole
percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an AIM
Fund's shares. The AIM Funds and AIM Distributors reserve the right to modify,
suspend, or terminate the Program at any time on 60 days' prior written notice
to shareholders. A request to participate in the Program must be received in
good order at least five business days prior to the next rebalancing date. Once
a shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
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AIM INVESTOR'S GUIDE
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM Funds --
Sales Charges and Dealer Concessions," shares of certain of the AIM Funds,
including the Class A shares of the Multiple Class Funds, listed below and
referred to herein as the "Load Funds," are sold at a public offering price that
includes a maximum sales charge of 5.50% or 4.75% of the public offering price
of such shares; Class A shares (or shares which normally involve the payment of
initial sales charges) of certain of the AIM Funds, listed below and referred to
herein as the "Lower Load Funds," are sold at a public offering price that
includes a maximum sales charge of 1.00% of the public offering price of such
shares; and Class A shares or shares of certain other funds, listed below and
referred to herein as the "No Load Funds," are sold at net asset value, without
payment of a sales charge.
LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM ADVISOR FLEX FUND -- CLASS A
AIM ADVISOR INTERNATIONAL VALUE FUND -- CLASS A
AIM ADVISOR LARGE CAP VALUE FUND -- CLASS A
AIM ADVISOR MULTIFLEX FUND -- CLASS A
AIM ADVISOR REAL ESTATE FUND -- CLASS A
AIM AGGRESSIVE GROWTH FUND -- CLASS A
AIM AMERICA VALUE FUND -- CLASS A
AIM ASIAN GROWTH FUND -- CLASS A
AIM BALANCED FUND -- CLASS A
AIM BLUE CHIP FUND -- CLASS A
AIM CAPITAL DEVELOPMENT FUND -- CLASS A
AIM CHARTER FUND -- CLASS A
AIM CONSTELLATION FUND -- CLASS A
AIM DEVELOPING MARKETS FUND -- CLASS A
AIM EMERGING MARKETS FUND -- CLASS A
AIM EUROPE GROWTH FUND -- CLASS A
AIM EUROPEAN DEVELOPMENT FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH FUND -- CLASS A
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND -- CLASS A
AIM GLOBAL FINANCIAL SERVICES FUND -- CLASS A
AIM GLOBAL GOVERNMENT INCOME FUND -- CLASS A
AIM GLOBAL GROWTH FUND -- CLASS A
AIM GLOBAL GROWTH & INCOME FUND -- CLASS A
AIM GLOBAL HEALTH CARE FUND -- CLASS A
AIM GLOBAL HIGH INCOME FUND -- CLASS A
AIM GLOBAL INCOME FUND -- CLASS A
AIM GLOBAL INFRASTRUCTURE FUND -- CLASS A
AIM GLOBAL RESOURCES FUND -- CLASS A
AIM GLOBAL TELECOMMUNICATIONS FUND -- CLASS A
AIM GLOBAL TRENDS FUND -- CLASS A
AIM GLOBAL UTILITIES FUND -- CLASS A
AIM HIGH INCOME MUNICIPAL FUND -- CLASS A
AIM HIGH YIELD FUND -- CLASS A
AIM INCOME FUND -- CLASS A
AIM INTERMEDIATE GOVERNMENT FUND -- CLASS A
AIM INTERNATIONAL EQUITY FUND -- CLASS A
AIM INTERNATIONAL GROWTH FUND -- CLASS A
AIM JAPAN GROWTH FUND -- CLASS A
AIM LATIN AMERICAN GROWTH FUND -- CLASS A
AIM MID CAP GROWTH FUND -- CLASS A
AIM MONEY MARKET FUND -- CLASS A
AIM MUNICIPAL BOND FUND -- CLASS A
AIM NEW PACIFIC GROWTH FUND -- CLASS A
AIM SELECT GROWTH FUND -- CLASS A
AIM SMALL CAP EQUITY FUND -- CLASS A
AIM SMALL CAP OPPORTUNITIES FUND -- CLASS A
AIM STRATEGIC INCOME FUND -- CLASS A
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT -- CLASS A
AIM VALUE FUND -- CLASS A
AIM WEINGARTEN FUND -- CLASS A
AIM WORLDWIDE GROWTH FUND -- CLASS A
LOWER LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM LIMITED MATURITY TREASURY FUND -- CLASS A
AIM TAX-FREE INTERMEDIATE FUND -- CLASS A
NO LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM MONEY MARKET FUND -- AIM CASH RESERVE SHARES
AIM TAX-EXEMPT CASH FUND -- CLASS A
AIM DOLLAR FUND -- CLASS A
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE, (iii) Class A shares
may be exchanged for Class A shares, (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A shares of AIM MONEY MARKET FUND or for Class B or Class C shares.
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AIM INVESTOR'S GUIDE
DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund or acquired upon
any Lower Load Fund. exchange of
shares of any
Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
</TABLE>
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE
IS REVISED AS FOLLOWS:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value if shares were acquired Net Asset Value Net Asset Value Not Applicable Not Applicable
upon exchange of any Load Fund.
Otherwise, difference in sales charge
will apply.
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund. acquired upon
Difference in sales charge will apply if exchange of
No Load shares were acquired upon shares of any
exchange of Lower Load Fund shares. Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C.............. Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>
An exchange is permitted only in the following circumstances: (a) if the
funds offer more than one class of shares, the exchange must be between the same
class of shares (e.g., Class A, Class B and Class C shares of a Multiple Class
Fund cannot be exchanged for each other) except that AIM Cash Reserve Shares of
AIM MONEY MARKET FUND may be exchanged for Class A shares of another Multiple
Class Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten business days, and all other shares are held
in an account for at least one day, prior to the exchange; and (h) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the AIM Funds.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
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AIM INVESTOR'S GUIDE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged
are redeemed at their net asset value as determined at NYSE Close on the day
that an exchange request in proper form (described below) is received. Exchange
requests received after NYSE Close will result in the redemption of shares at
their net asset value at NYSE Close on the next business day. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase, Exchange and
Redemption Orders (AIM MONEY MARKET FUND only)" for information regarding the
timing of exchange orders for AIM MONEY MARKET FUND. Normally, shares of an AIM
Fund to be acquired by exchange are purchased at their net asset value or
applicable offering price, as the case may be, determined on the date that such
request is received, but under unusual market conditions such purchases may be
delayed for up to five business days if it is determined that a fund would be
materially disadvantaged by an immediate transfer of the proceeds of the
exchange. If a shareholder is exchanging into a fund paying daily dividends
("Dividends, Distributions and Tax Matters -- Dividends and Distributions,"
below), and the release of the exchange proceeds is delayed for the foregoing
five-day period, such shareholder will not begin to accrue dividends until the
sixth business day after the exchange. Shares purchased by check may not be
exchanged until it is determined that the check has cleared, which may take up
to ten business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. If a shareholder does not wish to allow telephone
exchanges by any person in his account, he should decline that option on the
account application. AIM Distributors has made arrangements with certain dealers
and investment advisory firms to accept telephone instructions to exchange
shares between any of the AIM Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the funds, including the condition that any such dealer or
investment advisor enter into an agreement (which contains additional conditions
with respect to exchanges of shares) with AIM Distributors. To exchange shares
by telephone, a shareholder, dealer or investment advisor who has satisfied the
foregoing conditions must call AFS at (800) 959-4246. If a shareholder is unable
to reach AFS by telephone, he may also request exchanges by telegraph or use
overnight courier services to expedite exchanges by mail, which will be
effective on the business day received by the Transfer Agent as long as such
request is received prior to NYSE Close. The Transfer Agent and AIM Distributors
will not be liable for any loss, expense or cost arising out of any telephone
exchange request that they reasonably believe to be genuine, but may in certain
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's Social Security Number and current address, and mailings of
confirmations promptly after the transaction.
EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
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AIM INVESTOR'S GUIDE
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
MULTIPLE DISTRIBUTION SYSTEM. CLASS B SHARES. Class B shares purchased
under the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS % OF DOLLAR
YEARS SINCE PURCHASE MADE AMOUNT SUBJECT TO CHARGE
- ------------------------------------------------------------------------------------------ ---------------------------
<S> <C>
First..................................................................................... 5%
Second.................................................................................... 4%
Third..................................................................................... 3%
Fourth.................................................................................... 3%
Fifth..................................................................................... 2%
Sixth..................................................................................... 1%
Seventh and Following..................................................................... None
</TABLE>
In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
CLASS C SHARES. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
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AIM INVESTOR'S GUIDE
WAIVERS. Contingent deferred sales charges on Class B and Class C shares
will be waived on redemptions (1) following the death or post-purchase
disability, as defined in Section 72(m)(7) of the Code, of a shareholder or a
settlor of a living trust (provided AIM Distributors is notified of such death
or post-purchase disability at the time of the redemption request and is
provided with satisfactory evidence of such death or post-purchase disability),
(2) in connection with certain distributions from IRAs, custodial accounts
maintained pursuant to Code Section 403(b), deferred compensation plans
qualified under Code Section 457 and plans qualified under Code Section 401
(collectively, "Retirement Plans"), (3) pursuant to a Systematic Withdrawal
Plan, provided that amounts withdrawn under such plan do not exceed on an annual
basis 12% of the value of the shareholder's investment in Class B or Class C
shares at the time the shareholder elects to participate in the Systematic
Withdrawal Plan, (4) effected pursuant to the right of a Multiple Class Fund to
liquidate a shareholder's account if the aggregate net asset value of shares
held in the account is less than the designated minimum account size described
in the prospectus of such Multiple Class Fund, (5) effected by AIM of its
investment in Class B or Class C shares and (6) of Class C shares where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payment otherwise payable to the dealer described in the last paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds."
Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
Waiver category (2) above applies only to redemptions resulting from:
(i) required minimum distributions to plan participants or beneficiaries who
are age 70 1/2 or older, and only with respect to that portion of such
distributions which does not exceed 12% annually of the participant's or
beneficiary's account value in a particular AIM Fund;
(ii) in-kind transfers of assets where the participant or beneficiary notifies
AIM Distributors of such transfer no later than the time such transfer
occurs;
(iii) tax-free rollovers or transfers of assets to another Retirement Plan
invested in Class B or Class C shares of one or more Multiple Class Funds;
(iv) tax-free returns of excess contributions or returns of excess deferral
amounts; and
(v) distributions upon the death or disability (as defined in the Code) of the
participant or beneficiary.
Shareholders who purchased Class B shares of the AIM/GT Funds or Class C
shares of AIM GLOBAL TRENDS FUND prior to June 1, 1998 are entitled to certain
additional waivers of the contingent deferred sales charge on those shares as
described in the Statement of Additional Information of each respective fund
under "How to Purchase and Redeem Shares."
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND [or Class A shares
of AIM DOLLAR FUND] which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code,
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<PAGE>
AIM INVESTOR'S GUIDE
or Plans created under Section 403(b) of the Code and sponsored by nonprofit
organizations as defined under Section 501(c)(3) of the Code, where shares are
being redeemed in connection with employee terminations or withdrawals, and (a)
the total amount invested in a Plan is at least $1,000,000, (b) the sponsor of a
Plan signs a letter of intent to invest at least $1,000,000 in one or more of
the AIM Funds, or (c) the shares being redeemed were purchased by an
employer-sponsored Plan with at least 100 eligible employees; provided, however,
that Plans created under Section 403(b) of the Code which are sponsored by
public educational institutions shall qualify under (a), (b) or (c) above on the
basis of the value of each Plan participant's aggregate investment in the AIM
Funds, and not on the aggregate investment made by the Plan or on the number of
eligible employees; (2) redemptions of shares following the death or
post-purchase disability, as defined in Section 72(m)(7) of the Code, of a
shareholder or a settlor of a living trust; (3) redemptions of shares purchased
at net asset value by private foundations or endowment funds where the initial
amount invested was at least $1,000,000; (4) redemptions of shares purchased by
an investor in amounts of $1,000,000 or more where such investor's dealer of
record, due to the nature of the investor's account, notifies AIM Distributors
prior to the time of investment that the dealer waives the payments otherwise
payable to the dealer as described in the third paragraph under the caption
"Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM Funds;"
and (5) pursuant to a Systematic Withdrawal Plan, provided that amounts
withdrawn under such plan do not exceed on an annual basis 12% of the value of
the shareholder's investment in Class A shares at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund
to establish as IRA, should include the following information along with a
written request for either partial or full liquidation of fund shares; (a) a
statement as to whether or not the shareholder has attained age 59 1/2, and (b)
a statement as to whether or not the shareholder elects to have federal income
tax withheld from the proceeds of the liquidation.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in this account, he should decline that option on the account
application. The telephone redemption feature can be used only if: (a) the
redemption proceeds are to be mailed to the address of record or transferred
electronically or wired to the pre-authorized bank account; (b) there has been
no change of address of record on the account within the preceding 30 days; (c)
the shares to be redeemed are not in certificate form; (d) the person requesting
the redemption can provide proper identification information, and (e) the
proceeds of the redemption do not exceed $50,000. Accounts in AIM Distributors'
prototype retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not
eligible for the telephone redemption option. AIM Distributors has made
arrangements with certain dealers and investment advisors to accept telephone
instructions for the redemption of shares. AIM Distributors reserves the right
to impose conditions on these dealers and investment advisors, including the
condition that they enter into agreements (which contain additional conditions
with respect to the redemption of shares) with AIM Distributors. The Transfer
Agent and AIM Distributors will not be liable for any loss, expense or cost
arising out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain
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AIM INVESTOR'S GUIDE
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's taxpayer identification number and current address, and mailings
of confirmations promptly after the transaction.
EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order
is received prior to 11:30 a.m. Eastern Time, the redemption will be effective
on that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next business day.
REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of
AIM MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing
the appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an
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AIM INVESTOR'S GUIDE
address that has been changed within the past 30 days; (5) requests to transfer
the registration of shares to another owner, (6) telephone exchange and
telephone redemption authorization forms; (7) changes in previously designated
wiring or electronic funds transfer instructions, and (8) written redemptions or
exchanges of shares previously reported as lost, whether or not the redemption
amount is under $50,000 or the proceeds are to be sent to the address of record.
These requirements may be waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within 90 days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment may alter any capital gains payable. If
there has been a loss on the redemption and shares of the same fund are
repurchased, all of the loss may not be tax deductible, depending on the timing
and amount reinvested. Under the Code, if the redemption proceeds of fund shares
on which a sales charge was paid are reinvested in shares of the same fund, or
exchanged for shares of another AIM Fund, at a reduced sales charge within 90
days of the payment of the sales charge, the shareholder's basis in the fund
shares redeemed may not include the amount of the sales charge paid, thereby
reducing the loss or increasing the gain recognized from the redemption;
however, the shareholder's basis in the fund shares purchased will include the
sales charge. Each AIM Fund may amend, suspend or cease offering the privilege
at any time as to shares redeemed after the date of such amendment, suspension
or cessation. This privilege may only be exercised once each year by a
shareholder with respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in
connection with the redemption of Class A shares and who subsequently reinvest a
portion or all of the value of the redeemed shares in Class A shares of any AIM
Fund within 90 days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is
determined as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close
with respect to AIM MONEY MARKET FUND) on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an AIM Fund's share
will be determined as of the close of the NYSE on such day. For purposes of
defining net asset value per share, futures and options contracts generally will
be valued 15 minutes after the close of trading of the NYSE. The net asset value
per share is calculated by subtracting a class' liabilities from its assets and
dividing the result by the total number of class shares outstanding. The
determination of net asset value per share is made in accordance with generally
accepted accounting principles. Among other items, liabilities include accrued
expenses and dividends payable, and total assets include portfolio securities
valued at their market value, as well as income accrued but
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AIM INVESTOR'S GUIDE
not yet received. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
supervision of the fund's officers and in accordance with methods which are
specifically authorized by its governing Board of Directors or Trustees.
Short-term obligations with maturities of 60 days or less, and the securities
held by the Money Market Funds, are valued at amortized cost as reflecting fair
value. AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOARD FUND, AIM TAX-EXEMPT
BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund's policy regarding the payment of dividends and distributions
is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND............................. declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND.............. declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.................. declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND........................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND...................... declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND........................ declared and paid annually annually annually
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND............................. declared and paid annually annually annually
AIM BALANCED FUND................................. declared and paid quarterly annually annually
AIM BLUE CHIP FUND................................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND...................... declared and paid annually annually annually
AIM CHARTER FUND.................................. declared and paid quarterly annually annually
AIM CONSTELLATION FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND..................... declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND................. declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INCOME FUND............................ declared daily; paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM GLOBAL UTILITIES FUND......................... declared daily; paid monthly annually annually
AIM HIGH INCOME MUNICIPAL FUND.................... declared daily; paid monthly annually annually
AIM HIGH YIELD FUND............................... declared daily; paid monthly annually annually
AIM INCOME FUND................................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.................. declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND..................... declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND................ declared daily; paid monthly annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM MONEY MARKET FUND............................. declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND........................... declared daily; paid monthly annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SELECT GROWTH FUND............................ declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM SMALL CAP OPPORTUNITIES FUND.................. declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT........... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.......................... declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND.................... declared daily; paid monthly annually annually
AIM VALUE FUND.................................... declared and paid annually annually annually
AIM WEINGARTEN FUND............................... declared and paid annually annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in
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AIM INVESTOR'S GUIDE
like shares of another Multiple Class Fund, to the extent permitted. For funds
that do not declare a dividend daily, such dividends and distributions will be
reinvested at the net asset value per share determined on the ex-dividend date.
For funds that declare a dividend daily, such dividends and distributions will
be reinvested at the net asset value per share determined on the payable date.
Shareholders may elect, by written notice to the Transfer Agent, to receive such
distributions, or the dividend portion thereof, in cash, or to invest such
dividends and distributions in shares of another fund in the AIM Funds; provided
that (i) dividends and distributions attributable to Class B shares may only be
reinvested in Class B shares, (ii) dividends and distributions attributable to
Class C shares may only be reinvested in Class C shares, (iii) dividends and
distributions attributable to Class A shares may not be reinvested in Class B or
Class C shares, and (iv) dividends and distributions attributable to the AIM
Cash Reserve Shares of AIM MONEY MARKET FUND may not be reinvested in the Class
A shares of that Fund or in any Class B or Class C shares. Investors who have
not previously selected such a reinvestment option on the account application
form may contact the Transfer Agent at any time to obtain a form to authorize
such reinvestments in another AIM Fund. Such reinvestments into the AIM Funds
are not subject to sales charges, and shares so purchased are automatically
credited to the account of the shareholder.
Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS--GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares, except for "exempt-interest dividends" paid by AIM HIGH INCOME MUNICIPAL
FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND (the "Tax-Exempt
Funds"), which are exempt from federal income tax. With respect to tax-exempt
shareholders, dividends and distributions from the AIM Funds are not subject to
federal income taxation to the extent permitted under the applicable tax
exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
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AIM INVESTOR'S GUIDE
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HIGH
INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH YIELD
FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be
required to include the "exempt-interest" portion of dividends paid by the
Tax-Exempt Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other
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AIM INVESTOR'S GUIDE
taxable securities. For additional information concerning the alternative
minimum tax and certain collateral tax consequences of the receipt of
exempt-interest dividends, see the Statements of Additional Information
applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP GROWTH FUND,
AIM SMALL CAP EQUITY FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH FUND --
SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do so,
each of these funds may elect to pass through to its shareholders credits for
foreign taxes paid. If a fund makes such an election, a shareholder who receives
a distribution (1) will be required to include in gross income his proportionate
share of foreign taxes allocable to the distribution and (2) may claim a credit
or deduction for such share for his taxable year in which the distribution is
received, subject to the general limitations imposed on the allowance of foreign
tax credits and deductions. Shareholders should also note that certain gains or
losses attributable to fluctuations in exchange rates or foreign currency
forward contracts may increase or decrease the amount of income of the fund
available for distribution to shareholders and should note that if, for any
fund, such losses exceed other income during a taxable year, the fund would not
be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each AIM Fund's transfer agent and
dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
A-26
<PAGE>
AIM INVESTOR'S GUIDE
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If several members of a household own shares of the same fund,
only one annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
A-27
<PAGE>
AIM INTERNATIONAL GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 9411
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[
]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM JAPAN GROWTH FUND
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM Japan Growth Fund (the "Fund"),
which is one of several series investment portfolios comprising AIM Growth
Series (the "Trust"), an open-end, series, management investment company. The
Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of issuers domiciled in Japan.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM JAPAN GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 6
Investment Objective and Policies......................................................... 7
Risk Factors.............................................................................. 10
Management................................................................................ 12
Other Information......................................................................... 15
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of issuers domiciled in Japan.
Investment Managers: The Fund is managed by AIM Advisors, Inc. ("AIM") and is sub-advised and sub-administered by INVESCO
(NY), Inc. (the "Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management
affiliates provide investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment
management group that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing presence in Asia. AIM was
organized in 1976 and, together with its subsidiaries, currently advises approximately 90 investment
company portfolios.
Purchasing Shares: Investors may select Class A or Class B shares of the Fund which are offered by this Prospectus at an
offering price that reflects differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to a separate
prospectus, the Fund also offers Advisor Class shares, which represent interests in the Fund. The
Advisor Class has different distribution arrangements.
Class A Shares: Shares are offered at net asset value plus any applicable initial sales charge.
</TABLE>
Prospectus Page 2
<PAGE>
AIM JAPAN GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B Shares: Shares are offered at net asset value without an initial sales charge and are subject to a maximum
contingent deferred sales charge of 5% on certain redemptions made within six years from the date
such shares were purchased. Class B shares automatically convert to Class A shares of the Fund eight
years following the end of the calendar month in which a purchase was made. Class B shares are
subject to higher expenses than Class A shares.
Initial investments in any class of shares must be at least $500 and additional investments must be
at least $50. The minimum initial investment is modified for investments through tax-qualified
retirement plans and accounts initially established with an Automatic Investment Plan. The
distributor of the Fund's shares is AIM Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
Suitability for Investors: An investor in Class A or Class B shares of the Fund should consider the method of purchasing shares
that is most beneficial given the amount of the purchase, the length of time the shares are expected
to be held, and other circumstances. Investors should consider whether, during the anticipated life
of their investment in the Fund, the accumulated distribution fees and any applicable contingent
deferred sales charges on Class B shares prior to conversion would be less than the initial sales
charge and accumulated distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares. To assist investors
in making this determination, the table under the caption "Table of Fees and Expenses" sets forth
examples of the charges applicable to each class of shares. Class A shares will normally be more
beneficial than Class B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase of more than $250,000
for Class B shares.
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Class A and Class B shares of the Fund may be exchanged for shares of other funds in The
AIM Family of Funds in the manner and subject to the policies and charges set forth herein. See
"Exchange Privilege."
Redeeming Shares: Class A shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, generally without charge. A contingent deferred sales charge of 1% may apply to
certain redemptions where a purchase of more than $1 million is made at net asset value. See "How to
Redeem Shares -- Contingent Deferred Sales Charge Program for Large Purchases."
</TABLE>
Prospectus Page 3
<PAGE>
AIM JAPAN GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, less a contingent deferred sales charge for redemptions made within six years from
the date such shares were purchased. Class B shares redeemed after six years from the date such
shares were purchased will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters" and "Special Plans."
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
The Fund invests primarily in foreign securities. Investments in foreign securities involve risks
relating to political and economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates also may affect the
Fund's net asset value, earnings and gains and losses realized on sales of securities.
The Fund invests a significant portion of its assets in issuers in a particular country. As a result,
the Fund may be subject to greater risks and may experience greater volatility than a fund that is
more broadly diversified geographically.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 4
<PAGE>
AIM JAPAN GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Class A and Class B shares of the Fund are
reflected in the following table (1):
<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION COSTS (2):
Maximum sales charge on purchases (as a % of
offering price).................................. 5.50% None
Sales charges on reinvested distributions to
shareholders..................................... None None
Maximum deferred sales charge (as a % of net asset
value at time of purchase or sale, whichever is
less)............................................ None 5.00%
Redemption charges................................ None None
Exchange fees..................................... None None
ANNUAL FUND OPERATING EXPENSES (3):
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees..... 0.98% 0.98%
12b-1 distribution and service fees............... 0.35% 1.00%
Other expenses (after reimbursement (includes
interest expense not subject to
reimbursement)).................................. 0.67% 0.67%
------- -------
Total Fund Operating Expenses..................... 2.00% 2.65%
------- -------
------- -------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (7):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS(6)
------ ------- ------- -----------
<S> <C> <C> <C> <C>
Class A shares (4).................................... $74 $115 $158 $277
Class B shares
Assuming a complete redemption at end of period
(5)................................................ $78 $115 $165 $285
Assuming no redemption.............................. $27 $ 83 $142 $285
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. rules regarding investment companies.
(2) Sales charge waivers are available for Class A and Class B shares, and
reduced sales charge purchase plans are available for Class A shares. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase. The charge generally
declines by 1% annually thereafter, reaching zero after six years. See
"Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
Sales Charges."
(3) Expenses are based on the Fund's fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 2.00% and 2.65% of the average daily net
assets of the Fund's Class A and Class B shares, respectively. "Other
expenses" include custody, transfer agency, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information. With respect to Class A shares, without
reimbursements, "Other expenses" and "Total Fund Operating Expenses" would
have been 0.73% and 2.06%, respectively, for the Fund. With respect to Class
B shares, without reimbursements, "Other expenses" and "Total Fund Operating
Expenses" would have been 0.73% and 2.71%, respectively, for the Fund.
(4) Assumes payment of maximum sales charge by the investor.
(5) Assumes deduction of the applicable contingent deferred sales charge.
(6) For Class B shares, this number reflects the conversion to Class A shares
eight years following the end of the calendar month in which a purchase was
made.
(7) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT
EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the assumption
in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 5
<PAGE>
AIM JAPAN GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information.
AIM JAPAN GROWTH FUND
(FORMERLY GT GLOBAL JAPAN GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. Standardized total return for Class
A shares reflects the deduction of the Fund's maximum front-end sales charge at
the time of purchase. Standardized total return for Class B shares reflects the
deduction of the maximum applicable contingent deferred sales charge on a
redemption of shares held for the period.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 6
<PAGE>
AIM JAPAN GROWTH FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The Fund seeks long-term growth of capital. The Fund seeks its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of issuers domiciled in Japan. Equity securities in which the
Fund may invest include common stocks, preferred stocks, convertible debt
securities and warrants to acquire such securities. There can be no assurance
that the Fund will achieve its investment objective.
The Fund is designed for investors wishing to concentrate their investment in
the Japanese market but still desiring the professional management, liquidity
and diversification afforded by a mutual fund.
The Japan Fund may invest up to 35% of its total assets in the equity securities
of issuers domiciled outside of Japan. Such investments may include: (a)
securities of issuers in countries that are not located in Japan but are linked
by tradition, economic markets, cultural similarities or geography to Japan; and
(b) securities of issuers located elsewhere in the world that have operations in
Japan or that stand to benefit from political and economic events in Japan.
The Fund may invest up to 35% of its total assets in debt securities, including
U.S. and foreign government securities and corporate debt securities, Samurai
and Yankee bonds, Eurobonds and Depository Receipts. The issuers of such debt
securities may or may not be domiciled in Japan. The Fund will limit its
purchases of debt securities to investment grade obligations. "Investment grade"
debt refers to those securities rated within one of the four highest ratings
categories by Moody's Investors Service, Inc. ("Moody's") or by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or, if not
similarly rated by any other nationally recognized statistical rating
organization ("NRSRO"), deemed by the Sub-adviser to be of equivalent quality.
Debt rated Baa by Moody's, which is the lowest category of investment grade
debt, is considered by Moody's to have speculative characteristics. See the
Statement of Additional Information for a description of Moody's and S&P
ratings.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Fund, the Sub-adviser seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth rates. The Sub-adviser further
attempts to identify those companies in such countries and industries that are
best positioned and managed to take advantage of these economic and political
factors. The Sub-adviser intends to invest in such markets only after balancing
the potential for growth of selected companies in each market relative to the
risks of investing in each such country. Among the factors to be considered are
that several of the markets are so-called developing countries, and their
economies and markets are less developed and more prone to uncertainty,
instability and risk than those of the other markets in which the Fund invests.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in Japan if it is (a) organized under the laws of, or has its principal office
in Japan or (b) normally derives 50% or more of its total revenues from business
in Japan, provided that, in the Sub-adviser's view, the value of such issuer's
securities tends to reflect Japan's development to a greater extent than
developments elsewhere. However, these are not absolute requirements, and
certain companies incorporated in Japan and considered by the Sub-adviser to be
located in Japan may have substantial foreign operations or subsidiaries and/or
export sales exceeding in size the assets or sales in Japan.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies
Prospectus Page 7
<PAGE>
AIM JAPAN GROWTH FUND
other than the U.S. dollar or in multinational currency units are evaluated on
the strength of the particular currency against the U.S. dollar as well as on
the current and expected levels of interest rates in the country or countries.
In addition to the foregoing, the Fund may seek to take advantage of differences
in relative values of fixed income securities among various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency units
such as Euros) and/or high quality debt securities or money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, most or all investments of the Fund may be made in
the United States and denominated in U.S. dollars. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units such as Euros) and may invest
in high quality foreign or domestic money market instruments. For a description
of money market instruments, see "Temporary Defensive Strategies" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Fund may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Fund's borrowings exceed 5% of its
total assets. Any borrowing by the Fund may cause greater fluctuation in the
value of its shares than would be the case if the Fund did not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is
Prospectus Page 8
<PAGE>
AIM JAPAN GROWTH FUND
made. While a loan is outstanding, the borrower must maintain with the Fund's
custodian collateral consisting of cash, U.S. government securities or certain
irrevocable letters of credit equal to at least the value of the borrowed
securities, plus any accrued interest or such other collateral as permitted by
the Fund's investment program and regulatory agencies, and as approved by the
Board. The risks in lending portfolio securities, as with other extensions of
secured credit, consist of possible delay in receiving additional collateral or
in recovery of the securities and possible loss of rights in the collateral
should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Forward Currency Strategies" herein and the Statement of Additional
Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Funds also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
AMERICAN DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in
Prospectus Page 9
<PAGE>
AIM JAPAN GROWTH FUND
U.S. securities markets. See "Investment Objectives and Policies -- Depository
Receipts" in the Statement of Additional Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Trust's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
FOREIGN INVESTING. The Fund invests primarily in foreign securities. Investing
in foreign securities entails certain risks. The securities of non-U.S. issuers
generally will not be registered with, nor will the issuers thereof be subject
to, the reporting requirements of the SEC. Accordingly, there may be less
publicly available information about foreign securities and issuers than is
available about domestic securities and issuers. Foreign companies generally are
not subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
Securities of some foreign companies are less liquid and their prices may be
more volatile than securities of comparable domestic companies. In addition,
certain costs attributable to foreign investing, such as custody charges, are
higher than those attributable to domestic investing. The Fund's interest and
dividends from foreign issuers may be subject to non-U.S. withholding taxes,
thereby reducing its net investment income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the repatriation of
assets of the Fund, political or social instability, or diplomatic developments
that could affect their investments in those countries. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, rate of
savings and capital reinvestment, resource self-sufficiency and balance of
payments positions.
Because the Fund may invest substantially in securities denominated in
currencies other than the U.S. dollar, and because it may hold foreign
currencies, it will be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between such currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Fund's shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund. Currencies generally are
evaluated on the basis of fundamental economic criteria (e.g., relative
inflation and interest rate levels and trends, growth rate forecasts, balance of
payments status and economic policies) as well as technical and
Prospectus Page 10
<PAGE>
AIM JAPAN GROWTH FUND
political data. The exchange rates between the U.S. dollar and other currencies
are determined by supply and demand in the currency exchange markets, the
international balance of payments, governmental intervention, speculation and
other economic and political conditions. If the currency in which a security is
denominated appreciates against the U.S. dollar, the dollar value of the
security will increase. Conversely, a decline in the exchange rate of the
currency would adversely affect the value of the security expressed in U.S.
dollars.
CONCENTRATION. The Fund invests a significant portion of its assets in a
particular country. As a result, the Fund may be subject to greater risks and
may experience greater volatility than a fund that is more broadly diversified
geographically.
JAPAN. The Fund invests primarily in equity securities of issuers domiciled in
Japan. Accordingly, the Fund's performance will be closely tied to economic and
political conditions in Japan, and its performance is expected to be more
volatile than more geographically diversified funds. Changes in regulatory, tax
or economic policy in Japan could significantly affect the Japanese securities
markets and therefore the Fund's performance.
Japan's economic growth has declined significantly since 1990. The general
government position has deteriorated as result of weakening economic growth and
stimulative measures taken to support economic activity and to restore financial
stability. Although the decline in interest rates and fiscal stimulation
packages have helped to contain recessionary forces, uncertainties remain. Japan
is also heavily dependent upon international trade, so its economy is especially
sensitive to trade barriers and disputes.
The common stocks of many Japanese companies trade at high price-earnings
ratios, which may be attributable in part to inefficiencies associated with
Japanese corporate operations. Differences in accounting methods make it
difficult to compare the earnings of Japanese companies with those of companies
in other countries, especially the United States. In general, however, reported
net income in Japan is understated relative to U.S. accounting standards and
this is one reason why price-earnings ratios of the stocks of Japanese companies
have tended historically to be higher than those for U.S. stocks. In addition,
Japanese companies have tended to have higher growth rates than U.S. companies,
and Japanese interest rates have generally been lower than in the United States,
both of which factors tend to result in lower discount rates and higher
price-earnings ratios in Japan than in the United States.
The Japanese securities markets are less regulated than those in the United
States. Evidence has emerged from time to time of distortion of market prices to
serve political or other purposes. Shareholders' rights are also not always
equally enforced.
In addition, Japan's banking industry is undergoing problems related to bad
loans and declining values in real estate.
OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACTS. Although the Fund is authorized
to enter into options, futures and forward currency transactions it might not
enter into any such transactions. Options, futures and foreign currency
transactions involve certain risks, which include: (1) dependence on the
Sub-adviser's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts or options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
Prospectus Page 11
<PAGE>
AIM JAPAN GROWTH FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund, including
the investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund are delegated to the officers of the Trust, subject
always to the investment objective and policies of the Fund and to the general
supervision of the Trust's Board. See "Trustees and Executive Officers" in the
Statement of Additional Information for information on the Trustees of the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million and .90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 2.00%
and 2.65% of the average daily net assets of the Fund's Class A and Class B
shares, respectively.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administrative services agreement, dated as of May 29, 1998 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises approximately 90 investment company portfolios encompassing a
broad range of investment objectives. The Sub-adviser, 50 California Street,
27th Floor, San Francisco, California 94111, and 1166 Avenue of the Americas,
New York, New York 10036, serves as the sub-adviser to the Fund pursuant to an
investment sub-advisory and sub-administrative agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
Prospectus Page 12
<PAGE>
AIM JAPAN GROWTH FUND
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Fund, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Andrew Callender Portfolio Manager since Head of Investments for Japan and Portfolio Manager for the
Tokyo 1997 Sub-adviser and INVESCO GT Asset Management Japan Ltd. (Tokyo), an
affiliate of the Sub-adviser, since 1997. Portfolio Manager for
INVESCO GT Asset Management Japan Ltd. from 1990 to 1997.
</TABLE>
------------------------
In placing orders for the Fund's portfolio securities transactions, the
Sub-adviser seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-adviser may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions for the Fund may
be executed through affiliates of AIM or the Sub-adviser. High portfolio
turnover (over 100%) involves correspondingly greater brokerage commissions and
other transaction costs that the Fund will bear directly and could result in the
realization of net capital gains that would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 on behalf of Class A shares of the Fund, and has entered into a
Master Distribution Agreement, dated May 29, 1998, on behalf of Class B shares
of the Fund (individually referred to as a "Distribution Agreement" or
collectively as the "Distribution Agreements.") with AIM Distributors, a
registered broker-dealer and a wholly owned subsidiary of AIM, to act as the
distributor of Class A and Class B shares of the Fund. Certain Trustees and
officers of the Trust are affiliated with AIM Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right to
distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset based
sales charges in respect of the outstanding Class B shares attributable to the
distribution efforts of AIM Distributors; provided, however, that a complete
termination of the Class B shares master distribution plan (as defined in the
plan) would terminate all payments to AIM Distributors. Termination of the Class
B shares distribution plan or Distribution Agreement does not affect the
obligation of Class B shareholders to pay contingent deferred sales charges.
DISTRIBUTION PLANS. CLASS A PLAN. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
Prospectus Page 13
<PAGE>
AIM JAPAN GROWTH FUND
Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
Of the aggregate amount payable under the Class A Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee. Payments pursuant to the
Plans are subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
CLASS B PLAN. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
BOTH PLANS. Activities that may be financed under the Class A Plan and the Class
B Plan (collectively, the "Plans") include, but are not limited to: printing of
prospectuses and statements of additional information and reports for other than
existing shareholders, overhead, preparation and distribution of advertising
material and sales literature, expense of organizing and conducting sales
seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
Under the Plans, AIM Distributors may in its discretion from time to time agree
to waive voluntarily all or any portion of its 12b-1 fee, while retaining its
ability to be reimbursed for such fee prior to the end of each fiscal year.
Prospectus Page 14
<PAGE>
AIM JAPAN GROWTH FUND
Under the Plans, certain financial institutions which have entered into service
agreements and which sell shares of the Fund on an agency basis, may receive
payments from the Fund pursuant to the respective Plans. AIM Distributors does
not act as principal, but rather as agent, for the Fund in making such payments.
The Fund will obtain a representation from such financial institutions that they
will either be licensed as dealers as required under applicable state law, or
that they will not engage in activities which would constitute acting as a
"dealer" as defined under applicable state law. Financial intermediaries and any
other person entitled to receive compensation for selling Fund shares may
receive different compensation for selling shares of one class over another.
For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets and assumed the
liabilities of "G.T. Global Growth Series", a Massachusetts business trust. The
Fund constitutes one of the eight separate and distinct series or portfolios of
the Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 15
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND AIM GLOBAL RESOURCES FUND
AIM ADVISOR INTERNATIONAL VALUE FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM ADVISOR LARGE CAP VALUE FUND AIM GLOBAL TRENDS FUND
AIM ADVISOR MULTIFLEX FUND AIM GLOBAL UTILITIES FUND
AIM ADVISOR REAL ESTATE FUND AIM HIGH INCOME MUNICIPAL FUND
AIM AGGRESSIVE GROWTH FUND AIM HIGH YIELD FUND
AIM AMERICA VALUE FUND AIM INCOME FUND
AIM ASIAN GROWTH FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM BALANCED FUND AIM INTERNATIONAL EQUITY FUND
AIM BLUE CHIP FUND AIM INTERNATIONAL GROWTH FUND
AIM CAPITAL DEVELOPMENT FUND AIM JAPAN GROWTH FUND
AIM CHARTER FUND AIM LATIN AMERICAN GROWTH FUND
AIM CONSTELLATION FUND AIM LIMITED MATURITY TREASURY FUND
AIM DEVELOPING MARKETS FUND AIM MID CAP GROWTH FUND
AIM DOLLAR FUND(*) AIM MONEY MARKET FUND(*)
AIM EMERGING MARKETS FUND AIM MUNICIPAL BOND FUND
AIM EUROPEAN DEVELOPMENT FUND AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND AIM SELECT GROWTH FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM SMALL CAP OPPORTUNITIES FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM GLOBAL GROWTH FUND AIM TAX-EXEMPT CASH FUND(*)
AIM GLOBAL GROWTH & INCOME FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL HEALTH CARE FUND AIM VALUE FUND
AIM GLOBAL HIGH INCOME FUND AIM WEINGARTEN FUND
AIM GLOBAL INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
asset value, without payment of a sales charge, as described below. Other
funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
FUND, are sold with an initial sales charge or subject to a contingent
deferred sales charge upon redemption, as described below.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM
Family of Funds ("AIM Funds"), an investor must submit a fully completed new
Account Application form directly to A I M Fund Services, Inc. ("AFS" or the
"Transfer Agent") or through any dealer authorized by A I M Distributors, Inc.
("AIM Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
is $500, except for accounts initially established through an Automatic
Investment Plan, which requires a special authorization form (see "Special
Plans") and for certain retirement accounts. The minimum initial investment for
accounts established with an Automatic Investment Plan is $50. The minimum
initial investment for an Individual Retirement Arrangement ("IRA") or Roth IRA
is $250. There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such
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AIM INVESTOR'S GUIDE
plans is $25), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM Funds account.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Shares of any AIM Funds not named on the cover of this Prospectus, as well
as Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>
HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased
directly through AIM Distributors or through any dealer who has entered into an
agreement with AIM Distributors. The minimum investment for subsequent purchases
is $50. The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. There are no such minimum investment requirements for investment of
dividends and distributions of any of the AIM Funds into any other existing AIM
Funds account.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION-SM-: To purchase additional shares by electronic
funds transfer, please contact the Client Services Department of AFS for
details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN GROWTH FUND, AIM
BALANCED FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER
FUND, AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP GROWTH FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT
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AIM INVESTOR'S GUIDE
CASH FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without
a sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over another class in the same Multiple Class Fund. Factors an investor
should consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH
FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP EQUITY
FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
SALES CHARGES AND DEALER CONCESSIONS
GROUP I. Certain AIM Funds are currently sold with a sales charge ranging
from 5.50% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM
ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
GROWTH FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $25,000................................................................ 5.50 % 5.82 % 4.75 %
$25,000 but less than $50,000.................................................... 5.25 5.54 4.50
$50,000 but less than $100,000................................................... 4.75 4.99 4.00
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 3.00 3.09 2.50
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
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AIM INVESTOR'S GUIDE
GROUP II. Certain AIM Funds are currently sold with a sales charge ranging
from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND,
AIM BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND,
AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL HIGH INCOME FUND,
AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES
FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND FUND, AIM
STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $50,000................................................................ 4.75 % 4.99 % 4.00 %
$50,000 but less than $100,000................................................... 4.00 4.17 3.25
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 2.50 2.56 2.00
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $100,000............................................................... 1.00 % 1.01 % 0.75 %
$100,000 but less than $250,000.................................................. 0.75 0.76 0.50
$250,000 but less than $1,000,000................................................ 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus
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AIM INVESTOR'S GUIDE
payments or other consideration shall not exceed 0.25% of the public offering
price of the shares sold. Any such bonus or incentive programs will not change
the price paid by investors for the purchase of the applicable AIM Fund's shares
or the amount that any particular AIM Fund will receive as proceeds from such
sales. Dealers may not use sales of the AIM Funds' shares to qualify for any
incentives to the extent that such incentives may be prohibited by the laws of
any state.
AIM Distributors may make payments to dealers and institutions who are
dealers of record for purchases of $1 million of more of Class A shares (or
shares which normally involve payment of initial sales charges), which are sold
at net asset value and are subject to a contingent deferred sales charge, for
all AIM Funds other than Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND as follows: 1% of the first $2 million
of such purchases, plus 0.80% of the next $1 million of such purchases, plus
0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess
of $20 million of such purchases. See "Contingent Deferred Sales Charge Program
for Large Purchases." AIM Distributors may make payments to dealers and
institutions who are dealers of record for purchases of $1 million or more of
Class A shares (or shares which normally involve payment of initial sales
charges), and which are sold at net asset value and are not subject to a
contingent deferred sales charge, in an amount up to 0.10% of such purchases of
Class A shares of AIM LIMITED MATURITY TREASURY FUND, and in an amount up to
0.25% of such purchases of Class A shares of AIM TAX-FREE INTERMEDIATE FUND.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed
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<PAGE>
AIM INVESTOR'S GUIDE
during the next twelve months on Saturdays and Sundays and on the days on which
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class
Funds currently offer two or more classes of shares through separate
distribution systems (the "Multiple Distribution System"). Although each class
of shares of a particular Multiple Class Fund represents an interest in the same
portfolio of investments, each class is subject to a different distribution
structure and, as a result, differing expenses. This Multiple Distribution
System allows investors to select the class that is best suited to the
investor's needs and objectives. In considering the options afforded by the
Multiple Distribution System, investors should consider both the applicable
initial sales charge or contingent deferred sales charge, as well as the ongoing
expenses borne by each class of shares and other relevant factors, such as
whether his or her investment goals are long-term or short-term.
CLASS A SHARES generally are sold subject to the initial sales charges
described above and are subject to the other fees and expenses described
herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
needs of an investor who wishes to establish a dollar cost averaging
program, pursuant to which Class A shares an investor owns may be exchanged
at net asset value for Class A shares of another Multiple Class Fund or
shares of another AIM Fund which is not a Multiple Class Fund, subject to
the terms and conditions described under the caption "Exchange Privilege --
Terms and Conditions of Exchanges."
CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made within
the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."
Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and other distributions)
eight years from the end of the calendar month in which the purchase of
Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
outstanding on May 29, 1998 and which are continuously held by the
shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
FUND seven years from the end of the calendar month in which the purchase of
such Class B shares was made. If a shareholder exchanges Class B shares of
AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
shares will be subject to the eight year conversion feature applicable to
Class B shares of all other AIM Funds. Following such conversion of their
Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
payments associated with Class B shares. See "Management -- Distribution
Plans."
AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an initial
sales charge and are not subject to a contingent deferred sales charge;
however, they are subject to the other fees and expenses described in the
prospectus for AIM MONEY MARKET FUND.
TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon
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Eastern Time or NYSE Close on any business day of the Fund will be confirmed at
the price next determined. Net asset value is normally determined at 12:00 noon
Eastern Time and NYSE Close on each business day of AIM MONEY MARKET FUND.
SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
The term "purchaser" means:
- - an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the benefit
of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
plan (unless such 403(b) plan qualifies as the purchaser as defined below);
- - a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), provided that:
a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will
not accept contributions submitted with respect to individual
participants);
b. each transmittal must be accompanied by a single check or wire
transfer; and
c. all new participants must be added to the 403(b) plan by submitting an
application on behalf of each new participant with the contribution
transmittal;
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- - a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;
- - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or SIMPLE
IRA accounts should be linked;
- - any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or
- - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").
Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge
made during the 13-month period will be made at the public offering price
applicable to a single transaction of the total dollar amount indicated by the
LOI, as described under "Sales Charges and Dealer Concessions." It is the
purchaser's responsibility at the time of purchase to specify the account
numbers that should be considered in determining the appropriate sales charge.
The offering price may be further reduced as described under "Rights of
Accumulation" if the Transfer Agent is advised of all other accounts at the time
of the investment. Shares acquired through reinvestment of dividends and capital
gain distributions will not be applied to the LOI. At any time during the
13-month period after meeting the original obligation, a purchaser may revise
his intended investment amount upward by submitting a written and signed
request. Such a revision will not change the original expiration date. By
signing an LOI, a purchaser is not making a binding commitment to purchase
additional shares, but if purchases made within the 13-month period do not total
the amount specified, the investor will pay the increased amount of sales charge
as described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase with the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
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irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds
at net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase Class A shares of the AIM Funds through
AIM Distributors without payment of an initial sales charge: (a) A I M
Management Group Inc. ("AIM Management") and its affiliated companies; (b) any
current or retired officer, director, trustee or employee, or any member of the
immediate family (including spouse, children, parents and parents of spouse) of
any such person, of AIM Management or its affiliates or of certain mutual funds
which are advised or managed by AIM; or any trust established exclusively for
the benefit of such persons; (c) any employee benefit plan established for
employees of AIM Management or its affiliates; (d) any current or retired
officer, director, trustee or employee, or any member of
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AIM INVESTOR'S GUIDE
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, or of CIGNA Corporation or of any of its affiliated
companies, or of First Data Investor Services Group (formerly The Shareholder
Services Group, Inc.); (e) any investment company sponsored by CIGNA
Investments, Inc. or any of its affiliated companies for the benefit of its
directors' deferred compensation plans; (f) discretionary advised clients of AIM
or AIM Capital; (g) registered representatives and employees of dealers who have
entered into agreements with AIM Distributors (or financial institutions that
have arrangements with such dealers with respect to the sale of shares of the
AIM Funds) and any member of the immediate family (including spouse, children,
parents and parents of spouse) of any such person, provided that purchases at
net asset value are permitted by the policies of such person's employer; (h)
certain broker-dealers, investment advisers or bank trust departments that
provide asset allocation, similar specialized investment services or investment
company transaction services for their customers, that charge a minimum annual
fee for such services, and that have entered into an agreement with AIM
Distributors with respect to their use of the AIM Funds in connection with such
services; (i) any employee or any member of the immediate family (including
spouse, children, parents and parents of spouse) of any employee, of Triformis
Inc.; (j) shareholders of the AIM/GT Funds as of April 30, 1987 who since that
date continually have owned shares of one or more of the AIM/GT Funds; and (k)
certain former AMA Investment Advisers' shareholders who became shareholders of
the AIM Global Health Care Fund in October 1989, and who have continuously held
shares in the AIM/GT Funds since that time.
In addition, shares of any AIM Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the total amount invested in the
plan is at least $1,000,000, (2) the sponsor signs a $1,000,000 LOI, (3) such
shares are purchased by an employer-sponsored plan with at least 100 eligible
employees, or (4) all of the plan's transactions are executed through a single
financial institution or service organization who has entered into an agreement
with AIM Distributors with respect to their use of the AIM Funds in connection
with such accounts. Section 403(b) plans sponsored by public educational
institutions will not be eligible for net asset value purchases based on the
aggregate investment made by the plan or the number of eligible employees.
Participants in such plans will be eligible for reduced sales charges based
solely on the aggregate value of their individual investments in the applicable
AIM Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms for share purchases of the Load Funds (as defined under the
caption "Exchange Privilege") sold at net asset value to an employee benefit
plan in accordance with this paragraph as follows: 1% of the first $2 million of
such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50%
of the next $17 million of such purchases, plus 0.25% of amounts in excess of
$20 million of such purchases and up to 0.10% of the net asset value of any
Class A shares of AIM LIMITED MATURITY TREASURY FUND sold at net asset value to
an employee benefit plan in accordance with this paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone
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number of the dealer who sold to the unit holder the units to be redeemed or
repurchased; and (ii) states that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by the
proceeds from the redemption or repurchase of units of such trusts.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a
shareholder who owns shares which are not subject to a contingent deferred sales
charge, can arrange for monthly, quarterly or annual amounts (but not less than
$50) to be drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that exceed on an annual
basis 12% of such account will be subject to a contingent deferred sales charge
on the amounts exceeding 12% of the account value at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the
Transfer Agent and all dividends and distributions are reinvested to shares of
the applicable AIM Fund by the Transfer Agent. To provide funds for payments
made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient
full and fractional shares at their net asset value in effect at the time of
each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in
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the amount specified by the shareholder (minimum $50 per investment, per
account) and on a day or date(s) specified by the shareholder. The proceeds are
invested in shares of the designated AIM Fund at the applicable offering price
determined on the date of the withdrawal. An Automatic Investment Plan may be
discontinued upon 10 days' prior notice to the Transfer Agent or AIM
Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination money-
purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans; SARSEP
plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement accounts").
Information concerning these plans, including the custodian's fees and the forms
necessary to adopt such plans, can be obtained by calling or writing the AIM
Funds or AIM Distributors. Shares of the AIM Funds are also available for
investment through existing 401(k) plans (for both individuals and employers)
adopted under the Code. The plan custodian currently imposes an annual $10
maintenance fee with respect to each retirement account for which it serves as
the custodian. This fee is generally charged in December. Each AIM Fund and/or
the custodian reserve the right to change this maintenance fee and to initiate
an establishment fee (not to exceed its cost).
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of AIM Funds. The Program automatically rebalances
holdings of AIM Funds to the established allocation on a periodic basis. Under
the Program, a shareholder may predesignate, on a percentage basis, how the
total value of his or her holdings in a minimum of two, and a maximum of ten,
AIM Funds ("Personal Portfolio") is to be rebalanced on a quarterly, semiannual,
or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more AIM Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other AIM Funds in the
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shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the AIM
Fund(s) in a shareholder's Personal Portfolio have appreciated during a
rebalancing period, the Program will result in shares of AIM Fund(s) that have
appreciated most during the period being exchanged for shares of AIM Fund(s)
that have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular AIM Fund would
be 2% or less. In predesignating percentages, shareholders must use whole
percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an AIM
Fund's shares. The AIM Funds and AIM Distributors reserve the right to modify,
suspend, or terminate the Program at any time on 60 days' prior written notice
to shareholders. A request to participate in the Program must be received in
good order at least five business days prior to the next rebalancing date. Once
a shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
A-13
<PAGE>
AIM INVESTOR'S GUIDE
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM Funds --
Sales Charges and Dealer Concessions," shares of certain of the AIM Funds,
including the Class A shares of the Multiple Class Funds, listed below and
referred to herein as the "Load Funds," are sold at a public offering price that
includes a maximum sales charge of 5.50% or 4.75% of the public offering price
of such shares; Class A shares (or shares which normally involve the payment of
initial sales charges) of certain of the AIM Funds, listed below and referred to
herein as the "Lower Load Funds," are sold at a public offering price that
includes a maximum sales charge of 1.00% of the public offering price of such
shares; and Class A shares or shares of certain other funds, listed below and
referred to herein as the "No Load Funds," are sold at net asset value, without
payment of a sales charge.
LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM ADVISOR FLEX FUND -- CLASS A
AIM ADVISOR INTERNATIONAL VALUE FUND -- CLASS A
AIM ADVISOR LARGE CAP VALUE FUND -- CLASS A
AIM ADVISOR MULTIFLEX FUND -- CLASS A
AIM ADVISOR REAL ESTATE FUND -- CLASS A
AIM AGGRESSIVE GROWTH FUND -- CLASS A
AIM AMERICA VALUE FUND -- CLASS A
AIM ASIAN GROWTH FUND -- CLASS A
AIM BALANCED FUND -- CLASS A
AIM BLUE CHIP FUND -- CLASS A
AIM CAPITAL DEVELOPMENT FUND -- CLASS A
AIM CHARTER FUND -- CLASS A
AIM CONSTELLATION FUND -- CLASS A
AIM DEVELOPING MARKETS FUND -- CLASS A
AIM EMERGING MARKETS FUND -- CLASS A
AIM EUROPE GROWTH FUND -- CLASS A
AIM EUROPEAN DEVELOPMENT FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH FUND -- CLASS A
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND -- CLASS A
AIM GLOBAL FINANCIAL SERVICES FUND -- CLASS A
AIM GLOBAL GOVERNMENT INCOME FUND -- CLASS A
AIM GLOBAL GROWTH FUND -- CLASS A
AIM GLOBAL GROWTH & INCOME FUND -- CLASS A
AIM GLOBAL HEALTH CARE FUND -- CLASS A
AIM GLOBAL HIGH INCOME FUND -- CLASS A
AIM GLOBAL INCOME FUND -- CLASS A
AIM GLOBAL INFRASTRUCTURE FUND -- CLASS A
AIM GLOBAL RESOURCES FUND -- CLASS A
AIM GLOBAL TELECOMMUNICATIONS FUND -- CLASS A
AIM GLOBAL TRENDS FUND -- CLASS A
AIM GLOBAL UTILITIES FUND -- CLASS A
AIM HIGH INCOME MUNICIPAL FUND -- CLASS A
AIM HIGH YIELD FUND -- CLASS A
AIM INCOME FUND -- CLASS A
AIM INTERMEDIATE GOVERNMENT FUND -- CLASS A
AIM INTERNATIONAL EQUITY FUND -- CLASS A
AIM INTERNATIONAL GROWTH FUND -- CLASS A
AIM JAPAN GROWTH FUND -- CLASS A
AIM LATIN AMERICAN GROWTH FUND -- CLASS A
AIM MID CAP GROWTH FUND -- CLASS A
AIM MONEY MARKET FUND -- CLASS A
AIM MUNICIPAL BOND FUND -- CLASS A
AIM NEW PACIFIC GROWTH FUND -- CLASS A
AIM SELECT GROWTH FUND -- CLASS A
AIM SMALL CAP EQUITY FUND -- CLASS A
AIM SMALL CAP OPPORTUNITIES FUND -- CLASS A
AIM STRATEGIC INCOME FUND -- CLASS A
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT -- CLASS A
AIM VALUE FUND -- CLASS A
AIM WEINGARTEN FUND -- CLASS A
AIM WORLDWIDE GROWTH FUND -- CLASS A
LOWER LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM LIMITED MATURITY TREASURY FUND -- CLASS A
AIM TAX-FREE INTERMEDIATE FUND -- CLASS A
NO LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM MONEY MARKET FUND -- AIM CASH RESERVE SHARES
AIM TAX-EXEMPT CASH FUND -- CLASS A
AIM DOLLAR FUND -- CLASS A
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE, (iii) Class A shares
may be exchanged for Class A shares, (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A shares of AIM MONEY MARKET FUND or for Class B or Class C shares.
A-14
<PAGE>
AIM INVESTOR'S GUIDE
DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund or acquired upon
any Lower Load Fund. exchange of
shares of any
Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
</TABLE>
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE
IS REVISED AS FOLLOWS:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value if shares were acquired Net Asset Value Net Asset Value Not Applicable Not Applicable
upon exchange of any Load Fund.
Otherwise, difference in sales charge
will apply.
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund. acquired upon
Difference in sales charge will apply if exchange of
No Load shares were acquired upon shares of any
exchange of Lower Load Fund shares. Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C.............. Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>
An exchange is permitted only in the following circumstances: (a) if the
funds offer more than one class of shares, the exchange must be between the same
class of shares (e.g., Class A, Class B and Class C shares of a Multiple Class
Fund cannot be exchanged for each other) except that AIM Cash Reserve Shares of
AIM MONEY MARKET FUND may be exchanged for Class A shares of another Multiple
Class Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten business days, and all other shares are held
in an account for at least one day, prior to the exchange; and (h) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the AIM Funds.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
A-15
<PAGE>
AIM INVESTOR'S GUIDE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged
are redeemed at their net asset value as determined at NYSE Close on the day
that an exchange request in proper form (described below) is received. Exchange
requests received after NYSE Close will result in the redemption of shares at
their net asset value at NYSE Close on the next business day. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase, Exchange and
Redemption Orders (AIM MONEY MARKET FUND only)" for information regarding the
timing of exchange orders for AIM MONEY MARKET FUND. Normally, shares of an AIM
Fund to be acquired by exchange are purchased at their net asset value or
applicable offering price, as the case may be, determined on the date that such
request is received, but under unusual market conditions such purchases may be
delayed for up to five business days if it is determined that a fund would be
materially disadvantaged by an immediate transfer of the proceeds of the
exchange. If a shareholder is exchanging into a fund paying daily dividends
("Dividends, Distributions and Tax Matters -- Dividends and Distributions,"
below), and the release of the exchange proceeds is delayed for the foregoing
five-day period, such shareholder will not begin to accrue dividends until the
sixth business day after the exchange. Shares purchased by check may not be
exchanged until it is determined that the check has cleared, which may take up
to ten business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. If a shareholder does not wish to allow telephone
exchanges by any person in his account, he should decline that option on the
account application. AIM Distributors has made arrangements with certain dealers
and investment advisory firms to accept telephone instructions to exchange
shares between any of the AIM Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the funds, including the condition that any such dealer or
investment advisor enter into an agreement (which contains additional conditions
with respect to exchanges of shares) with AIM Distributors. To exchange shares
by telephone, a shareholder, dealer or investment advisor who has satisfied the
foregoing conditions must call AFS at (800) 959-4246. If a shareholder is unable
to reach AFS by telephone, he may also request exchanges by telegraph or use
overnight courier services to expedite exchanges by mail, which will be
effective on the business day received by the Transfer Agent as long as such
request is received prior to NYSE Close. The Transfer Agent and AIM Distributors
will not be liable for any loss, expense or cost arising out of any telephone
exchange request that they reasonably believe to be genuine, but may in certain
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's Social Security Number and current address, and mailings of
confirmations promptly after the transaction.
EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
A-16
<PAGE>
AIM INVESTOR'S GUIDE
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
MULTIPLE DISTRIBUTION SYSTEM. CLASS B SHARES. Class B shares purchased
under the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS % OF DOLLAR
YEARS SINCE PURCHASE MADE AMOUNT SUBJECT TO CHARGE
- ------------------------------------------------------------------------------------------ ---------------------------
<S> <C>
First..................................................................................... 5%
Second.................................................................................... 4%
Third..................................................................................... 3%
Fourth.................................................................................... 3%
Fifth..................................................................................... 2%
Sixth..................................................................................... 1%
Seventh and Following..................................................................... None
</TABLE>
In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
CLASS C SHARES. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
A-17
<PAGE>
AIM INVESTOR'S GUIDE
WAIVERS. Contingent deferred sales charges on Class B and Class C shares
will be waived on redemptions (1) following the death or post-purchase
disability, as defined in Section 72(m)(7) of the Code, of a shareholder or a
settlor of a living trust (provided AIM Distributors is notified of such death
or post-purchase disability at the time of the redemption request and is
provided with satisfactory evidence of such death or post-purchase disability),
(2) in connection with certain distributions from IRAs, custodial accounts
maintained pursuant to Code Section 403(b), deferred compensation plans
qualified under Code Section 457 and plans qualified under Code Section 401
(collectively, "Retirement Plans"), (3) pursuant to a Systematic Withdrawal
Plan, provided that amounts withdrawn under such plan do not exceed on an annual
basis 12% of the value of the shareholder's investment in Class B or Class C
shares at the time the shareholder elects to participate in the Systematic
Withdrawal Plan, (4) effected pursuant to the right of a Multiple Class Fund to
liquidate a shareholder's account if the aggregate net asset value of shares
held in the account is less than the designated minimum account size described
in the prospectus of such Multiple Class Fund, (5) effected by AIM of its
investment in Class B or Class C shares and (6) of Class C shares where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payment otherwise payable to the dealer described in the last paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds."
Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
Waiver category (2) above applies only to redemptions resulting from:
(i) required minimum distributions to plan participants or beneficiaries who
are age 70 1/2 or older, and only with respect to that portion of such
distributions which does not exceed 12% annually of the participant's or
beneficiary's account value in a particular AIM Fund;
(ii) in-kind transfers of assets where the participant or beneficiary notifies
AIM Distributors of such transfer no later than the time such transfer
occurs;
(iii) tax-free rollovers or transfers of assets to another Retirement Plan
invested in Class B or Class C shares of one or more Multiple Class Funds;
(iv) tax-free returns of excess contributions or returns of excess deferral
amounts; and
(v) distributions upon the death or disability (as defined in the Code) of the
participant or beneficiary.
Shareholders who purchased Class B shares of the AIM/GT Funds or Class C
shares of AIM GLOBAL TRENDS FUND prior to June 1, 1998 are entitled to certain
additional waivers of the contingent deferred sales charge on those shares as
described in the Statement of Additional Information of each respective fund
under "How to Purchase and Redeem Shares."
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND [or Class A shares
of AIM DOLLAR FUND] which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code,
A-18
<PAGE>
AIM INVESTOR'S GUIDE
or Plans created under Section 403(b) of the Code and sponsored by nonprofit
organizations as defined under Section 501(c)(3) of the Code, where shares are
being redeemed in connection with employee terminations or withdrawals, and (a)
the total amount invested in a Plan is at least $1,000,000, (b) the sponsor of a
Plan signs a letter of intent to invest at least $1,000,000 in one or more of
the AIM Funds, or (c) the shares being redeemed were purchased by an
employer-sponsored Plan with at least 100 eligible employees; provided, however,
that Plans created under Section 403(b) of the Code which are sponsored by
public educational institutions shall qualify under (a), (b) or (c) above on the
basis of the value of each Plan participant's aggregate investment in the AIM
Funds, and not on the aggregate investment made by the Plan or on the number of
eligible employees; (2) redemptions of shares following the death or
post-purchase disability, as defined in Section 72(m)(7) of the Code, of a
shareholder or a settlor of a living trust; (3) redemptions of shares purchased
at net asset value by private foundations or endowment funds where the initial
amount invested was at least $1,000,000; (4) redemptions of shares purchased by
an investor in amounts of $1,000,000 or more where such investor's dealer of
record, due to the nature of the investor's account, notifies AIM Distributors
prior to the time of investment that the dealer waives the payments otherwise
payable to the dealer as described in the third paragraph under the caption
"Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM Funds;"
and (5) pursuant to a Systematic Withdrawal Plan, provided that amounts
withdrawn under such plan do not exceed on an annual basis 12% of the value of
the shareholder's investment in Class A shares at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund
to establish as IRA, should include the following information along with a
written request for either partial or full liquidation of fund shares; (a) a
statement as to whether or not the shareholder has attained age 59 1/2, and (b)
a statement as to whether or not the shareholder elects to have federal income
tax withheld from the proceeds of the liquidation.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in this account, he should decline that option on the account
application. The telephone redemption feature can be used only if: (a) the
redemption proceeds are to be mailed to the address of record or transferred
electronically or wired to the pre-authorized bank account; (b) there has been
no change of address of record on the account within the preceding 30 days; (c)
the shares to be redeemed are not in certificate form; (d) the person requesting
the redemption can provide proper identification information, and (e) the
proceeds of the redemption do not exceed $50,000. Accounts in AIM Distributors'
prototype retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not
eligible for the telephone redemption option. AIM Distributors has made
arrangements with certain dealers and investment advisors to accept telephone
instructions for the redemption of shares. AIM Distributors reserves the right
to impose conditions on these dealers and investment advisors, including the
condition that they enter into agreements (which contain additional conditions
with respect to the redemption of shares) with AIM Distributors. The Transfer
Agent and AIM Distributors will not be liable for any loss, expense or cost
arising out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain
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AIM INVESTOR'S GUIDE
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's taxpayer identification number and current address, and mailings
of confirmations promptly after the transaction.
EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order
is received prior to 11:30 a.m. Eastern Time, the redemption will be effective
on that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next business day.
REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of
AIM MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing
the appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an
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AIM INVESTOR'S GUIDE
address that has been changed within the past 30 days; (5) requests to transfer
the registration of shares to another owner, (6) telephone exchange and
telephone redemption authorization forms; (7) changes in previously designated
wiring or electronic funds transfer instructions, and (8) written redemptions or
exchanges of shares previously reported as lost, whether or not the redemption
amount is under $50,000 or the proceeds are to be sent to the address of record.
These requirements may be waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within 90 days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment may alter any capital gains payable. If
there has been a loss on the redemption and shares of the same fund are
repurchased, all of the loss may not be tax deductible, depending on the timing
and amount reinvested. Under the Code, if the redemption proceeds of fund shares
on which a sales charge was paid are reinvested in shares of the same fund, or
exchanged for shares of another AIM Fund, at a reduced sales charge within 90
days of the payment of the sales charge, the shareholder's basis in the fund
shares redeemed may not include the amount of the sales charge paid, thereby
reducing the loss or increasing the gain recognized from the redemption;
however, the shareholder's basis in the fund shares purchased will include the
sales charge. Each AIM Fund may amend, suspend or cease offering the privilege
at any time as to shares redeemed after the date of such amendment, suspension
or cessation. This privilege may only be exercised once each year by a
shareholder with respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in
connection with the redemption of Class A shares and who subsequently reinvest a
portion or all of the value of the redeemed shares in Class A shares of any AIM
Fund within 90 days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is
determined as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close
with respect to AIM MONEY MARKET FUND) on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an AIM Fund's share
will be determined as of the close of the NYSE on such day. For purposes of
defining net asset value per share, futures and options contracts generally will
be valued 15 minutes after the close of trading of the NYSE. The net asset value
per share is calculated by subtracting a class' liabilities from its assets and
dividing the result by the total number of class shares outstanding. The
determination of net asset value per share is made in accordance with generally
accepted accounting principles. Among other items, liabilities include accrued
expenses and dividends payable, and total assets include portfolio securities
valued at their market value, as well as income accrued but
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AIM INVESTOR'S GUIDE
not yet received. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
supervision of the fund's officers and in accordance with methods which are
specifically authorized by its governing Board of Directors or Trustees.
Short-term obligations with maturities of 60 days or less, and the securities
held by the Money Market Funds, are valued at amortized cost as reflecting fair
value. AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOARD FUND, AIM TAX-EXEMPT
BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund's policy regarding the payment of dividends and distributions
is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND............................. declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND.............. declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.................. declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND........................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND...................... declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND........................ declared and paid annually annually annually
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND............................. declared and paid annually annually annually
AIM BALANCED FUND................................. declared and paid quarterly annually annually
AIM BLUE CHIP FUND................................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND...................... declared and paid annually annually annually
AIM CHARTER FUND.................................. declared and paid quarterly annually annually
AIM CONSTELLATION FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND..................... declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND................. declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INCOME FUND............................ declared daily; paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM GLOBAL UTILITIES FUND......................... declared daily; paid monthly annually annually
AIM HIGH INCOME MUNICIPAL FUND.................... declared daily; paid monthly annually annually
AIM HIGH YIELD FUND............................... declared daily; paid monthly annually annually
AIM INCOME FUND................................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.................. declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND..................... declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND................ declared daily; paid monthly annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM MONEY MARKET FUND............................. declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND........................... declared daily; paid monthly annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SELECT GROWTH FUND............................ declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM SMALL CAP OPPORTUNITIES FUND.................. declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT........... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.......................... declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND.................... declared daily; paid monthly annually annually
AIM VALUE FUND.................................... declared and paid annually annually annually
AIM WEINGARTEN FUND............................... declared and paid annually annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in
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AIM INVESTOR'S GUIDE
like shares of another Multiple Class Fund, to the extent permitted. For funds
that do not declare a dividend daily, such dividends and distributions will be
reinvested at the net asset value per share determined on the ex-dividend date.
For funds that declare a dividend daily, such dividends and distributions will
be reinvested at the net asset value per share determined on the payable date.
Shareholders may elect, by written notice to the Transfer Agent, to receive such
distributions, or the dividend portion thereof, in cash, or to invest such
dividends and distributions in shares of another fund in the AIM Funds; provided
that (i) dividends and distributions attributable to Class B shares may only be
reinvested in Class B shares, (ii) dividends and distributions attributable to
Class C shares may only be reinvested in Class C shares, (iii) dividends and
distributions attributable to Class A shares may not be reinvested in Class B or
Class C shares, and (iv) dividends and distributions attributable to the AIM
Cash Reserve Shares of AIM MONEY MARKET FUND may not be reinvested in the Class
A shares of that Fund or in any Class B or Class C shares. Investors who have
not previously selected such a reinvestment option on the account application
form may contact the Transfer Agent at any time to obtain a form to authorize
such reinvestments in another AIM Fund. Such reinvestments into the AIM Funds
are not subject to sales charges, and shares so purchased are automatically
credited to the account of the shareholder.
Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS--GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares, except for "exempt-interest dividends" paid by AIM HIGH INCOME MUNICIPAL
FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND (the "Tax-Exempt
Funds"), which are exempt from federal income tax. With respect to tax-exempt
shareholders, dividends and distributions from the AIM Funds are not subject to
federal income taxation to the extent permitted under the applicable tax
exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
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AIM INVESTOR'S GUIDE
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HIGH
INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH YIELD
FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be
required to include the "exempt-interest" portion of dividends paid by the
Tax-Exempt Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other
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AIM INVESTOR'S GUIDE
taxable securities. For additional information concerning the alternative
minimum tax and certain collateral tax consequences of the receipt of
exempt-interest dividends, see the Statements of Additional Information
applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP GROWTH FUND,
AIM SMALL CAP EQUITY FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH FUND --
SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do so,
each of these funds may elect to pass through to its shareholders credits for
foreign taxes paid. If a fund makes such an election, a shareholder who receives
a distribution (1) will be required to include in gross income his proportionate
share of foreign taxes allocable to the distribution and (2) may claim a credit
or deduction for such share for his taxable year in which the distribution is
received, subject to the general limitations imposed on the allowance of foreign
tax credits and deductions. Shareholders should also note that certain gains or
losses attributable to fluctuations in exchange rates or foreign currency
forward contracts may increase or decrease the amount of income of the fund
available for distribution to shareholders and should note that if, for any
fund, such losses exceed other income during a taxable year, the fund would not
be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each AIM Fund's transfer agent and
dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
A-26
<PAGE>
AIM INVESTOR'S GUIDE
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If several members of a household own shares of the same fund,
only one annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
A-27
<PAGE>
AIM JAPAN GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM MID CAP GROWTH FUND
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM Mid Cap Growth Fund (the "Fund"),
which is one of several series investment portfolios comprising AIM Growth
Series (the "Trust"), an open-end series, management investment company. The
Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of companies domiciled in the United
States that, at the time of purchase, have market capitalizations of $1 billion
to $5 billion ("U.S. mid cap companies").
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM MID CAP GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 6
Investment Objective and Policies......................................................... 7
Risk Factors.............................................................................. 10
Management................................................................................ 11
Other Information......................................................................... 14
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of U.S. mid cap companies.
Investment Managers: The Fund is managed by AIM Advisors, Inc. ("AIM") and is sub-advised and sub-administered by INVESCO
(NY), Inc. (the "Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management
affiliates provide investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment
management group that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing presence in Asia. AIM was
organized in 1976 and, together with its subsidiaries, currently advises approximately 90 investment
company portfolios.
Purchasing Shares: Investors may select Class A or Class B shares of the Fund which are offered by this Prospectus at an
offering price that reflects differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to a separate
prospectus, the Fund also offers Advisor Class shares, which represent interests in the Fund. The
Advisor Class has different distribution arrangements.
Class A Shares: Shares are offered at net asset value plus any applicable initial sales charge.
</TABLE>
Prospectus Page 2
<PAGE>
AIM MID CAP GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B Shares: Shares are offered at net asset value without an initial sales charge, and are subject to a maximum
contingent deferred sales charge of 5% on certain redemptions made within six years from the date
such shares were purchased. Class B shares automatically convert to Class A shares of the Fund eight
years following the end of the calendar month in which a purchase was made. Class B shares are
subject to higher expenses than Class A shares.
Initial investments in any class of shares must be at least $500 and additional investments must be
at least $50. The minimum initial investment is modified for investments through tax-qualified
retirement plans and accounts initially established with an Automatic Investment Plan. The
distributor of the Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
Suitability for Investors: An investor in Class A or Class B shares of the Fund should consider the method of purchasing shares
that is most beneficial given the amount of the purchase, the length of time the shares are expected
to be held, and other circumstances. Investors should consider whether, during the anticipated life
of their investment in the Fund, the accumulated distribution fees and any applicable contingent
deferred sales charges on Class B shares prior to conversion would be less than the initial sales
charge and accumulated distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares. To assist investors
in making this determination, the table under the caption "Table of Fees and Expenses" sets forth
examples of the charges applicable to each class of shares. Class A shares will normally be more
beneficial than Class B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase of more than $250,000
for Class B shares.
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Class A and Class B shares of the Fund may be exchanged for shares of other funds in The
AIM Family of Funds in the manner and subject to the policies and charges set forth herein. See
"Exchange Privilege."
Redeeming Shares: Class A shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, generally without charge. A contingent deferred sales charge of 1% may apply to
certain redemptions where a purchase of more than $1 million is made at net asset value. See "How to
Redeem Shares -- Contingent Deferred Sales Charge Program for Large Purchases."
</TABLE>
Prospectus Page 3
<PAGE>
AIM MID CAP GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, less a contingent deferred sales charge for redemptions made within six years from
the date such shares were purchased. Class B shares redeemed after six years from the date such
shares were purchased will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters" and "Special Plans."
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 4
<PAGE>
AIM MID CAP GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Class A and Class B shares of the Funds are
reflected in the following table (1):
<TABLE>
<CAPTION>
CLASS A CLASS B
--------- ---------
<S> <C> <C>
SHAREHOLDER TRANSACTION COSTS (2):
Maximum sales charge on purchases
(as a % of offering price).................................................... 5.50% None
Sales charges on reinvested distributions to shareholders...................... None None
Maximum deferred sales charge (as a % of net asset value at time of purchase or
sale, whichever is less)...................................................... None 5.00%
Redemption charges............................................................. None None
Exchange fees.................................................................. None None
ANNUAL FUND OPERATING EXPENSES (3):
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees.................................. 0.72% 0.72%
12b-1 distribution and service fees............................................ 0.35% 1.00%
Other expenses (after reimbursement (includes interest expense not subject to
reimbursement))............................................................... 0.41% 0.41%
--------- ---------
Total Fund Operating Expenses.................................................. 1.48% 2.13%
--------- ---------
--------- ---------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (7):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Funds, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS(6)
------ ------- ------- -----------
<S> <C> <C> <C> <C>
Class A shares (4)............................................................... $69 $100 $132 $223
Class B shares
Assuming a complete redemption at end of period (5)............................ $73 $100 $138 $231
Assuming no redemption......................................................... $22 $ 67 $115 $231
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. rules regarding investment companies.
(2) Sales charge waivers are available for Class A and Class B shares, and
reduced sales charge purchase plans are available for Class A shares. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase. The charge generally
declines by 1% annually thereafter, reaching zero after six years. See
"Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
Sales Charges".
(3) Expenses are based on the Fund's fiscal year ended December 31, 1997. "Other
expenses" include custody, transfer agency, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information.
(4) Assumes payment of maximum sales charge by the investor.
(5) Assumes deduction of the applicable contingent deferred sales charge.
(6) For Class B shares, this number reflects the conversion to Class A shares
eight years following the end of the calendar month in which a purchase was
made.
(7) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT
EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the assumption
in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 5
<PAGE>
AIM MID CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information.
AIM MID CAP GROWTH FUND
(FORMERLY GT GLOBAL AMERICA MID CAP GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Funds will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of a Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding each Fund's
performance is contained in that Fund's annual report to shareholders, which is
available upon request and without charge.
Each Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. Standardized total return for Class
A shares reflects the deduction of the Fund's maximum front-end sales charge at
the time of purchase. Standardized total return for Class B and Class C shares
reflects the deduction of the maximum applicable contingent deferred sales
charge on a redemption of shares held for the period.
A Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of any Fund. Such practices will
have the effect of increasing that Fund's total return. The performance of each
Fund will vary from time to time and past results are not necessarily
representative of future results. A Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 6
<PAGE>
AIM MID CAP GROWTH FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Mid Cap Fund is long term growth of capital.
There can be no assurance that the Fund will achieve its investment objective.
The Fund seeks its investment objective by investing, under normal
circumstances, at least 65% of its total assets in equity securities of U.S. mid
cap companies. Equity securities in which the Fund may invest include common
stocks, preferred stocks, convertible debt securities and warrants to acquire
such securities. The Fund may also invest up to 35% of its total assets in the
equity securities of (a) issuers domiciled in the United States that, at the
time of purchase, have market capitalizations of less than $1 billion or greater
than $5 billion; and (b) issuers domiciled outside the United States, including
(i) issuers linked by tradition, economic markets, cultural similarities or
geography to the United States; and (ii) issuers located elsewhere in the world
that have operations in the United States or that stand to benefit from
political or economic events in the United States. In addition, the Fund may
invest up to 35% of its total assets in investment grade debt securities,
including U.S. and foreign government securities and corporate debt securities,
Samurai and Yankee bonds, Euro bonds and Depositary Receipts. The issuers of
such debt securities may or may not be domiciled in the United States.
For purposes of this Prospectus, market capitalization means the total market
value of a company's outstanding common stock. There is no necessary correlation
between market capitalization and the financial attributes (such as level of
assets, revenues or income) often used to measure a company's size.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In selecting equity securities for the Fund, the Sub-adviser uses a multi-stage
process to identify companies that possess sustainable above average growth at
an attractive offering price. The process for selecting mid cap growth stocks
consists of four components: asset allocation, industry diversification, stock
selection and quality control. The Sub-adviser tracks individual companies and
categorizes them into industry groups. Purchases and sales of individual
securities are based on the ratings established by the Sub-adviser on a weekly
basis. Stocks ranked in the top 30% are buys, and the bottom 30% are sells. The
quality control process ensures consistency with the industry and asset
allocation guidelines as well as stock guidelines. There is no assurance that
this process will produce better or more consistent results than other
investment processes.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
currency units (such as Euros) are evaluated on the strength of the particular
currency against the U.S. dollar as well as on the current and expected levels
of interest rates in the country or countries. In addition to the foregoing, the
Fund may seek to take advantage of differences in relative values of fixed
income securities among various countries.
Prospectus Page 7
<PAGE>
AIM MID CAP GROWTH FUND
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency
units) and/or high quality debt securities or money market instruments issued by
corporations or the U.S. or a foreign government. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units) and may invest in high
quality foreign or domestic money market instruments. For a description of money
market instruments, see "Temporary Defensive Strategies" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions. The Fund may
borrow up to 33 1/3% of its total assets. However, no additional investments
will be made if the Fund's borrowings exceed 5% of its total assets. Any
borrowing by the Fund may cause greater fluctuation in the value of its shares
than would be the case if the Fund did not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is made. While a loan is outstanding, the borrower must maintain with the
Fund's custodian collateral consisting of cash, U.S. government securities or
certain irrevocable letters of credit equal to at least the value of the
borrowed securities, plus any accrued interest or such other collateral as
permitted by the Fund's investment program and regulatory agencies, and as
approved by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights
Prospectus Page 8
<PAGE>
AIM MID CAP GROWTH FUND
in the collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Currency Strategies" herein and the Statement of Additional Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Fund also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign issuers in the
form of ADRs or other similar securities convertible into securities of foreign
issuers. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs are receipts
typically issued by a United States bank or trust company evidencing ownership
of the underlying securities. Generally, ADRs in registered form are designed
for use in U.S. securities markets. See "Investment Objectives and Policies --
Depository Receipts" in the Statement of Additional Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund
Prospectus Page 9
<PAGE>
AIM MID CAP GROWTH FUND
has adopted certain investment limitations that also may not be changed without
shareholder approval. A complete description of these limitations is included in
the Statement of Additional Information. Unless specifically noted, the Fund's
investment policies described in this Prospectus and in the Statement of
Additional Information are not fundamental policies and may be changed by vote
of the Company's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
CONCENTRATION. The Fund invests a significant portion of its assets in a
particular country or region of the world. As a result, the Fund may be subject
to greater risks and may experience greater volatility than a fund that is more
broadly diversified geographically.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, it
might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-adviser's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts or options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
Prospectus Page 10
<PAGE>
AIM MID CAP GROWTH FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund, including
the investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund are delegated to the officers of the Trust, subject
always to the investment objective and policies of the Fund and to the general
supervision of the Trust's Board, See "Trustees and Executive Officers" in the
Statement of Additional Information for information on the Trustees of the
Trust.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .725% on the first $500 million, .70% on the next $500 million, .675% on the
next $500 million, and .65% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 1.75%
and 2.40% of the average daily net assets of such Fund's Class A and Class B
shares, respectively.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administrative services agreement, dated as of May 29, 1998 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises approximately 90 investment company portfolios encompassing a
broad range of investment objectives. The Sub-adviser, 50 California Street,
27th Floor, San Francisco, California 94111, and 1166 Avenue of the Americas,
New York, New York 10036, serves as the sub-adviser to the Fund pursuant to an
investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
Prospectus Page 11
<PAGE>
AIM MID CAP GROWTH FUND
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Fund, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Brent W. Clum Portfolio Manager since Portfolio Manager for the Sub-adviser since 1997. Senior Equity
New York 1997 Research Analyst for the Sub-adviser since 1995. Employed by
Chancellor Capital Management, Inc., a predecessor of the
Sub-adviser from 1995 to October 1996. Vice President and Analyst at
T. Rowe Price from 1990 to 1995. Chartered Financial Analyst and
Certified Public Accountant.
</TABLE>
------------------------
With respect to the Fund, the Sub-adviser utilizes a team approach that relies
on its bottom-up, research-intensive, process-driven stock selection capability
to build the various investment portfolios. The Sub-adviser's disciplined
process combines the inputs of analysts performing fundamental and quantitative
research, various committees that set the Sub-adviser's firmwide economic
forecasts and sector and industry allocations and portfolio management teams
responsible for stock selection decisions. While individual members of the Sub-
adviser's investment team are assigned primary responsibility for the day-to-day
management of the Fund, along with similarly managed accounts, it is reviewed on
a regular basis by the applicable investment team to monitor compliance with
applicable investment guidelines.
In placing orders for the Fund's portfolio transactions, the Sub-adviser seeks
to obtain the best net results. Consistent with its obligation to obtain the
best net results, the Sub-adviser may consider a broker/dealer's sale of shares
of the AIM Funds as a factor in considering through whom portfolio transactions
will be effected. Brokerage transactions for the Fund may be executed through
affiliates of AIM or the Sub-adviser. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Fund will bear directly and could result in the realization of
net capital gains that would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 on behalf of Class A shares of the Fund, and has entered into a
Master Distribution Agreement, dated May 29, 1998, on behalf of Class B shares
of the Fund (individually referred to as a "Distribution Agreement" or
collectively as the "Distribution Agreements.") with AIM Distributors, a
registered broker-dealer and a wholly owned subsidiary of AIM, to act as the
distributor of Class A and Class B shares of the Fund. Certain Trustees and
officers of the Trust are affiliated with AIM Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right to
distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average
Prospectus Page 12
<PAGE>
AIM MID CAP GROWTH FUND
daily net assets attributable to Class B shares attributable to the sales
efforts of AIM Distributors. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors; provided, however,
that a complete termination of the Class B shares master distribution plan (as
defined in the plan) would terminate all payments to AIM Distributors.
Termination of the Class B shares distribution plan or Distribution Agreement
does not affect the obligation of Class B shareholders to pay contingent
deferred sales charges.
DISTRIBUTION PLANS. CLASS A PLAN. The Company has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
Of the aggregate amount payable under the Class A Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee. Payments pursuant to the
Plans are subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
CLASS B PLAN. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
BOTH PLANS. Activities that may be financed under the Class A Plan and the Class
B Plan (collectively, the "Plans") include, but are not limited to: printing of
prospectuses and statements of additional information and reports for other than
existing shareholders, overhead, preparation and distribution of advertising
material and sales literature, expense of organizing and conducting sales
seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the
Prospectus Page 13
<PAGE>
AIM MID CAP GROWTH FUND
expenses actually incurred by AIM Distributors on behalf of the Fund. Thus, even
if AIM Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
Under the Plans, AIM Distributors may in its discretion from time to time agree
to waive voluntarily all or any portion of its 12b-1 fee, while retaining its
ability to be reimbursed for such fee prior to the end of each fiscal year.
Under the Plans, certain financial institutions which have entered into service
agreements and which sell shares of the Fund on an agency basis, may receive
payments from the Fund pursuant to the respective Plans. AIM Distributors does
not act as principal, but rather as agent, for the Fund in making such payments.
The Fund will obtain a representation from such financial institutions that they
will either be licensed as dealers as required under applicable state law, or
that they will not engage in activities which would constitute acting as a
"dealer" as defined under applicable state law. Financial intermediaries and any
other person entitled to receive compensation for selling Fund shares may
receive different compensation for selling shares of one class over another.
For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of G.T. Global Growth Series, a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series or portfolios
of the Trust.
From time to time the Trust may establish other funds, each corresponding to a
distinct investment portfolio and a distinct series of the Trust's shares of
beneficial interest. Shares of each Fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund
Prospectus Page 14
<PAGE>
AIM MID CAP GROWTH FUND
represents an interest in the Fund only, has a par value of $0.01 per share,
represents an equal proportionate interest in the Fund with other shares of the
Fund and is entitled to such dividends and distributions out of the income
earned and gain realized on the assets belonging to the Fund as may be declared
by the Board of Trustees. Each share of the Fund is equal as to earnings, assets
and voting privileges to each other share in the Fund, except that each normally
has exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 15
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND AIM GLOBAL RESOURCES FUND
AIM ADVISOR INTERNATIONAL VALUE FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM ADVISOR LARGE CAP VALUE FUND AIM GLOBAL TRENDS FUND
AIM ADVISOR MULTIFLEX FUND AIM GLOBAL UTILITIES FUND
AIM ADVISOR REAL ESTATE FUND AIM HIGH INCOME MUNICIPAL FUND
AIM AGGRESSIVE GROWTH FUND AIM HIGH YIELD FUND
AIM AMERICA VALUE FUND AIM INCOME FUND
AIM ASIAN GROWTH FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM BALANCED FUND AIM INTERNATIONAL EQUITY FUND
AIM BLUE CHIP FUND AIM INTERNATIONAL GROWTH FUND
AIM CAPITAL DEVELOPMENT FUND AIM JAPAN GROWTH FUND
AIM CHARTER FUND AIM LATIN AMERICAN GROWTH FUND
AIM CONSTELLATION FUND AIM LIMITED MATURITY TREASURY FUND
AIM DEVELOPING MARKETS FUND AIM MID CAP GROWTH FUND
AIM DOLLAR FUND(*) AIM MONEY MARKET FUND(*)
AIM EMERGING MARKETS FUND AIM MUNICIPAL BOND FUND
AIM EUROPEAN DEVELOPMENT FUND AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND AIM SELECT GROWTH FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM SMALL CAP OPPORTUNITIES FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM GLOBAL GROWTH FUND AIM TAX-EXEMPT CASH FUND(*)
AIM GLOBAL GROWTH & INCOME FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL HEALTH CARE FUND AIM VALUE FUND
AIM GLOBAL HIGH INCOME FUND AIM WEINGARTEN FUND
AIM GLOBAL INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
asset value, without payment of a sales charge, as described below. Other
funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
FUND, are sold with an initial sales charge or subject to a contingent
deferred sales charge upon redemption, as described below.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM
Family of Funds ("AIM Funds"), an investor must submit a fully completed new
Account Application form directly to A I M Fund Services, Inc. ("AFS" or the
"Transfer Agent") or through any dealer authorized by A I M Distributors, Inc.
("AIM Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
is $500, except for accounts initially established through an Automatic
Investment Plan, which requires a special authorization form (see "Special
Plans") and for certain retirement accounts. The minimum initial investment for
accounts established with an Automatic Investment Plan is $50. The minimum
initial investment for an Individual Retirement Arrangement ("IRA") or Roth IRA
is $250. There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such
A-1
<PAGE>
AIM INVESTOR'S GUIDE
plans is $25), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM Funds account.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Shares of any AIM Funds not named on the cover of this Prospectus, as well
as Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>
HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased
directly through AIM Distributors or through any dealer who has entered into an
agreement with AIM Distributors. The minimum investment for subsequent purchases
is $50. The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. There are no such minimum investment requirements for investment of
dividends and distributions of any of the AIM Funds into any other existing AIM
Funds account.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION-SM-: To purchase additional shares by electronic
funds transfer, please contact the Client Services Department of AFS for
details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN GROWTH FUND, AIM
BALANCED FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER
FUND, AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP GROWTH FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT
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AIM INVESTOR'S GUIDE
CASH FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without
a sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over another class in the same Multiple Class Fund. Factors an investor
should consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH
FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP EQUITY
FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
SALES CHARGES AND DEALER CONCESSIONS
GROUP I. Certain AIM Funds are currently sold with a sales charge ranging
from 5.50% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM
ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
GROWTH FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $25,000................................................................ 5.50 % 5.82 % 4.75 %
$25,000 but less than $50,000.................................................... 5.25 5.54 4.50
$50,000 but less than $100,000................................................... 4.75 4.99 4.00
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 3.00 3.09 2.50
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
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AIM INVESTOR'S GUIDE
GROUP II. Certain AIM Funds are currently sold with a sales charge ranging
from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND,
AIM BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND,
AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL HIGH INCOME FUND,
AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES
FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND FUND, AIM
STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $50,000................................................................ 4.75 % 4.99 % 4.00 %
$50,000 but less than $100,000................................................... 4.00 4.17 3.25
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 2.50 2.56 2.00
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $100,000............................................................... 1.00 % 1.01 % 0.75 %
$100,000 but less than $250,000.................................................. 0.75 0.76 0.50
$250,000 but less than $1,000,000................................................ 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus
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AIM INVESTOR'S GUIDE
payments or other consideration shall not exceed 0.25% of the public offering
price of the shares sold. Any such bonus or incentive programs will not change
the price paid by investors for the purchase of the applicable AIM Fund's shares
or the amount that any particular AIM Fund will receive as proceeds from such
sales. Dealers may not use sales of the AIM Funds' shares to qualify for any
incentives to the extent that such incentives may be prohibited by the laws of
any state.
AIM Distributors may make payments to dealers and institutions who are
dealers of record for purchases of $1 million of more of Class A shares (or
shares which normally involve payment of initial sales charges), which are sold
at net asset value and are subject to a contingent deferred sales charge, for
all AIM Funds other than Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND as follows: 1% of the first $2 million
of such purchases, plus 0.80% of the next $1 million of such purchases, plus
0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess
of $20 million of such purchases. See "Contingent Deferred Sales Charge Program
for Large Purchases." AIM Distributors may make payments to dealers and
institutions who are dealers of record for purchases of $1 million or more of
Class A shares (or shares which normally involve payment of initial sales
charges), and which are sold at net asset value and are not subject to a
contingent deferred sales charge, in an amount up to 0.10% of such purchases of
Class A shares of AIM LIMITED MATURITY TREASURY FUND, and in an amount up to
0.25% of such purchases of Class A shares of AIM TAX-FREE INTERMEDIATE FUND.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed
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AIM INVESTOR'S GUIDE
during the next twelve months on Saturdays and Sundays and on the days on which
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class
Funds currently offer two or more classes of shares through separate
distribution systems (the "Multiple Distribution System"). Although each class
of shares of a particular Multiple Class Fund represents an interest in the same
portfolio of investments, each class is subject to a different distribution
structure and, as a result, differing expenses. This Multiple Distribution
System allows investors to select the class that is best suited to the
investor's needs and objectives. In considering the options afforded by the
Multiple Distribution System, investors should consider both the applicable
initial sales charge or contingent deferred sales charge, as well as the ongoing
expenses borne by each class of shares and other relevant factors, such as
whether his or her investment goals are long-term or short-term.
CLASS A SHARES generally are sold subject to the initial sales charges
described above and are subject to the other fees and expenses described
herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
needs of an investor who wishes to establish a dollar cost averaging
program, pursuant to which Class A shares an investor owns may be exchanged
at net asset value for Class A shares of another Multiple Class Fund or
shares of another AIM Fund which is not a Multiple Class Fund, subject to
the terms and conditions described under the caption "Exchange Privilege --
Terms and Conditions of Exchanges."
CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made within
the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."
Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and other distributions)
eight years from the end of the calendar month in which the purchase of
Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
outstanding on May 29, 1998 and which are continuously held by the
shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
FUND seven years from the end of the calendar month in which the purchase of
such Class B shares was made. If a shareholder exchanges Class B shares of
AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
shares will be subject to the eight year conversion feature applicable to
Class B shares of all other AIM Funds. Following such conversion of their
Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
payments associated with Class B shares. See "Management -- Distribution
Plans."
AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an initial
sales charge and are not subject to a contingent deferred sales charge;
however, they are subject to the other fees and expenses described in the
prospectus for AIM MONEY MARKET FUND.
TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon
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AIM INVESTOR'S GUIDE
Eastern Time or NYSE Close on any business day of the Fund will be confirmed at
the price next determined. Net asset value is normally determined at 12:00 noon
Eastern Time and NYSE Close on each business day of AIM MONEY MARKET FUND.
SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
The term "purchaser" means:
- - an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the benefit
of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
plan (unless such 403(b) plan qualifies as the purchaser as defined below);
- - a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), provided that:
a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will
not accept contributions submitted with respect to individual
participants);
b. each transmittal must be accompanied by a single check or wire
transfer; and
c. all new participants must be added to the 403(b) plan by submitting an
application on behalf of each new participant with the contribution
transmittal;
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AIM INVESTOR'S GUIDE
- - a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;
- - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or SIMPLE
IRA accounts should be linked;
- - any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or
- - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").
Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge
made during the 13-month period will be made at the public offering price
applicable to a single transaction of the total dollar amount indicated by the
LOI, as described under "Sales Charges and Dealer Concessions." It is the
purchaser's responsibility at the time of purchase to specify the account
numbers that should be considered in determining the appropriate sales charge.
The offering price may be further reduced as described under "Rights of
Accumulation" if the Transfer Agent is advised of all other accounts at the time
of the investment. Shares acquired through reinvestment of dividends and capital
gain distributions will not be applied to the LOI. At any time during the
13-month period after meeting the original obligation, a purchaser may revise
his intended investment amount upward by submitting a written and signed
request. Such a revision will not change the original expiration date. By
signing an LOI, a purchaser is not making a binding commitment to purchase
additional shares, but if purchases made within the 13-month period do not total
the amount specified, the investor will pay the increased amount of sales charge
as described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase with the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
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AIM INVESTOR'S GUIDE
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds
at net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase Class A shares of the AIM Funds through
AIM Distributors without payment of an initial sales charge: (a) A I M
Management Group Inc. ("AIM Management") and its affiliated companies; (b) any
current or retired officer, director, trustee or employee, or any member of the
immediate family (including spouse, children, parents and parents of spouse) of
any such person, of AIM Management or its affiliates or of certain mutual funds
which are advised or managed by AIM; or any trust established exclusively for
the benefit of such persons; (c) any employee benefit plan established for
employees of AIM Management or its affiliates; (d) any current or retired
officer, director, trustee or employee, or any member of
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AIM INVESTOR'S GUIDE
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, or of CIGNA Corporation or of any of its affiliated
companies, or of First Data Investor Services Group (formerly The Shareholder
Services Group, Inc.); (e) any investment company sponsored by CIGNA
Investments, Inc. or any of its affiliated companies for the benefit of its
directors' deferred compensation plans; (f) discretionary advised clients of AIM
or AIM Capital; (g) registered representatives and employees of dealers who have
entered into agreements with AIM Distributors (or financial institutions that
have arrangements with such dealers with respect to the sale of shares of the
AIM Funds) and any member of the immediate family (including spouse, children,
parents and parents of spouse) of any such person, provided that purchases at
net asset value are permitted by the policies of such person's employer; (h)
certain broker-dealers, investment advisers or bank trust departments that
provide asset allocation, similar specialized investment services or investment
company transaction services for their customers, that charge a minimum annual
fee for such services, and that have entered into an agreement with AIM
Distributors with respect to their use of the AIM Funds in connection with such
services; (i) any employee or any member of the immediate family (including
spouse, children, parents and parents of spouse) of any employee, of Triformis
Inc.; (j) shareholders of the AIM/GT Funds as of April 30, 1987 who since that
date continually have owned shares of one or more of the AIM/GT Funds; and (k)
certain former AMA Investment Advisers' shareholders who became shareholders of
the AIM Global Health Care Fund in October 1989, and who have continuously held
shares in the AIM/GT Funds since that time.
In addition, shares of any AIM Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the total amount invested in the
plan is at least $1,000,000, (2) the sponsor signs a $1,000,000 LOI, (3) such
shares are purchased by an employer-sponsored plan with at least 100 eligible
employees, or (4) all of the plan's transactions are executed through a single
financial institution or service organization who has entered into an agreement
with AIM Distributors with respect to their use of the AIM Funds in connection
with such accounts. Section 403(b) plans sponsored by public educational
institutions will not be eligible for net asset value purchases based on the
aggregate investment made by the plan or the number of eligible employees.
Participants in such plans will be eligible for reduced sales charges based
solely on the aggregate value of their individual investments in the applicable
AIM Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms for share purchases of the Load Funds (as defined under the
caption "Exchange Privilege") sold at net asset value to an employee benefit
plan in accordance with this paragraph as follows: 1% of the first $2 million of
such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50%
of the next $17 million of such purchases, plus 0.25% of amounts in excess of
$20 million of such purchases and up to 0.10% of the net asset value of any
Class A shares of AIM LIMITED MATURITY TREASURY FUND sold at net asset value to
an employee benefit plan in accordance with this paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone
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AIM INVESTOR'S GUIDE
number of the dealer who sold to the unit holder the units to be redeemed or
repurchased; and (ii) states that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by the
proceeds from the redemption or repurchase of units of such trusts.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
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SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a
shareholder who owns shares which are not subject to a contingent deferred sales
charge, can arrange for monthly, quarterly or annual amounts (but not less than
$50) to be drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that exceed on an annual
basis 12% of such account will be subject to a contingent deferred sales charge
on the amounts exceeding 12% of the account value at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the
Transfer Agent and all dividends and distributions are reinvested to shares of
the applicable AIM Fund by the Transfer Agent. To provide funds for payments
made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient
full and fractional shares at their net asset value in effect at the time of
each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in
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AIM INVESTOR'S GUIDE
the amount specified by the shareholder (minimum $50 per investment, per
account) and on a day or date(s) specified by the shareholder. The proceeds are
invested in shares of the designated AIM Fund at the applicable offering price
determined on the date of the withdrawal. An Automatic Investment Plan may be
discontinued upon 10 days' prior notice to the Transfer Agent or AIM
Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination money-
purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans; SARSEP
plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement accounts").
Information concerning these plans, including the custodian's fees and the forms
necessary to adopt such plans, can be obtained by calling or writing the AIM
Funds or AIM Distributors. Shares of the AIM Funds are also available for
investment through existing 401(k) plans (for both individuals and employers)
adopted under the Code. The plan custodian currently imposes an annual $10
maintenance fee with respect to each retirement account for which it serves as
the custodian. This fee is generally charged in December. Each AIM Fund and/or
the custodian reserve the right to change this maintenance fee and to initiate
an establishment fee (not to exceed its cost).
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of AIM Funds. The Program automatically rebalances
holdings of AIM Funds to the established allocation on a periodic basis. Under
the Program, a shareholder may predesignate, on a percentage basis, how the
total value of his or her holdings in a minimum of two, and a maximum of ten,
AIM Funds ("Personal Portfolio") is to be rebalanced on a quarterly, semiannual,
or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more AIM Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other AIM Funds in the
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shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the AIM
Fund(s) in a shareholder's Personal Portfolio have appreciated during a
rebalancing period, the Program will result in shares of AIM Fund(s) that have
appreciated most during the period being exchanged for shares of AIM Fund(s)
that have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular AIM Fund would
be 2% or less. In predesignating percentages, shareholders must use whole
percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an AIM
Fund's shares. The AIM Funds and AIM Distributors reserve the right to modify,
suspend, or terminate the Program at any time on 60 days' prior written notice
to shareholders. A request to participate in the Program must be received in
good order at least five business days prior to the next rebalancing date. Once
a shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
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EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM Funds --
Sales Charges and Dealer Concessions," shares of certain of the AIM Funds,
including the Class A shares of the Multiple Class Funds, listed below and
referred to herein as the "Load Funds," are sold at a public offering price that
includes a maximum sales charge of 5.50% or 4.75% of the public offering price
of such shares; Class A shares (or shares which normally involve the payment of
initial sales charges) of certain of the AIM Funds, listed below and referred to
herein as the "Lower Load Funds," are sold at a public offering price that
includes a maximum sales charge of 1.00% of the public offering price of such
shares; and Class A shares or shares of certain other funds, listed below and
referred to herein as the "No Load Funds," are sold at net asset value, without
payment of a sales charge.
LOAD FUNDS:
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AIM ADVISOR FLEX FUND -- CLASS A
AIM ADVISOR INTERNATIONAL VALUE FUND -- CLASS A
AIM ADVISOR LARGE CAP VALUE FUND -- CLASS A
AIM ADVISOR MULTIFLEX FUND -- CLASS A
AIM ADVISOR REAL ESTATE FUND -- CLASS A
AIM AGGRESSIVE GROWTH FUND -- CLASS A
AIM AMERICA VALUE FUND -- CLASS A
AIM ASIAN GROWTH FUND -- CLASS A
AIM BALANCED FUND -- CLASS A
AIM BLUE CHIP FUND -- CLASS A
AIM CAPITAL DEVELOPMENT FUND -- CLASS A
AIM CHARTER FUND -- CLASS A
AIM CONSTELLATION FUND -- CLASS A
AIM DEVELOPING MARKETS FUND -- CLASS A
AIM EMERGING MARKETS FUND -- CLASS A
AIM EUROPE GROWTH FUND -- CLASS A
AIM EUROPEAN DEVELOPMENT FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH FUND -- CLASS A
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND -- CLASS A
AIM GLOBAL FINANCIAL SERVICES FUND -- CLASS A
AIM GLOBAL GOVERNMENT INCOME FUND -- CLASS A
AIM GLOBAL GROWTH FUND -- CLASS A
AIM GLOBAL GROWTH & INCOME FUND -- CLASS A
AIM GLOBAL HEALTH CARE FUND -- CLASS A
AIM GLOBAL HIGH INCOME FUND -- CLASS A
AIM GLOBAL INCOME FUND -- CLASS A
AIM GLOBAL INFRASTRUCTURE FUND -- CLASS A
AIM GLOBAL RESOURCES FUND -- CLASS A
AIM GLOBAL TELECOMMUNICATIONS FUND -- CLASS A
AIM GLOBAL TRENDS FUND -- CLASS A
AIM GLOBAL UTILITIES FUND -- CLASS A
AIM HIGH INCOME MUNICIPAL FUND -- CLASS A
AIM HIGH YIELD FUND -- CLASS A
AIM INCOME FUND -- CLASS A
AIM INTERMEDIATE GOVERNMENT FUND -- CLASS A
AIM INTERNATIONAL EQUITY FUND -- CLASS A
AIM INTERNATIONAL GROWTH FUND -- CLASS A
AIM JAPAN GROWTH FUND -- CLASS A
AIM LATIN AMERICAN GROWTH FUND -- CLASS A
AIM MID CAP GROWTH FUND -- CLASS A
AIM MONEY MARKET FUND -- CLASS A
AIM MUNICIPAL BOND FUND -- CLASS A
AIM NEW PACIFIC GROWTH FUND -- CLASS A
AIM SELECT GROWTH FUND -- CLASS A
AIM SMALL CAP EQUITY FUND -- CLASS A
AIM SMALL CAP OPPORTUNITIES FUND -- CLASS A
AIM STRATEGIC INCOME FUND -- CLASS A
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT -- CLASS A
AIM VALUE FUND -- CLASS A
AIM WEINGARTEN FUND -- CLASS A
AIM WORLDWIDE GROWTH FUND -- CLASS A
LOWER LOAD FUNDS:
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AIM LIMITED MATURITY TREASURY FUND -- CLASS A
AIM TAX-FREE INTERMEDIATE FUND -- CLASS A
NO LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM MONEY MARKET FUND -- AIM CASH RESERVE SHARES
AIM TAX-EXEMPT CASH FUND -- CLASS A
AIM DOLLAR FUND -- CLASS A
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE, (iii) Class A shares
may be exchanged for Class A shares, (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A shares of AIM MONEY MARKET FUND or for Class B or Class C shares.
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AIM INVESTOR'S GUIDE
DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund or acquired upon
any Lower Load Fund. exchange of
shares of any
Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
</TABLE>
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE
IS REVISED AS FOLLOWS:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value if shares were acquired Net Asset Value Net Asset Value Not Applicable Not Applicable
upon exchange of any Load Fund.
Otherwise, difference in sales charge
will apply.
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund. acquired upon
Difference in sales charge will apply if exchange of
No Load shares were acquired upon shares of any
exchange of Lower Load Fund shares. Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C.............. Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>
An exchange is permitted only in the following circumstances: (a) if the
funds offer more than one class of shares, the exchange must be between the same
class of shares (e.g., Class A, Class B and Class C shares of a Multiple Class
Fund cannot be exchanged for each other) except that AIM Cash Reserve Shares of
AIM MONEY MARKET FUND may be exchanged for Class A shares of another Multiple
Class Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten business days, and all other shares are held
in an account for at least one day, prior to the exchange; and (h) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the AIM Funds.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
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<PAGE>
AIM INVESTOR'S GUIDE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged
are redeemed at their net asset value as determined at NYSE Close on the day
that an exchange request in proper form (described below) is received. Exchange
requests received after NYSE Close will result in the redemption of shares at
their net asset value at NYSE Close on the next business day. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase, Exchange and
Redemption Orders (AIM MONEY MARKET FUND only)" for information regarding the
timing of exchange orders for AIM MONEY MARKET FUND. Normally, shares of an AIM
Fund to be acquired by exchange are purchased at their net asset value or
applicable offering price, as the case may be, determined on the date that such
request is received, but under unusual market conditions such purchases may be
delayed for up to five business days if it is determined that a fund would be
materially disadvantaged by an immediate transfer of the proceeds of the
exchange. If a shareholder is exchanging into a fund paying daily dividends
("Dividends, Distributions and Tax Matters -- Dividends and Distributions,"
below), and the release of the exchange proceeds is delayed for the foregoing
five-day period, such shareholder will not begin to accrue dividends until the
sixth business day after the exchange. Shares purchased by check may not be
exchanged until it is determined that the check has cleared, which may take up
to ten business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. If a shareholder does not wish to allow telephone
exchanges by any person in his account, he should decline that option on the
account application. AIM Distributors has made arrangements with certain dealers
and investment advisory firms to accept telephone instructions to exchange
shares between any of the AIM Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the funds, including the condition that any such dealer or
investment advisor enter into an agreement (which contains additional conditions
with respect to exchanges of shares) with AIM Distributors. To exchange shares
by telephone, a shareholder, dealer or investment advisor who has satisfied the
foregoing conditions must call AFS at (800) 959-4246. If a shareholder is unable
to reach AFS by telephone, he may also request exchanges by telegraph or use
overnight courier services to expedite exchanges by mail, which will be
effective on the business day received by the Transfer Agent as long as such
request is received prior to NYSE Close. The Transfer Agent and AIM Distributors
will not be liable for any loss, expense or cost arising out of any telephone
exchange request that they reasonably believe to be genuine, but may in certain
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's Social Security Number and current address, and mailings of
confirmations promptly after the transaction.
EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
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<PAGE>
AIM INVESTOR'S GUIDE
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
MULTIPLE DISTRIBUTION SYSTEM. CLASS B SHARES. Class B shares purchased
under the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS % OF DOLLAR
YEARS SINCE PURCHASE MADE AMOUNT SUBJECT TO CHARGE
- ------------------------------------------------------------------------------------------ ---------------------------
<S> <C>
First..................................................................................... 5%
Second.................................................................................... 4%
Third..................................................................................... 3%
Fourth.................................................................................... 3%
Fifth..................................................................................... 2%
Sixth..................................................................................... 1%
Seventh and Following..................................................................... None
</TABLE>
In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
CLASS C SHARES. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
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<PAGE>
AIM INVESTOR'S GUIDE
WAIVERS. Contingent deferred sales charges on Class B and Class C shares
will be waived on redemptions (1) following the death or post-purchase
disability, as defined in Section 72(m)(7) of the Code, of a shareholder or a
settlor of a living trust (provided AIM Distributors is notified of such death
or post-purchase disability at the time of the redemption request and is
provided with satisfactory evidence of such death or post-purchase disability),
(2) in connection with certain distributions from IRAs, custodial accounts
maintained pursuant to Code Section 403(b), deferred compensation plans
qualified under Code Section 457 and plans qualified under Code Section 401
(collectively, "Retirement Plans"), (3) pursuant to a Systematic Withdrawal
Plan, provided that amounts withdrawn under such plan do not exceed on an annual
basis 12% of the value of the shareholder's investment in Class B or Class C
shares at the time the shareholder elects to participate in the Systematic
Withdrawal Plan, (4) effected pursuant to the right of a Multiple Class Fund to
liquidate a shareholder's account if the aggregate net asset value of shares
held in the account is less than the designated minimum account size described
in the prospectus of such Multiple Class Fund, (5) effected by AIM of its
investment in Class B or Class C shares and (6) of Class C shares where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payment otherwise payable to the dealer described in the last paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds."
Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
Waiver category (2) above applies only to redemptions resulting from:
(i) required minimum distributions to plan participants or beneficiaries who
are age 70 1/2 or older, and only with respect to that portion of such
distributions which does not exceed 12% annually of the participant's or
beneficiary's account value in a particular AIM Fund;
(ii) in-kind transfers of assets where the participant or beneficiary notifies
AIM Distributors of such transfer no later than the time such transfer
occurs;
(iii) tax-free rollovers or transfers of assets to another Retirement Plan
invested in Class B or Class C shares of one or more Multiple Class Funds;
(iv) tax-free returns of excess contributions or returns of excess deferral
amounts; and
(v) distributions upon the death or disability (as defined in the Code) of the
participant or beneficiary.
Shareholders who purchased Class B shares of the AIM/GT Funds or Class C
shares of AIM GLOBAL TRENDS FUND prior to June 1, 1998 are entitled to certain
additional waivers of the contingent deferred sales charge on those shares as
described in the Statement of Additional Information of each respective fund
under "How to Purchase and Redeem Shares."
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND [or Class A shares
of AIM DOLLAR FUND] which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code,
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<PAGE>
AIM INVESTOR'S GUIDE
or Plans created under Section 403(b) of the Code and sponsored by nonprofit
organizations as defined under Section 501(c)(3) of the Code, where shares are
being redeemed in connection with employee terminations or withdrawals, and (a)
the total amount invested in a Plan is at least $1,000,000, (b) the sponsor of a
Plan signs a letter of intent to invest at least $1,000,000 in one or more of
the AIM Funds, or (c) the shares being redeemed were purchased by an
employer-sponsored Plan with at least 100 eligible employees; provided, however,
that Plans created under Section 403(b) of the Code which are sponsored by
public educational institutions shall qualify under (a), (b) or (c) above on the
basis of the value of each Plan participant's aggregate investment in the AIM
Funds, and not on the aggregate investment made by the Plan or on the number of
eligible employees; (2) redemptions of shares following the death or
post-purchase disability, as defined in Section 72(m)(7) of the Code, of a
shareholder or a settlor of a living trust; (3) redemptions of shares purchased
at net asset value by private foundations or endowment funds where the initial
amount invested was at least $1,000,000; (4) redemptions of shares purchased by
an investor in amounts of $1,000,000 or more where such investor's dealer of
record, due to the nature of the investor's account, notifies AIM Distributors
prior to the time of investment that the dealer waives the payments otherwise
payable to the dealer as described in the third paragraph under the caption
"Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM Funds;"
and (5) pursuant to a Systematic Withdrawal Plan, provided that amounts
withdrawn under such plan do not exceed on an annual basis 12% of the value of
the shareholder's investment in Class A shares at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund
to establish as IRA, should include the following information along with a
written request for either partial or full liquidation of fund shares; (a) a
statement as to whether or not the shareholder has attained age 59 1/2, and (b)
a statement as to whether or not the shareholder elects to have federal income
tax withheld from the proceeds of the liquidation.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in this account, he should decline that option on the account
application. The telephone redemption feature can be used only if: (a) the
redemption proceeds are to be mailed to the address of record or transferred
electronically or wired to the pre-authorized bank account; (b) there has been
no change of address of record on the account within the preceding 30 days; (c)
the shares to be redeemed are not in certificate form; (d) the person requesting
the redemption can provide proper identification information, and (e) the
proceeds of the redemption do not exceed $50,000. Accounts in AIM Distributors'
prototype retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not
eligible for the telephone redemption option. AIM Distributors has made
arrangements with certain dealers and investment advisors to accept telephone
instructions for the redemption of shares. AIM Distributors reserves the right
to impose conditions on these dealers and investment advisors, including the
condition that they enter into agreements (which contain additional conditions
with respect to the redemption of shares) with AIM Distributors. The Transfer
Agent and AIM Distributors will not be liable for any loss, expense or cost
arising out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain
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<PAGE>
AIM INVESTOR'S GUIDE
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's taxpayer identification number and current address, and mailings
of confirmations promptly after the transaction.
EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order
is received prior to 11:30 a.m. Eastern Time, the redemption will be effective
on that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next business day.
REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of
AIM MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing
the appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an
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AIM INVESTOR'S GUIDE
address that has been changed within the past 30 days; (5) requests to transfer
the registration of shares to another owner, (6) telephone exchange and
telephone redemption authorization forms; (7) changes in previously designated
wiring or electronic funds transfer instructions, and (8) written redemptions or
exchanges of shares previously reported as lost, whether or not the redemption
amount is under $50,000 or the proceeds are to be sent to the address of record.
These requirements may be waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within 90 days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment may alter any capital gains payable. If
there has been a loss on the redemption and shares of the same fund are
repurchased, all of the loss may not be tax deductible, depending on the timing
and amount reinvested. Under the Code, if the redemption proceeds of fund shares
on which a sales charge was paid are reinvested in shares of the same fund, or
exchanged for shares of another AIM Fund, at a reduced sales charge within 90
days of the payment of the sales charge, the shareholder's basis in the fund
shares redeemed may not include the amount of the sales charge paid, thereby
reducing the loss or increasing the gain recognized from the redemption;
however, the shareholder's basis in the fund shares purchased will include the
sales charge. Each AIM Fund may amend, suspend or cease offering the privilege
at any time as to shares redeemed after the date of such amendment, suspension
or cessation. This privilege may only be exercised once each year by a
shareholder with respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in
connection with the redemption of Class A shares and who subsequently reinvest a
portion or all of the value of the redeemed shares in Class A shares of any AIM
Fund within 90 days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is
determined as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close
with respect to AIM MONEY MARKET FUND) on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an AIM Fund's share
will be determined as of the close of the NYSE on such day. For purposes of
defining net asset value per share, futures and options contracts generally will
be valued 15 minutes after the close of trading of the NYSE. The net asset value
per share is calculated by subtracting a class' liabilities from its assets and
dividing the result by the total number of class shares outstanding. The
determination of net asset value per share is made in accordance with generally
accepted accounting principles. Among other items, liabilities include accrued
expenses and dividends payable, and total assets include portfolio securities
valued at their market value, as well as income accrued but
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AIM INVESTOR'S GUIDE
not yet received. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
supervision of the fund's officers and in accordance with methods which are
specifically authorized by its governing Board of Directors or Trustees.
Short-term obligations with maturities of 60 days or less, and the securities
held by the Money Market Funds, are valued at amortized cost as reflecting fair
value. AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOARD FUND, AIM TAX-EXEMPT
BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund's policy regarding the payment of dividends and distributions
is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND............................. declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND.............. declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.................. declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND........................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND...................... declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND........................ declared and paid annually annually annually
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND............................. declared and paid annually annually annually
AIM BALANCED FUND................................. declared and paid quarterly annually annually
AIM BLUE CHIP FUND................................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND...................... declared and paid annually annually annually
AIM CHARTER FUND.................................. declared and paid quarterly annually annually
AIM CONSTELLATION FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND..................... declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND................. declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INCOME FUND............................ declared daily; paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM GLOBAL UTILITIES FUND......................... declared daily; paid monthly annually annually
AIM HIGH INCOME MUNICIPAL FUND.................... declared daily; paid monthly annually annually
AIM HIGH YIELD FUND............................... declared daily; paid monthly annually annually
AIM INCOME FUND................................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.................. declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND..................... declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND................ declared daily; paid monthly annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM MONEY MARKET FUND............................. declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND........................... declared daily; paid monthly annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SELECT GROWTH FUND............................ declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM SMALL CAP OPPORTUNITIES FUND.................. declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT........... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.......................... declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND.................... declared daily; paid monthly annually annually
AIM VALUE FUND.................................... declared and paid annually annually annually
AIM WEINGARTEN FUND............................... declared and paid annually annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in
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AIM INVESTOR'S GUIDE
like shares of another Multiple Class Fund, to the extent permitted. For funds
that do not declare a dividend daily, such dividends and distributions will be
reinvested at the net asset value per share determined on the ex-dividend date.
For funds that declare a dividend daily, such dividends and distributions will
be reinvested at the net asset value per share determined on the payable date.
Shareholders may elect, by written notice to the Transfer Agent, to receive such
distributions, or the dividend portion thereof, in cash, or to invest such
dividends and distributions in shares of another fund in the AIM Funds; provided
that (i) dividends and distributions attributable to Class B shares may only be
reinvested in Class B shares, (ii) dividends and distributions attributable to
Class C shares may only be reinvested in Class C shares, (iii) dividends and
distributions attributable to Class A shares may not be reinvested in Class B or
Class C shares, and (iv) dividends and distributions attributable to the AIM
Cash Reserve Shares of AIM MONEY MARKET FUND may not be reinvested in the Class
A shares of that Fund or in any Class B or Class C shares. Investors who have
not previously selected such a reinvestment option on the account application
form may contact the Transfer Agent at any time to obtain a form to authorize
such reinvestments in another AIM Fund. Such reinvestments into the AIM Funds
are not subject to sales charges, and shares so purchased are automatically
credited to the account of the shareholder.
Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS--GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares, except for "exempt-interest dividends" paid by AIM HIGH INCOME MUNICIPAL
FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND (the "Tax-Exempt
Funds"), which are exempt from federal income tax. With respect to tax-exempt
shareholders, dividends and distributions from the AIM Funds are not subject to
federal income taxation to the extent permitted under the applicable tax
exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
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AIM INVESTOR'S GUIDE
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HIGH
INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH YIELD
FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be
required to include the "exempt-interest" portion of dividends paid by the
Tax-Exempt Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other
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AIM INVESTOR'S GUIDE
taxable securities. For additional information concerning the alternative
minimum tax and certain collateral tax consequences of the receipt of
exempt-interest dividends, see the Statements of Additional Information
applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP GROWTH FUND,
AIM SMALL CAP EQUITY FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH FUND --
SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do so,
each of these funds may elect to pass through to its shareholders credits for
foreign taxes paid. If a fund makes such an election, a shareholder who receives
a distribution (1) will be required to include in gross income his proportionate
share of foreign taxes allocable to the distribution and (2) may claim a credit
or deduction for such share for his taxable year in which the distribution is
received, subject to the general limitations imposed on the allowance of foreign
tax credits and deductions. Shareholders should also note that certain gains or
losses attributable to fluctuations in exchange rates or foreign currency
forward contracts may increase or decrease the amount of income of the fund
available for distribution to shareholders and should note that if, for any
fund, such losses exceed other income during a taxable year, the fund would not
be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each AIM Fund's transfer agent and
dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
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AIM INVESTOR'S GUIDE
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If several members of a household own shares of the same fund,
only one annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
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<PAGE>
AIM MID CAP GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM NEW PACIFIC GROWTH FUND
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM New Pacific Growth Fund (the
"Fund"), which is one of several series investment portfolios comprising AIM
Growth Series (the "Trust"), an open-end, series, management investment company.
The Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of issuers domiciled in its Primary
Investment Area (as defined herein).
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
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AIM NEW PACIFIC GROWTH FUND
TABLE OF CONTENTS
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Summary................................................................................... 2
Financial Highlights...................................................................... 6
Investment Objective and Policies......................................................... 7
Risk Factors.............................................................................. 10
Management................................................................................ 13
Other Information......................................................................... 16
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SUMMARY
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The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of issuers domiciled in its Primary Investment Area
(as defined herein).
Investment Managers: The Fund is managed by A I M Advisors, Inc. ("AIM") and is sub-advised by INVESCO (NY), Inc. (the
"Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate and individual
clients around the world. AIM and the Sub-adviser are both indirect wholly owned subsidiaries of
AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment management group that
has a significant presence in the institutional and retail segment of the investment management
industry in North America and Europe, and a growing presence in Asia. AIM was organized in 1976 and,
together with its subsidiaries, currently advises approximately 90 investment company portfolios.
Purchasing Shares: Investors may select Class A or Class B shares of the Fund which are offered by this Prospectus at an
offering price that reflects differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to a separate
prospectus, the Fund also offers Advisor Class shares, which represent interests in the Fund. The
Advisor Class has different distribution arrangements.
Class A Shares: Shares are offered at net asset value plus any applicable initial sales charge.
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Prospectus Page 2
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AIM NEW PACIFIC GROWTH FUND
SUMMARY
(Continued)
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Class B Shares: Shares are offered at net asset value without an initial sales charge and are subject to a maximum
contingent deferred sales charge of 5% on certain redemptions made within six years from the date
such shares were purchased. Class B shares automatically convert to Class A shares of the Fund eight
years following the end of the calendar month in which a purchase was made. Class B shares are
subject to higher expenses than Class A shares.
Initial investments in any class of shares must be at least $500 and additional investments must be
at least $50. The minimum initial investment is modified for investments through tax-qualified
retirement plans and accounts initially established with an Automatic Investment Plan. The dis-
tributor of the Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
Suitability for Investors: An investor in Class A or Class B shares of the Fund should consider the method of purchasing shares
that is most beneficial given the amount of the purchase, the length of time the shares are expected
to be held, and other circumstances. Investors should consider whether, during the anticipated life
of their investment in the Fund, the accumulated distribution fees and any applicable contingent
deferred sales charges on Class B shares prior to conversion would be less than the initial sales
charge and accumulated distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares. To assist investors
in making this determination, the table under the caption "Table of Fees and Expenses" sets forth
examples of the charges applicable to each class of shares. Class A shares will normally be more
beneficial than Class B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase of more than $250,000
for Class B shares.
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, " The AIM Family
of Funds"). Class A and Class B shares of the Fund may be exchanged for shares of other funds in The
AIM Family of Funds in the manner and subject to the policies and charges set forth herein. See
"Exchange Privilege."
Redeeming Shares: Class A shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, generally without charge. A contingent deferred sales charge of 1% may apply to
certain redemptions where a purchase of more than $1 million is made at net asset value. See "How to
Redeem Shares -- Contingent Deferred Sales Charge Program for Large Purchases."
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Prospectus Page 3
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AIM NEW PACIFIC GROWTH FUND
SUMMARY
(Continued)
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Class B shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, less a contingent deferred sales charge for redemptions made within six years from
the date such shares were purchased. Class B shares redeemed after six years from the date such
shares were purchased will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on a monthly
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters" and "Special Plans."
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
The Fund invests primarily in foreign securities. Investments in foreign securities involve risks
relating to political and economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates also may affect the
Fund's net asset value, earnings and gains and losses realized on sales of securities.
The Fund invests a significant portion of its assets in issuers in a particular region of the world.
As a result, the Fund may be subject to greater risks and may experience greater volatility than a
fund that is more broadly diversified geographically.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
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THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 4
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AIM NEW PACIFIC GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Class A and Class B shares of the Fund are
reflected in the following table (1):
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CLASS A CLASS B
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SHAREHOLDER TRANSACTION COSTS (2):
Maximum sales charge on purchases (as a % of
offering price).................................. 5.50% None
Sales charges on reinvested distributions to
shareholders..................................... None None
Maximum deferred sales charge (as a % of net asset
value at time of purchase or sale, whichever is
less)............................................ None 5.00%
Redemption charges................................ None None
Exchange fees..................................... None None
ANNUAL FUND OPERATING EXPENSES (3):
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees..... 0.97% 0.97%
12b-1 distribution and service fees............... 0.35% 1.00%
Other expenses.................................... 0.61% 0.61%
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Total Fund Operating Expenses..................... 1.93% 2.58%
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HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (7):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Funds, assuming a 5%
annual return:
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10
1 YEAR 3 YEARS 5 YEARS YEARS(6)
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Class A shares (4)....................................................... $ 74 $113 $ 154 $ 270
Class B shares
Assuming a complete redemption at end of period (5).................... $ 78 $113 $ 161 $ 278
Assuming no redemption................................................. $ 26 $ 81 $ 139 $ 278
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(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. rules regarding investment companies.
(2) Sales charge waivers are available for Class A and Class B shares, and
reduced sales charge purchase plans are available for Class A shares. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase. The charge generally
declines by 1% annually thereafter, reaching zero after six years. See
"Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
Sales Charges."
(3) Expenses are based on the Fund's fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 2.00% and 2.65% of the average daily net
assets of the Fund's Class A and Class B shares, respectively. "Other
expenses" include custody, transfer agency, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information.
(4) Assumes payment of maximum sales charge by the investor.
(5) Assumes deduction of the applicable contingent deferred sales charge.
(6) For Class B shares, this number reflects the conversion to Class A shares
eight years following the end of the calendar month in which a purchase was
made.
(7) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT
EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the assumption
in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 5
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AIM NEW PACIFIC GROWTH FUND
FINANCIAL HIGHLIGHTS
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The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information.
AIM NEW PACIFIC GROWTH FUND
(FORMERLY GT GLOBAL NEW PACIFIC GROWTH FUND)
[TO BE ADDED]
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PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. Standardized total return for Class
A shares reflects the deduction of the Fund's maximum front-end sales charge at
the time of purchase. Standardized total return for Class B shares reflects the
deduction of the maximum applicable contingent deferred sales charge on a
redemption of shares held for the period.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 6
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AIM NEW PACIFIC GROWTH FUND
INVESTMENT OBJECTIVES
AND POLICIES
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The Fund seeks long-term growth of capital. The Fund seeks its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of issuers domiciled in its Primary Investment Area, as
described below. Equity securities in which these Funds may invest include
common stocks, preferred stocks, convertible debt securities and warrants to
acquire such securities. The Fund's Primary Investment Area includes the
following countries: Australia, Hong Kong, India, Indonesia, Malaysia, New
Zealand, Pakistan, the Philippines, Singapore, South Korea, Taiwan and Thailand.
Because the development of the world's economies and stock markets is rapidly
evolving, from time to time the Board of Trustees may add or delete countries
from the Fund's Primary Investment Area. There can be no assurance that the Fund
will achieve its investment objective.
The Fund is a regional fund for investors interested in a more geographically
concentrated investment but still desiring to diversify across multiple markets.
The Fund may invest up to 35% of its total assets in the equity securities of
issuers domiciled outside of its Primary Investment Area. Such investments may
include: (a) securities of issuers in countries that are not located in the
Primary Investment Area but are linked by tradition, economic markets, cultural
similarities or geography to the countries in such Primary Investment Area; and
(b) securities of issuers located elsewhere in the world that have operations in
the Primary Investment Area or that stand to benefit from political and economic
events in the Primary Investment Area.
The Fund may invest up to 35% of its total assets in debt securities, including
U.S. and foreign government securities and corporate debt securities, Samurai
and Yankee bonds, Eurobonds and Depository Receipts. The issuers of such debt
securities may or may not be domiciled in the Primary Investment Area of the
Fund. The Fund will limit its purchases of debt securities to investment grade
obligations. "Investment grade" debt refers to those securities rated within one
of the four highest ratings categories by Moody's Investors Service, Inc.
("Moody's") or by Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. ("S&P"), or, if not similarly rated by any other nationally recognized
statistical rating organization ("NRSRO"), deemed by the Sub-adviser to be of
equivalent quality. Debt rated Baa by Moody's, which is the lowest category of
investment grade debt, is considered by Moody's to have speculative
characteristics. See the Statement of Additional Information for a description
of Moody's and S&P ratings.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Fund, the Sub-adviser seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth rates. The Sub-adviser further
attempts to identify those companies in such countries and industries that are
best positioned and managed to take advantage of these economic and political
factors. The Sub-adviser intends to invest in such markets only after balancing
the potential for growth of selected companies in each market relative to the
risks of investing in each such country. Among the factors to be considered are
that several of the markets are so-called developing countries, and their
economies and markets are less developed and more prone to uncertainty,
instability and risk than those of the other markets in which the Fund invests.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to refect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis
Prospectus Page 7
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AIM NEW PACIFIC GROWTH FUND
of its views as to the best values then currently available in the marketplace.
Such values are a function of yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding the economy, movements in
the general level and term of interest rates, currency values, political
developments, and variations in the supply of funds available for investment in
the world bond market relative to the demands placed upon it. If market interest
rates decline, fixed income securities generally appreciate in value and vice
versa. Fixed income securities denominated in currencies other than the U.S.
dollar or in multinational currency units are evaluated on the strength of the
particular currency against the U.S. dollar as well as on the current and
expected levels of interest rates in the country or countries. In addition to
the foregoing, the Fund may seek to take advantage of differences in relative
values of fixed income securities among various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency units
such as Euros) and/or high quality debt securities or money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, most or all investments of the Fund may be made in
the United States and denominated in U.S. dollars. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units such as Euros) and may invest
in high quality foreign or domestic money market instruments. For a description
of money market instruments, see "Temporary Defensive Strategies" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Fund may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Fund's borrowings exceed 5% of its
total assets. Any borrowing by the Fund may cause greater fluctuation in the
value of its shares than would be the case if the Fund did not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment
Prospectus Page 8
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AIM NEW PACIFIC GROWTH FUND
(for which the Fund may receive a fee) to purchase similar, but not identical,
securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is made. While a loan is outstanding, the borrower must maintain with the
Fund's custodian collateral consisting of cash, U.S. government securities or
certain irrevocable letters of credit equal to at least the value of the
borrowed securities, plus any accrued interest or such other collateral as
permitted by the Fund's investment program and regulatory agencies, and as
approved by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Currency Strategies" herein and the Statement of Additional Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Fund also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
Prospectus Page 9
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AIM NEW PACIFIC GROWTH FUND
AMERICAN DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in U.S. securities markets. See "Investment
Objectives and Policies -- Depository Receipts" in the Statement of Additional
Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Trust's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
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RISK FACTORS
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GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
FOREIGN INVESTING. The Fund invests primarily in foreign securities. Investing
in foreign securities entails certain risks. The securities of non-U.S. issuers
generally will not be registered with, nor will the issuers thereof be subject
to, the reporting requirements of the SEC. Accordingly, there may be less
publicly available information about foreign securities and issuers than is
available about domestic securities and issuers. Foreign companies generally are
not subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
Securities of some foreign companies are less liquid and their prices may be
more volatile than securities of comparable domestic companies. In addition,
certain costs attributable to foreign investing, such as custody charges, are
higher than those attributable to domestic investing. The Fund's interest and
dividends from foreign issuers may be subject to non-U.S. withholding taxes,
thereby reducing its net investment income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the repatriation of
assets of the Fund, political or social instability, or diplomatic developments
that could affect their investments in those countries. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, rate of
savings and capital reinvestment, resource self-sufficiency and balance of
payments positions.
Because the Fund may invest substantially in securities denominated in
currencies other than the U.S. dollar, and because it may hold foreign
currencies, it will be affected favorably or unfavorably by exchange control
regulations or changes in the
Prospectus Page 10
<PAGE>
AIM NEW PACIFIC GROWTH FUND
exchange rates between such currencies and the U.S. dollar. Changes in currency
exchange rates will influence the value of the Fund's shares, and also may
affect the value of dividends and interest earned by the Fund and gains and
losses realized by the Fund. Currencies generally are evaluated on the basis of
fundamental economic criteria (e.g., relative inflation and interest rate levels
and trends, growth rate forecasts, balance of payments status and economic
policies) as well as technical and political data. The exchange rates between
the U.S. dollar and other currencies are determined by supply and demand in the
currency exchange markets, the international balance of payments, governmental
intervention, speculation and other economic and political conditions. If the
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the currency would adversely affect the value of the security
expressed in U.S. dollars.
INVESTING IN EMERGING MARKETS. Because of the special risks associated with
investing in emerging markets, an investment in the Fund should be considered
speculative. Investors are strongly advised to consider carefully the special
risks involved in emerging markets, which are in addition to the usual risks of
investing in developed foreign markets around the world.
Investing in emerging markets involves risks relating to potential political and
economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation in any
emerging market, the Fund could lose its entire investment in that market.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
Economies in emerging markets generally are dependent heavily upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by the countries
with which they trade. These economies also have been and may continue to be
affected adversely by economic conditions in the countries in which they trade.
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
In addition, brokerage commissions, custodial services and other costs relating
to investment in foreign markets generally are more expensive than in the United
States, particularly with respect to emerging markets. Such markets have
different settlement and clearance procedures. In certain markets there have
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the Fund to make intended securities purchases due to settlement
problems could cause the Fund to forego attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, in possible liability to the purchaser.
In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occurred in certain countries.
The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Fund's portfolio securities in such
markets may not be readily available. Section 22(e) of the 1940 Act permits a
registered investment company to suspend redemption of its shares for any period
during which an emergency exists, as determined by the SEC. Accordingly, when
the Fund believes that appropriate circumstances warrant, it will promptly apply
to the SEC for a determination that an emergency exists within the meaning of
Section 22(e). During the period commencing from the Fund's identification of
such conditions
Prospectus Page 11
<PAGE>
AIM NEW PACIFIC GROWTH FUND
until the date of SEC action, the portfolio securities of the Fund in the
affected markets will be valued at fair value as determined in good faith by or
under the direction of the Trust's Board of Trustees.
CONCENTRATION. The Fund invests a significant portion of its assets in a
particular region of the world. As a result, the Fund may be subject to greater
risks and may experience greater volatility than a fund that is more broadly
diversified geographically.
PACIFIC REGION COUNTRIES. The Fund invests primarily in equity securities of
issuers located in Pacific region countries other than Japan. Certain of the
risks associated with international investments are heightened for investments
in Pacific region countries. For example, some of the currencies of Pacific
region countries have experienced steady devaluations relative to the U.S.
dollar, and major adjustments have been made periodically in certain such
currencies. Moreover, recent currency devaluations in some Pacific region
countries have resulted in high interest rate levels and sharp reductions in
economic activity and have diminished prospects for short-term growth in
corporate earnings. Certain countries, such as India, face serious exchange
constraints. Jurisdictional disputes also exist between South Korea and North
Korea.
In addition, Hong Kong reverted to Chinese administration on July 1, 1997. The
long-term effects of this reversion are not known at this time. However, the
Fund's investments in Hong Kong may now be subject to the same or similar risks
as any investment in China. Investments in Hong Kong may be subject to
expropriation, nationalization or confiscation, in which case the Fund could
lose its entire investment in Hong Kong, if any. In addition, the reversion of
Hong Kong also presents a risk that the Hong Kong dollar will be devalued and a
risk of possible loss of investor confidence in Hong Kong's currency, stock
market and economy.
OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACTS. Although the Fund is authorized
to enter into options, futures and forward currency transactions, it might not
enter into any such transactions. Options, futures and foreign currency
transactions involve certain risks, which include: (1) dependence on the
Sub-adviser's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts or options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund or Portfolio to maintain
"cover" or to set aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
Prospectus Page 12
<PAGE>
AIM NEW PACIFIC GROWTH FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund, including
the investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund are delegated to the officers of the Trust, subject
always to the investment objective and policies of the Fund and to the general
supervision of the Trust's Board. See "Trustees and Executive Officers" in the
Statement of Additional Information for information on the Trustees of the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million and .90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 2.00%
and 2.65% of the average daily net assets of the Fund's Class A and Class B
shares, respectively.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement, dated as of May 29, 1998 (the "Advisory Agreement").
AIM was organized in 1976 and, together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. The Sub-adviser, 50 California Street, 27th
Floor, San Francisco, California 94111, and 1166 Avenue of the Americas, New
York, New York 10036, serves as the sub-adviser to the Fund pursuant to an
investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP
Prospectus Page 13
<PAGE>
AIM NEW PACIFIC GROWTH FUND
PLC. AMVESCAP PLC and its subsidiaries are an independent investment management
group that has a significant presence in the institutional and retail segment of
the investment management industry in North America and Europe, and a growing
presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Funds, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professionals primarily responsible for the portfolio management
of the Fund are as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Anna Tong Portfolio Manager since Portfolio Manager for the Sub-adviser since June 1998 and a Managing
Hong Kong 1998 Director and Chief Investment Officer for INVESCO Asia Ltd. (Hong
Kong) ("INVESCO Asia") since April 1997. Managing Director for
INVESCO International (FE) Ltd. (Hong Kong) and a Director of
INVESCO Investment Management (HK) Ltd. (Hong Kong) since March
1985. INVESCO Asia, INVESCO International (FE) Ltd. and INVESCO
Investment Management (HK) Ltd. are affiliates of the Sub-adviser.
Sammy Lau Portfolio Manager since Portfolio Manager for the Sub-adviser since June 1998 and a Director
Hong Kong 1998 of INVESCO Asia since January 1996. Associate Director of INVESCO
Asia from December 1994 to January 1996. Associate at J.P. Morgan
(Hong Kong) from November 1993 to November 1994. Investment Manager
for Baring International Asset Admin Ltd. (Hong Kong) from June 1990
to October 1993.
</TABLE>
------------------------
In placing orders for the Fund's portfolio securities transactions, the
Sub-adviser seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-adviser may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions for the Fund may
be executed through affiliates of AIM or the Sub-adviser. High portfolio
turnover (over 100%) involves correspondingly greater brokerage commissions and
other transaction costs that the Fund will bear directly and could result in the
realization of net capital gains that would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 on behalf of Class A shares of the Fund, and has entered into a
Master Distribution Agreement, dated May 29, 1998, on behalf of Class B shares
of the Fund (individually referred to as a "Distribution Agreement" or
collectively as the "Distribution Agreements") with AIM Distributors, a
registered broker-dealer and a wholly owned subsidiary of AIM, to act as the
distributor of Class A and Class B shares of the Fund. Certain Trustees and
officers of the Trust are affiliated with AIM Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right to
distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would
Prospectus Page 14
<PAGE>
AIM NEW PACIFIC GROWTH FUND
continue to receive payments of asset based sales charges in respect of the
outstanding Class B shares attributable to the distribution efforts of AIM
Distributors; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments to AIM Distributors. Termination of the Class B shares distribution
plan or Distribution Agreement does not affect the obligation of Class B
shareholders to pay contingent deferred sales charges.
DISTRIBUTION PLANS. CLASS A PLAN. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
Of the aggregate amount payable under the Class A Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee. Payments pursuant to the
Plans are subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
CLASS B PLAN. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
BOTH PLANS. Activities that may be financed under the Class A Plan and the Class
B Plan (collectively, the "Plans") include, but are not limited to: printing of
prospectuses and statements of additional information and reports for other than
existing shareholders, overhead, preparation and distribution of advertising
material and sales literature, expense of organizing and conducting sales
seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the expenses
actually incurred by AIM Distributors on behalf of the Fund. Thus, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust
Prospectus Page 15
<PAGE>
AIM NEW PACIFIC GROWTH FUND
will not be obligated to pay more than that fee, and if AIM Distributors'
expenses are less than the fee it receives, AIM Distributors will retain the
full amount of the fee. Payments pursuant to the Plans are subject to any
applicable limitations imposed by rules of the National Association of
Securities Dealers, Inc.
Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
Under the Plans, AIM Distributors may in its discretion from time to time agree
to waive voluntarily all or any portion of its 12b-1 fee, while retaining its
ability to be reimbursed for such fee prior to the end of each fiscal year.
Under the Plans, certain financial institutions which have entered into service
agreements and which sell shares of the Fund on an agency basis, may receive
payments from the Fund pursuant to the respective Plans. AIM Distributors does
not act as principal, but rather as agent, for the Fund in making such payments.
The Fund will obtain a representation from such financial institutions that they
will either be licensed as dealers as required under applicable state law, or
that they will not engage in activities which would constitute acting as a
"dealer" as defined under applicable state law. Financial intermediaries and any
other person entitled to receive compensation for selling Fund shares may
receive different compensation for selling shares of one class over another.
For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of "G.T. Global Growth Series," a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series or portfolios
of the Trust. From time to time the Trust may establish additional funds, each
corresponding to a distinct investment portfolio and a distinct series of the
Trust's shares of beneficial interest. Shares of each fund are entitled to one
vote per share (with proportional voting for fractional shares) and are freely
transferable. Shareholders have no preemptive rights. Other than the automatic
conversion of Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
Prospectus Page 16
<PAGE>
AIM NEW PACIFIC GROWTH FUND
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 17
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND AIM GLOBAL RESOURCES FUND
AIM ADVISOR INTERNATIONAL VALUE FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM ADVISOR LARGE CAP VALUE FUND AIM GLOBAL TRENDS FUND
AIM ADVISOR MULTIFLEX FUND AIM GLOBAL UTILITIES FUND
AIM ADVISOR REAL ESTATE FUND AIM HIGH INCOME MUNICIPAL FUND
AIM AGGRESSIVE GROWTH FUND AIM HIGH YIELD FUND
AIM AMERICA VALUE FUND AIM INCOME FUND
AIM ASIAN GROWTH FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM BALANCED FUND AIM INTERNATIONAL EQUITY FUND
AIM BLUE CHIP FUND AIM INTERNATIONAL GROWTH FUND
AIM CAPITAL DEVELOPMENT FUND AIM JAPAN GROWTH FUND
AIM CHARTER FUND AIM LATIN AMERICAN GROWTH FUND
AIM CONSTELLATION FUND AIM LIMITED MATURITY TREASURY FUND
AIM DEVELOPING MARKETS FUND AIM MID CAP GROWTH FUND
AIM DOLLAR FUND(*) AIM MONEY MARKET FUND(*)
AIM EMERGING MARKETS FUND AIM MUNICIPAL BOND FUND
AIM EUROPEAN DEVELOPMENT FUND AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND AIM SELECT GROWTH FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM SMALL CAP OPPORTUNITIES FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM GLOBAL GROWTH FUND AIM TAX-EXEMPT CASH FUND(*)
AIM GLOBAL GROWTH & INCOME FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL HEALTH CARE FUND AIM VALUE FUND
AIM GLOBAL HIGH INCOME FUND AIM WEINGARTEN FUND
AIM GLOBAL INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
asset value, without payment of a sales charge, as described below. Other
funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
FUND, are sold with an initial sales charge or subject to a contingent
deferred sales charge upon redemption, as described below.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM
Family of Funds ("AIM Funds"), an investor must submit a fully completed new
Account Application form directly to A I M Fund Services, Inc. ("AFS" or the
"Transfer Agent") or through any dealer authorized by A I M Distributors, Inc.
("AIM Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
is $500, except for accounts initially established through an Automatic
Investment Plan, which requires a special authorization form (see "Special
Plans") and for certain retirement accounts. The minimum initial investment for
accounts established with an Automatic Investment Plan is $50. The minimum
initial investment for an Individual Retirement Arrangement ("IRA") or Roth IRA
is $250. There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such
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AIM INVESTOR'S GUIDE
plans is $25), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM Funds account.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Shares of any AIM Funds not named on the cover of this Prospectus, as well
as Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>
HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased
directly through AIM Distributors or through any dealer who has entered into an
agreement with AIM Distributors. The minimum investment for subsequent purchases
is $50. The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. There are no such minimum investment requirements for investment of
dividends and distributions of any of the AIM Funds into any other existing AIM
Funds account.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION-SM-: To purchase additional shares by electronic
funds transfer, please contact the Client Services Department of AFS for
details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN GROWTH FUND, AIM
BALANCED FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER
FUND, AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP GROWTH FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT
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AIM INVESTOR'S GUIDE
CASH FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without
a sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over another class in the same Multiple Class Fund. Factors an investor
should consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH
FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP EQUITY
FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
SALES CHARGES AND DEALER CONCESSIONS
GROUP I. Certain AIM Funds are currently sold with a sales charge ranging
from 5.50% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM
ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
GROWTH FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $25,000................................................................ 5.50 % 5.82 % 4.75 %
$25,000 but less than $50,000.................................................... 5.25 5.54 4.50
$50,000 but less than $100,000................................................... 4.75 4.99 4.00
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 3.00 3.09 2.50
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
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AIM INVESTOR'S GUIDE
GROUP II. Certain AIM Funds are currently sold with a sales charge ranging
from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND,
AIM BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND,
AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL HIGH INCOME FUND,
AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES
FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND FUND, AIM
STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $50,000................................................................ 4.75 % 4.99 % 4.00 %
$50,000 but less than $100,000................................................... 4.00 4.17 3.25
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 2.50 2.56 2.00
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $100,000............................................................... 1.00 % 1.01 % 0.75 %
$100,000 but less than $250,000.................................................. 0.75 0.76 0.50
$250,000 but less than $1,000,000................................................ 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus
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AIM INVESTOR'S GUIDE
payments or other consideration shall not exceed 0.25% of the public offering
price of the shares sold. Any such bonus or incentive programs will not change
the price paid by investors for the purchase of the applicable AIM Fund's shares
or the amount that any particular AIM Fund will receive as proceeds from such
sales. Dealers may not use sales of the AIM Funds' shares to qualify for any
incentives to the extent that such incentives may be prohibited by the laws of
any state.
AIM Distributors may make payments to dealers and institutions who are
dealers of record for purchases of $1 million of more of Class A shares (or
shares which normally involve payment of initial sales charges), which are sold
at net asset value and are subject to a contingent deferred sales charge, for
all AIM Funds other than Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND as follows: 1% of the first $2 million
of such purchases, plus 0.80% of the next $1 million of such purchases, plus
0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess
of $20 million of such purchases. See "Contingent Deferred Sales Charge Program
for Large Purchases." AIM Distributors may make payments to dealers and
institutions who are dealers of record for purchases of $1 million or more of
Class A shares (or shares which normally involve payment of initial sales
charges), and which are sold at net asset value and are not subject to a
contingent deferred sales charge, in an amount up to 0.10% of such purchases of
Class A shares of AIM LIMITED MATURITY TREASURY FUND, and in an amount up to
0.25% of such purchases of Class A shares of AIM TAX-FREE INTERMEDIATE FUND.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed
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AIM INVESTOR'S GUIDE
during the next twelve months on Saturdays and Sundays and on the days on which
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class
Funds currently offer two or more classes of shares through separate
distribution systems (the "Multiple Distribution System"). Although each class
of shares of a particular Multiple Class Fund represents an interest in the same
portfolio of investments, each class is subject to a different distribution
structure and, as a result, differing expenses. This Multiple Distribution
System allows investors to select the class that is best suited to the
investor's needs and objectives. In considering the options afforded by the
Multiple Distribution System, investors should consider both the applicable
initial sales charge or contingent deferred sales charge, as well as the ongoing
expenses borne by each class of shares and other relevant factors, such as
whether his or her investment goals are long-term or short-term.
CLASS A SHARES generally are sold subject to the initial sales charges
described above and are subject to the other fees and expenses described
herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
needs of an investor who wishes to establish a dollar cost averaging
program, pursuant to which Class A shares an investor owns may be exchanged
at net asset value for Class A shares of another Multiple Class Fund or
shares of another AIM Fund which is not a Multiple Class Fund, subject to
the terms and conditions described under the caption "Exchange Privilege --
Terms and Conditions of Exchanges."
CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made within
the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."
Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and other distributions)
eight years from the end of the calendar month in which the purchase of
Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
outstanding on May 29, 1998 and which are continuously held by the
shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
FUND seven years from the end of the calendar month in which the purchase of
such Class B shares was made. If a shareholder exchanges Class B shares of
AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
shares will be subject to the eight year conversion feature applicable to
Class B shares of all other AIM Funds. Following such conversion of their
Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
payments associated with Class B shares. See "Management -- Distribution
Plans."
AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an initial
sales charge and are not subject to a contingent deferred sales charge;
however, they are subject to the other fees and expenses described in the
prospectus for AIM MONEY MARKET FUND.
TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon
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<PAGE>
AIM INVESTOR'S GUIDE
Eastern Time or NYSE Close on any business day of the Fund will be confirmed at
the price next determined. Net asset value is normally determined at 12:00 noon
Eastern Time and NYSE Close on each business day of AIM MONEY MARKET FUND.
SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
The term "purchaser" means:
- - an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the benefit
of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
plan (unless such 403(b) plan qualifies as the purchaser as defined below);
- - a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), provided that:
a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will
not accept contributions submitted with respect to individual
participants);
b. each transmittal must be accompanied by a single check or wire
transfer; and
c. all new participants must be added to the 403(b) plan by submitting an
application on behalf of each new participant with the contribution
transmittal;
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AIM INVESTOR'S GUIDE
- - a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;
- - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or SIMPLE
IRA accounts should be linked;
- - any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or
- - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").
Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge
made during the 13-month period will be made at the public offering price
applicable to a single transaction of the total dollar amount indicated by the
LOI, as described under "Sales Charges and Dealer Concessions." It is the
purchaser's responsibility at the time of purchase to specify the account
numbers that should be considered in determining the appropriate sales charge.
The offering price may be further reduced as described under "Rights of
Accumulation" if the Transfer Agent is advised of all other accounts at the time
of the investment. Shares acquired through reinvestment of dividends and capital
gain distributions will not be applied to the LOI. At any time during the
13-month period after meeting the original obligation, a purchaser may revise
his intended investment amount upward by submitting a written and signed
request. Such a revision will not change the original expiration date. By
signing an LOI, a purchaser is not making a binding commitment to purchase
additional shares, but if purchases made within the 13-month period do not total
the amount specified, the investor will pay the increased amount of sales charge
as described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase with the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
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AIM INVESTOR'S GUIDE
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds
at net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase Class A shares of the AIM Funds through
AIM Distributors without payment of an initial sales charge: (a) A I M
Management Group Inc. ("AIM Management") and its affiliated companies; (b) any
current or retired officer, director, trustee or employee, or any member of the
immediate family (including spouse, children, parents and parents of spouse) of
any such person, of AIM Management or its affiliates or of certain mutual funds
which are advised or managed by AIM; or any trust established exclusively for
the benefit of such persons; (c) any employee benefit plan established for
employees of AIM Management or its affiliates; (d) any current or retired
officer, director, trustee or employee, or any member of
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AIM INVESTOR'S GUIDE
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, or of CIGNA Corporation or of any of its affiliated
companies, or of First Data Investor Services Group (formerly The Shareholder
Services Group, Inc.); (e) any investment company sponsored by CIGNA
Investments, Inc. or any of its affiliated companies for the benefit of its
directors' deferred compensation plans; (f) discretionary advised clients of AIM
or AIM Capital; (g) registered representatives and employees of dealers who have
entered into agreements with AIM Distributors (or financial institutions that
have arrangements with such dealers with respect to the sale of shares of the
AIM Funds) and any member of the immediate family (including spouse, children,
parents and parents of spouse) of any such person, provided that purchases at
net asset value are permitted by the policies of such person's employer; (h)
certain broker-dealers, investment advisers or bank trust departments that
provide asset allocation, similar specialized investment services or investment
company transaction services for their customers, that charge a minimum annual
fee for such services, and that have entered into an agreement with AIM
Distributors with respect to their use of the AIM Funds in connection with such
services; (i) any employee or any member of the immediate family (including
spouse, children, parents and parents of spouse) of any employee, of Triformis
Inc.; (j) shareholders of the AIM/GT Funds as of April 30, 1987 who since that
date continually have owned shares of one or more of the AIM/GT Funds; and (k)
certain former AMA Investment Advisers' shareholders who became shareholders of
the AIM Global Health Care Fund in October 1989, and who have continuously held
shares in the AIM/GT Funds since that time.
In addition, shares of any AIM Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the total amount invested in the
plan is at least $1,000,000, (2) the sponsor signs a $1,000,000 LOI, (3) such
shares are purchased by an employer-sponsored plan with at least 100 eligible
employees, or (4) all of the plan's transactions are executed through a single
financial institution or service organization who has entered into an agreement
with AIM Distributors with respect to their use of the AIM Funds in connection
with such accounts. Section 403(b) plans sponsored by public educational
institutions will not be eligible for net asset value purchases based on the
aggregate investment made by the plan or the number of eligible employees.
Participants in such plans will be eligible for reduced sales charges based
solely on the aggregate value of their individual investments in the applicable
AIM Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms for share purchases of the Load Funds (as defined under the
caption "Exchange Privilege") sold at net asset value to an employee benefit
plan in accordance with this paragraph as follows: 1% of the first $2 million of
such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50%
of the next $17 million of such purchases, plus 0.25% of amounts in excess of
$20 million of such purchases and up to 0.10% of the net asset value of any
Class A shares of AIM LIMITED MATURITY TREASURY FUND sold at net asset value to
an employee benefit plan in accordance with this paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone
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AIM INVESTOR'S GUIDE
number of the dealer who sold to the unit holder the units to be redeemed or
repurchased; and (ii) states that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by the
proceeds from the redemption or repurchase of units of such trusts.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a
shareholder who owns shares which are not subject to a contingent deferred sales
charge, can arrange for monthly, quarterly or annual amounts (but not less than
$50) to be drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that exceed on an annual
basis 12% of such account will be subject to a contingent deferred sales charge
on the amounts exceeding 12% of the account value at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the
Transfer Agent and all dividends and distributions are reinvested to shares of
the applicable AIM Fund by the Transfer Agent. To provide funds for payments
made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient
full and fractional shares at their net asset value in effect at the time of
each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in
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AIM INVESTOR'S GUIDE
the amount specified by the shareholder (minimum $50 per investment, per
account) and on a day or date(s) specified by the shareholder. The proceeds are
invested in shares of the designated AIM Fund at the applicable offering price
determined on the date of the withdrawal. An Automatic Investment Plan may be
discontinued upon 10 days' prior notice to the Transfer Agent or AIM
Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination money-
purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans; SARSEP
plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement accounts").
Information concerning these plans, including the custodian's fees and the forms
necessary to adopt such plans, can be obtained by calling or writing the AIM
Funds or AIM Distributors. Shares of the AIM Funds are also available for
investment through existing 401(k) plans (for both individuals and employers)
adopted under the Code. The plan custodian currently imposes an annual $10
maintenance fee with respect to each retirement account for which it serves as
the custodian. This fee is generally charged in December. Each AIM Fund and/or
the custodian reserve the right to change this maintenance fee and to initiate
an establishment fee (not to exceed its cost).
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of AIM Funds. The Program automatically rebalances
holdings of AIM Funds to the established allocation on a periodic basis. Under
the Program, a shareholder may predesignate, on a percentage basis, how the
total value of his or her holdings in a minimum of two, and a maximum of ten,
AIM Funds ("Personal Portfolio") is to be rebalanced on a quarterly, semiannual,
or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more AIM Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other AIM Funds in the
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shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the AIM
Fund(s) in a shareholder's Personal Portfolio have appreciated during a
rebalancing period, the Program will result in shares of AIM Fund(s) that have
appreciated most during the period being exchanged for shares of AIM Fund(s)
that have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular AIM Fund would
be 2% or less. In predesignating percentages, shareholders must use whole
percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an AIM
Fund's shares. The AIM Funds and AIM Distributors reserve the right to modify,
suspend, or terminate the Program at any time on 60 days' prior written notice
to shareholders. A request to participate in the Program must be received in
good order at least five business days prior to the next rebalancing date. Once
a shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
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EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM Funds --
Sales Charges and Dealer Concessions," shares of certain of the AIM Funds,
including the Class A shares of the Multiple Class Funds, listed below and
referred to herein as the "Load Funds," are sold at a public offering price that
includes a maximum sales charge of 5.50% or 4.75% of the public offering price
of such shares; Class A shares (or shares which normally involve the payment of
initial sales charges) of certain of the AIM Funds, listed below and referred to
herein as the "Lower Load Funds," are sold at a public offering price that
includes a maximum sales charge of 1.00% of the public offering price of such
shares; and Class A shares or shares of certain other funds, listed below and
referred to herein as the "No Load Funds," are sold at net asset value, without
payment of a sales charge.
LOAD FUNDS:
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AIM ADVISOR FLEX FUND -- CLASS A
AIM ADVISOR INTERNATIONAL VALUE FUND -- CLASS A
AIM ADVISOR LARGE CAP VALUE FUND -- CLASS A
AIM ADVISOR MULTIFLEX FUND -- CLASS A
AIM ADVISOR REAL ESTATE FUND -- CLASS A
AIM AGGRESSIVE GROWTH FUND -- CLASS A
AIM AMERICA VALUE FUND -- CLASS A
AIM ASIAN GROWTH FUND -- CLASS A
AIM BALANCED FUND -- CLASS A
AIM BLUE CHIP FUND -- CLASS A
AIM CAPITAL DEVELOPMENT FUND -- CLASS A
AIM CHARTER FUND -- CLASS A
AIM CONSTELLATION FUND -- CLASS A
AIM DEVELOPING MARKETS FUND -- CLASS A
AIM EMERGING MARKETS FUND -- CLASS A
AIM EUROPE GROWTH FUND -- CLASS A
AIM EUROPEAN DEVELOPMENT FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH FUND -- CLASS A
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND -- CLASS A
AIM GLOBAL FINANCIAL SERVICES FUND -- CLASS A
AIM GLOBAL GOVERNMENT INCOME FUND -- CLASS A
AIM GLOBAL GROWTH FUND -- CLASS A
AIM GLOBAL GROWTH & INCOME FUND -- CLASS A
AIM GLOBAL HEALTH CARE FUND -- CLASS A
AIM GLOBAL HIGH INCOME FUND -- CLASS A
AIM GLOBAL INCOME FUND -- CLASS A
AIM GLOBAL INFRASTRUCTURE FUND -- CLASS A
AIM GLOBAL RESOURCES FUND -- CLASS A
AIM GLOBAL TELECOMMUNICATIONS FUND -- CLASS A
AIM GLOBAL TRENDS FUND -- CLASS A
AIM GLOBAL UTILITIES FUND -- CLASS A
AIM HIGH INCOME MUNICIPAL FUND -- CLASS A
AIM HIGH YIELD FUND -- CLASS A
AIM INCOME FUND -- CLASS A
AIM INTERMEDIATE GOVERNMENT FUND -- CLASS A
AIM INTERNATIONAL EQUITY FUND -- CLASS A
AIM INTERNATIONAL GROWTH FUND -- CLASS A
AIM JAPAN GROWTH FUND -- CLASS A
AIM LATIN AMERICAN GROWTH FUND -- CLASS A
AIM MID CAP GROWTH FUND -- CLASS A
AIM MONEY MARKET FUND -- CLASS A
AIM MUNICIPAL BOND FUND -- CLASS A
AIM NEW PACIFIC GROWTH FUND -- CLASS A
AIM SELECT GROWTH FUND -- CLASS A
AIM SMALL CAP EQUITY FUND -- CLASS A
AIM SMALL CAP OPPORTUNITIES FUND -- CLASS A
AIM STRATEGIC INCOME FUND -- CLASS A
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT -- CLASS A
AIM VALUE FUND -- CLASS A
AIM WEINGARTEN FUND -- CLASS A
AIM WORLDWIDE GROWTH FUND -- CLASS A
LOWER LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM LIMITED MATURITY TREASURY FUND -- CLASS A
AIM TAX-FREE INTERMEDIATE FUND -- CLASS A
NO LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM MONEY MARKET FUND -- AIM CASH RESERVE SHARES
AIM TAX-EXEMPT CASH FUND -- CLASS A
AIM DOLLAR FUND -- CLASS A
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE, (iii) Class A shares
may be exchanged for Class A shares, (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A shares of AIM MONEY MARKET FUND or for Class B or Class C shares.
A-14
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AIM INVESTOR'S GUIDE
DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund or acquired upon
any Lower Load Fund. exchange of
shares of any
Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
</TABLE>
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE
IS REVISED AS FOLLOWS:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value if shares were acquired Net Asset Value Net Asset Value Not Applicable Not Applicable
upon exchange of any Load Fund.
Otherwise, difference in sales charge
will apply.
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund. acquired upon
Difference in sales charge will apply if exchange of
No Load shares were acquired upon shares of any
exchange of Lower Load Fund shares. Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C.............. Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>
An exchange is permitted only in the following circumstances: (a) if the
funds offer more than one class of shares, the exchange must be between the same
class of shares (e.g., Class A, Class B and Class C shares of a Multiple Class
Fund cannot be exchanged for each other) except that AIM Cash Reserve Shares of
AIM MONEY MARKET FUND may be exchanged for Class A shares of another Multiple
Class Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten business days, and all other shares are held
in an account for at least one day, prior to the exchange; and (h) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the AIM Funds.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
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<PAGE>
AIM INVESTOR'S GUIDE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged
are redeemed at their net asset value as determined at NYSE Close on the day
that an exchange request in proper form (described below) is received. Exchange
requests received after NYSE Close will result in the redemption of shares at
their net asset value at NYSE Close on the next business day. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase, Exchange and
Redemption Orders (AIM MONEY MARKET FUND only)" for information regarding the
timing of exchange orders for AIM MONEY MARKET FUND. Normally, shares of an AIM
Fund to be acquired by exchange are purchased at their net asset value or
applicable offering price, as the case may be, determined on the date that such
request is received, but under unusual market conditions such purchases may be
delayed for up to five business days if it is determined that a fund would be
materially disadvantaged by an immediate transfer of the proceeds of the
exchange. If a shareholder is exchanging into a fund paying daily dividends
("Dividends, Distributions and Tax Matters -- Dividends and Distributions,"
below), and the release of the exchange proceeds is delayed for the foregoing
five-day period, such shareholder will not begin to accrue dividends until the
sixth business day after the exchange. Shares purchased by check may not be
exchanged until it is determined that the check has cleared, which may take up
to ten business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. If a shareholder does not wish to allow telephone
exchanges by any person in his account, he should decline that option on the
account application. AIM Distributors has made arrangements with certain dealers
and investment advisory firms to accept telephone instructions to exchange
shares between any of the AIM Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the funds, including the condition that any such dealer or
investment advisor enter into an agreement (which contains additional conditions
with respect to exchanges of shares) with AIM Distributors. To exchange shares
by telephone, a shareholder, dealer or investment advisor who has satisfied the
foregoing conditions must call AFS at (800) 959-4246. If a shareholder is unable
to reach AFS by telephone, he may also request exchanges by telegraph or use
overnight courier services to expedite exchanges by mail, which will be
effective on the business day received by the Transfer Agent as long as such
request is received prior to NYSE Close. The Transfer Agent and AIM Distributors
will not be liable for any loss, expense or cost arising out of any telephone
exchange request that they reasonably believe to be genuine, but may in certain
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's Social Security Number and current address, and mailings of
confirmations promptly after the transaction.
EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
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<PAGE>
AIM INVESTOR'S GUIDE
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
MULTIPLE DISTRIBUTION SYSTEM. CLASS B SHARES. Class B shares purchased
under the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS % OF DOLLAR
YEARS SINCE PURCHASE MADE AMOUNT SUBJECT TO CHARGE
- ------------------------------------------------------------------------------------------ ---------------------------
<S> <C>
First..................................................................................... 5%
Second.................................................................................... 4%
Third..................................................................................... 3%
Fourth.................................................................................... 3%
Fifth..................................................................................... 2%
Sixth..................................................................................... 1%
Seventh and Following..................................................................... None
</TABLE>
In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
CLASS C SHARES. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
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<PAGE>
AIM INVESTOR'S GUIDE
WAIVERS. Contingent deferred sales charges on Class B and Class C shares
will be waived on redemptions (1) following the death or post-purchase
disability, as defined in Section 72(m)(7) of the Code, of a shareholder or a
settlor of a living trust (provided AIM Distributors is notified of such death
or post-purchase disability at the time of the redemption request and is
provided with satisfactory evidence of such death or post-purchase disability),
(2) in connection with certain distributions from IRAs, custodial accounts
maintained pursuant to Code Section 403(b), deferred compensation plans
qualified under Code Section 457 and plans qualified under Code Section 401
(collectively, "Retirement Plans"), (3) pursuant to a Systematic Withdrawal
Plan, provided that amounts withdrawn under such plan do not exceed on an annual
basis 12% of the value of the shareholder's investment in Class B or Class C
shares at the time the shareholder elects to participate in the Systematic
Withdrawal Plan, (4) effected pursuant to the right of a Multiple Class Fund to
liquidate a shareholder's account if the aggregate net asset value of shares
held in the account is less than the designated minimum account size described
in the prospectus of such Multiple Class Fund, (5) effected by AIM of its
investment in Class B or Class C shares and (6) of Class C shares where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payment otherwise payable to the dealer described in the last paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds."
Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
Waiver category (2) above applies only to redemptions resulting from:
(i) required minimum distributions to plan participants or beneficiaries who
are age 70 1/2 or older, and only with respect to that portion of such
distributions which does not exceed 12% annually of the participant's or
beneficiary's account value in a particular AIM Fund;
(ii) in-kind transfers of assets where the participant or beneficiary notifies
AIM Distributors of such transfer no later than the time such transfer
occurs;
(iii) tax-free rollovers or transfers of assets to another Retirement Plan
invested in Class B or Class C shares of one or more Multiple Class Funds;
(iv) tax-free returns of excess contributions or returns of excess deferral
amounts; and
(v) distributions upon the death or disability (as defined in the Code) of the
participant or beneficiary.
Shareholders who purchased Class B shares of the AIM/GT Funds or Class C
shares of AIM GLOBAL TRENDS FUND prior to June 1, 1998 are entitled to certain
additional waivers of the contingent deferred sales charge on those shares as
described in the Statement of Additional Information of each respective fund
under "How to Purchase and Redeem Shares."
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND [or Class A shares
of AIM DOLLAR FUND] which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code,
A-18
<PAGE>
AIM INVESTOR'S GUIDE
or Plans created under Section 403(b) of the Code and sponsored by nonprofit
organizations as defined under Section 501(c)(3) of the Code, where shares are
being redeemed in connection with employee terminations or withdrawals, and (a)
the total amount invested in a Plan is at least $1,000,000, (b) the sponsor of a
Plan signs a letter of intent to invest at least $1,000,000 in one or more of
the AIM Funds, or (c) the shares being redeemed were purchased by an
employer-sponsored Plan with at least 100 eligible employees; provided, however,
that Plans created under Section 403(b) of the Code which are sponsored by
public educational institutions shall qualify under (a), (b) or (c) above on the
basis of the value of each Plan participant's aggregate investment in the AIM
Funds, and not on the aggregate investment made by the Plan or on the number of
eligible employees; (2) redemptions of shares following the death or
post-purchase disability, as defined in Section 72(m)(7) of the Code, of a
shareholder or a settlor of a living trust; (3) redemptions of shares purchased
at net asset value by private foundations or endowment funds where the initial
amount invested was at least $1,000,000; (4) redemptions of shares purchased by
an investor in amounts of $1,000,000 or more where such investor's dealer of
record, due to the nature of the investor's account, notifies AIM Distributors
prior to the time of investment that the dealer waives the payments otherwise
payable to the dealer as described in the third paragraph under the caption
"Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM Funds;"
and (5) pursuant to a Systematic Withdrawal Plan, provided that amounts
withdrawn under such plan do not exceed on an annual basis 12% of the value of
the shareholder's investment in Class A shares at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund
to establish as IRA, should include the following information along with a
written request for either partial or full liquidation of fund shares; (a) a
statement as to whether or not the shareholder has attained age 59 1/2, and (b)
a statement as to whether or not the shareholder elects to have federal income
tax withheld from the proceeds of the liquidation.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in this account, he should decline that option on the account
application. The telephone redemption feature can be used only if: (a) the
redemption proceeds are to be mailed to the address of record or transferred
electronically or wired to the pre-authorized bank account; (b) there has been
no change of address of record on the account within the preceding 30 days; (c)
the shares to be redeemed are not in certificate form; (d) the person requesting
the redemption can provide proper identification information, and (e) the
proceeds of the redemption do not exceed $50,000. Accounts in AIM Distributors'
prototype retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not
eligible for the telephone redemption option. AIM Distributors has made
arrangements with certain dealers and investment advisors to accept telephone
instructions for the redemption of shares. AIM Distributors reserves the right
to impose conditions on these dealers and investment advisors, including the
condition that they enter into agreements (which contain additional conditions
with respect to the redemption of shares) with AIM Distributors. The Transfer
Agent and AIM Distributors will not be liable for any loss, expense or cost
arising out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain
A-19
<PAGE>
AIM INVESTOR'S GUIDE
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's taxpayer identification number and current address, and mailings
of confirmations promptly after the transaction.
EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order
is received prior to 11:30 a.m. Eastern Time, the redemption will be effective
on that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next business day.
REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of
AIM MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing
the appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an
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AIM INVESTOR'S GUIDE
address that has been changed within the past 30 days; (5) requests to transfer
the registration of shares to another owner, (6) telephone exchange and
telephone redemption authorization forms; (7) changes in previously designated
wiring or electronic funds transfer instructions, and (8) written redemptions or
exchanges of shares previously reported as lost, whether or not the redemption
amount is under $50,000 or the proceeds are to be sent to the address of record.
These requirements may be waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within 90 days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment may alter any capital gains payable. If
there has been a loss on the redemption and shares of the same fund are
repurchased, all of the loss may not be tax deductible, depending on the timing
and amount reinvested. Under the Code, if the redemption proceeds of fund shares
on which a sales charge was paid are reinvested in shares of the same fund, or
exchanged for shares of another AIM Fund, at a reduced sales charge within 90
days of the payment of the sales charge, the shareholder's basis in the fund
shares redeemed may not include the amount of the sales charge paid, thereby
reducing the loss or increasing the gain recognized from the redemption;
however, the shareholder's basis in the fund shares purchased will include the
sales charge. Each AIM Fund may amend, suspend or cease offering the privilege
at any time as to shares redeemed after the date of such amendment, suspension
or cessation. This privilege may only be exercised once each year by a
shareholder with respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in
connection with the redemption of Class A shares and who subsequently reinvest a
portion or all of the value of the redeemed shares in Class A shares of any AIM
Fund within 90 days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is
determined as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close
with respect to AIM MONEY MARKET FUND) on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an AIM Fund's share
will be determined as of the close of the NYSE on such day. For purposes of
defining net asset value per share, futures and options contracts generally will
be valued 15 minutes after the close of trading of the NYSE. The net asset value
per share is calculated by subtracting a class' liabilities from its assets and
dividing the result by the total number of class shares outstanding. The
determination of net asset value per share is made in accordance with generally
accepted accounting principles. Among other items, liabilities include accrued
expenses and dividends payable, and total assets include portfolio securities
valued at their market value, as well as income accrued but
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AIM INVESTOR'S GUIDE
not yet received. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
supervision of the fund's officers and in accordance with methods which are
specifically authorized by its governing Board of Directors or Trustees.
Short-term obligations with maturities of 60 days or less, and the securities
held by the Money Market Funds, are valued at amortized cost as reflecting fair
value. AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOARD FUND, AIM TAX-EXEMPT
BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund's policy regarding the payment of dividends and distributions
is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND............................. declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND.............. declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.................. declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND........................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND...................... declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND........................ declared and paid annually annually annually
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND............................. declared and paid annually annually annually
AIM BALANCED FUND................................. declared and paid quarterly annually annually
AIM BLUE CHIP FUND................................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND...................... declared and paid annually annually annually
AIM CHARTER FUND.................................. declared and paid quarterly annually annually
AIM CONSTELLATION FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND..................... declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND................. declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INCOME FUND............................ declared daily; paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM GLOBAL UTILITIES FUND......................... declared daily; paid monthly annually annually
AIM HIGH INCOME MUNICIPAL FUND.................... declared daily; paid monthly annually annually
AIM HIGH YIELD FUND............................... declared daily; paid monthly annually annually
AIM INCOME FUND................................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.................. declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND..................... declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND................ declared daily; paid monthly annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM MONEY MARKET FUND............................. declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND........................... declared daily; paid monthly annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SELECT GROWTH FUND............................ declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM SMALL CAP OPPORTUNITIES FUND.................. declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT........... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.......................... declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND.................... declared daily; paid monthly annually annually
AIM VALUE FUND.................................... declared and paid annually annually annually
AIM WEINGARTEN FUND............................... declared and paid annually annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in
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AIM INVESTOR'S GUIDE
like shares of another Multiple Class Fund, to the extent permitted. For funds
that do not declare a dividend daily, such dividends and distributions will be
reinvested at the net asset value per share determined on the ex-dividend date.
For funds that declare a dividend daily, such dividends and distributions will
be reinvested at the net asset value per share determined on the payable date.
Shareholders may elect, by written notice to the Transfer Agent, to receive such
distributions, or the dividend portion thereof, in cash, or to invest such
dividends and distributions in shares of another fund in the AIM Funds; provided
that (i) dividends and distributions attributable to Class B shares may only be
reinvested in Class B shares, (ii) dividends and distributions attributable to
Class C shares may only be reinvested in Class C shares, (iii) dividends and
distributions attributable to Class A shares may not be reinvested in Class B or
Class C shares, and (iv) dividends and distributions attributable to the AIM
Cash Reserve Shares of AIM MONEY MARKET FUND may not be reinvested in the Class
A shares of that Fund or in any Class B or Class C shares. Investors who have
not previously selected such a reinvestment option on the account application
form may contact the Transfer Agent at any time to obtain a form to authorize
such reinvestments in another AIM Fund. Such reinvestments into the AIM Funds
are not subject to sales charges, and shares so purchased are automatically
credited to the account of the shareholder.
Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS--GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares, except for "exempt-interest dividends" paid by AIM HIGH INCOME MUNICIPAL
FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND (the "Tax-Exempt
Funds"), which are exempt from federal income tax. With respect to tax-exempt
shareholders, dividends and distributions from the AIM Funds are not subject to
federal income taxation to the extent permitted under the applicable tax
exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
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AIM INVESTOR'S GUIDE
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HIGH
INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH YIELD
FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be
required to include the "exempt-interest" portion of dividends paid by the
Tax-Exempt Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other
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AIM INVESTOR'S GUIDE
taxable securities. For additional information concerning the alternative
minimum tax and certain collateral tax consequences of the receipt of
exempt-interest dividends, see the Statements of Additional Information
applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP GROWTH FUND,
AIM SMALL CAP EQUITY FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH FUND --
SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do so,
each of these funds may elect to pass through to its shareholders credits for
foreign taxes paid. If a fund makes such an election, a shareholder who receives
a distribution (1) will be required to include in gross income his proportionate
share of foreign taxes allocable to the distribution and (2) may claim a credit
or deduction for such share for his taxable year in which the distribution is
received, subject to the general limitations imposed on the allowance of foreign
tax credits and deductions. Shareholders should also note that certain gains or
losses attributable to fluctuations in exchange rates or foreign currency
forward contracts may increase or decrease the amount of income of the fund
available for distribution to shareholders and should note that if, for any
fund, such losses exceed other income during a taxable year, the fund would not
be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each AIM Fund's transfer agent and
dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
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AIM INVESTOR'S GUIDE
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If several members of a household own shares of the same fund,
only one annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
A-27
<PAGE>
AIM NEW PACIFIC GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM SMALL CAP EQUITY FUND
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM Small Cap Equity Fund (the
"Fund"), which is one of several series investment portfolios comprising AIM
Growth Series (the "Trust"), an open-end, series, management investment company.
The Fund is a diversified portfolio which seeks long-term capital appreciation
by investing all of its investable assets in the Small Cap Portfolio (the
"Portfolio"), which, in turn, invests primarily in equity securities of
companies domiciled in the United States that, at the time of purchase, have
market capitalizations of up to $1 billion ("U.S. small cap companies").
The Portfolio's investment objective is identical to that of the Fund. The
investment experience of the Fund will correspond directly with the investment
experience of the Portfolio.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM SMALL CAP EQUITY FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 6
Investment Objective and Policies......................................................... 7
Risk Factors.............................................................................. 10
Management................................................................................ 12
Other Information......................................................................... 15
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund and the Portfolio: The Fund is a diversified series of the Trust. The Portfolio is a diversified series of Growth
Portfolio. The Fund seeks long-term capital appreciation. The Fund invests all of its investable
assets in the Portfolio, which, in turn, invests primarily in equity securities of U.S. small cap
companies.
Investment Managers: The Portfolio is managed by A I M Advisors, Inc. ("AIM") and is sub-advised and sub-administered by
INVESCO (NY), Inc. (the "Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management
affiliates provide investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment
management group that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing presence in Asia. AIM was
organized in 1976 and, together with its subsidiaries, currently advises approximately 90 investment
company portfolios.
Purchasing Shares: Investors may select Class A or Class B shares of the Fund which are offered by this Prospectus at an
offering price that reflects differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to a seperate
prospectus, the Fund also offers Advisor Class shares, which represent interests in the Fund. The
Advisor Class has different distribution arrangements.
Class A Shares: Shares are offered at net asset value plus any applicable initial sales charge.
</TABLE>
Prospectus Page 2
<PAGE>
AIM SMALL CAP EQUITY FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B Shares: Shares are offered at net asset value without an initial sales charge, and are subject to a maximum
contingent deferred sales charge of 5% on certain redemptions made within six years from the date
such shares were purchased. Class B shares automatically convert to Class A shares of the Fund eight
years following the end of the calendar month in which a purchase was made. Class B shares are
subject to higher expenses than Class A shares.
Initial investments in any class of shares must be at least $500 and additional investments must be
at least $50. The minimum initial investment is modified for investments through tax-qualified
retirement plans and accounts initially established with an Automatic Investment Plan. The
distributor of the Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
Suitability for Investors: An investor in Class A or Class B shares of the Fund should consider the method of purchasing shares
that is most beneficial given the amount of the purchase, the length of time the shares are expected
to be held, and other circumstances. Investors should consider whether, during the anticipated life
of their investment in the Fund, the accumulated distribution fees and any applicable contingent
deferred sales charges on Class B shares prior to conversion would be less than the initial sales
charge and accumulated distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares. To assist investors
in making this determination, the table under the caption "Table of Fees and Expenses" sets forth
examples of the charges applicable to each class of shares. Class A shares will normally be more
beneficial than Class B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase of more than $250,000
for Class B shares.
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, " The AIM Family
of Funds"). Class A and Class B shares of the Fund may be exchanged for shares of other funds in The
AIM Family of Funds in the manner and subject to the policies and charges set forth herein. See
"Exchange Privilege."
Redeeming Shares: Class A shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, generally without charge. A contingent deferred sales charge of 1% may apply to
certain redemptions where a purchase of more than $1 million is made at net asset value. See "How to
Redeem Shares -- Contingent Deferred Sales Charge Program for Large Purchases."
</TABLE>
Prospectus Page 3
<PAGE>
AIM SMALL CAP EQUITY FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, less a contingent deferred sales charge for redemptions made within six years from
the date such shares were purchased. Class B shares redeemed after six years from the date such
shares were purchased will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters" and "Special Plans."
Risk Factors: There is no assurance that the Fund or the Portfolio will achieve its investment objective. The
Fund's net asset value will fluctuate, reflecting fluctuations in the market value of the Portfolio's
securities.
The Portfolio may engage in certain options and futures transactions to attempt to hedge against the
overall level of investment risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 4
<PAGE>
AIM SMALL CAP EQUITY FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Class A and Class B shares of the Fund are
reflected in the following table (1):
<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION COSTS (2):
Maximum sales charge on purchases (as a % of
offering price).................................. 5.50% None
Sales charges on reinvested distributions to
shareholders..................................... None None
Maximum deferred sales charge (as a % of net asset
value at time of purchase or sale, whichever is
less)............................................ None 5.00%
Redemption charges................................ None None
Exchange fees..................................... None None
ANNUAL FUND OPERATING EXPENSES (3):
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees..... 0.73% 0.73%
12b-1 distribution and service fees............... 0.35% 1.00%
Other expenses (after reimbursement (includes
interest expense not subject to
reimbursement)).................................. 0.67% 0.67%
------- -------
Total Fund Operating Expenses..................... 1.75% 2.40%
------- -------
------- -------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (7):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS(6)
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A shares (4)....................................................... $ 72 $108 $ 145 $ 251
Class B shares
Assuming a complete redemption at end of period (5).................... $ 76 $108 $ 152 $ 260
Assuming no redemption................................................. $ 25 $ 76 $ 129 $ 260
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. rules regarding investment companies.
(2) Sales charge waivers are available for Class A and Class B shares, and
reduced sales charge purchase plans are available for Class A shares. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase. The charge generally
declines by 1% annually thereafter, reaching zero after six years. See
"Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
Sales Charges."
(3) Expenses are based on the Fund's fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 1.75% and 2.40% of the average daily net
assets of the Fund's Class A and Class B shares, respectively. "Other
expenses" include custody, transfer agency, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information. With respect to Class A shares, without
reimbursements, "Other expenses" and "Total Fund Operating Expenses" would
have been 1.44% and 2.52%, respectively, for the Fund (including its share
of the expenses of the Portfolio). With respect to Class B shares, without
reimbursements, "Other expenses" and "Total Fund Operating Expenses" would
have been 1.44% and 3.17%, respectively, for the Fund and the Portfolio. The
Board of Trustees of the Trust believes that the aggregate per share
expenses of the Fund and the Portfolio will be approximately equal to the
expenses the Fund would incur if its assets were invested directly in the
type of securities being held by the Portfolio.
(4) Assumes payment of maximum sales charge by the investor.
(5) Assumes deduction of the applicable contingent deferred sales charge.
(6) For Class B shares, this number reflects the conversion to Class A shares
eight years following the end of the calendar month in which a purchase was
made.
(7) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S
DIRECT AND INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The
table and the assumption in the Hypothetical Example of a 5% annual return
are required by regulations of the SEC applicable to all mutual funds. The
5% annual return is not a prediction of and does not represent the Fund's or
the Portfolio's projected or actual performance.
Prospectus Page 5
<PAGE>
AIM SMALL CAP EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information.
AIM SMALL CAP EQUITY FUND
(FORMERLY GT GLOBAL AMERICA SMALL CAP GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. Standardized total return for Class
A shares reflects the deduction of the Fund's maximum front-end sales charge at
the time of purchase. Standardized total return for Class B shares reflects the
deduction of the maximum applicable contingent deferred sales charge on a
redemption of shares held for the period.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 6
<PAGE>
AIM SMALL CAP EQUITY FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Fund is long term capital appreciation. The Fund
seeks its investment objective by investing all of its investable assets in the
Portfolio, which, in turn, normally invests at least 65% of its total assets in
equity securities, including common stocks, preferred stocks, convertible debt
securities and warrants of U.S. small cap companies. The remainder of the
Portfolio's assets may be invested in common stocks, preferred stocks,
convertible debt securities and warrants of companies domiciled in the United
States that, at the time of purchase, have market capitalizations of greater
than $1 billion and non-convertible debt securities, U.S. government securities
and high quality money market instruments, such as U.S. government obligations,
high grade commercial paper, bank certificates of deposit and bankers'
acceptances, of issuers domiciled in the United States. The Portfolio also may
invest up to 10% of its total assets in securities of foreign issuers in the
form of American Depository Receipts ("ADRs") or other similar securities
convertible into securities of foreign issuers. There can be no assurance that
the Fund or the Portfolio will achieve its investment objective.
The debt obligations that the Portfolio may invest in are limited to U.S.
government securities and corporate debt securities of issuers domiciled in the
United States. The Portfolio will limit its purchases of debt securities to
investment grade obligations, as defined above.
For purposes of this Prospectus, market capitalization means the total market
value of a company's outstanding common stock. There is no necessary correlation
between market capitalization and the financial attributes (such as level of
assets, revenues or income) often used to measure a company's size.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In selecting equity securities for the Portfolio, the Sub-adviser uses a
multi-stage process to identify companies that possess sustainable above average
growth at an attractive offering price. The process for selecting small cap
growth stocks consists of four components: asset allocation, industry
diversification, stock selection and quality control. The Sub-adviser tracks
individual companies and categorizes them into industry groups. Purchases and
sales of individual securities are based on the ratings established by the
Sub-adviser on a weekly basis. Stocks ranked in the top 30% are buys, and the
bottom 30% are sells. The quality control process ensures consistency with the
industry and asset allocation guidelines as well as stock guidelines. There is
no assurance that this process will produce better or more consistent results
than other investment processes.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
currency units (such as Euros) are evaluated on the strength of the particular
currency against the U.S. dollar as well as on the current and expected levels
of interest rates in the country or countries.
Prospectus Page 7
<PAGE>
AIM SMALL CAP EQUITY FUND
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Portfolio may invest less than 65% of
its total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Portfolio may hold U.S. dollars and/or
may invest any portion of its assets in high quality domestic debt securities or
high quality money market instruments. To the extent the Portfolio adopts a
temporary defensive position, it will not be invested so as to achieve directly
its investment objective.
In addition, the Portfolio may hold U.S. dollars and may invest in domestic debt
securities or high quality money market instruments pending investment of
proceeds from new sales of Fund shares, or to meet its ordinary daily cash
needs. For a description of money market instruments, see "Temporary Defensive
Strategies" in the "Investment Objectives and Policies" section of the Statement
of Additional Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Portfolio may invest up to
10% of its total assets in other investment companies. As a shareholder in an
investment company, the Portfolio would bear its ratable share of that
investment company's expenses, including its advisory and administration fees.
At the same time, the Portfolio would continue to pay its own management fees
and other expenses. AIM and the Sub-adviser will waive their advisory fees to
the extent that the Portfolio invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Portfolio
may be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemption of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of the Fund's shares than would be the case if the Portfolio did
not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Portfolio
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Portfolio's sale of securities together with
its commitment (for which the Portfolio may receive a fee) to purchase similar,
but not identical, securities at a future date.
SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolio to retain ownership of the securities loaned and, at the same
time, enhance the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Fund's investment program and
regulatory agencies, and as approved by the Board. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delay in receiving additional collateral or in recovery of the
securities and
Prospectus Page 8
<PAGE>
AIM SMALL CAP EQUITY FUND
possible loss of rights in the collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
OPTIONS AND FUTURES TRANSACTIONS. The Portfolio may use options on securities,
options on indices, futures contracts and options on futures contracts to
attempt to hedge against the overall level of investment risk normally
associated with its portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk Factors --
Options and Futures Strategies" herein and "Options, Futures and Currency
Strategies" in the Statement of Additional Information.
In addition, the Portfolio may purchase and sell put and call options on equity
and debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Portfolio or that the Sub-adviser intends to include in
the Portfolio's holdings. The Portfolio also may buy and sell put and call
options on stock indexes to hedge against overall fluctuations in the securities
markets or market sectors generally or in a specific market sector.
Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Portfolio's holdings. The Portfolio also may purchase stock index futures
contracts and purchase call options or write put options on such contracts to
hedge against a general stock market or market sector advance and thereby
attempt to lessen the cost of future securities acquisitions. The Portfolio may
use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolio against changes in the general level of interest rates.
AMERICAN DEPOSITORY RECEIPTS. The Portfolio may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in U.S. securities markets. See "Investment
Objectives and Policies -- Depository Receipts" in the Statement of Additional
Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Trust's Board of Trustees, without shareholder approval. The investment policies
of the Fund are identical to the investment policies of the Portfolio.
The approval of the Fund and of other investors in the Portfolio, if any, is not
required to change the
Prospectus Page 9
<PAGE>
AIM SMALL CAP EQUITY FUND
investment objective, policies or limitations of the Portfolio, unless otherwise
specified. Written notice shall be provided to shareholders of the Fund thirty
days prior to any changes in the Portfolio's investment objective. If a
percentage restriction on investment or utilization of assets in an investment
policy or restriction is adhered to at the time an investment is made, a later
change in percentage ownership of a security or kind of securities resulting
from changing market values or a similar type of event will not be considered a
violation of the Fund's or Portfolio's investment policies or restrictions.
OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
The Fund may redeem its investment in the Portfolio at any time, if the Board of
Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. A change in the Portfolio's investment objective,
policies or limitations that is not approved by the Board or shareholders of the
Fund could require the Fund to redeem its interest in the Portfolio. Any such
redemption could result in a distribution in kind of portfolio securities (as
opposed to a cash distribution) by the Portfolio. In addition, a distribution in
kind could result in a less diversified portfolio of investments for the Fund
and could adversely affect its liquidity. Should such a distribution occur, the
Fund could incur brokerage fees or other transaction costs in converting such
securities to cash. Upon redemption, the Board would consider what action might
be taken, including the investment of all the investable assets of the Fund in
another pooled investment entity having substantially the same investment
objective as the Fund or the direct retention by the Fund of its own investment
adviser and/or subadviser to manage its assets in accordance with its investment
objective, policies and limitations discussed herein.
In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
The Fund may be materially affected by the actions of other large investors, if
any, in the Portfolio. For example, as with all open-end investment companies,
if a large investor were to redeem its interest in the Portfolio, (1) the
Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns, and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset value will fluctuate, reflecting
fluctuations in the market value of the Portfolio's securities. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. In addition, the value of debt securities held by the Portfolio
will fluctuate with changes in the perceived creditworthiness of the issuers of
such securities and interest rates.
Prospectus Page 10
<PAGE>
AIM SMALL CAP EQUITY FUND
SMALL CAP COMPANIES. The Portfolio invests primarily in equity securities of
U.S. small cap companies. Small cap companies may be more vulnerable than larger
companies to adverse business, economic or market developments. Small cap
companies may also have more limited product lines, markets or financial
resources than companies with larger capitalizations, and may be more dependent
on a relatively small management group. In addition, small cap companies may not
be well-known to the investing public, may not have institutional ownership and
may have only cyclical, static or moderate growth prospects. Most small cap
company stocks pay low or no dividends. Securities of small cap companies are
generally less liquid and their prices more volatile than those of securities of
larger companies. The securities of some small cap companies may not be widely
traded, and the Portfolio's position in securities of such companies may be
substantial in relation to the market for such securities. Accordingly, it may
be difficult for the Portfolio to dispose of securities of these small cap
companies at prevailing market prices in order to meet redemptions.
OPTIONS AND FUTURES TRANSACTIONS. Although the Portfolio is authorized to enter
into options and futures transactions, the Portfolio might not enter into any
such transactions. Options and futures transactions involve certain risks, which
include: (1) dependence on the Sub-adviser's ability to predict movements in the
prices of individual securities, fluctuations in the general securities markets
or in the appropriate market sector and movements in interest rates; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, futures contracts or options thereon and movements in the price of the
security hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts or options thereon are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
Prospectus Page 11
<PAGE>
AIM SMALL CAP EQUITY FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's and the Portfolio's Boards of Trustees have overall responsibility
for the operation of the Fund and the Portfolio, respectively. The Trust's and
Portfolio's Boards of Trustees have approved all significant agreements between
the Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administrative services agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund and the Portfolio are delegated to the officers of the
Trust and the Portfolio, subject always to the investment objective and policies
of the Fund and the Portfolio and to the general supervision of the Boards. See
"Trustees and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Portfolio include, but are not
limited to, determining the composition of the investment holdings of the
Portfolio and placing orders to buy, sell or hold particular securities. In
addition, AIM and the Sub-adviser provide the following administrative services
to the Fund and the Portfolio: furnishing corporate officers and clerical staff;
providing office space, services and equipment; and supervising all matters
relating to the Fund's and the Portfolio's operations.
The Fund pays AIM administration fees, computed daily and paid monthly, at the
annualized rate of 0.25% of the Fund's average daily net assets. AIM has
appointed the Sub-adviser as the Fund's sub-administrator. In addition, the Fund
bears its pro rata portion of the investment management and administration fees
paid by the Portfolio to AIM and the Sub-adviser. The Portfolio pays AIM such
fees, computed daily and paid monthly, based on the average daily net assets of
the Portfolio, at the annualized rate of .475% on the first $500 million, .45%
on the next $500 million, .425% on the next $500 million and .40% on all amounts
thereafter. Out of its aggregate fees payable by the Fund and the Portfolio, AIM
pays the Sub-adviser sub-advisory and sub-administration fees equal to 40% of
the aggregate fees AIM receives from the Fund and the Portfolio. The investment
management and administration fees paid by the Fund and the Portfolio are higher
than those paid by most mutual funds. The Fund and Portfolio pay all expenses
not assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 1.75%
and 2.40% of the average daily net assets of the Fund's Class A and Class B
shares, respectively.
The Sub-adviser also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-adviser receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-adviser (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement, dated as of May 29, 1998 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises approximately 90 investment company portfolios encompassing a
broad range of investment objectives. The Sub-adviser, 50 California Street,
27th Floor, San Francisco, California 94111, and 1166 Avenue of the Americas,
New York, New York 10036, serves as the sub-adviser to the Portfolio pursuant to
an investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP
Prospectus Page 12
<PAGE>
AIM SMALL CAP EQUITY FUND
PLC acquired LGT's Asset Management Division, which included the Sub-adviser and
certain other affiliates. As a result of this transaction, the Sub-adviser is
now an indirect wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the
Sub-adviser and its worldwide asset management affiliates provided investment
management and/or administrative services to institutional, corporate and
individual clients around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Portfolio, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professional primarily responsible for the portfolio management
of the Portfolio is as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE PORTFOLIO PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Mark J. Cunneen Portfolio Manager since Portfolio Manager for the Sub-adviser since December 1992. Employed
New York 1997 by Chancellor Capital Management, Inc., a predecessor of the
Sub-adviser, from December 1992 to October 1996.
</TABLE>
------------------------
With respect to the Portfolio the Sub-adviser utilizes a team approach that
relies on its bottom-up, research-intensive, process-driven stock selection
capability to build various investment portfolios. The Sub-adviser's disciplined
process combines the inputs of analysts performing fundamental and quantitative
research, various committees that set the Sub-adviser's firmwide economic
forecasts and sector and industry allocations and portfolio management teams
responsible for stock selection decisions. While individual member(s) of the
Sub-adviser's investment team are assigned primary responsibility for the
day-to-day management of the Portfolio, along with similarly managed accounts,
the Portfolio is reviewed on a regular basis by the applicable investment team
to monitor compliance with applicable investment guidelines.
In placing orders for the Portfolio's portfolio securities transactions, the
Sub-adviser seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-adviser may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions for the
Portfolio may be executed through affiliates of AIM or the Sub-adviser. High
portfolio turnover (over 100%) involves correspondingly greater brokerage
commissions and other transaction costs that the Portfolio will bear directly
and could result in the realization of net capital gains that would be taxable
when distributed to shareholders. See "Dividends, Distributions and Tax
Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 on behalf of Class A shares of the Fund, and has entered into a
Master Distribution Agreement, dated May 29, 1998, on behalf of Class B shares
of the Fund (individually referred to as a "Distribution Agreement" or
collectively as the "Distribution Agreements.") with AIM Distributors, a
registered broker-dealer and a wholly owned subsidiary of AIM, to act as the
distributor of Class A and Class B shares of the Fund. Certain Trustees and
officers of the Trust are affiliated with AIM Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right to
distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B
Prospectus Page 13
<PAGE>
AIM SMALL CAP EQUITY FUND
shares provides that AIM Distributors (or its assignee or transferee) will
receive 0.75% (of the total 1.00% payable under the distribution plan applicable
to Class B shares) of the Fund's average daily net assets attributable to Class
B shares attributable to the sales efforts of AIM Distributors. In the event the
Class B shares Distribution Agreement is terminated, AIM Distributors would
continue to receive payments of asset based sales charges in respect of the
outstanding Class B shares attributable to the distribution efforts of AIM
Distributors; provided, however, that a complete termination of the Class B
shares master distribution plan (as defined in the plan) would terminate all
payments to AIM Distributors. Termination of the Class B shares distribution
plan or Distribution Agreement does not affect the obligation of Class B
shareholders to pay contingent deferred sales charges.
DISTRIBUTION PLANS. CLASS A PLAN. The Company has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
Of the aggregate amount payable under the Class A Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee. Payments pursuant to the
Plans are subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
CLASS B PLAN. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
BOTH PLANS. Activities that may be financed under the Class A Plan and the Class
B Plan (collectively, the "Plans") include, but are not limited to: printing of
prospectuses and statements of additional information and reports for other than
existing shareholders, overhead, preparation and distribution of advertising
material and sales literature, expense of organizing and conducting sales
seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or
Prospectus Page 14
<PAGE>
AIM SMALL CAP EQUITY FUND
as payments of service fees under shareholder service arrangements, and the cost
of administering the Plans. These amounts payable by the Fund under the Plans
need not be directly related to the expenses actually incurred by AIM
Distributors on behalf of the Fund. Thus, even if AIM Distributors' actual
expenses exceed the fee payable to AIM Distributors thereunder at any given
time, the Trust will not be obligated to pay more than that fee, and if AIM
Distributors' expenses are less than the fee it receives, AIM Distributors will
retain the full amount of the fee. Payments pursuant to the Plans are subject to
any applicable limitations imposed by rules of the National Association of
Securities Dealers, Inc.
Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
Under the Plans, AIM Distributors may in its discretion from time to time agree
to waive voluntarily all or any portion of its 12b-1 fee, while retaining its
ability to be reimbursed for such fee prior to the end of each fiscal year.
Under the Plans, certain financial institutions which have entered into service
agreements and which sell shares of the Fund on an agency basis, may receive
payments from the Fund pursuant to the respective Plans. AIM Distributors does
not act as principal, but rather as agent, for the Fund in making such payments.
The Fund will obtain a representation from such financial institutions that they
will either be licensed as dealers as required under applicable state law, or
that they will not engage in activities which would constitute acting as a
"dealer" as defined under applicable state law. Financial intermediaries and any
other person entitled to receive compensation for selling Fund shares may
receive different compensation for selling shares of one class over another.
For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets and assumed the
liabilities of G.T. Global Growth Series, a Massachusetts business trust. The
Fund constitutes one of the eight separate and distinct series portfolios of the
Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Prospectus Page 15
<PAGE>
AIM SMALL CAP EQUITY FUND
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Growth Portfolio, a Delaware business trust. Under Delaware law, the Fund and
other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However,
Growth Portfolio's Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Portfolio and requires that notice of
such disclaimer be given in each agreement, obligation or instrument entered
into or executed by the Portfolio or a trustee. The Agreement and Declaration of
Trust also provides for indemnification from the Portfolio property for all
losses and expenses of any shareholder held personally liable for the
Portfolio's obligations. Thus the risk of an investor incurring financial loss
on account of such liability is limited to circumstances in which the Portfolio
itself would be unable to meet its obligations and where the other party was
held not to be bound by the disclaimer.
Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust, to the Fund and
to the Portfolio.
Prospectus Page 16
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND AIM GLOBAL RESOURCES FUND
AIM ADVISOR INTERNATIONAL VALUE FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM ADVISOR LARGE CAP VALUE FUND AIM GLOBAL TRENDS FUND
AIM ADVISOR MULTIFLEX FUND AIM GLOBAL UTILITIES FUND
AIM ADVISOR REAL ESTATE FUND AIM HIGH INCOME MUNICIPAL FUND
AIM AGGRESSIVE GROWTH FUND AIM HIGH YIELD FUND
AIM AMERICA VALUE FUND AIM INCOME FUND
AIM ASIAN GROWTH FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM BALANCED FUND AIM INTERNATIONAL EQUITY FUND
AIM BLUE CHIP FUND AIM INTERNATIONAL GROWTH FUND
AIM CAPITAL DEVELOPMENT FUND AIM JAPAN GROWTH FUND
AIM CHARTER FUND AIM LATIN AMERICAN GROWTH FUND
AIM CONSTELLATION FUND AIM LIMITED MATURITY TREASURY FUND
AIM DEVELOPING MARKETS FUND AIM MID CAP GROWTH FUND
AIM DOLLAR FUND(*) AIM MONEY MARKET FUND(*)
AIM EMERGING MARKETS FUND AIM MUNICIPAL BOND FUND
AIM EUROPEAN DEVELOPMENT FUND AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND AIM SELECT GROWTH FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM SMALL CAP OPPORTUNITIES FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM GLOBAL GROWTH FUND AIM TAX-EXEMPT CASH FUND(*)
AIM GLOBAL GROWTH & INCOME FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL HEALTH CARE FUND AIM VALUE FUND
AIM GLOBAL HIGH INCOME FUND AIM WEINGARTEN FUND
AIM GLOBAL INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
asset value, without payment of a sales charge, as described below. Other
funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
FUND, are sold with an initial sales charge or subject to a contingent
deferred sales charge upon redemption, as described below.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM
Family of Funds ("AIM Funds"), an investor must submit a fully completed new
Account Application form directly to A I M Fund Services, Inc. ("AFS" or the
"Transfer Agent") or through any dealer authorized by A I M Distributors, Inc.
("AIM Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
is $500, except for accounts initially established through an Automatic
Investment Plan, which requires a special authorization form (see "Special
Plans") and for certain retirement accounts. The minimum initial investment for
accounts established with an Automatic Investment Plan is $50. The minimum
initial investment for an Individual Retirement Arrangement ("IRA") or Roth IRA
is $250. There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such
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AIM INVESTOR'S GUIDE
plans is $25), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM Funds account.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Shares of any AIM Funds not named on the cover of this Prospectus, as well
as Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>
HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased
directly through AIM Distributors or through any dealer who has entered into an
agreement with AIM Distributors. The minimum investment for subsequent purchases
is $50. The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. There are no such minimum investment requirements for investment of
dividends and distributions of any of the AIM Funds into any other existing AIM
Funds account.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION-SM-: To purchase additional shares by electronic
funds transfer, please contact the Client Services Department of AFS for
details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN GROWTH FUND, AIM
BALANCED FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER
FUND, AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP GROWTH FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT
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AIM INVESTOR'S GUIDE
CASH FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without
a sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over another class in the same Multiple Class Fund. Factors an investor
should consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH
FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP EQUITY
FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
SALES CHARGES AND DEALER CONCESSIONS
GROUP I. Certain AIM Funds are currently sold with a sales charge ranging
from 5.50% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM
ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
GROWTH FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $25,000................................................................ 5.50 % 5.82 % 4.75 %
$25,000 but less than $50,000.................................................... 5.25 5.54 4.50
$50,000 but less than $100,000................................................... 4.75 4.99 4.00
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 3.00 3.09 2.50
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
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AIM INVESTOR'S GUIDE
GROUP II. Certain AIM Funds are currently sold with a sales charge ranging
from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND,
AIM BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND,
AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL HIGH INCOME FUND,
AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES
FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND FUND, AIM
STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $50,000................................................................ 4.75 % 4.99 % 4.00 %
$50,000 but less than $100,000................................................... 4.00 4.17 3.25
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 2.50 2.56 2.00
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $100,000............................................................... 1.00 % 1.01 % 0.75 %
$100,000 but less than $250,000.................................................. 0.75 0.76 0.50
$250,000 but less than $1,000,000................................................ 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus
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AIM INVESTOR'S GUIDE
payments or other consideration shall not exceed 0.25% of the public offering
price of the shares sold. Any such bonus or incentive programs will not change
the price paid by investors for the purchase of the applicable AIM Fund's shares
or the amount that any particular AIM Fund will receive as proceeds from such
sales. Dealers may not use sales of the AIM Funds' shares to qualify for any
incentives to the extent that such incentives may be prohibited by the laws of
any state.
AIM Distributors may make payments to dealers and institutions who are
dealers of record for purchases of $1 million of more of Class A shares (or
shares which normally involve payment of initial sales charges), which are sold
at net asset value and are subject to a contingent deferred sales charge, for
all AIM Funds other than Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND as follows: 1% of the first $2 million
of such purchases, plus 0.80% of the next $1 million of such purchases, plus
0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess
of $20 million of such purchases. See "Contingent Deferred Sales Charge Program
for Large Purchases." AIM Distributors may make payments to dealers and
institutions who are dealers of record for purchases of $1 million or more of
Class A shares (or shares which normally involve payment of initial sales
charges), and which are sold at net asset value and are not subject to a
contingent deferred sales charge, in an amount up to 0.10% of such purchases of
Class A shares of AIM LIMITED MATURITY TREASURY FUND, and in an amount up to
0.25% of such purchases of Class A shares of AIM TAX-FREE INTERMEDIATE FUND.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed
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AIM INVESTOR'S GUIDE
during the next twelve months on Saturdays and Sundays and on the days on which
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class
Funds currently offer two or more classes of shares through separate
distribution systems (the "Multiple Distribution System"). Although each class
of shares of a particular Multiple Class Fund represents an interest in the same
portfolio of investments, each class is subject to a different distribution
structure and, as a result, differing expenses. This Multiple Distribution
System allows investors to select the class that is best suited to the
investor's needs and objectives. In considering the options afforded by the
Multiple Distribution System, investors should consider both the applicable
initial sales charge or contingent deferred sales charge, as well as the ongoing
expenses borne by each class of shares and other relevant factors, such as
whether his or her investment goals are long-term or short-term.
CLASS A SHARES generally are sold subject to the initial sales charges
described above and are subject to the other fees and expenses described
herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
needs of an investor who wishes to establish a dollar cost averaging
program, pursuant to which Class A shares an investor owns may be exchanged
at net asset value for Class A shares of another Multiple Class Fund or
shares of another AIM Fund which is not a Multiple Class Fund, subject to
the terms and conditions described under the caption "Exchange Privilege --
Terms and Conditions of Exchanges."
CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made within
the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."
Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and other distributions)
eight years from the end of the calendar month in which the purchase of
Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
outstanding on May 29, 1998 and which are continuously held by the
shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
FUND seven years from the end of the calendar month in which the purchase of
such Class B shares was made. If a shareholder exchanges Class B shares of
AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
shares will be subject to the eight year conversion feature applicable to
Class B shares of all other AIM Funds. Following such conversion of their
Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
payments associated with Class B shares. See "Management -- Distribution
Plans."
AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an initial
sales charge and are not subject to a contingent deferred sales charge;
however, they are subject to the other fees and expenses described in the
prospectus for AIM MONEY MARKET FUND.
TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon
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<PAGE>
AIM INVESTOR'S GUIDE
Eastern Time or NYSE Close on any business day of the Fund will be confirmed at
the price next determined. Net asset value is normally determined at 12:00 noon
Eastern Time and NYSE Close on each business day of AIM MONEY MARKET FUND.
SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
The term "purchaser" means:
- - an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the benefit
of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
plan (unless such 403(b) plan qualifies as the purchaser as defined below);
- - a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), provided that:
a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will
not accept contributions submitted with respect to individual
participants);
b. each transmittal must be accompanied by a single check or wire
transfer; and
c. all new participants must be added to the 403(b) plan by submitting an
application on behalf of each new participant with the contribution
transmittal;
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AIM INVESTOR'S GUIDE
- - a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;
- - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or SIMPLE
IRA accounts should be linked;
- - any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or
- - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").
Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge
made during the 13-month period will be made at the public offering price
applicable to a single transaction of the total dollar amount indicated by the
LOI, as described under "Sales Charges and Dealer Concessions." It is the
purchaser's responsibility at the time of purchase to specify the account
numbers that should be considered in determining the appropriate sales charge.
The offering price may be further reduced as described under "Rights of
Accumulation" if the Transfer Agent is advised of all other accounts at the time
of the investment. Shares acquired through reinvestment of dividends and capital
gain distributions will not be applied to the LOI. At any time during the
13-month period after meeting the original obligation, a purchaser may revise
his intended investment amount upward by submitting a written and signed
request. Such a revision will not change the original expiration date. By
signing an LOI, a purchaser is not making a binding commitment to purchase
additional shares, but if purchases made within the 13-month period do not total
the amount specified, the investor will pay the increased amount of sales charge
as described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase with the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
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AIM INVESTOR'S GUIDE
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds
at net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase Class A shares of the AIM Funds through
AIM Distributors without payment of an initial sales charge: (a) A I M
Management Group Inc. ("AIM Management") and its affiliated companies; (b) any
current or retired officer, director, trustee or employee, or any member of the
immediate family (including spouse, children, parents and parents of spouse) of
any such person, of AIM Management or its affiliates or of certain mutual funds
which are advised or managed by AIM; or any trust established exclusively for
the benefit of such persons; (c) any employee benefit plan established for
employees of AIM Management or its affiliates; (d) any current or retired
officer, director, trustee or employee, or any member of
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AIM INVESTOR'S GUIDE
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, or of CIGNA Corporation or of any of its affiliated
companies, or of First Data Investor Services Group (formerly The Shareholder
Services Group, Inc.); (e) any investment company sponsored by CIGNA
Investments, Inc. or any of its affiliated companies for the benefit of its
directors' deferred compensation plans; (f) discretionary advised clients of AIM
or AIM Capital; (g) registered representatives and employees of dealers who have
entered into agreements with AIM Distributors (or financial institutions that
have arrangements with such dealers with respect to the sale of shares of the
AIM Funds) and any member of the immediate family (including spouse, children,
parents and parents of spouse) of any such person, provided that purchases at
net asset value are permitted by the policies of such person's employer; (h)
certain broker-dealers, investment advisers or bank trust departments that
provide asset allocation, similar specialized investment services or investment
company transaction services for their customers, that charge a minimum annual
fee for such services, and that have entered into an agreement with AIM
Distributors with respect to their use of the AIM Funds in connection with such
services; (i) any employee or any member of the immediate family (including
spouse, children, parents and parents of spouse) of any employee, of Triformis
Inc.; (j) shareholders of the AIM/GT Funds as of April 30, 1987 who since that
date continually have owned shares of one or more of the AIM/GT Funds; and (k)
certain former AMA Investment Advisers' shareholders who became shareholders of
the AIM Global Health Care Fund in October 1989, and who have continuously held
shares in the AIM/GT Funds since that time.
In addition, shares of any AIM Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the total amount invested in the
plan is at least $1,000,000, (2) the sponsor signs a $1,000,000 LOI, (3) such
shares are purchased by an employer-sponsored plan with at least 100 eligible
employees, or (4) all of the plan's transactions are executed through a single
financial institution or service organization who has entered into an agreement
with AIM Distributors with respect to their use of the AIM Funds in connection
with such accounts. Section 403(b) plans sponsored by public educational
institutions will not be eligible for net asset value purchases based on the
aggregate investment made by the plan or the number of eligible employees.
Participants in such plans will be eligible for reduced sales charges based
solely on the aggregate value of their individual investments in the applicable
AIM Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms for share purchases of the Load Funds (as defined under the
caption "Exchange Privilege") sold at net asset value to an employee benefit
plan in accordance with this paragraph as follows: 1% of the first $2 million of
such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50%
of the next $17 million of such purchases, plus 0.25% of amounts in excess of
$20 million of such purchases and up to 0.10% of the net asset value of any
Class A shares of AIM LIMITED MATURITY TREASURY FUND sold at net asset value to
an employee benefit plan in accordance with this paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone
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AIM INVESTOR'S GUIDE
number of the dealer who sold to the unit holder the units to be redeemed or
repurchased; and (ii) states that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by the
proceeds from the redemption or repurchase of units of such trusts.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a
shareholder who owns shares which are not subject to a contingent deferred sales
charge, can arrange for monthly, quarterly or annual amounts (but not less than
$50) to be drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that exceed on an annual
basis 12% of such account will be subject to a contingent deferred sales charge
on the amounts exceeding 12% of the account value at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the
Transfer Agent and all dividends and distributions are reinvested to shares of
the applicable AIM Fund by the Transfer Agent. To provide funds for payments
made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient
full and fractional shares at their net asset value in effect at the time of
each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in
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AIM INVESTOR'S GUIDE
the amount specified by the shareholder (minimum $50 per investment, per
account) and on a day or date(s) specified by the shareholder. The proceeds are
invested in shares of the designated AIM Fund at the applicable offering price
determined on the date of the withdrawal. An Automatic Investment Plan may be
discontinued upon 10 days' prior notice to the Transfer Agent or AIM
Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination money-
purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans; SARSEP
plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement accounts").
Information concerning these plans, including the custodian's fees and the forms
necessary to adopt such plans, can be obtained by calling or writing the AIM
Funds or AIM Distributors. Shares of the AIM Funds are also available for
investment through existing 401(k) plans (for both individuals and employers)
adopted under the Code. The plan custodian currently imposes an annual $10
maintenance fee with respect to each retirement account for which it serves as
the custodian. This fee is generally charged in December. Each AIM Fund and/or
the custodian reserve the right to change this maintenance fee and to initiate
an establishment fee (not to exceed its cost).
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of AIM Funds. The Program automatically rebalances
holdings of AIM Funds to the established allocation on a periodic basis. Under
the Program, a shareholder may predesignate, on a percentage basis, how the
total value of his or her holdings in a minimum of two, and a maximum of ten,
AIM Funds ("Personal Portfolio") is to be rebalanced on a quarterly, semiannual,
or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more AIM Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other AIM Funds in the
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shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the AIM
Fund(s) in a shareholder's Personal Portfolio have appreciated during a
rebalancing period, the Program will result in shares of AIM Fund(s) that have
appreciated most during the period being exchanged for shares of AIM Fund(s)
that have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular AIM Fund would
be 2% or less. In predesignating percentages, shareholders must use whole
percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an AIM
Fund's shares. The AIM Funds and AIM Distributors reserve the right to modify,
suspend, or terminate the Program at any time on 60 days' prior written notice
to shareholders. A request to participate in the Program must be received in
good order at least five business days prior to the next rebalancing date. Once
a shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
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EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM Funds --
Sales Charges and Dealer Concessions," shares of certain of the AIM Funds,
including the Class A shares of the Multiple Class Funds, listed below and
referred to herein as the "Load Funds," are sold at a public offering price that
includes a maximum sales charge of 5.50% or 4.75% of the public offering price
of such shares; Class A shares (or shares which normally involve the payment of
initial sales charges) of certain of the AIM Funds, listed below and referred to
herein as the "Lower Load Funds," are sold at a public offering price that
includes a maximum sales charge of 1.00% of the public offering price of such
shares; and Class A shares or shares of certain other funds, listed below and
referred to herein as the "No Load Funds," are sold at net asset value, without
payment of a sales charge.
LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM ADVISOR FLEX FUND -- CLASS A
AIM ADVISOR INTERNATIONAL VALUE FUND -- CLASS A
AIM ADVISOR LARGE CAP VALUE FUND -- CLASS A
AIM ADVISOR MULTIFLEX FUND -- CLASS A
AIM ADVISOR REAL ESTATE FUND -- CLASS A
AIM AGGRESSIVE GROWTH FUND -- CLASS A
AIM AMERICA VALUE FUND -- CLASS A
AIM ASIAN GROWTH FUND -- CLASS A
AIM BALANCED FUND -- CLASS A
AIM BLUE CHIP FUND -- CLASS A
AIM CAPITAL DEVELOPMENT FUND -- CLASS A
AIM CHARTER FUND -- CLASS A
AIM CONSTELLATION FUND -- CLASS A
AIM DEVELOPING MARKETS FUND -- CLASS A
AIM EMERGING MARKETS FUND -- CLASS A
AIM EUROPE GROWTH FUND -- CLASS A
AIM EUROPEAN DEVELOPMENT FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH FUND -- CLASS A
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND -- CLASS A
AIM GLOBAL FINANCIAL SERVICES FUND -- CLASS A
AIM GLOBAL GOVERNMENT INCOME FUND -- CLASS A
AIM GLOBAL GROWTH FUND -- CLASS A
AIM GLOBAL GROWTH & INCOME FUND -- CLASS A
AIM GLOBAL HEALTH CARE FUND -- CLASS A
AIM GLOBAL HIGH INCOME FUND -- CLASS A
AIM GLOBAL INCOME FUND -- CLASS A
AIM GLOBAL INFRASTRUCTURE FUND -- CLASS A
AIM GLOBAL RESOURCES FUND -- CLASS A
AIM GLOBAL TELECOMMUNICATIONS FUND -- CLASS A
AIM GLOBAL TRENDS FUND -- CLASS A
AIM GLOBAL UTILITIES FUND -- CLASS A
AIM HIGH INCOME MUNICIPAL FUND -- CLASS A
AIM HIGH YIELD FUND -- CLASS A
AIM INCOME FUND -- CLASS A
AIM INTERMEDIATE GOVERNMENT FUND -- CLASS A
AIM INTERNATIONAL EQUITY FUND -- CLASS A
AIM INTERNATIONAL GROWTH FUND -- CLASS A
AIM JAPAN GROWTH FUND -- CLASS A
AIM LATIN AMERICAN GROWTH FUND -- CLASS A
AIM MID CAP GROWTH FUND -- CLASS A
AIM MONEY MARKET FUND -- CLASS A
AIM MUNICIPAL BOND FUND -- CLASS A
AIM NEW PACIFIC GROWTH FUND -- CLASS A
AIM SELECT GROWTH FUND -- CLASS A
AIM SMALL CAP EQUITY FUND -- CLASS A
AIM SMALL CAP OPPORTUNITIES FUND -- CLASS A
AIM STRATEGIC INCOME FUND -- CLASS A
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT -- CLASS A
AIM VALUE FUND -- CLASS A
AIM WEINGARTEN FUND -- CLASS A
AIM WORLDWIDE GROWTH FUND -- CLASS A
LOWER LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM LIMITED MATURITY TREASURY FUND -- CLASS A
AIM TAX-FREE INTERMEDIATE FUND -- CLASS A
NO LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM MONEY MARKET FUND -- AIM CASH RESERVE SHARES
AIM TAX-EXEMPT CASH FUND -- CLASS A
AIM DOLLAR FUND -- CLASS A
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE, (iii) Class A shares
may be exchanged for Class A shares, (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A shares of AIM MONEY MARKET FUND or for Class B or Class C shares.
A-14
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AIM INVESTOR'S GUIDE
DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund or acquired upon
any Lower Load Fund. exchange of
shares of any
Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
</TABLE>
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE
IS REVISED AS FOLLOWS:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value if shares were acquired Net Asset Value Net Asset Value Not Applicable Not Applicable
upon exchange of any Load Fund.
Otherwise, difference in sales charge
will apply.
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund. acquired upon
Difference in sales charge will apply if exchange of
No Load shares were acquired upon shares of any
exchange of Lower Load Fund shares. Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C.............. Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>
An exchange is permitted only in the following circumstances: (a) if the
funds offer more than one class of shares, the exchange must be between the same
class of shares (e.g., Class A, Class B and Class C shares of a Multiple Class
Fund cannot be exchanged for each other) except that AIM Cash Reserve Shares of
AIM MONEY MARKET FUND may be exchanged for Class A shares of another Multiple
Class Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten business days, and all other shares are held
in an account for at least one day, prior to the exchange; and (h) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the AIM Funds.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
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<PAGE>
AIM INVESTOR'S GUIDE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged
are redeemed at their net asset value as determined at NYSE Close on the day
that an exchange request in proper form (described below) is received. Exchange
requests received after NYSE Close will result in the redemption of shares at
their net asset value at NYSE Close on the next business day. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase, Exchange and
Redemption Orders (AIM MONEY MARKET FUND only)" for information regarding the
timing of exchange orders for AIM MONEY MARKET FUND. Normally, shares of an AIM
Fund to be acquired by exchange are purchased at their net asset value or
applicable offering price, as the case may be, determined on the date that such
request is received, but under unusual market conditions such purchases may be
delayed for up to five business days if it is determined that a fund would be
materially disadvantaged by an immediate transfer of the proceeds of the
exchange. If a shareholder is exchanging into a fund paying daily dividends
("Dividends, Distributions and Tax Matters -- Dividends and Distributions,"
below), and the release of the exchange proceeds is delayed for the foregoing
five-day period, such shareholder will not begin to accrue dividends until the
sixth business day after the exchange. Shares purchased by check may not be
exchanged until it is determined that the check has cleared, which may take up
to ten business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. If a shareholder does not wish to allow telephone
exchanges by any person in his account, he should decline that option on the
account application. AIM Distributors has made arrangements with certain dealers
and investment advisory firms to accept telephone instructions to exchange
shares between any of the AIM Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the funds, including the condition that any such dealer or
investment advisor enter into an agreement (which contains additional conditions
with respect to exchanges of shares) with AIM Distributors. To exchange shares
by telephone, a shareholder, dealer or investment advisor who has satisfied the
foregoing conditions must call AFS at (800) 959-4246. If a shareholder is unable
to reach AFS by telephone, he may also request exchanges by telegraph or use
overnight courier services to expedite exchanges by mail, which will be
effective on the business day received by the Transfer Agent as long as such
request is received prior to NYSE Close. The Transfer Agent and AIM Distributors
will not be liable for any loss, expense or cost arising out of any telephone
exchange request that they reasonably believe to be genuine, but may in certain
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's Social Security Number and current address, and mailings of
confirmations promptly after the transaction.
EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
A-16
<PAGE>
AIM INVESTOR'S GUIDE
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
MULTIPLE DISTRIBUTION SYSTEM. CLASS B SHARES. Class B shares purchased
under the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS % OF DOLLAR
YEARS SINCE PURCHASE MADE AMOUNT SUBJECT TO CHARGE
- ------------------------------------------------------------------------------------------ ---------------------------
<S> <C>
First..................................................................................... 5%
Second.................................................................................... 4%
Third..................................................................................... 3%
Fourth.................................................................................... 3%
Fifth..................................................................................... 2%
Sixth..................................................................................... 1%
Seventh and Following..................................................................... None
</TABLE>
In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
CLASS C SHARES. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
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<PAGE>
AIM INVESTOR'S GUIDE
WAIVERS. Contingent deferred sales charges on Class B and Class C shares
will be waived on redemptions (1) following the death or post-purchase
disability, as defined in Section 72(m)(7) of the Code, of a shareholder or a
settlor of a living trust (provided AIM Distributors is notified of such death
or post-purchase disability at the time of the redemption request and is
provided with satisfactory evidence of such death or post-purchase disability),
(2) in connection with certain distributions from IRAs, custodial accounts
maintained pursuant to Code Section 403(b), deferred compensation plans
qualified under Code Section 457 and plans qualified under Code Section 401
(collectively, "Retirement Plans"), (3) pursuant to a Systematic Withdrawal
Plan, provided that amounts withdrawn under such plan do not exceed on an annual
basis 12% of the value of the shareholder's investment in Class B or Class C
shares at the time the shareholder elects to participate in the Systematic
Withdrawal Plan, (4) effected pursuant to the right of a Multiple Class Fund to
liquidate a shareholder's account if the aggregate net asset value of shares
held in the account is less than the designated minimum account size described
in the prospectus of such Multiple Class Fund, (5) effected by AIM of its
investment in Class B or Class C shares and (6) of Class C shares where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payment otherwise payable to the dealer described in the last paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds."
Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
Waiver category (2) above applies only to redemptions resulting from:
(i) required minimum distributions to plan participants or beneficiaries who
are age 70 1/2 or older, and only with respect to that portion of such
distributions which does not exceed 12% annually of the participant's or
beneficiary's account value in a particular AIM Fund;
(ii) in-kind transfers of assets where the participant or beneficiary notifies
AIM Distributors of such transfer no later than the time such transfer
occurs;
(iii) tax-free rollovers or transfers of assets to another Retirement Plan
invested in Class B or Class C shares of one or more Multiple Class Funds;
(iv) tax-free returns of excess contributions or returns of excess deferral
amounts; and
(v) distributions upon the death or disability (as defined in the Code) of the
participant or beneficiary.
Shareholders who purchased Class B shares of the AIM/GT Funds or Class C
shares of AIM GLOBAL TRENDS FUND prior to June 1, 1998 are entitled to certain
additional waivers of the contingent deferred sales charge on those shares as
described in the Statement of Additional Information of each respective fund
under "How to Purchase and Redeem Shares."
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND [or Class A shares
of AIM DOLLAR FUND] which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code,
A-18
<PAGE>
AIM INVESTOR'S GUIDE
or Plans created under Section 403(b) of the Code and sponsored by nonprofit
organizations as defined under Section 501(c)(3) of the Code, where shares are
being redeemed in connection with employee terminations or withdrawals, and (a)
the total amount invested in a Plan is at least $1,000,000, (b) the sponsor of a
Plan signs a letter of intent to invest at least $1,000,000 in one or more of
the AIM Funds, or (c) the shares being redeemed were purchased by an
employer-sponsored Plan with at least 100 eligible employees; provided, however,
that Plans created under Section 403(b) of the Code which are sponsored by
public educational institutions shall qualify under (a), (b) or (c) above on the
basis of the value of each Plan participant's aggregate investment in the AIM
Funds, and not on the aggregate investment made by the Plan or on the number of
eligible employees; (2) redemptions of shares following the death or
post-purchase disability, as defined in Section 72(m)(7) of the Code, of a
shareholder or a settlor of a living trust; (3) redemptions of shares purchased
at net asset value by private foundations or endowment funds where the initial
amount invested was at least $1,000,000; (4) redemptions of shares purchased by
an investor in amounts of $1,000,000 or more where such investor's dealer of
record, due to the nature of the investor's account, notifies AIM Distributors
prior to the time of investment that the dealer waives the payments otherwise
payable to the dealer as described in the third paragraph under the caption
"Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM Funds;"
and (5) pursuant to a Systematic Withdrawal Plan, provided that amounts
withdrawn under such plan do not exceed on an annual basis 12% of the value of
the shareholder's investment in Class A shares at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund
to establish as IRA, should include the following information along with a
written request for either partial or full liquidation of fund shares; (a) a
statement as to whether or not the shareholder has attained age 59 1/2, and (b)
a statement as to whether or not the shareholder elects to have federal income
tax withheld from the proceeds of the liquidation.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in this account, he should decline that option on the account
application. The telephone redemption feature can be used only if: (a) the
redemption proceeds are to be mailed to the address of record or transferred
electronically or wired to the pre-authorized bank account; (b) there has been
no change of address of record on the account within the preceding 30 days; (c)
the shares to be redeemed are not in certificate form; (d) the person requesting
the redemption can provide proper identification information, and (e) the
proceeds of the redemption do not exceed $50,000. Accounts in AIM Distributors'
prototype retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not
eligible for the telephone redemption option. AIM Distributors has made
arrangements with certain dealers and investment advisors to accept telephone
instructions for the redemption of shares. AIM Distributors reserves the right
to impose conditions on these dealers and investment advisors, including the
condition that they enter into agreements (which contain additional conditions
with respect to the redemption of shares) with AIM Distributors. The Transfer
Agent and AIM Distributors will not be liable for any loss, expense or cost
arising out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain
A-19
<PAGE>
AIM INVESTOR'S GUIDE
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's taxpayer identification number and current address, and mailings
of confirmations promptly after the transaction.
EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order
is received prior to 11:30 a.m. Eastern Time, the redemption will be effective
on that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next business day.
REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of
AIM MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing
the appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an
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AIM INVESTOR'S GUIDE
address that has been changed within the past 30 days; (5) requests to transfer
the registration of shares to another owner, (6) telephone exchange and
telephone redemption authorization forms; (7) changes in previously designated
wiring or electronic funds transfer instructions, and (8) written redemptions or
exchanges of shares previously reported as lost, whether or not the redemption
amount is under $50,000 or the proceeds are to be sent to the address of record.
These requirements may be waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within 90 days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment may alter any capital gains payable. If
there has been a loss on the redemption and shares of the same fund are
repurchased, all of the loss may not be tax deductible, depending on the timing
and amount reinvested. Under the Code, if the redemption proceeds of fund shares
on which a sales charge was paid are reinvested in shares of the same fund, or
exchanged for shares of another AIM Fund, at a reduced sales charge within 90
days of the payment of the sales charge, the shareholder's basis in the fund
shares redeemed may not include the amount of the sales charge paid, thereby
reducing the loss or increasing the gain recognized from the redemption;
however, the shareholder's basis in the fund shares purchased will include the
sales charge. Each AIM Fund may amend, suspend or cease offering the privilege
at any time as to shares redeemed after the date of such amendment, suspension
or cessation. This privilege may only be exercised once each year by a
shareholder with respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in
connection with the redemption of Class A shares and who subsequently reinvest a
portion or all of the value of the redeemed shares in Class A shares of any AIM
Fund within 90 days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is
determined as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close
with respect to AIM MONEY MARKET FUND) on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an AIM Fund's share
will be determined as of the close of the NYSE on such day. For purposes of
defining net asset value per share, futures and options contracts generally will
be valued 15 minutes after the close of trading of the NYSE. The net asset value
per share is calculated by subtracting a class' liabilities from its assets and
dividing the result by the total number of class shares outstanding. The
determination of net asset value per share is made in accordance with generally
accepted accounting principles. Among other items, liabilities include accrued
expenses and dividends payable, and total assets include portfolio securities
valued at their market value, as well as income accrued but
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AIM INVESTOR'S GUIDE
not yet received. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
supervision of the fund's officers and in accordance with methods which are
specifically authorized by its governing Board of Directors or Trustees.
Short-term obligations with maturities of 60 days or less, and the securities
held by the Money Market Funds, are valued at amortized cost as reflecting fair
value. AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOARD FUND, AIM TAX-EXEMPT
BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund's policy regarding the payment of dividends and distributions
is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND............................. declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND.............. declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.................. declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND........................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND...................... declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND........................ declared and paid annually annually annually
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND............................. declared and paid annually annually annually
AIM BALANCED FUND................................. declared and paid quarterly annually annually
AIM BLUE CHIP FUND................................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND...................... declared and paid annually annually annually
AIM CHARTER FUND.................................. declared and paid quarterly annually annually
AIM CONSTELLATION FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND..................... declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND................. declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INCOME FUND............................ declared daily; paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM GLOBAL UTILITIES FUND......................... declared daily; paid monthly annually annually
AIM HIGH INCOME MUNICIPAL FUND.................... declared daily; paid monthly annually annually
AIM HIGH YIELD FUND............................... declared daily; paid monthly annually annually
AIM INCOME FUND................................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.................. declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND..................... declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND................ declared daily; paid monthly annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM MONEY MARKET FUND............................. declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND........................... declared daily; paid monthly annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SELECT GROWTH FUND............................ declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM SMALL CAP OPPORTUNITIES FUND.................. declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT........... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.......................... declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND.................... declared daily; paid monthly annually annually
AIM VALUE FUND.................................... declared and paid annually annually annually
AIM WEINGARTEN FUND............................... declared and paid annually annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in
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AIM INVESTOR'S GUIDE
like shares of another Multiple Class Fund, to the extent permitted. For funds
that do not declare a dividend daily, such dividends and distributions will be
reinvested at the net asset value per share determined on the ex-dividend date.
For funds that declare a dividend daily, such dividends and distributions will
be reinvested at the net asset value per share determined on the payable date.
Shareholders may elect, by written notice to the Transfer Agent, to receive such
distributions, or the dividend portion thereof, in cash, or to invest such
dividends and distributions in shares of another fund in the AIM Funds; provided
that (i) dividends and distributions attributable to Class B shares may only be
reinvested in Class B shares, (ii) dividends and distributions attributable to
Class C shares may only be reinvested in Class C shares, (iii) dividends and
distributions attributable to Class A shares may not be reinvested in Class B or
Class C shares, and (iv) dividends and distributions attributable to the AIM
Cash Reserve Shares of AIM MONEY MARKET FUND may not be reinvested in the Class
A shares of that Fund or in any Class B or Class C shares. Investors who have
not previously selected such a reinvestment option on the account application
form may contact the Transfer Agent at any time to obtain a form to authorize
such reinvestments in another AIM Fund. Such reinvestments into the AIM Funds
are not subject to sales charges, and shares so purchased are automatically
credited to the account of the shareholder.
Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS--GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares, except for "exempt-interest dividends" paid by AIM HIGH INCOME MUNICIPAL
FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND (the "Tax-Exempt
Funds"), which are exempt from federal income tax. With respect to tax-exempt
shareholders, dividends and distributions from the AIM Funds are not subject to
federal income taxation to the extent permitted under the applicable tax
exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
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AIM INVESTOR'S GUIDE
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HIGH
INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH YIELD
FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be
required to include the "exempt-interest" portion of dividends paid by the
Tax-Exempt Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other
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AIM INVESTOR'S GUIDE
taxable securities. For additional information concerning the alternative
minimum tax and certain collateral tax consequences of the receipt of
exempt-interest dividends, see the Statements of Additional Information
applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP GROWTH FUND,
AIM SMALL CAP EQUITY FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH FUND --
SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do so,
each of these funds may elect to pass through to its shareholders credits for
foreign taxes paid. If a fund makes such an election, a shareholder who receives
a distribution (1) will be required to include in gross income his proportionate
share of foreign taxes allocable to the distribution and (2) may claim a credit
or deduction for such share for his taxable year in which the distribution is
received, subject to the general limitations imposed on the allowance of foreign
tax credits and deductions. Shareholders should also note that certain gains or
losses attributable to fluctuations in exchange rates or foreign currency
forward contracts may increase or decrease the amount of income of the fund
available for distribution to shareholders and should note that if, for any
fund, such losses exceed other income during a taxable year, the fund would not
be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each AIM Fund's transfer agent and
dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
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AIM INVESTOR'S GUIDE
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If several members of a household own shares of the same fund,
only one annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
A-27
<PAGE>
AIM SMALL CAP EQUITY FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call (800)
347-4246 or write to A I M Distributors, Inc. and request a free prospectus.
Please read the prospectus carefully before you invest or send money.
<PAGE>
[LOGO]
AIM WORLDWIDE GROWTH FUND
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM Worldwide Growth Fund (the
"Fund"), which is one of several series investment portfolios comprising AIM
Growth Series (the "Trust"), an open-end, series, management investment company.
The Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of issuers domiciled anywhere in the
world.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or by calling
1-800-347-4246. The SEC maintains a Web site at http://www.sec.gov that contains
the Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM WORLDWIDE GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 6
Investment Objective and Policies......................................................... 7
Risk Factors.............................................................................. 10
Management................................................................................ 12
Other Information......................................................................... 17
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of issuers domiciled in its Primary Investment Area
(as defined herein).
Investment Managers: The Fund is managed by A I M Advisors, Inc. ("AIM") and is sub-advised and sub-administered by
INVESCO (NY), Inc. (the "Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management
affiliates provide investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment
management group that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing presence in Asia. AIM was
organized in 1976 and, together with its subsidiaries, currently advises approximately 90 investment
company portfolios.
Purchasing Shares: Investors may select Class A or Class B shares of the Fund which are offered by this Prospectus at an
offering price that reflects differing sales charges and expense levels. See "Terms and Conditions of
Purchase of the AIM Funds -- Sales Charges and Dealer Concessions." Pursuant to a separate
prospectus, the Fund also offers Advisor Class shares, which represent interests in the Fund. The
Advisor Class has different distribution arrangements.
Class A Shares: Shares are offered at net asset value plus any applicable sales charge.
</TABLE>
Prospectus Page 2
<PAGE>
AIM WORLDWIDE GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B Shares: Shares are offered at net asset value without an initial sales charge, and are subject to a maximum
contingent deferred sales charge of 5% on certain redemptions made within six years from the date
such shares were purchased. Class B shares automatically convert to Class A shares of the Fund eight
years following the end of the calendar month in which a purchase was made. Class B shares are
subject to higher expenses than Class A shares.
Initial investments in any class of shares must be at least $500 and additional investments must be
at least $50. The minimum initial investment is modified for investments through tax-qualified
retirement plans and accounts initially established with an Automatic Investment Plan. The
distributor of the Fund's shares is A I M Distributors, Inc. ("AIM Distributors"), P.O. Box 4739,
Houston, TX 77210-4739. See "How to Purchase Shares" and "Special Plans."
Suitability for Investors: An investor in Class A or Class B shares of the Fund should consider the method of purchasing shares
that is most beneficial given the amount of the purchase, the length of time the shares are expected
to be held, and other circumstances. Investors should consider whether, during the anticipated life
of their investment in the Fund, the accumulated distribution fees and any applicable contingent
deferred sales charges on Class B shares prior to conversion would be less than the initial sales
charge and accumulated distribution fees on Class A shares purchased at the same time, and to what
extent such differential would be offset by the higher return on Class A shares. To assist investors
in making this determination, the table under the caption "Table of Fees and Expenses" sets forth
examples of the charges applicable to each class of shares. Class A shares will normally be more
beneficial than Class B shares to the investor who qualifies for reduced initial sales charges, as
described below. Therefore, AIM Distributors will reject any order for purchase of more than $250,000
for Class B shares.
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Class A and Class B shares of the Fund may be exchanged for shares of other funds in The
AIM Family of
Funds in the manner and subject to the policies and charges set forth herein. See "Exchange
Privilege."
Redeeming Shares: Class A shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, generally without charge. A contingent deferred sales charge of 1% may apply to
certain redemptions where a purchase of more than $1 million is made at net asset value. See "How to
Redeem Shares -- Contingent Deferred Sales Charge Program for Large Purchases."
</TABLE>
Prospectus Page 3
<PAGE>
AIM WORLDWIDE GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Class B shareholders of the Fund may redeem all or a portion of their shares at net asset value on
any business day, less a contingent deferred sales charge for redemptions made within six years from
the date such shares were purchased. Class B shares redeemed after six years from the date such
shares were purchased will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters" and "Special Plans."
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
The Fund may invest a significant portion of its assets in foreign securities. Investments in foreign
securities involve risks relating to political and economic developments abroad and the differences
between the regulations to which U.S. and foreign issuers are subject. Individual foreign economies
also may differ favorably or unfavorably from the U.S. economy. Changes in foreign currency exchange
rates also may affect the Fund's net asset value, earnings and gains and losses realized on sales of
securities.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 4
<PAGE>
AIM WORLDWIDE GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Class A and Class B shares of the Fund are
reflected in the following table (1):
<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION COSTS (2):
Maximum sales charge on purchases
(as a % of offering price)....................... 5.50% None
Sales charges on reinvested distributions to
shareholders..................................... None None
Maximum deferred sales charge (as a % of net asset
value at time of purchase or sale, whichever is
less)............................................ None 5.00%
Redemption charges................................ None None
Exchange fees..................................... None None
ANNUAL FUND OPERATING EXPENSES (3):
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees..... 0.98% 0.98%
12b-1 distribution and service fees............... 0.35% 1.00%
Other expenses.................................... 0.49% 0.49%
------- -------
Total Fund Operating Expenses..................... 1.82% 2.47%
------- -------
------- -------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (7):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
10
1 YEAR 3 YEARS 5 YEARS YEARS(6)
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A shares (4).......................... $ 73 $110 $ 149 $ 258
Class B shares
Assuming a complete redemption at end of
period (5)............................... $ 77 $110 $ 156 $ 267
Assuming no redemption.................... $ 25 $ 78 $ 133 $ 267
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc. rules regarding investment companies.
(2) Sales charge waivers are available for Class A and Class B shares, and
reduced sales charge purchase plans are available for Class A shares. The
maximum 5% contingent deferred sales charge on Class B shares applies to
redemptions during the first year after purchase. The charge generally
declines by 1% annually thereafter, reaching zero after six years. See
"Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
Sales Charges."
(3) Expenses are based on the Fund's fiscal year ended December 31, 1997. "Other
expenses" include custody, transfer agency, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information.
(4) Assumes payment of maximum sales charge by the investor.
(5) Assumes deduction of the applicable contingent deferred sales charge.
(6) For Class B shares, this number reflects the conversion to Class A shares
eight years following the end of the calendar month in which a purchase was
made.
(7) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT
EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the assumption
in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 5
<PAGE>
AIM WORLDWIDE GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Class A and Class B share of the Fund. This information
is supplemented by the financial statements and accompanying notes appearing in
the Statement of Additional Information.
AIM WORLDWIDE GROWTH FUND
(FORMERLY GT GLOBAL WORLDWIDE GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Funds. Further information regarding the Fund's
performance is contained in that Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. Standardized total return for Class
A shares reflects the deduction of a Fund's maximum front-end sales charge at
the time of purchase. Standardized total return for Class B shares reflects the
deduction of the maximum applicable contingent deferred sales charge on a
redemption of shares held for the period.
A Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, a
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of any Fund. Such practices will
have the effect of increasing that Fund's total return. The performance of each
Fund will vary from time to time and past results are not necessarily
representative of future results. A Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 6
<PAGE>
AIM WORLDWIDE GROWTH FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The Fund seeks long-term growth of capital. It seeks its objective by investing,
under normal circumstances, at least 65% of its total assets in equity
securities of issuers domiciled in its Primary Investment Area, as described
below. Equity securities in which the Fund may invest include common stocks,
preferred stocks, convertible debt securities and warrants to acquire such
securities. The Fund's Primary Investment Area includes the following countries:
Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Columbia,
Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia,
Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands,
New Zealand, Norway, Pakistan, Peru, the Philippines, Portugal, Singapore,
Spain, South Africa, South Korea, Sweden, Switzerland, Taiwan, Thailand, Turkey,
United Kingdom, United States and Venezuela. There can be no assurance that the
Fund will achieve its investment objective.
Because the development of the world's economies and stock markets is rapidly
evolving, from time to time the Board of Trustees may add or delete countries
from the Fund's Primary Investment Area.
The Fund is designed for those investors desiring to delegate equity investment
decisions, including allocation of assets among the world's different markets,
currency strategies and individual stock selection, to the Sub-adviser's
professional team of investment specialists.
Under normal circumstances, the assets of the Fund are invested in the equity
securities of issuers domiciled in at least three different countries, and 20%
to 60% of the Fund's assets normally are invested in the equity securities of
U.S. issuers.
The Fund may invest up to 35% of its total assets in debt securities, including
U.S. and foreign government securities and corporate debt securities, Samurai
and Yankee bonds, Eurobonds and Depository Receipts. The Fund will limit its
purchases of debt securities to investment grade obligations. "Investment grade"
debt refers to those securities rated within one of the four highest ratings
categories by Moody's Investors Service, Inc. ("Moody's") or by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or, if not
similarly rated by any other nationally recognized statistical rating
organization ("NRSRO"), deemed by the Sub-adviser to be of equivalent quality.
Debt rated Baa by Moody's, which is the lowest category of investment grade
debt, is considered by Moody's to have speculative characteristics. See the
Statement of Additional Information for a description of Moody's and S&P
ratings.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Fund, the Sub-adviser seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth rates. The Sub-adviser further
attempts to identify those companies in such countries and industries that are
best positioned and managed to take advantage of these economic and political
factors. The Sub-adviser intends to invest in such markets only after balancing
the potential for growth of selected companies in each market relative to the
risks of investing in each such country. Among the factors to be considered are
that several of the markets are so-called developing countries, and their
economies and markets are less developed and more prone to uncertainty,
instability and risk than those of the other markets in which the Fund invests.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently
Prospectus Page 7
<PAGE>
AIM WORLDWIDE GROWTH FUND
available in the marketplace. Such values are a function of yield, maturity,
issue classification and quality characteristics, coupled with expectations
regarding the economy, movements in the general level and term of interest
rates, currency values, political developments, and variations in the supply of
funds available for investment in the world bond market relative to the demands
placed upon it. If market interest rates decline, fixed income securities
generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
currency units are evaluated on the strength of the particular currency against
the U.S. dollar as well as on the current and expected levels of interest rates
in the country or countries. In addition to the foregoing, the Fund may seek to
take advantage of differences in relative values of fixed income securities
among various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency units
such as Euros) and/or high quality debt securities or money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, most or all investments of the Fund may be made in
the United States and denominated in U.S. dollars. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units) and may invest in high
quality foreign or domestic money market instruments. For a description of money
market instruments, see "Temporary Defensive Strategies" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions. The Fund may
borrow up to 33 1/3% of its total assets. However, no additional investments
will be made if the Fund's borrowings exceed 5% of its total assets. Any
borrowing by the Fund may cause greater fluctuation in the value of its shares
than would be the case if the Fund did not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which that Fund may receive a fee) to purchase
Prospectus Page 8
<PAGE>
AIM WORLDWIDE GROWTH FUND
similar, but not identical, securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is made. While a loan is outstanding, the borrower must maintain with the
Fund's custodian collateral consisting of cash, U.S. government securities or
certain irrevocable letters of credit equal to at least the value of the
borrowed securities, plus any accrued interest or such other collateral as
permitted by the Fund's investment program and regulatory agencies, and as
approved by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Forward Currency Transactions" herein and the Statement of Additional
Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Fund also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
Prospectus Page 9
<PAGE>
AIM WORLDWIDE GROWTH FUND
DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign issuers in the
form of ADRs or other similar securities convertible into securities of foreign
issuers. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs are receipts
typically issued by a United States bank or trust company evidencing ownership
of the underlying securities. Generally, ADRs in registered form are designed
for use in U.S. securities markets. See "Investment Objectives and Policies --
Depository Receipts" in the Statement of Additional Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Company's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
FOREIGN INVESTING. The Fund invests a significant portion of its assets in
foreign securities. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor will
the issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. Securities of some foreign companies are less
liquid and their prices may be more volatile than securities of comparable
domestic companies. In addition, certain costs attributable to foreign
investing, such as custody charges, are higher than those attributable to
domestic investing. The Fund's interest and dividends from foreign issuers may
be subject to non-U.S. withholding taxes, thereby reducing its net investment
income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the repatriation of
assets of the Fund, political or social instability, or diplomatic developments
that could affect their investments in those countries. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, rate of
savings and capital reinvestment, resource self-sufficiency and balance of
payments positions.
Because the Fund may invest substantially in securities denominated in
currencies other than the U.S. dollar, and may hold foreign currencies, it will
be affected favorably or unfavorably by exchange
Prospectus Page 10
<PAGE>
AIM WORLDWIDE GROWTH FUND
control regulations or changes in the exchange rates between such currencies and
the U.S. dollar. Changes in currency exchange rates will influence the value of
the Fund's shares, and also may affect the value of dividends and interest
earned by the Fund and gains and losses realized by the Fund. Currencies
generally are evaluated on the basis of fundamental economic criteria (e.g.,
relative inflation and interest rate levels and trends, growth rate forecasts,
balance of payments status and economic policies) as well as technical and
political data. The exchange rates between the U.S. dollar and other currencies
are determined by supply and demand in the currency exchange markets, the
international balance of payments, governmental intervention, speculation and
other economic and political conditions. If the currency in which a security is
denominated appreciates against the U.S. dollar, the dollar value of the
security will increase. Conversely, a decline in the exchange rate of the
currency would adversely affect the value of the security expressed in U.S.
dollars.
INVESTING IN EMERGING MARKETS. Because of the special risks associated with
investing in emerging markets, an investment in the Fund should be considered
speculative. Investors are strongly advised to consider carefully the special
risks involved in emerging markets, which are in addition to the usual risks of
investing in developed foreign markets around the world.
Investing in emerging markets involves risks relating to potential political and
economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation in any
emerging market, the Fund could lose its entire investment in that market.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
Economies in emerging markets generally are dependent heavily upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by the countries
with which they trade. These economies also have been and may continue to be
affected adversely by economic conditions in the countries in which they trade.
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
In addition, brokerage commissions, custodial services and other costs relating
to investment in foreign markets generally are more expensive than in the United
States, particularly with respect to emerging markets. Such markets have
different settlement and clearance procedures. In certain markets there have
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the Fund to make intended securities purchases due to settlement
problems could cause the Fund to forego attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, in possible liability to the purchaser.
In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occurred in certain countries.
The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Fund's portfolio securities in such
markets may not be readily available. Section 22(e) of the 1940 Act permits a
registered investment company to suspend redemption of its shares for any period
during which an emergency exists, as determined by the SEC. Accordingly, when
the Fund believes that appropriate circumstances warrant, it will promptly apply
to the SEC for a determination that an emergency exists within the meaning of
Section 22(e). During the period commencing
Prospectus Page 11
<PAGE>
AIM WORLDWIDE GROWTH FUND
from the Fund's identification of such conditions until the date of SEC action,
the portfolio securities of the Fund in the affected markets will be valued at
fair value as determined in good faith by or under the direction of the
Company's Board of Trustees.
[PACIFIC REGION COUNTRIES. The Fund may invest significantly in this region.
Certain of the risks associated with international investments are heightened
for investments in Pacific region countries. For example, some of the currencies
of Pacific region countries have experienced steady devaluations relative to the
U.S. dollar, and major adjustments have been made periodically in certain such
currencies. Moreover, recent currency devaluations in some Pacific region
countries have resulted in high interest rate levels and sharp reductions in
economic activity and have diminished prospects for short-term growth in
corporate earnings. Certain countries, such as India, face serious exchange
constraints. Jurisdictional disputes also exist between South Korea and North
Korea.
In addition, Hong Kong reverted to Chinese administration on July 1, 1997. The
long-term effects of this reversion are not known at this time. However, the
Fund's investments in Hong Kong may now be subject to the same or similar risks
as any investment in China. Investments in Hong Kong may be subject to
expropriation, nationalization or confiscation, in which case the Pacific Fund
could lose its entire investment in Hong Kong. In addition, the reversion of
Hong Kong also presents a risk that the Hong Kong dollar will be devalued and a
risk of possible loss of investor confidence in Hong Kong's currency, stock
market and economy.]
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions it
might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-adviser's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts or options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund, including
the investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and
Prospectus Page 12
<PAGE>
AIM WORLDWIDE GROWTH FUND
the Sub-adviser, the agreements with AIM Distributors regarding distribution of
the Fund's shares, the custody agreement and transfer agency agreement. The
day-to-day operations of the Fund are delegated to the officers of the Trust,
subject always to the investment objective and policies of the Fund and to the
general supervision of the Trust's Board. See "Trustees and Executive Officers"
in the Statement of Additional Information for information on the Trustees of
the Trust.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million and .90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund and the
Portfolio are higher than those paid by most mutual funds. The Fund pays all
expenses not assumed by AIM, the Sub-adviser, AIM Distributors or other agents.
AIM has undertaken to limit the Fund's expenses (exclusive of brokerage
commissions, taxes, interest and extraordinary expenses) to the maximum annual
rate of 2.00% and 2.65% of the average daily net assets of the Fund's Class A
and Class B shares, respectively.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement, dated as of May 29, 1998 (the "Advisory Agreement").
AIM was organized in 1976 and, together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. The Sub-adviser, 50 California Street, 27th
Floor, San Francisco, California 94111, and 1166 Avenue of the Americas, New
York, New York 10036, serves as the sub-adviser to the Fund pursuant to an
investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Fund, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
Prospectus Page 13
<PAGE>
AIM WORLDWIDE GROWTH FUND
The investment professionals primarily responsible for the portfolio management
of the Fund are as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Roger Yates Portfolio Manager since Global Chief Investment Officer for the Sub-adviser and INVESCO GT
London 1996 Asset Management PLC (London) ("GT Asset Management"), an affiliate
of the Sub-adviser, since October 1997. International Chief
Investment Officer for the Sub-adviser and GT Asset Management from
September 1996 to October 1997. Chief Investment Officer and
Portfolio Manager for Europe and the United Kingdom for the
Sub-adviser and GT Asset Management from 1994 to September 1996.
Investment Manager for Morgan Grenfell Asset Management from 1988 to
1994.
Michael Lindsell Portfolio Manager since Head of Investment Strategy for Global Equities for the Sub-adviser
London 1997 and GT Asset Management since 1996. Chief Investment Officer for
Japan for INVESCO GT Asset Management Asia Ltd. (Hong Kong) and
Portfolio Manager for the Sub-adviser from 1992 to 1996. Director of
Warburg Asset Management (Tokyo) prior thereto.
Richard K. Collins Portfolio Manager since Senior Equity Portfolio Manager and Managing Director for the
New York 1997 Sub-adviser since April 1993. Senior Analyst and Portfolio Manager
from 1982 to April 1993. Employed by Chancellor Capital Management,
Inc. a predecessor of the Sub-adviser from 1982 to October 1996.
Senior Equity Analyst for Scudder, Stevens & Clark from 1973 to
1982, and Vice President of Research from 1976 to 1982. Research
Analyst for Salomon Brothers from 1970 to 1973. Chartered Financial
Analyst and member of the Association of Investment Management
Research (AIMR) and the New York Society of Securities Analysts.
</TABLE>
------------------------
In placing orders for the Fund's portfolio transactions, the Sub-adviser seeks
to obtain the best net results. Consistent with its obligation to obtain the
best net results, the Sub-adviser may consider a broker/dealer's sale of shares
of the AIM Funds as a factor in considering through whom portfolio transactions
will be effected. Brokerage transactions for the Fund may be executed through
affiliates of AIM or the Sub-adviser. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Fund will bear directly and could result in the realization of
net capital gains that would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 on behalf of Class A shares of the Fund, and has entered into a
Master Distribution Agreement, dated May 29, 1998, on behalf of Class B shares
of the Fund (individually referred to as a "Distribution Agreement" or
collectively as the "Distribution Agreements") with AIM Distributors, a
registered broker-dealer and a wholly owned subsidiary of AIM, to act as the
distributor of Class A and Class B shares of the Fund. Certain Trustees and
officers of the Trust are affiliated with AIM Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right to
distribute shares of the Fund directly and through institutions with whom AIM
Distributors has entered into selected dealer agreements. Under the Distribution
Agreement for the Class B shares, AIM Distributors sells Class B shares of the
Fund at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of the Fund's average
Prospectus Page 14
<PAGE>
AIM WORLDWIDE GROWTH FUND
daily net assets attributable to Class B shares attributable to the sales
efforts of AIM Distributors. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset based sales charges in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors; provided, however,
that a complete termination of the Class B shares master distribution plan (as
defined in the plan) would terminate all payments to AIM Distributors.
Termination of the Class B shares distribution plan or Distribution Agreement
does not affect the obligation of Class B shareholders to pay contingent
deferred sales charges.
DISTRIBUTION PLANS. CLASS A PLAN. The Trust has adopted a Master Distribution
Plan applicable to Class A shares of the Fund (the "Class A Plan") pursuant to
Rule 12b-1 under the 1940 Act, to compensate AIM Distributors for the purpose of
financing any activity that is intended to result in the sale of Class A shares
of the Fund.
Under the Class A Plan, the Trust may compensate AIM Distributors an aggregate
amount of 0.35% of the average daily net assets of Class A shares of the Fund on
an annualized basis.
The Class A Plan is designed to compensate AIM Distributors, on a quarterly
basis, for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class A shares of the Fund. Payments can also be directed
by AIM Distributors to selected institutions who have entered into service
agreements with respect to Class A shares of the Fund and who provide continuing
personal services to their customers who own Class A shares of the Fund. The
service fees payable to selected institutions are calculated at the annual rate
of 0.25% of the average daily net asset value of those Fund shares that are held
in such institution's customers' accounts which were purchased on or after a
prescribed date set forth in the Plan.
Of the aggregate amount payable under the Class A Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund, in amounts
of up to 0.25% of the average net assets of the Fund attributable to the
customers of such dealers or financial institutions are characterized as a
service fee, and payments to dealers and other financial institutions in excess
of such amount and payments to AIM Distributors would be characterized as an
asset-based sales charge pursuant to the Class A Plan. The Class A Plan also
imposes a cap on the total amount of sales charges, including asset-based sales
charges, that may be paid by the Trust with respect to the Fund. The Class A
Plan does not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Class A Plan on behalf of the Fund. Thus, under the Class A Plan, even if AIM
Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Fund will not be obligated to pay more than
that fee. If AIM Distributors' expenses are less than the fee it receives, AIM
Distributors will retain the full amount of the fee. Payments pursuant to the
Plans are subject to any applicable limitations imposed by rules of the National
Association of Securities Dealers, Inc.
CLASS B PLAN. The Trust has also adopted a master distribution plan applicable
to Class B shares of the Fund (the "Class B Plan"). Under the Class B Plan, the
Fund pays distribution expenses at an annual rate of 1.00% of the average daily
net assets attributable to the Fund's Class B shares. Of such amount the Fund
pays a service fee of 0.25% of the average daily net assets attributable to the
Fund's Class B shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
Class B shares of the Fund. Any amounts not paid as a service fee would
constitute an asset-based sales charge. Amounts paid in accordance with the
Class B Plan with respect to the Fund may be used to finance any activity
primarily intended to result in the sale of Class B shares of the Fund.
BOTH PLANS. Activities that may be financed under the Class A Plan and the Class
B Plan (collectively, the "Plans") include, but are not limited to: printing of
prospectuses and statements of additional information and reports for other than
existing shareholders, overhead, preparation and distribution of advertising
material and sales literature, expense of organizing and conducting sales
seminars, supplemental payments to dealers and other institutions such as
asset-based sales charges or as payments of service fees under shareholder
service arrangements, and the cost of administering the Plans. These amounts
payable by the Fund under the Plans need not be directly related to the
Prospectus Page 15
<PAGE>
AIM WORLDWIDE GROWTH FUND
expenses actually incurred by AIM Distributors on behalf of the Fund. Thus, even
if AIM Distributors' actual expenses exceed the fee payable to AIM Distributors
thereunder at any given time, the Trust will not be obligated to pay more than
that fee, and if AIM Distributors' expenses are less than the fee it receives,
AIM Distributors will retain the full amount of the fee. Payments pursuant to
the Plans are subject to any applicable limitations imposed by rules of the
National Association of Securities Dealers, Inc.
Each of the Plans may be terminated at any time by a vote of the majority of
those Trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
Under the Plans, AIM Distributors may in its discretion from time to time agree
to waive voluntarily all or any portion of its 12b-1 fee, while retaining its
ability to be reimbursed for such fee prior to the end of each fiscal year.
Under the Plans, certain financial institutions which have entered into service
agreements and which sell shares of the Fund on an agency basis, may receive
payments from the Fund pursuant to the respective Plans. AIM Distributors does
not act as principal, but rather as agent, for the Fund in making such payments.
The Fund will obtain a representation from such financial institutions that they
will either be licensed as dealers as required under applicable state law, or
that they will not engage in activities which would constitute acting as a
"dealer" as defined under applicable state law. Financial intermediaries and any
other person entitled to receive compensation for selling Fund shares may
receive different compensation for selling shares of one class over another.
For additional information concerning the operation of the Plans see the
Statement of Additional Information.
Prospectus Page 16
<PAGE>
AIM WORLDWIDE GROWTH FUND
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of G.T. Global Growth Series, a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series or portfolios
of the Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 17
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND AIM GLOBAL RESOURCES FUND
AIM ADVISOR INTERNATIONAL VALUE FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM ADVISOR LARGE CAP VALUE FUND AIM GLOBAL TRENDS FUND
AIM ADVISOR MULTIFLEX FUND AIM GLOBAL UTILITIES FUND
AIM ADVISOR REAL ESTATE FUND AIM HIGH INCOME MUNICIPAL FUND
AIM AGGRESSIVE GROWTH FUND AIM HIGH YIELD FUND
AIM AMERICA VALUE FUND AIM INCOME FUND
AIM ASIAN GROWTH FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM BALANCED FUND AIM INTERNATIONAL EQUITY FUND
AIM BLUE CHIP FUND AIM INTERNATIONAL GROWTH FUND
AIM CAPITAL DEVELOPMENT FUND AIM JAPAN GROWTH FUND
AIM CHARTER FUND AIM LATIN AMERICAN GROWTH FUND
AIM CONSTELLATION FUND AIM LIMITED MATURITY TREASURY FUND
AIM DEVELOPING MARKETS FUND AIM MID CAP GROWTH FUND
AIM DOLLAR FUND(*) AIM MONEY MARKET FUND(*)
AIM EMERGING MARKETS FUND AIM MUNICIPAL BOND FUND
AIM EUROPEAN DEVELOPMENT FUND AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND AIM SELECT GROWTH FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM SMALL CAP OPPORTUNITIES FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM GLOBAL GROWTH FUND AIM TAX-EXEMPT CASH FUND(*)
AIM GLOBAL GROWTH & INCOME FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL HEALTH CARE FUND AIM VALUE FUND
AIM GLOBAL HIGH INCOME FUND AIM WEINGARTEN FUND
AIM GLOBAL INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND are offered to investors at net
asset value, without payment of a sales charge, as described below. Other
funds, including the Class A, Class B and Class C shares of AIM MONEY MARKET
FUND, are sold with an initial sales charge or subject to a contingent
deferred sales charge upon redemption, as described below.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM
Family of Funds ("AIM Funds"), an investor must submit a fully completed new
Account Application form directly to A I M Fund Services, Inc. ("AFS" or the
"Transfer Agent") or through any dealer authorized by A I M Distributors, Inc.
("AIM Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
is $500, except for accounts initially established through an Automatic
Investment Plan, which requires a special authorization form (see "Special
Plans") and for certain retirement accounts. The minimum initial investment for
accounts established with an Automatic Investment Plan is $50. The minimum
initial investment for an Individual Retirement Arrangement ("IRA") or Roth IRA
is $250. There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Savings Incentive Match Plans for Employee IRA ("SIMPLE IRA")
accounts, 403(b) plans or 457 (state deferred compensation) plans (except that
the minimum initial investment for salary deferrals for such
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AIM INVESTOR'S GUIDE
plans is $25), or for investment of dividends and distributions of any of the
AIM Funds into any existing AIM Funds account.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Shares of any AIM Funds not named on the cover of this Prospectus, as well
as Advisor Class shares of certain AIM Funds, are offered pursuant to separate
prospectuses. Copies of other prospectuses may be obtained by calling (800)
347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>
HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased
directly through AIM Distributors or through any dealer who has entered into an
agreement with AIM Distributors. The minimum investment for subsequent purchases
is $50. The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. There are no such minimum investment requirements for investment of
dividends and distributions of any of the AIM Funds into any other existing AIM
Funds account.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION-SM-: To purchase additional shares by electronic
funds transfer, please contact the Client Services Department of AFS for
details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds, including Class A shares (the "Class A shares") of
AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE
CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL ESTATE FUND, AIM
AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN GROWTH FUND, AIM
BALANCED FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER
FUND, AIM CONSTELLATION FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM
EMERGING MARKETS FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES
FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL
INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS
FUND, AIM GLOBAL TRENDS FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH INCOME
MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM INTERNATIONAL GROWTH FUND,
AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM MID CAP GROWTH FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL
BOND FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT GROWTH FUND, AIM SMALL CAP
EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM STRATEGIC INCOME FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE
INTERMEDIATE FUND, AIM VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH
FUND, collectively (other than AIM AGGRESSIVE GROWTH FUND, AIM LIMITED MATURITY
TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND
and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may be
purchased at their respective net asset value plus a sales charge as indicated
below, except that Class A shares of AIM DOLLAR FUND and AIM TAX-EXEMPT
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AIM INVESTOR'S GUIDE
CASH FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without
a sales charge and Class B shares (the "Class B shares") and Class C shares (the
"Class C shares") of the Multiple Class Funds which offer such classes are sold
at net asset value subject to a contingent deferred sales charge payable upon
certain redemptions. Class B shares of AIM DOLLAR FUND, however, may be acquired
only by an exchange of shares of another AIM Fund. These contingent deferred
sales charges are described under the caption "How to Redeem Shares -- Multiple
Distribution System." Securities dealers and other persons entitled to receive
compensation for selling or servicing shares of a Multiple Class Fund may
receive different compensation for selling or servicing one particular class of
shares over another class in the same Multiple Class Fund. Factors an investor
should consider prior to purchasing Class A, Class B or Class C shares (or, if
applicable, AIM Cash Reserve Shares) of a Multiple Class Fund are described
below under "Special Information Relating to Multiple Class Funds." For
information on purchasing any of the AIM Funds and to receive a prospectus,
please call (800) 347-4246. As described below, the sales charge otherwise
applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value."
The following Multiple Class Funds sometimes are referred to herein as the
"AIM/GT Funds": AIM AMERICA VALUE FUND, AIM DEVELOPING MARKETS FUND, AIM DOLLAR
FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE
FUND, AIM GLOBAL HIGH INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL
RESOURCES FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM
INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN AMERICAN GROWTH
FUND, AIM MID CAP GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM SMALL CAP EQUITY
FUND, AIM STRATEGIC INCOME FUND and AIM WORLDWIDE GROWTH FUND.
The following tables show the sales charge and dealer concession at various
investment levels for the AIM Funds.
SALES CHARGES AND DEALER CONCESSIONS
GROUP I. Certain AIM Funds are currently sold with a sales charge ranging
from 5.50% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM
ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM AMERICA VALUE FUND, AIM ASIAN
GROWTH FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND,
AIM CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND,
AIM GLOBAL UTILITIES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM MID CAP
GROWTH FUND, AIM MONEY MARKET FUND, AIM NEW PACIFIC GROWTH FUND, AIM SELECT
GROWTH FUND, AIM SMALL CAP EQUITY FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM
VALUE FUND, AIM WEINGARTEN FUND and AIM WORLDWIDE GROWTH FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $25,000................................................................ 5.50 % 5.82 % 4.75 %
$25,000 but less than $50,000.................................................... 5.25 5.54 4.50
$50,000 but less than $100,000................................................... 4.75 4.99 4.00
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 3.00 3.09 2.50
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
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AIM INVESTOR'S GUIDE
GROUP II. Certain AIM Funds are currently sold with a sales charge ranging
from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND,
AIM BALANCED FUND, AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM
GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND,
AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM
GLOBAL GROWTH FUND, AIM GLOBAL HEALTH CARE FUND, AIM GLOBAL HIGH INCOME FUND,
AIM GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES
FUND, AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL TRENDS FUND, AIM HIGH
INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LATIN AMERICAN GROWTH FUND, AIM MUNICIPAL BOND FUND, AIM
STRATEGIC INCOME FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $50,000................................................................ 4.75 % 4.99 % 4.00 %
$50,000 but less than $100,000................................................... 4.00 4.17 3.25
$100,000 but less than $250,000.................................................. 3.75 3.90 3.00
$250,000 but less than $500,000.................................................. 2.50 2.56 2.00
$500,000 but less than $1,000,000................................................ 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." PURCHASES OF $1,000,000 OR MORE ARE
AT NET ASSET VALUE, SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE OF 1% IF
SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE DATE SUCH SHARES WERE PURCHASED,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
---------------------------- -------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
OF THE OF THE OF THE
PUBLIC NET PUBLIC
OFFERING AMOUNT OFFERING
AMOUNT OF INVESTMENT IN SINGLE TRANSACTION PRICE INVESTED PRICE
- --------------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $100,000............................................................... 1.00 % 1.01 % 0.75 %
$100,000 but less than $250,000.................................................. 0.75 0.76 0.50
$250,000 but less than $1,000,000................................................ 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
ALL GROUPS OF AIM FUNDS. AIM Distributors may elect to re-allow the entire
initial sales charge to dealers for all sales with respect to which orders are
placed with AIM Distributors during a particular period. Dealers to whom
substantially the entire sales charge is re-allowed may be deemed to be
"underwriters" as that term is defined under the Securities Act of 1933.
In addition to amounts paid to dealers as a dealer concession out of the
initial sales charge paid by investors, AIM Distributors may, from time to time,
at its expense or as an expense for which it may be compensated under a
distribution plan, if applicable, pay a bonus or other consideration or
incentive to dealers who sell a minimum dollar amount of the shares of the AIM
Funds during a specified period of time. In some instances, these incentives may
be offered only to certain dealers who have sold or may sell significant amounts
of shares. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection with
trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus
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AIM INVESTOR'S GUIDE
payments or other consideration shall not exceed 0.25% of the public offering
price of the shares sold. Any such bonus or incentive programs will not change
the price paid by investors for the purchase of the applicable AIM Fund's shares
or the amount that any particular AIM Fund will receive as proceeds from such
sales. Dealers may not use sales of the AIM Funds' shares to qualify for any
incentives to the extent that such incentives may be prohibited by the laws of
any state.
AIM Distributors may make payments to dealers and institutions who are
dealers of record for purchases of $1 million of more of Class A shares (or
shares which normally involve payment of initial sales charges), which are sold
at net asset value and are subject to a contingent deferred sales charge, for
all AIM Funds other than Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND as follows: 1% of the first $2 million
of such purchases, plus 0.80% of the next $1 million of such purchases, plus
0.50% of the next $17 million of such purchases, plus 0.25% of amounts in excess
of $20 million of such purchases. See "Contingent Deferred Sales Charge Program
for Large Purchases." AIM Distributors may make payments to dealers and
institutions who are dealers of record for purchases of $1 million or more of
Class A shares (or shares which normally involve payment of initial sales
charges), and which are sold at net asset value and are not subject to a
contingent deferred sales charge, in an amount up to 0.10% of such purchases of
Class A shares of AIM LIMITED MATURITY TREASURY FUND, and in an amount up to
0.25% of such purchases of Class A shares of AIM TAX-FREE INTERMEDIATE FUND.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds at the time of such sales. Payments with
respect to Class B shares will equal 4.00% of the purchase price of the Class B
shares sold by the dealer or institution, and will consist of a sales commission
equal to 3.75% of the purchase price of the Class B shares sold plus an advance
of the first year service fee of 0.25% with respect to such shares. The portion
of the payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
on Class C shares are not paid on sales to investors exempt from the CDSC,
including Class C shareholders of record on April 30, 1995 who purchase
additional shares in any of the Funds on or after May 1, 1995, and in
circumstances where AIM Distributors grants an exemption on particular
transactions.
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of regular trading on the New York Stock Exchange ("NYSE"), which is
generally 4:00 p.m. Eastern Time (and which is hereinafter referred to as "NYSE
Close"), on any business day of an AIM Fund will be confirmed at the price next
determined. Orders received after NYSE Close will be confirmed at the price
determined on the next business day of the AIM Fund. Certain financial
institutions (or their designees) may be authorized to accept purchase orders on
behalf of the AIM Funds. Orders received by authorized institutions (or their
designees) before NYSE Close will be deemed to have been received by an AIM Fund
on such day and will be effected that day, provided that such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. It is the responsibility of the dealer/financial institution to ensure
that all orders are transmitted on a timely basis to the Transfer Agent. Any
loss resulting from the dealer/financial institution's failure to submit an
order within the prescribed time frame will be borne by that dealer/financial
institution. Please see "How to Purchase Shares -- Purchases by Wire" for
information on obtaining a reference number for wire orders, which will
facilitate the handling of such orders and ensure prompt credit to an investor's
account. A "business day" of an AIM Fund is any day on which the NYSE is open
for business. It is expected that the NYSE will be closed
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AIM INVESTOR'S GUIDE
during the next twelve months on Saturdays and Sundays and on the days on which
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class
Funds currently offer two or more classes of shares through separate
distribution systems (the "Multiple Distribution System"). Although each class
of shares of a particular Multiple Class Fund represents an interest in the same
portfolio of investments, each class is subject to a different distribution
structure and, as a result, differing expenses. This Multiple Distribution
System allows investors to select the class that is best suited to the
investor's needs and objectives. In considering the options afforded by the
Multiple Distribution System, investors should consider both the applicable
initial sales charge or contingent deferred sales charge, as well as the ongoing
expenses borne by each class of shares and other relevant factors, such as
whether his or her investment goals are long-term or short-term.
CLASS A SHARES generally are sold subject to the initial sales charges
described above and are subject to the other fees and expenses described
herein. Class A shares of AIM MONEY MARKET FUND are designed to meet the
needs of an investor who wishes to establish a dollar cost averaging
program, pursuant to which Class A shares an investor owns may be exchanged
at net asset value for Class A shares of another Multiple Class Fund or
shares of another AIM Fund which is not a Multiple Class Fund, subject to
the terms and conditions described under the caption "Exchange Privilege --
Terms and Conditions of Exchanges."
CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made within
the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."
Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and other distributions)
eight years from the end of the calendar month in which the purchase of
Class B shares was made. Class B shares of AIM GLOBAL TRENDS FUND that were
outstanding on May 29, 1998 and which are continuously held by the
shareholder, automatically convert to Class A shares of AIM GLOBAL TRENDS
FUND seven years from the end of the calendar month in which the purchase of
such Class B shares was made. If a shareholder exchanges Class B shares of
AIM GLOBAL TRENDS FUND that were outstanding on, and continuously held
since, May 29, 1998 for Class B shares of any other AIM Fund, such Class B
shares will be subject to the eight year conversion feature applicable to
Class B shares of all other AIM Funds. Following such conversion of their
Class B shares, investors will be relieved of the higher Rule 12b-1 Plan
payments associated with Class B shares. See "Management -- Distribution
Plans."
AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an initial
sales charge and are not subject to a contingent deferred sales charge;
however, they are subject to the other fees and expenses described in the
prospectus for AIM MONEY MARKET FUND.
TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon
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<PAGE>
AIM INVESTOR'S GUIDE
Eastern Time or NYSE Close on any business day of the Fund will be confirmed at
the price next determined. Net asset value is normally determined at 12:00 noon
Eastern Time and NYSE Close on each business day of AIM MONEY MARKET FUND.
SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND, AIM TAX-EXEMPT CASH
FUND and AIM DOLLAR FUND (THE "MONEY MARKET FUNDS"). Because each Money Market
Fund uses the amortized cost method of valuing the securities it holds and
rounds its per share net asset value to the nearest whole cent, it is
anticipated that the net asset value of the shares of such funds will remain
constant at $1.00 per share. However, there is no assurance that each Money
Market Fund can maintain a $1.00 net asset value per share. In order to earn
dividends with respect to AIM MONEY MARKET FUND on the same day that a purchase
is made, purchase payments in the form of federal funds must be received by the
Transfer Agent before 12:00 noon Eastern Time on that day. Purchases made by
payments in any other form, or payments in the form of federal funds received
after such time but prior to NYSE Close, will begin to earn dividends on the
next business day following the date of purchase. The Money Market Funds
generally will not issue share certificates but will record investor holdings in
noncertificate form and regularly advise the shareholder of his ownership
position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of Class A shares of the AIM Funds that
are otherwise subject to an initial sales charge, provided that such purchases
are made by a "purchaser" as hereinafter defined. Purchases of Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM DOLLAR FUND, AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and Class B and Class C shares of the Multiple Class Funds
will not be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges.
The term "purchaser" means:
- - an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the benefit
of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
plan (unless such 403(b) plan qualifies as the purchaser as defined below);
- - a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), provided that:
a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will
not accept contributions submitted with respect to individual
participants);
b. each transmittal must be accompanied by a single check or wire
transfer; and
c. all new participants must be added to the 403(b) plan by submitting an
application on behalf of each new participant with the contribution
transmittal;
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- - a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;
- - a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension account ("SARSEP"), or Savings Incentive Match
Plans for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or SIMPLE
IRA accounts should be linked;
- - any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or
- - the discretionary advised accounts of A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").
Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by virtue of the foregoing definition, to the reduced
sales charge. No person or entity may distribute shares of the AIM Funds without
payment of the applicable sales charge other than to persons or entities who
qualify for a reduction in the sales charge provided herein.
(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for (i) Class A
shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares
of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple
Class Funds) within the following 13 consecutive months. By marking the LOI
section on the account application and by signing the account application, the
purchaser indicates that he understands and agrees to the terms of the LOI and
is bound by the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge
made during the 13-month period will be made at the public offering price
applicable to a single transaction of the total dollar amount indicated by the
LOI, as described under "Sales Charges and Dealer Concessions." It is the
purchaser's responsibility at the time of purchase to specify the account
numbers that should be considered in determining the appropriate sales charge.
The offering price may be further reduced as described under "Rights of
Accumulation" if the Transfer Agent is advised of all other accounts at the time
of the investment. Shares acquired through reinvestment of dividends and capital
gain distributions will not be applied to the LOI. At any time during the
13-month period after meeting the original obligation, a purchaser may revise
his intended investment amount upward by submitting a written and signed
request. Such a revision will not change the original expiration date. By
signing an LOI, a purchaser is not making a binding commitment to purchase
additional shares, but if purchases made within the 13-month period do not total
the amount specified, the investor will pay the increased amount of sales charge
as described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase with the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
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irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
Any investor who purchased shares of the AIM/GT Funds pursuant to a LOI
entered into prior to June 1, 1998 may continue to make such purchases under the
terms of such LOI. See "How to Purchase and Redeem Shares" in the Statement of
Additional Information.
(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM DOLLAR FUND, AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM
MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) at the time of the proposed purchase. Rights of accumulation are also
available to holders of the Connecticut General Guaranteed Account, established
for tax-qualified group annuities, for contracts purchased on or before June 30,
1992. To determine whether or not a reduced initial sales charge applies to a
proposed purchase, AIM Distributors takes into account not only the money which
is invested upon such proposed purchase, but also the value of all shares of the
AIM Funds (except for (i) Class A shares of AIM DOLLAR FUND, AIM TAX-EXEMPT CASH
FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND and (ii) Class B and
Class C shares of the Multiple Class Funds) owned by such purchaser, calculated
at their then current public offering price. If a purchaser so qualifies for a
reduced sales charge, the reduced sales charge applies to the total amount of
money then being invested by such purchaser and not just to the portion that
exceeds the breakpoint above which a reduced sales charge applies. For example,
if a purchaser already owns qualifying shares of any AIM Fund with a value of
$20,000 and wishes to invest an additional $20,000 in a fund with a maximum
initial sales charge of 5.50%, the reduced initial sales charge of 5.25% will
apply to the full $20,000 purchase and not just to the $15,000 in excess of the
$25,000 breakpoint. To qualify for obtaining the discount applicable to a
particular purchase, the purchaser or his dealer must furnish AFS with a list of
the account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds
at net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and other distributions from
a fund (see "Dividends, Distributions and Tax Matters"); (b) exchanges of shares
of certain other funds (see "Exchange Privilege"); (c) use of the reinstatement
privilege (see "How to Redeem Shares"); or (d) a merger, consolidation or
acquisition of assets of a fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase Class A shares of the AIM Funds through
AIM Distributors without payment of an initial sales charge: (a) A I M
Management Group Inc. ("AIM Management") and its affiliated companies; (b) any
current or retired officer, director, trustee or employee, or any member of the
immediate family (including spouse, children, parents and parents of spouse) of
any such person, of AIM Management or its affiliates or of certain mutual funds
which are advised or managed by AIM; or any trust established exclusively for
the benefit of such persons; (c) any employee benefit plan established for
employees of AIM Management or its affiliates; (d) any current or retired
officer, director, trustee or employee, or any member of
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AIM INVESTOR'S GUIDE
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, or of CIGNA Corporation or of any of its affiliated
companies, or of First Data Investor Services Group (formerly The Shareholder
Services Group, Inc.); (e) any investment company sponsored by CIGNA
Investments, Inc. or any of its affiliated companies for the benefit of its
directors' deferred compensation plans; (f) discretionary advised clients of AIM
or AIM Capital; (g) registered representatives and employees of dealers who have
entered into agreements with AIM Distributors (or financial institutions that
have arrangements with such dealers with respect to the sale of shares of the
AIM Funds) and any member of the immediate family (including spouse, children,
parents and parents of spouse) of any such person, provided that purchases at
net asset value are permitted by the policies of such person's employer; (h)
certain broker-dealers, investment advisers or bank trust departments that
provide asset allocation, similar specialized investment services or investment
company transaction services for their customers, that charge a minimum annual
fee for such services, and that have entered into an agreement with AIM
Distributors with respect to their use of the AIM Funds in connection with such
services; (i) any employee or any member of the immediate family (including
spouse, children, parents and parents of spouse) of any employee, of Triformis
Inc.; (j) shareholders of the AIM/GT Funds as of April 30, 1987 who since that
date continually have owned shares of one or more of the AIM/GT Funds; and (k)
certain former AMA Investment Advisers' shareholders who became shareholders of
the AIM Global Health Care Fund in October 1989, and who have continuously held
shares in the AIM/GT Funds since that time.
In addition, shares of any AIM Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the total amount invested in the
plan is at least $1,000,000, (2) the sponsor signs a $1,000,000 LOI, (3) such
shares are purchased by an employer-sponsored plan with at least 100 eligible
employees, or (4) all of the plan's transactions are executed through a single
financial institution or service organization who has entered into an agreement
with AIM Distributors with respect to their use of the AIM Funds in connection
with such accounts. Section 403(b) plans sponsored by public educational
institutions will not be eligible for net asset value purchases based on the
aggregate investment made by the plan or the number of eligible employees.
Participants in such plans will be eligible for reduced sales charges based
solely on the aggregate value of their individual investments in the applicable
AIM Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms for share purchases of the Load Funds (as defined under the
caption "Exchange Privilege") sold at net asset value to an employee benefit
plan in accordance with this paragraph as follows: 1% of the first $2 million of
such purchases, plus 0.80% of the next $1 million of such purchases, plus 0.50%
of the next $17 million of such purchases, plus 0.25% of amounts in excess of
$20 million of such purchases and up to 0.10% of the net asset value of any
Class A shares of AIM LIMITED MATURITY TREASURY FUND sold at net asset value to
an employee benefit plan in accordance with this paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sales of Class A shares of
AIM WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such
trusts; and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone
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number of the dealer who sold to the unit holder the units to be redeemed or
repurchased; and (ii) states that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by the
proceeds from the redemption or repurchase of units of such trusts.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a
shareholder who owns shares which are not subject to a contingent deferred sales
charge, can arrange for monthly, quarterly or annual amounts (but not less than
$50) to be drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that exceed on an annual
basis 12% of such account will be subject to a contingent deferred sales charge
on the amounts exceeding 12% of the account value at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the
Transfer Agent and all dividends and distributions are reinvested to shares of
the applicable AIM Fund by the Transfer Agent. To provide funds for payments
made under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient
full and fractional shares at their net asset value in effect at the time of
each such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C shares of the Multiple Class Funds, and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in
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the amount specified by the shareholder (minimum $50 per investment, per
account) and on a day or date(s) specified by the shareholder. The proceeds are
invested in shares of the designated AIM Fund at the applicable offering price
determined on the date of the withdrawal. An Automatic Investment Plan may be
discontinued upon 10 days' prior notice to the Transfer Agent or AIM
Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" for a description
of payment dates for these options. In order to qualify to have dividends and
distributions of one AIM Fund invested in shares of another AIM Fund, the
following conditions must be satisfied: (a) the shareholder must have an account
balance in the dividend paying fund of at least $5,000; (b) the account must be
held in the name of the shareholder (i.e., the account may not be held in
nominee name); and (c) the shareholder must have requested and completed an
authorization relating to the reinvestment of dividends into another AIM Fund.
An authorization may be given on the account application or on an authorization
form available from AIM Distributors. An AIM Fund will waive the $5,000 minimum
account value requirement if the shareholder has an account in the fund selected
to receive the dividends and distributions with a value of at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sale charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination money-
purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans; SARSEP
plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement accounts").
Information concerning these plans, including the custodian's fees and the forms
necessary to adopt such plans, can be obtained by calling or writing the AIM
Funds or AIM Distributors. Shares of the AIM Funds are also available for
investment through existing 401(k) plans (for both individuals and employers)
adopted under the Code. The plan custodian currently imposes an annual $10
maintenance fee with respect to each retirement account for which it serves as
the custodian. This fee is generally charged in December. Each AIM Fund and/or
the custodian reserve the right to change this maintenance fee and to initiate
an establishment fee (not to exceed its cost).
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of AIM Funds. The Program automatically rebalances
holdings of AIM Funds to the established allocation on a periodic basis. Under
the Program, a shareholder may predesignate, on a percentage basis, how the
total value of his or her holdings in a minimum of two, and a maximum of ten,
AIM Funds ("Personal Portfolio") is to be rebalanced on a quarterly, semiannual,
or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more AIM Funds in the shareholder's Personal Portfolio for
shares of the same class(es) of one or more other AIM Funds in the
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shareholder's Personal Portfolio. See "Exchange Privilege." If shares of the AIM
Fund(s) in a shareholder's Personal Portfolio have appreciated during a
rebalancing period, the Program will result in shares of AIM Fund(s) that have
appreciated most during the period being exchanged for shares of AIM Fund(s)
that have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions." Participation in the Program does not assure that a shareholder
will profit from purchases under the Program nor does it prevent or lessen
losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular AIM Fund would
be 2% or less. In predesignating percentages, shareholders must use whole
percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an AIM
Fund's shares. The AIM Funds and AIM Distributors reserve the right to modify,
suspend, or terminate the Program at any time on 60 days' prior written notice
to shareholders. A request to participate in the Program must be received in
good order at least five business days prior to the next rebalancing date. Once
a shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, which AIM Funds
or what allocation percentages are assigned to the Program, unless canceled or
changed in writing and received by the Transfer Agent in good order at least
five business days prior to the rebalancing date. Shareholders participating in
the Program may also participate in the Right of Accumulation, LOI, and
Automatic Investment Plan. Certain dealers/financial institutions may charge a
fee for establishing accounts relating to the Program. Investors should contact
their dealers/financial institutions or AIM Distributors for more information.
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EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM Funds --
Sales Charges and Dealer Concessions," shares of certain of the AIM Funds,
including the Class A shares of the Multiple Class Funds, listed below and
referred to herein as the "Load Funds," are sold at a public offering price that
includes a maximum sales charge of 5.50% or 4.75% of the public offering price
of such shares; Class A shares (or shares which normally involve the payment of
initial sales charges) of certain of the AIM Funds, listed below and referred to
herein as the "Lower Load Funds," are sold at a public offering price that
includes a maximum sales charge of 1.00% of the public offering price of such
shares; and Class A shares or shares of certain other funds, listed below and
referred to herein as the "No Load Funds," are sold at net asset value, without
payment of a sales charge.
LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM ADVISOR FLEX FUND -- CLASS A
AIM ADVISOR INTERNATIONAL VALUE FUND -- CLASS A
AIM ADVISOR LARGE CAP VALUE FUND -- CLASS A
AIM ADVISOR MULTIFLEX FUND -- CLASS A
AIM ADVISOR REAL ESTATE FUND -- CLASS A
AIM AGGRESSIVE GROWTH FUND -- CLASS A
AIM AMERICA VALUE FUND -- CLASS A
AIM ASIAN GROWTH FUND -- CLASS A
AIM BALANCED FUND -- CLASS A
AIM BLUE CHIP FUND -- CLASS A
AIM CAPITAL DEVELOPMENT FUND -- CLASS A
AIM CHARTER FUND -- CLASS A
AIM CONSTELLATION FUND -- CLASS A
AIM DEVELOPING MARKETS FUND -- CLASS A
AIM EMERGING MARKETS FUND -- CLASS A
AIM EUROPE GROWTH FUND -- CLASS A
AIM EUROPEAN DEVELOPMENT FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH FUND -- CLASS A
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND -- CLASS A
AIM GLOBAL FINANCIAL SERVICES FUND -- CLASS A
AIM GLOBAL GOVERNMENT INCOME FUND -- CLASS A
AIM GLOBAL GROWTH FUND -- CLASS A
AIM GLOBAL GROWTH & INCOME FUND -- CLASS A
AIM GLOBAL HEALTH CARE FUND -- CLASS A
AIM GLOBAL HIGH INCOME FUND -- CLASS A
AIM GLOBAL INCOME FUND -- CLASS A
AIM GLOBAL INFRASTRUCTURE FUND -- CLASS A
AIM GLOBAL RESOURCES FUND -- CLASS A
AIM GLOBAL TELECOMMUNICATIONS FUND -- CLASS A
AIM GLOBAL TRENDS FUND -- CLASS A
AIM GLOBAL UTILITIES FUND -- CLASS A
AIM HIGH INCOME MUNICIPAL FUND -- CLASS A
AIM HIGH YIELD FUND -- CLASS A
AIM INCOME FUND -- CLASS A
AIM INTERMEDIATE GOVERNMENT FUND -- CLASS A
AIM INTERNATIONAL EQUITY FUND -- CLASS A
AIM INTERNATIONAL GROWTH FUND -- CLASS A
AIM JAPAN GROWTH FUND -- CLASS A
AIM LATIN AMERICAN GROWTH FUND -- CLASS A
AIM MID CAP GROWTH FUND -- CLASS A
AIM MONEY MARKET FUND -- CLASS A
AIM MUNICIPAL BOND FUND -- CLASS A
AIM NEW PACIFIC GROWTH FUND -- CLASS A
AIM SELECT GROWTH FUND -- CLASS A
AIM SMALL CAP EQUITY FUND -- CLASS A
AIM SMALL CAP OPPORTUNITIES FUND -- CLASS A
AIM STRATEGIC INCOME FUND -- CLASS A
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT -- CLASS A
AIM VALUE FUND -- CLASS A
AIM WEINGARTEN FUND -- CLASS A
AIM WORLDWIDE GROWTH FUND -- CLASS A
LOWER LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM LIMITED MATURITY TREASURY FUND -- CLASS A
AIM TAX-FREE INTERMEDIATE FUND -- CLASS A
NO LOAD FUNDS:
- --------------------------------------------------------------------------------
AIM MONEY MARKET FUND -- AIM CASH RESERVE SHARES
AIM TAX-EXEMPT CASH FUND -- CLASS A
AIM DOLLAR FUND -- CLASS A
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH FUND
(AND CLASS A SHARES OF AIM DOLLAR FUND); (II) LOWER LOAD FUND SHARE PURCHASES OF
$1,000,000 OR MORE AND AIM CASH RESERVE SHARES OF AIM MONEY MARKET FUND, AIM
TAX-EXEMPT CASH FUND AND AIM DOLLAR FUND PURCHASES MAY BE EXCHANGED FOR LOAD
FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH WILL THEN BE SUBJECT TO A
CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR PURPOSES OF CALCULATING THE
CONTINGENT DEFERRED SALES CHARGES ON THE LOAD FUND SHARES ACQUIRED, THE 18-MONTH
PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH EXCHANGE, (iii) Class A shares
may be exchanged for Class A shares, (iv) Class B shares may be exchanged only
for Class B shares; (v) Class C shares may only be exchanged for Class C shares;
and (vi) AIM Cash Reserve Shares of AIM MONEY MARKET FUND may not be exchanged
for Class A shares of AIM MONEY MARKET FUND or for Class B or Class C shares.
A-14
<PAGE>
AIM INVESTOR'S GUIDE
DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund or acquired upon
any Lower Load Fund. exchange of
shares of any
Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
</TABLE>
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE
IS REVISED AS FOLLOWS:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD --------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
- --------------------------------------------------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Load Funds............. Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load Funds....... Net Asset Value if shares were acquired Net Asset Value Net Asset Value Not Applicable Not Applicable
upon exchange of any Load Fund.
Otherwise, difference in sales charge
will apply.
No Load Funds.......... Offering Price if No Load shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
directly purchased. Net Asset Value if if No Load
No Load shares were acquired upon shares were
exchange of shares of any Load Fund. acquired upon
Difference in sales charge will apply if exchange of
No Load shares were acquired upon shares of any
exchange of Lower Load Fund shares. Load Fund or
any Lower Load
Fund;
otherwise,
Offering Price.
Multiple Class Funds:
Class B.............. Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C.............. Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>
An exchange is permitted only in the following circumstances: (a) if the
funds offer more than one class of shares, the exchange must be between the same
class of shares (e.g., Class A, Class B and Class C shares of a Multiple Class
Fund cannot be exchanged for each other) except that AIM Cash Reserve Shares of
AIM MONEY MARKET FUND may be exchanged for Class A shares of another Multiple
Class Fund; (b) the dollar amount of the exchange must be at least equal to the
minimum investment applicable to the shares of the fund acquired through such
exchange; (c) the shares of the fund acquired through exchange must be qualified
for sale in the state in which the shareholder resides; (d) the exchange must be
made between accounts having identical registrations and addresses; (e) the full
amount of the purchase price for the shares being exchanged must have already
been received by the fund; (f) the account from which shares have been exchanged
must be coded as having a certified taxpayer identification number on file or,
in the alternative, an appropriate IRS Form W-8 (certificate of foreign status)
or Form W-9 (certifying exempt status) must have been received by the fund; (g)
newly acquired shares (through either an initial or subsequent investment) are
held in an account for at least ten business days, and all other shares are held
in an account for at least one day, prior to the exchange; and (h) certificates
representing shares must be returned before shares can be exchanged. There is no
fee for exchanges among the AIM Funds.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
A-15
<PAGE>
AIM INVESTOR'S GUIDE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged
are redeemed at their net asset value as determined at NYSE Close on the day
that an exchange request in proper form (described below) is received. Exchange
requests received after NYSE Close will result in the redemption of shares at
their net asset value at NYSE Close on the next business day. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase, Exchange and
Redemption Orders (AIM MONEY MARKET FUND only)" for information regarding the
timing of exchange orders for AIM MONEY MARKET FUND. Normally, shares of an AIM
Fund to be acquired by exchange are purchased at their net asset value or
applicable offering price, as the case may be, determined on the date that such
request is received, but under unusual market conditions such purchases may be
delayed for up to five business days if it is determined that a fund would be
materially disadvantaged by an immediate transfer of the proceeds of the
exchange. If a shareholder is exchanging into a fund paying daily dividends
("Dividends, Distributions and Tax Matters -- Dividends and Distributions,"
below), and the release of the exchange proceeds is delayed for the foregoing
five-day period, such shareholder will not begin to accrue dividends until the
sixth business day after the exchange. Shares purchased by check may not be
exchanged until it is determined that the check has cleared, which may take up
to ten business days from the date that the check is received. See "Terms and
Conditions of Purchase of the AIM Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. If a shareholder does not wish to allow telephone
exchanges by any person in his account, he should decline that option on the
account application. AIM Distributors has made arrangements with certain dealers
and investment advisory firms to accept telephone instructions to exchange
shares between any of the AIM Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the funds, including the condition that any such dealer or
investment advisor enter into an agreement (which contains additional conditions
with respect to exchanges of shares) with AIM Distributors. To exchange shares
by telephone, a shareholder, dealer or investment advisor who has satisfied the
foregoing conditions must call AFS at (800) 959-4246. If a shareholder is unable
to reach AFS by telephone, he may also request exchanges by telegraph or use
overnight courier services to expedite exchanges by mail, which will be
effective on the business day received by the Transfer Agent as long as such
request is received prior to NYSE Close. The Transfer Agent and AIM Distributors
will not be liable for any loss, expense or cost arising out of any telephone
exchange request that they reasonably believe to be genuine, but may in certain
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's Social Security Number and current address, and mailings of
confirmations promptly after the transaction.
EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B or Class C
shares. For purposes of determining a shareholder's holding period of Class B or
Class C shares in the calculation of the applicable contingent deferred sales
A-16
<PAGE>
AIM INVESTOR'S GUIDE
charge, the period of time during which Class B or Class C shares were held
prior to an exchange will be added to the holding period of the applicable Class
B or Class C shares acquired in an exchange.
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. Although
a contingent deferred sales charge may be applicable to certain redemptions as
described below, there is no redemption fee imposed when shares are redeemed or
repurchased; however, dealers may charge service fees for handling repurchase
transactions.
MULTIPLE DISTRIBUTION SYSTEM. CLASS B SHARES. Class B shares purchased
under the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," less the applicable contingent deferred sales
charge shown in the table below. No deferred sales charge will be imposed (i) on
redemptions of Class B shares following six years from the date such shares were
purchased, (ii) on Class B shares acquired through reinvestments of dividends
and distributions attributable to Class B shares or (iii) on amounts that
represent capital appreciation in the shareholder's account above the purchase
price of the Class B shares.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS % OF DOLLAR
YEARS SINCE PURCHASE MADE AMOUNT SUBJECT TO CHARGE
- ------------------------------------------------------------------------------------------ ---------------------------
<S> <C>
First..................................................................................... 5%
Second.................................................................................... 4%
Third..................................................................................... 3%
Fourth.................................................................................... 3%
Fifth..................................................................................... 2%
Sixth..................................................................................... 1%
Seventh and Following..................................................................... None
</TABLE>
In determining whether a contingent deferred sales charge is applicable, it
will be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and other distributions; third, of shares
held for more than six years from the date such shares were purchased; and
fourth, of shares held less than six years from the date such shares were
purchased. The applicable sales charge will be applied against the lesser of the
current market value of shares redeemed or their original cost.
Class B shares that are acquired during a tender offer by AIM Floating Rate
Fund ("Floating Rate Fund") pursuant to an exchange will be subject, in lieu of
the contingent deferred sales charge described above, to a contingent deferred
sales charge equivalent to the early withdrawal charge on the shares of the
Floating Rate Fund. For purposes of computing such early withdrawal charge, the
holding period of Class B shares being redeemed will include the holding period
of the Floating Rate Fund shares prior to exchange.
CLASS C SHARES. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE
FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, and AIM
ADVISOR REAL ESTATE FUND, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
A-17
<PAGE>
AIM INVESTOR'S GUIDE
WAIVERS. Contingent deferred sales charges on Class B and Class C shares
will be waived on redemptions (1) following the death or post-purchase
disability, as defined in Section 72(m)(7) of the Code, of a shareholder or a
settlor of a living trust (provided AIM Distributors is notified of such death
or post-purchase disability at the time of the redemption request and is
provided with satisfactory evidence of such death or post-purchase disability),
(2) in connection with certain distributions from IRAs, custodial accounts
maintained pursuant to Code Section 403(b), deferred compensation plans
qualified under Code Section 457 and plans qualified under Code Section 401
(collectively, "Retirement Plans"), (3) pursuant to a Systematic Withdrawal
Plan, provided that amounts withdrawn under such plan do not exceed on an annual
basis 12% of the value of the shareholder's investment in Class B or Class C
shares at the time the shareholder elects to participate in the Systematic
Withdrawal Plan, (4) effected pursuant to the right of a Multiple Class Fund to
liquidate a shareholder's account if the aggregate net asset value of shares
held in the account is less than the designated minimum account size described
in the prospectus of such Multiple Class Fund, (5) effected by AIM of its
investment in Class B or Class C shares and (6) of Class C shares where such
investor's dealer of record, due to the nature of the investor's account,
notifies AIM Distributors prior to the time of investment that the dealer waives
the payment otherwise payable to the dealer described in the last paragraph
under the caption "Terms and Conditions of Purchase of the AIM Funds -- All
Groups of AIM Funds."
Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability.
Waiver category (2) above applies only to redemptions resulting from:
(i) required minimum distributions to plan participants or beneficiaries who
are age 70 1/2 or older, and only with respect to that portion of such
distributions which does not exceed 12% annually of the participant's or
beneficiary's account value in a particular AIM Fund;
(ii) in-kind transfers of assets where the participant or beneficiary notifies
AIM Distributors of such transfer no later than the time such transfer
occurs;
(iii) tax-free rollovers or transfers of assets to another Retirement Plan
invested in Class B or Class C shares of one or more Multiple Class Funds;
(iv) tax-free returns of excess contributions or returns of excess deferral
amounts; and
(v) distributions upon the death or disability (as defined in the Code) of the
participant or beneficiary.
Shareholders who purchased Class B shares of the AIM/GT Funds or Class C
shares of AIM GLOBAL TRENDS FUND prior to June 1, 1998 are entitled to certain
additional waivers of the contingent deferred sales charge on those shares as
described in the Statement of Additional Information of each respective fund
under "How to Purchase and Redeem Shares."
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in the program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." This charge will be 1% of the
lesser of the value of the shares redeemed (excluding reinvested dividends and
capital gains distributions) or the total original cost of such shares. In
determining whether a contingent deferred sales charge is payable, and the
amount of any such charge, shares not subject to the contingent deferred sales
charge are redeemed first (including shares purchased by reinvested dividends
and capital gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18-MONTH PERIOD, (i) shares of any
Load Fund or AIM Cash Reserve shares of AIM MONEY MARKET FUND [or Class A shares
of AIM DOLLAR FUND] which were acquired through an exchange of shares which
previously were subject to the 1% contingent deferred sales charge will be
credited with the period of time such exchanged shares were held, and (ii)
shares of any Load Fund which are subject to the 1% contingent deferred sales
charge and which were acquired through an exchange of shares of a Lower Load or
a No Load Fund which previously were not subject to the 1% contingent deferred
sales charge will not be credited with the period of time such exchanged shares
were held. The charge will be waived in the following circumstances: (l)
redemptions of shares by employee benefit plans ("Plans") qualified under
Sections 401 or 457 of the Code,
A-18
<PAGE>
AIM INVESTOR'S GUIDE
or Plans created under Section 403(b) of the Code and sponsored by nonprofit
organizations as defined under Section 501(c)(3) of the Code, where shares are
being redeemed in connection with employee terminations or withdrawals, and (a)
the total amount invested in a Plan is at least $1,000,000, (b) the sponsor of a
Plan signs a letter of intent to invest at least $1,000,000 in one or more of
the AIM Funds, or (c) the shares being redeemed were purchased by an
employer-sponsored Plan with at least 100 eligible employees; provided, however,
that Plans created under Section 403(b) of the Code which are sponsored by
public educational institutions shall qualify under (a), (b) or (c) above on the
basis of the value of each Plan participant's aggregate investment in the AIM
Funds, and not on the aggregate investment made by the Plan or on the number of
eligible employees; (2) redemptions of shares following the death or
post-purchase disability, as defined in Section 72(m)(7) of the Code, of a
shareholder or a settlor of a living trust; (3) redemptions of shares purchased
at net asset value by private foundations or endowment funds where the initial
amount invested was at least $1,000,000; (4) redemptions of shares purchased by
an investor in amounts of $1,000,000 or more where such investor's dealer of
record, due to the nature of the investor's account, notifies AIM Distributors
prior to the time of investment that the dealer waives the payments otherwise
payable to the dealer as described in the third paragraph under the caption
"Terms and Conditions of Purchase of the AIM Funds -- All Groups of AIM Funds;"
and (5) pursuant to a Systematic Withdrawal Plan, provided that amounts
withdrawn under such plan do not exceed on an annual basis 12% of the value of
the shareholder's investment in Class A shares at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Shareholders who purchased $500,000 or more of Class A shares of the AIM/GT
Funds prior to June 1, 1998 are entitled to certain waivers of the contingent
deferred sales charge on those shares as described in the Statement of
Additional Information under "How to Purchase and Redeem Shares."
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund
to establish as IRA, should include the following information along with a
written request for either partial or full liquidation of fund shares; (a) a
statement as to whether or not the shareholder has attained age 59 1/2, and (b)
a statement as to whether or not the shareholder elects to have federal income
tax withheld from the proceeds of the liquidation.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in this account, he should decline that option on the account
application. The telephone redemption feature can be used only if: (a) the
redemption proceeds are to be mailed to the address of record or transferred
electronically or wired to the pre-authorized bank account; (b) there has been
no change of address of record on the account within the preceding 30 days; (c)
the shares to be redeemed are not in certificate form; (d) the person requesting
the redemption can provide proper identification information, and (e) the
proceeds of the redemption do not exceed $50,000. Accounts in AIM Distributors'
prototype retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not
eligible for the telephone redemption option. AIM Distributors has made
arrangements with certain dealers and investment advisors to accept telephone
instructions for the redemption of shares. AIM Distributors reserves the right
to impose conditions on these dealers and investment advisors, including the
condition that they enter into agreements (which contain additional conditions
with respect to the redemption of shares) with AIM Distributors. The Transfer
Agent and AIM Distributors will not be liable for any loss, expense or cost
arising out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain
A-19
<PAGE>
AIM INVESTOR'S GUIDE
cases be liable for losses due to unauthorized or fraudulent transactions if
they do not follow reasonable procedures for verification of telephone
transactions. Such reasonable procedures may include recordings of telephone
transactions (maintained for six months), requests for confirmation of the
shareholder's taxpayer identification number and current address, and mailings
of confirmations promptly after the transaction.
EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order
is received prior to 11:30 a.m. Eastern Time, the redemption will be effective
on that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next business day.
REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of
AIM MONEY MARKET FUND and Class A shares of AIM DOLLAR FUND). After completing
the appropriate authorization form, shareholders may use checks to effect
redemptions from AIM TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY
MARKET FUND and Class A shares of AIM DOLLAR FUND. This privilege does not apply
to retirement accounts or qualified plans. Checks may be drawn in any amount of
$250 or more. Checks drawn against insufficient shares in the account, against
shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented on the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent or certain financial institutions (or their designees) who
are authorized to accept redemption orders on behalf of the AIM Funds, provided
that such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer/financial institution to
ensure that all orders are transmitted on a timely basis. Any resulting loss
from the dealer/financial institution's failure to submit a request for
redemption within the prescribed time frame will be borne by that
dealer/financial institution. Telephone redemption requests must be made by NYSE
Close on any business day of an AIM Fund and will be confirmed at the price
determined as of the close of that day. No AIM Fund will accept requests which
specify a particular date for redemption or which specify any special
conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an
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AIM INVESTOR'S GUIDE
address that has been changed within the past 30 days; (5) requests to transfer
the registration of shares to another owner, (6) telephone exchange and
telephone redemption authorization forms; (7) changes in previously designated
wiring or electronic funds transfer instructions, and (8) written redemptions or
exchanges of shares previously reported as lost, whether or not the redemption
amount is under $50,000 or the proceeds are to be sent to the address of record.
These requirements may be waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within 90 days of a
redemption, a shareholder may invest all or part of the redemption proceeds in
Class A shares of any AIM Fund at the net asset value next computed after
receipt by the Transfer Agent of the funds to be reinvested; provided, however,
if the redemption was made from Class A shares of either AIM LIMITED MATURITY
TREASURY FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be
subject to the difference in sales charge between the shares redeemed and the
shares the proceeds are reinvested in. The shareholder must ask the Transfer
Agent for such privilege at the time of reinvestment. A realized gain on the
redemption is taxable, and reinvestment may alter any capital gains payable. If
there has been a loss on the redemption and shares of the same fund are
repurchased, all of the loss may not be tax deductible, depending on the timing
and amount reinvested. Under the Code, if the redemption proceeds of fund shares
on which a sales charge was paid are reinvested in shares of the same fund, or
exchanged for shares of another AIM Fund, at a reduced sales charge within 90
days of the payment of the sales charge, the shareholder's basis in the fund
shares redeemed may not include the amount of the sales charge paid, thereby
reducing the loss or increasing the gain recognized from the redemption;
however, the shareholder's basis in the fund shares purchased will include the
sales charge. Each AIM Fund may amend, suspend or cease offering the privilege
at any time as to shares redeemed after the date of such amendment, suspension
or cessation. This privilege may only be exercised once each year by a
shareholder with respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in
connection with the redemption of Class A shares and who subsequently reinvest a
portion or all of the value of the redeemed shares in Class A shares of any AIM
Fund within 90 days after such redemption may do so at net asset value if such
privilege is claimed at the time of reinvestment. Such reinvested proceeds will
not be subject to either a front-end sales charge at the time of reinvestment or
an additional contingent deferred sales charge upon subsequent redemption. In
order to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is
determined as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close
with respect to AIM MONEY MARKET FUND) on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an AIM Fund's share
will be determined as of the close of the NYSE on such day. For purposes of
defining net asset value per share, futures and options contracts generally will
be valued 15 minutes after the close of trading of the NYSE. The net asset value
per share is calculated by subtracting a class' liabilities from its assets and
dividing the result by the total number of class shares outstanding. The
determination of net asset value per share is made in accordance with generally
accepted accounting principles. Among other items, liabilities include accrued
expenses and dividends payable, and total assets include portfolio securities
valued at their market value, as well as income accrued but
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not yet received. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
supervision of the fund's officers and in accordance with methods which are
specifically authorized by its governing Board of Directors or Trustees.
Short-term obligations with maturities of 60 days or less, and the securities
held by the Money Market Funds, are valued at amortized cost as reflecting fair
value. AIM HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOARD FUND, AIM TAX-EXEMPT
BOND FUND OF CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND value variable rate
securities that have an unconditional demand or put feature exercisable within
seven days or less at par, which reflects the market value of such securities.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund's policy regarding the payment of dividends and distributions
is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND............................. declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND.............. declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.................. declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND........................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND...................... declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND........................ declared and paid annually annually annually
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND............................. declared and paid annually annually annually
AIM BALANCED FUND................................. declared and paid quarterly annually annually
AIM BLUE CHIP FUND................................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND...................... declared and paid annually annually annually
AIM CHARTER FUND.................................. declared and paid quarterly annually annually
AIM CONSTELLATION FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND..................... declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND................. declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INCOME FUND............................ declared daily; paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM GLOBAL UTILITIES FUND......................... declared daily; paid monthly annually annually
AIM HIGH INCOME MUNICIPAL FUND.................... declared daily; paid monthly annually annually
AIM HIGH YIELD FUND............................... declared daily; paid monthly annually annually
AIM INCOME FUND................................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.................. declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND..................... declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND................ declared daily; paid monthly annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM MONEY MARKET FUND............................. declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND........................... declared daily; paid monthly annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SELECT GROWTH FUND............................ declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM SMALL CAP OPPORTUNITIES FUND.................. declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT........... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.......................... declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND.................... declared daily; paid monthly annually annually
AIM VALUE FUND.................................... declared and paid annually annually annually
AIM WEINGARTEN FUND............................... declared and paid annually annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each AIM Fund may make
additional distributions, if necessary, to avoid a non-deductible 4% federal
excise tax on certain undistributed income and capital gain (the "Excise Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in
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AIM INVESTOR'S GUIDE
like shares of another Multiple Class Fund, to the extent permitted. For funds
that do not declare a dividend daily, such dividends and distributions will be
reinvested at the net asset value per share determined on the ex-dividend date.
For funds that declare a dividend daily, such dividends and distributions will
be reinvested at the net asset value per share determined on the payable date.
Shareholders may elect, by written notice to the Transfer Agent, to receive such
distributions, or the dividend portion thereof, in cash, or to invest such
dividends and distributions in shares of another fund in the AIM Funds; provided
that (i) dividends and distributions attributable to Class B shares may only be
reinvested in Class B shares, (ii) dividends and distributions attributable to
Class C shares may only be reinvested in Class C shares, (iii) dividends and
distributions attributable to Class A shares may not be reinvested in Class B or
Class C shares, and (iv) dividends and distributions attributable to the AIM
Cash Reserve Shares of AIM MONEY MARKET FUND may not be reinvested in the Class
A shares of that Fund or in any Class B or Class C shares. Investors who have
not previously selected such a reinvestment option on the account application
form may contact the Transfer Agent at any time to obtain a form to authorize
such reinvestments in another AIM Fund. Such reinvestments into the AIM Funds
are not subject to sales charges, and shares so purchased are automatically
credited to the account of the shareholder.
Dividends on Class B and Class C shares of an AIM Fund are expected to be
lower than dividends for Class A shares of that fund or AIM Cash Reserve Shares
because of higher distribution fees paid by Class B and Class C shares.
Dividends on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS--GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares, except for "exempt-interest dividends" paid by AIM HIGH INCOME MUNICIPAL
FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM
TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND (the "Tax-Exempt
Funds"), which are exempt from federal income tax. With respect to tax-exempt
shareholders, dividends and distributions from the AIM Funds are not subject to
federal income taxation to the extent permitted under the applicable tax
exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
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AIM INVESTOR'S GUIDE
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE FUND, AIM ASIAN GROWTH FUND,
AIM DEVELOPING MARKETS FUND, AIM DOLLAR FUND, AIM EMERGING MARKETS FUND, AIM
EUROPEAN DEVELOPMENT FUND, AIM EUROPE GROWTH FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GOVERNMENT INCOME FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL HIGH
INCOME FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL TRENDS FUND, AIM HIGH YIELD
FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MONEY MARKET FUND,
AIM NEW PACIFIC GROWTH FUND, AIM STRATEGIC INCOME FUND or any of the Tax-Exempt
Funds will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year. No gain or loss will be recognized by shareholders upon
the automatic conversion of Class B shares of a Multiple Class Fund into Class A
shares of such fund.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be
required to include the "exempt-interest" portion of dividends paid by the
Tax-Exempt Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may affect the amount of social security and railroad retirement
benefits subject to federal income tax, may affect the deductibility of interest
on certain indebtedness of a shareholder, and may have other collateral federal
income tax consequences. In addition, the Tax-Exempt Funds may invest in
Municipal Securities the interest on which will constitute an item of tax
preference and which therefore could give rise to a federal alternative minimum
tax liability for certain shareholders; each Tax-Exempt Fund may invest up to
20% of its net assets in such securities and other
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AIM INVESTOR'S GUIDE
taxable securities. For additional information concerning the alternative
minimum tax and certain collateral tax consequences of the receipt of
exempt-interest dividends, see the Statements of Additional Information
applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders that are taxable, but
will endeavor to avoid investments that would result in taxable dividends. The
percentage of dividends that constitutes exempt-interest dividends, and the
percentage thereof (if any) that constitutes items of tax preference, will be
determined annually. These percentages may differ from the actual percentages
for any particular day.
To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional fund shares.
Distributions of net capital gain will be taxable as long-term capital gains,
whether received in cash or additional fund shares and regardless of the length
of time a shareholder may have held his shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM LIMITED MATURITY TREASURY FUND, AIM MID CAP GROWTH FUND,
AIM SMALL CAP EQUITY FUND, AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM DEVELOPING
MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL CONSUMER
PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL SERVICES FUND, AIM GLOBAL
GROWTH FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INCOME FUND, AIM GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND,
AIM GLOBAL TELECOMMUNICATIONS FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND, AIM LATIN
AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND, AIM WORLDWIDE GROWTH FUND --
SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do so,
each of these funds may elect to pass through to its shareholders credits for
foreign taxes paid. If a fund makes such an election, a shareholder who receives
a distribution (1) will be required to include in gross income his proportionate
share of foreign taxes allocable to the distribution and (2) may claim a credit
or deduction for such share for his taxable year in which the distribution is
received, subject to the general limitations imposed on the allowance of foreign
tax credits and deductions. Shareholders should also note that certain gains or
losses attributable to fluctuations in exchange rates or foreign currency
forward contracts may increase or decrease the amount of income of the fund
available for distribution to shareholders and should note that if, for any
fund, such losses exceed other income during a taxable year, the fund would not
be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each AIM Fund's transfer agent and
dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
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YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be viewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If several members of a household own shares of the same fund,
only one annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
A-27
<PAGE>
AIM WORLDWIDE GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM AMERICA VALUE FUND
ADVISOR CLASS
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM AMERICA VALUE FUND (the "Fund"),
which is one of several series investment portfolios comprising AIM Growth
Series (the "Trust"), an open-end, series, management investment company.
The Fund is a diversified portfolio which seeks long-term capital appreciation
by investing all of its investable assets in the Value Portfolio (the
"Portfolio"), which, in turn, invests primarily in equity securities of
companies domiciled in the United States that, at the time of purchase, have
market capitalizations of greater than $500 million and that INVESCO (NY), Inc.
(the "Sub-adviser") believes to be undervalued in relation to long-term earning
power or other factors.
The Portfolio's investment objective is identical to that of the Fund. The
investment experience of the Fund will correspond directly with the investment
experience of the Portfolio.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM AMERICA VALUE FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 5
Investment Objective and Policies......................................................... 6
Risk Factors.............................................................................. 9
Management................................................................................ 10
Other Information......................................................................... 12
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund and the Portfolio: The Fund is a diversified series of the Trust. The Portfolio is a diversified series of Growth
Portfolio. The Fund seeks long-term capital appreciation. The Fund invests all of its investable
assets in the Portfolio, which, in turn, invests primarily in equity securities of companies
domiciled in the United States that, at the time of purchase, have market capitalizations of greater
than $500 million and that the Sub-adviser believes to be undervalued in relation to long-term
earning power or other factors.
Investment Managers: The Portfolio is managed by A I M Advisors, Inc. ("AIM") and is sub-advised by INVESCO (NY), Inc.
(the "Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate and individual
clients around the world. AIM and the Sub-adviser are both indirect wholly owned subsidiaries of
AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment management group that
has a significant presence in the institutional and retail segment of the investment management
industry in North America and Europe, and a growing presence in Asia. AIM was organized in 1976 and,
together with its subsidiaries, currently advises approximately 90 investment company portfolios.
Purchasing Shares: Advisor Class shares are offered through this Prospectus to (a) trustees or other fiduciaries
purchasing shares for employee benefit plans which are sponsored by organizations which have at least
1,000 employees; (b) any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment adviser has investment discretion over such
account, and (ii) the account holder pays such person as compensation for its advice and other
services an annual fee of at least 0.50% on the assets in the account; (c) any account with assets of
at least $10,000 if (i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the assets in the account;
(d) accounts
</TABLE>
Prospectus Page 2
<PAGE>
AIM AMERICA VALUE FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
advised by the Sub-adviser or one of the companies formerly affiliated with the Asset Management
Division of Liechtenstein Global Trust AG, provided such accounts were invested in Advisor Class
shares of any of the funds in The AIM Family of Funds on May 29, 1998; and (e) any of the companies
composing or affiliated with AMVESCAP PLC.
Initial investments in Advisor Class shares must be at least $500 and additional investments must be
at least $50. The distributor of the Advisor Class shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase Shares."
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Advisor Class shares of the Fund may be exchanged for Advisor Class shares of certain
funds in The AIM Family of Funds in the manner and subject to the policies and charges set forth
herein. See "Exchange Privilege."
Redeeming Shares: Advisor Class shareholders of the Fund may redeem all or a portion of their shares at net asset value
on any business day. See "How to Redeem Shares."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
Risk Factors: There is no assurance that the Fund or the Portfolio will achieve its investment objective. The
Fund's net asset value will fluctuate, reflecting fluctuations in the market value of the Portfolio's
securities.
The Portfolio may engage in certain options and futures transactions to attempt to hedge against the
overall level of investment risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 3
<PAGE>
AIM AMERICA VALUE FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Advisor Class shares of the Fund are reflected
in the following table (1):
<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER TRANSACTION COSTS:
Maximum sales charge on
purchases (as a % of
offering price)............ None
Sales charges on reinvested
distributions to
shareholders............... None
Maximum deferred sales
charge (as a % of net asset
value at time of purchase
or sale, whichever is
less)...................... None
Redemption charges.......... None
Exchange fees............... None
ANNUAL FUND OPERATING EXPENSES
(2):
(AS A % OF AVERAGE NET
ASSETS)
Investment management and
administration fees........ .73%
12b-1 distribution and
service fees............... None
Other expenses (after
reimbursements)............ .70%
---------
Total Fund Operating
Expenses................... 1.43%
---------
---------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (3):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Advisor Class shares....................................... $14 $45 $77 $169
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
(2) Expenses are based on the Fund's fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 1.40% of the average daily net assets of the
Fund's Advisor Class shares. "Other expenses" include custody, transfer
agent, legal, audit and other operating expenses. See "Management" herein
and the Statement of Additional Information for more information. Without
reimbursements, "Other expenses" and "Total Fund Operating Expenses" would
have been 1.92% and 2.65%, respectively, for the Advisor Class shares of the
Fund (including its share of the expenses of the Portfolio). Investors
purchasing Advisor Class shares through financial planners, trust companies,
bank trust departments or registered investment advisers, or under a "wrap
fee" program, will be subject to additional fees charged by such entities or
by the sponsors of such programs. Where any account advised by one of the
companies affiliated with AMVESCAP PLC invests in Advisor Class shares of
the Fund, such account shall not be subject to duplicative advisory fees.
The Board of Trustees of the Trust believes that the aggregate per share
expenses of the Fund and of the Portfolio will be approximately equal to the
expenses the Fund would incur if their assets were invested directly in the
type of securities being held by the Portfolio.
(3) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S
DIRECT AND INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The
table and the assumption in the Hypothetical Example of a 5% annual return
are required by regulations of the SEC applicable to all mutual funds. The
5% annual return is not a prediction of and does not represent the Fund's or
the Portfolio's projected or actual performance.
Prospectus Page 4
<PAGE>
AIM AMERICA VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes for
[ ] have been audited by [ ], independent accountants, whose
reports thereon appear in the Statement of Additional Information.
AIM AMERICA VALUE FUND
(FORMERLY GT GLOBAL AMERICA VALUE FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. The Fund's total return shows its
overall change in value, including changes in share price and assuming all the
Fund's dividends and capital gain distributions are reinvested. A cumulative
total return reflects the Fund's performance over a stated period of time. An
average annual total return reflects the hypothetical compounded annual rate of
return that would have produced the same cumulative total return if the Fund's
performance had been constant over the entire period. BECAUSE AVERAGE ANNUAL
RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD
RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To
illustrate the components of overall performance, the Fund may separate its
cumulative and average annual returns into income results and capital gains or
losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 5
<PAGE>
AIM AMERICA VALUE FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Fund is long term capital appreciation. The Fund
seeks its investment objective by investing all of its investable assets in the
Portfolio, which, in turn, normally invests at least 65% of its total assets in
equity securities, including common stocks, preferred stocks, convertible debt
securities and warrants of companies domiciled in the United States that, at the
time of purchase, have market capitalizations of greater than $500 million and
that the Sub-adviser believes to be undervalued in relation to long-term earning
power or other factors. The remainder of the Portfolio's assets may be invested
in common stocks, preferred stocks, convertible debt securities and warrants of
companies domiciled in the United States that are smaller than those defined
above and non-convertible debt securities, U.S. government securities and high
quality money market instruments, such as U.S. government obligations, high
grade commercial paper, bank certificates of deposit and bankers' acceptances,
of issuers domiciled in the United States. The Portfolio also may invest up to
10% of its total assets in securities of foreign issuers in the form of ADRs or
other similar securities convertible into securities of foreign issuers. There
can be no assurance that the Fund or the Portfolio will achieve its investment
objective.
The debt obligations that the Portfolio may invest in are limited to U.S.
government securities and corporate debt securities of issuers domiciled in the
United States. The Portfolio will limit its purchases of debt securities to
investment grade obligations, as defined above.
For purposes of this Prospectus, market capitalization means the total market
value of a company's outstanding common stock. There is no necessary correlation
between market capitalization and the financial attributes (such as level of
assets, revenues or income) often used to measure a company's size.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In selecting issuers for the Portfolio, the Sub-adviser attempts to identify
securities of issuers whose prospects and growth potential, in the Sub-adviser's
opinion, are currently undervalued by investors. In the Sub-adviser's view, an
issuer may show favorable prospects as a result of many factors, including
changes in management, shifts in supply and demand conditions in the industry in
which it operates, technological advances, new products or product cycles, or
changes in macroeconomic trends. The securities of such issuers may be
undervalued by the market due to many factors, including market decline,
tax-loss selling, poor economic conditions, limited coverage by the investment
community, investors' reluctance to overlook perceived financial, operational,
managerial or other problems affecting the issuer or the industry in which it
operates and other factors. The Sub-adviser will attempt to identify those
undervalued issuers with the potential for attractive returns.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
Prospectus Page 6
<PAGE>
AIM AMERICA VALUE FUND
currency units (such as Euros) are evaluated on the strength of the particular
currency against the U.S. dollar as well as on the current and expected levels
of interest rates in the country or countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Portfolio may invest less than 65% of
its total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Portfolio may hold U.S. dollars and/or
may invest any portion of its assets in high quality domestic debt securities or
high quality money market instruments. To the extent the Portfolio adopts a
temporary defensive position, it will not be invested so as to achieve directly
its investment objective.
In addition, the Portfolio may hold U.S. dollars and may invest in domestic debt
securities or high quality money market instruments pending investment of
proceeds from new sales of Fund shares, or to meet its ordinary daily cash
needs. For a description of money market instruments, see "Temporary Defensive
Strategies" in the "Investment Objectives and Policies" section of the Statement
of Additional Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Portfolio may invest up to
10% of its total assets in other investment companies. As a shareholder in an
investment company, the Portfolio would bear its ratable share of that
investment company's expenses, including its advisory and administration fees.
At the same time, the Portfolio would continue to pay its own management fees
and other expenses. AIM and the Sub-adviser will waive their advisory fees to
the extent that the Portfolio invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Portfolio
may be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemption of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of the Fund's shares than would be the case if the Portfolio did
not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Portfolio
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Portfolio's sale of securities together with
its commitment (for which the Portfolio may receive a fee) to purchase similar,
but not identical, securities at a future date.
SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolio to retain ownership of the securities loaned and, at the same
time, enhance the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Fund's investment program and
regulatory agencies, and as approved
Prospectus Page 7
<PAGE>
AIM AMERICA VALUE FUND
by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
OPTIONS AND FUTURES TRANSACTIONS. The Portfolio may use options on securities,
options on indices, futures contracts and options on futures contracts to
attempt to hedge against the overall level of investment risk normally
associated with its portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk Factors --
Options and Futures Strategies" herein and "Options, Futures and Currency
Strategies" in the Statement of Additional Information.
In addition, the Portfolio may purchase and sell put and call options on equity
and debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Portfolio or that the Sub-adviser intends to include in
the Portfolio's holdings. The Portfolio also may buy and sell put and call
options on stock indexes to hedge against overall fluctuations in the securities
markets or market sectors generally or in a specific market sector.
Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Portfolio's holdings. The Portfolio also may purchase stock index futures
contracts and purchase call options or write put options on such contracts to
hedge against a general stock market or market sector advance and thereby
attempt to lessen the cost of future securities acquisitions. The Portfolio may
use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolio against changes in the general level of interest rates.
AMERICAN DEPOSITORY RECEIPTS. The Portfolio may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in U.S. securities markets. See "Investment
Objectives and Policies -- Depository Receipts" in the Statement of Additional
Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Trust's Board of Trustees, without shareholder approval. The investment policies
of the
Prospectus Page 8
<PAGE>
AIM AMERICA VALUE FUND
Fund are identical to the investment policies of the Portfolio.
The approval of the Fund and of other investors in the Portfolio, if any, is not
required to change the investment objective, policies or limitations of the
Portfolio, unless otherwise specified. Written notice shall be provided to
shareholders of the Fund thirty days prior to any changes in the Portfolio's
investment objective. If a percentage restriction on investment or utilization
of assets in an investment policy or restriction is adhered to at the time an
investment is made, a later change in percentage ownership of a security or kind
of securities resulting from changing market values or a similar type of event
will not be considered a violation of the Fund's or Portfolio's investment
policies or restrictions.
OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
The Fund may each redeem its investment in the Portfolio at any time, if the
Board of Trustees of the Trust determines that it is in the best interests of
the Fund and its shareholders to do so. A change in the Portfolio's investment
objective, policies or limitations that is not approved by the Board or
shareholders of the Fund could require the Fund to redeem its interest in the
Portfolio. Any such redemption could result in a distribution in kind of
portfolio securities (as opposed to a cash distribution) by the Portfolio. In
addition, a distribution in kind could result in a less diversified portfolio of
investments for the Fund and could adversely affect its liquidity. Should such a
distribution occur, the Fund could incur brokerage fees or other transaction
costs in converting such securities to cash. Upon redemption, the Board would
consider what action might be taken, including the investment of all the
investable assets of the Fund in another pooled investment entity having
substantially the same investment objective as the Fund or the direct retention
by the Fund of its own investment adviser and/or subadviser to manage its assets
in accordance with its investment objective, policies and limitations discussed
herein.
In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
The Fund may be materially affected by the actions of other large investors, if
any, in the Portfolio. For example, as with all open-end investment companies,
if a large investor were to redeem its interest in the Portfolio, (1) the
Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns, and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset value will fluctuate, reflecting
fluctuations in the market value of the Portfolio's securities. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. In addition, the value of debt securities
Prospectus Page 9
<PAGE>
AIM AMERICA VALUE FUND
held by the Portfolio will fluctuate with changes in the perceived
creditworthiness of the issuers of such securities and interest rates.
OPTIONS AND FUTURES TRANSACTIONS. Although the Portfolio is authorized to enter
into options and futures transactions, the Portfolio might not enter into any
such transactions. Options and futures transactions involve certain risks, which
include: (1) dependence on the Sub-adviser's ability to predict movements in the
prices of individual securities, fluctuations in the general securities markets
or in the appropriate market sector and movements in interest rates; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, futures contracts or options thereon and movements in the price of the
security hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts or options thereon are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's and the Portfolio's Boards of Trustees have overall responsibility
for the operation of the Fund and the Portfolio, respectively. The Trust's and
the Portfolio's Boards of Trustees have approved all significant agreements
between the Trust and the Portfolio on the one side and persons or companies
furnishing services to the Fund and the Portfolio on the other, including the
investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund and the Portfolio are delegated to the officers of the
Trust and the Portfolio, subject always to the investment objective and policies
of the Fund and the Portfolio and to the general supervision of the Boards. See
"Trustees and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Portfolio include, but are not
limited to, determining the composition of the investment holdings of the
Portfolio and placing orders to buy, sell or hold particular securities. In
addition, AIM and the Sub-adviser provide the following administrative services
to the Fund and the Portfolio: furnishing corporate officers and clerical staff;
providing office space, services and equipment; and supervising all matters
relating to the Fund's and the Portfolio's operations.
The Fund pays AIM administration fees, computed daily and paid monthly, at the
annualized rate of 0.25% of the Fund's average daily net assets. AIM has
appointed the Sub-adviser as the Fund's sub-administrator. In addition, the Fund
bears its pro rata portion of the investment management and administration fees
paid by the Portfolio to AIM and the Sub-adviser. The Portfolio pays AIM such
fees, computed daily and paid monthly, based on the average daily net assets of
the Portfolio, at the annualized rate of .475% on the first $500 million, .45%
on the next $500 million, .425% on the next $500 million and .40% on all amounts
thereafter. Out of its aggregate fees payable by the Fund and the
Prospectus Page 10
<PAGE>
AIM AMERICA VALUE FUND
Portfolio, AIM pays the Sub-adviser sub-advisory and sub-administration fees
equal to 40% of the aggregate fees AIM receives from the Fund and the Portfolio.
The investment management and administration fees paid by the Fund and the
Portfolio are higher than those paid by most mutual funds. The Fund and
Portfolio pay all expenses not assumed by AIM, the Sub-adviser, AIM Distributors
or other agents. AIM has undertaken to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest and extraordinary expenses) to the
maximum annual rate of 1.40% of the average daily net assets of the Fund's
Advisor Class shares.
The Sub-adviser also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-adviser receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-adviser (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement, dated as of May 29, 1998 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises approximately 90 investment company portfolios encompassing a
broad range of investment objectives. The Sub-adviser, 50 California Street,
27th Floor, San Francisco, California 94111, and 1166 Avenue of the Americas,
New York, New York 10036, serves as the sub-adviser to the Portfolio pursuant to
an investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Portfolio, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professionals primarily responsible for the portfolio management
of the Portfolio are as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE PORTFOLIO PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Ted J. Ujazdowski Portfolio Manager since Portfolio Manager for the Sub-adviser since 1983. Director of the
New York 1997 Sub-adviser's Value Group since 1987. Employed by Chancellor Capital
Management, Inc. ("Chancellor Capital"), a predecessor of the
Sub-adviser, from 1983 to October 1996.
Adam D. Scheiner Portfolio Manager since Portfolio Manager and Analyst of the Sub-adviser's Value Group since
New York 1997 June 1993. Employed by Chancellor Capital from June 1993 to October
1996.
</TABLE>
Prospectus Page 11
<PAGE>
AIM AMERICA VALUE FUND
<TABLE>
<S> <C> <C>
Richard K. Collins Portfolio Manager since Senior Equity Portfolio Manager and Managing Director for the
New York 1997 Sub-adviser since April 1993. Employed by Chancellor Capital from
1982 to October 1996. Chartered Financial Analyst and member of the
Association of Investment Management Research (AIMR) and the New
York Society of Securities Analysts.
</TABLE>
------------------------
With respect to the Portfolio, the Sub-adviser utilizes a team approach that
relies on its bottom-up, research-intensive, process-driven stock selection
capability to build various investment portfolios. The Sub-adviser's disciplined
process combines the inputs of analysts performing fundamental and quantitative
research, various committees that set the Sub-adviser's firmwide economic
forecasts and sector and industry allocations and portfolio management teams
responsible for stock selection decisions. While individual members of the Sub-
adviser's investment team are assigned primary responsibility for the day-to-day
management of the Portfolio along with similarly managed accounts, the portfolio
is reviewed on a regular basis by the applicable investment team to monitor
compliance with applicable investment guidelines.
In placing orders for the Portfolio's portfolio securities transactions, the
Sub-adviser seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-adviser may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions for the
Portfolio may be executed through affiliates of AIM or the Sub-adviser. High
portfolio turnover (over 100%) involves correspondingly greater brokerage
commissions and other transaction costs that the Portfolio will bear directly
and could result in the realization of net capital gains that would be taxable
when distributed to shareholders. See "Dividends, Distributions and Tax
Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 (the 'Distribution Agreement"), with AIM Distributors, a registered
broker-dealer and a wholly owned subsidiary of AIM, to act as the distributor of
Advisor Class shares of the Fund. Certain Trustees and officers of the Trust are
affiliated with AIM Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right to
distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of G.T. Global Growth Series, a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series portfolios of
the Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of a fund may
vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Prospectus Page 12
<PAGE>
AIM AMERICA VALUE FUND
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Growth Portfolio, a Delaware business trust. Under Delaware law, the Fund and
other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However, the
Growth Portfolio's Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Portfolio and requires that notice of
such disclaimer be given in each agreement, obligation or instrument entered
into or executed by the Portfolio or a trustee. The Agreement and Declaration of
Trust also provides for indemnification from the Portfolio property for all
losses and expenses of any shareholder held personally liable for a Portfolio's
obligations. Thus the risk of an investor incurring financial loss on account of
such liability is limited to circumstances in which the Portfolio itself would
be unable to meet its obligations and where the other party was held not to be
bound by the disclaimer.
Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust, to the Fund and
to the Portfolio.
Prospectus Page 13
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several
of which offer Advisor Class shares. Only Advisor Class shares are offered
through this Prospectus. Advisor Class shares are available from the following
funds (collectively, the "Advisor Class Funds"):
<TABLE>
<S> <C>
AIM AMERICA VALUE FUND AIM GLOBAL RESOURCES FUND
AIM DEVELOPING MARKETS FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM DOLLAR FUND AIM GLOBAL TRENDS FUND
AIM EMERGING MARKETS FUND AIM INTERNATIONAL GROWTH FUND
AIM EUROPE GROWTH FUND AIM JAPAN GROWTH FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM LATIN AMERICAN GROWTH FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM MID CAP GROWTH FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM NEW PACIFIC GROWTH FUND
AIM GLOBAL GROWTH & INCOME FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL HEALTH CARE FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL HIGH INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through
Financial Advisers (as defined herein) who have entered into agreements with
A I M Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor
Class shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
for Advisor Class shares is $500.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Advisor Class shares of any Advisor Class Funds not named on the cover of
this Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered
A-1
<PAGE>
AIM INVESTOR'S GUIDE
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (800) 347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
Shareholder Name, Shareholder Account Number
OBI: (70 character limit)
</TABLE>
It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
In addition to the Advisor Class Funds, the AIM Funds consist of the
following funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND,
AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL
ESTATE FUND, AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED
FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM
CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND,
AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED
MATURITY TREASURY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM
SELECT GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND
OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
VALUE FUND and AIM WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE
GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with
the Advisor Class Funds, the "Multiple Class Funds." For information on
purchasing any of the AIM Funds and to receive a prospectus, please call (800)
347-4246. Net asset value is determined in the manner described under the
caption "Determination of Net Asset Value."
Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee"
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares.
A-2
<PAGE>
AIM INVESTOR'S GUIDE
Investors in wrap fee programs and advisory accounts may only purchase Advisor
Class shares through Financial Advisers who have entered into agreements with
AIM Distributors. Investors may be charged a fee by their agents or brokers for
effecting transactions in Advisor Class shares.
AIM Distributors may, from time to time, pay a bonus or other consideration
or incentive to dealers who sell a minimum dollar amount of the shares of the
AIM Funds during a specified period of time. In some instances, these incentives
may be offered only to certain dealers who have sold or may sell significant
amounts of shares. At the option of the dealer, such incentives may take the
form of payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND
uses the amortized cost method of valuing the securities it holds and rounds its
per share net asset value to the nearest whole cent, it is anticipated that the
net asset value of the shares of that fund will remain constant at $1.00 per
share. However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00
net asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of
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AIM INVESTOR'S GUIDE
redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
[SPECIAL PLANS
Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of Advisor Class Funds. The Program automatically
rebalances holdings of Advisor Class Funds to the established allocation on a
periodic basis. Under the Program, a shareholder may predesignate, on a
percentage basis, how the total value of his or her holdings in a minimum of
two, and a maximum of ten, Advisor Class Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more Advisor Class Funds in the shareholder's Personal
Portfolio for shares of the same class(es) of one or more other Advisor Class
Funds in the shareholder's Personal Portfolio. See "Exchange Privilege." If
shares of the Advisor Class Fund(s) in a shareholder's Personal Portfolio have
appreciated during a rebalancing period, the Program will result in shares of
Advisor Class Fund(s) that have appreciated most during the period being
exchanged for shares of Advisor Class Fund(s) that have appreciated least. SUCH
EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR
LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions." Participation in
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AIM INVESTOR'S GUIDE
the Program does not assure that a shareholder will profit from purchases under
the Program nor does it prevent or lessen losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular Advisor Class
Fund would be 2% or less. In predesignating percentages, shareholders must use
whole percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an
Advisor Class Fund's shares. The AIM Funds and AIM Distributors reserve the
right to modify, suspend, or terminate the Program at any time on 60 days' prior
written notice to shareholders. A request to participate in the Program must be
received in good order at least five business days prior to the next rebalancing
date. Once a shareholder establishes the Program for his or her Personal
Portfolio, a shareholder cannot cancel or change which rebalancing frequency,
which Advisor Class Funds or what allocation percentages are assigned to the
Program, unless canceled or changed in writing and received by the Transfer
Agent in good order at least five business days prior to the rebalancing date.
Certain dealers/financial institutions may charge a fee for establishing
accounts relating to the Program. Investors should contact their
dealers/financial institutions or AIM Distributors for more information.]
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the
Advisor Class Funds may participate in an exchange privilege as described below.
AIM Distributors acts as distributor for the Advisor Class Funds which represent
a range of different investment objectives and policies.
Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor Class Fund acquired through exchange
must be qualified for sale in the state in which the shareholder resides; (c)
the exchange must be made between accounts having identical registrations and
addresses; (d) the full amount of the purchase price for the shares being
exchanged must have already been received by the fund; (e) the account from
which shares have been exchanged must be coded as having a certified taxpayer
identification number on file or, in the alternative, an appropriate IRS Form
W-8 (certificate of foreign status) or Form W-9 (certifying exempt status) must
have been received by the fund; (f) newly acquired shares (through either an
initial or subsequent investment) are held in an account for at least ten
business days, and all other shares are held in an account for at least one day,
prior to the exchange; and (g) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the Advisor
Class Funds.
THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but
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AIM INVESTOR'S GUIDE
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that an Advisor Class Fund would be materially
disadvantaged by an immediate transfer of the proceeds of the exchange. If a
shareholder is exchanging into an Advisor Class Fund that declares daily
dividends ("Dividends, Distributions and Tax Matters -- Dividends and
Distributions," below), and the release of the exchange proceeds is delayed for
the foregoing five-day period, such shareholder will not begin to accrue
dividends until the sixth business day after the exchange. Advisor Class shares
purchased by check may not be exchanged until it is determined that the check
has cleared, which may take up to ten business days from the date that the check
is received. See "Terms and Conditions of Purchase of the AIM Funds -- Timing of
Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. A shareholder may give exchange information to his
Financial Adviser. If a shareholder does not wish to allow telephone exchanges
by any person in his account, he should decline that option on the account
application. AIM Distributors has made arrangements with certain dealers and
investment advisory firms to accept telephone instructions to exchange shares
between any of the Advisor Class Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the Advisor Class Funds, including the condition that any such
dealer or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/ financial institutions may charge service fees for handling
repurchase transactions.
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
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AIM INVESTOR'S GUIDE
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in his account, he should decline that option on the account application.
The telephone redemption feature can be used only if: (a) the redemption
proceeds are to be mailed to the address of record or transferred electronically
or wired to the pre-authorized bank account; (b) there has been no change of
address of record on the account within the preceding 30 days; (c) the shares to
be redeemed are not in certificate form; (d) the person requesting the
redemption can provide proper identification information, and (e) the proceeds
of the redemption do not exceed $50,000. AIM Distributors has made arrangements
with certain dealers and investment advisors to accept telephone instructions
for the redemption of shares. AIM Distributors reserves the right to impose
conditions on these dealers and investment advisors, including the condition
that they enter into agreements (which contain additional conditions with
respect to the redemption of shares) with AIM Distributors. The Transfer Agent
and AIM Distributors will not be liable for any loss, expense or cost arising
out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's taxpayer identification
number and current address, and mailings of confirmations promptly after the
transaction.
TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the
Advisor Class Funds are redeemed at their net asset value next computed after a
request for redemption in proper form (including signature guarantees and other
required documentation for written redemptions) is received by the Transfer
Agent or certain financial institutions (or their designees) who are authorized
to accept redemption orders on behalf of the AIM Funds, provided that such
orders are transmitted to the Transfer Agent prior to the time set for receipt
of such orders. Orders for the redemption of Advisor Class shares received on
any business day of an AIM Fund will be confirmed at the price determined as of
the close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the
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AIM INVESTOR'S GUIDE
proceeds are to be sent to the address of record. These requirements may be
waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
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DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each Advisor Class Fund's policy regarding the payment of dividends and
distributions is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
Dividends on Advisor Class shares of an Advisor Class Fund are expected to
be higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
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TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares. With respect to tax-exempt shareholders, dividends and distributions
from the AIM Funds are not subject to federal income taxation to the extent
permitted under the applicable tax exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
A-10
<PAGE>
AIM INVESTOR'S GUIDE
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM MID CAP GROWTH
FUND, AIM SMALL CAP EQUITY FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each Advisor Class Fund's transfer
agent and dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If
A-11
<PAGE>
AIM INVESTOR'S GUIDE
several members of a household own shares of the same fund, only one annual or
semi-annual report will be mailed to that address. To receive additional copies,
please call (800) 347-4246, or write to A I M Distributors, Inc., P.O. Box 4739,
Houston, Texas 77210-4739. A Statement of Additional Information has been filed
with the SEC and is available upon request and without charge, by writing or
calling AIM Distributors. The SEC maintains a Web site at http://www.sec.gov
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding the Fund. This Prospectus omits
certain information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from this
Prospectus, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
A-12
<PAGE>
AIM AMERICA VALUE FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM EUROPE GROWTH FUND:
ADVISOR CLASS
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM Europe Growth Fund (the "Fund"),
which is one of several series investment portfolios comprising AIM Growth
Series (the "Trust"), an open-end, series, management investment company. The
Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of issuers domiciled in its Primary
Investment Area (as defined herein).
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM EUROPE GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Prospectus Summary........................................................................ 2
Financial Highlights...................................................................... 5
Investment Objectives and Policies........................................................ 6
Risk Factors.............................................................................. 9
Management................................................................................ 11
Other Information......................................................................... 13
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of issuers domiciled in its Primary Investment Area
(as defined herein).
Investment Managers: The Fund is managed by A I M Advisors, Inc. ("AIM") and is sub-advised and sub-administered by
INVESCO (NY), Inc. (the "Sub-Adviser"). AIM and the Sub-adviser and their worldwide asset management
affiliates provide investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment
management group that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing presence in Asia. AIM was
organized in 1976 and, together with its subsidiaries, currently advises approximately 90 investment
company portfolios.
Purchasing Shares: Advisor Class shares are offered through this Prospectus to (a) trustees or other fiduciaries
purchasing shares for employee benefit plans which are sponsored by organizations which have at least
1,000 employees; (b) any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment adviser has investment discretion over such
account, and (ii) the account holder pays such person as compensation for its advice and other
services an annual fee of at least 0.50% on the assets in the account; (c) any account with assets of
a least $10,000 if (i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the assets in the account;
(d) accounts advised by the Sub-Adviser or one of the companies formerly affiliated with the Asset
Management Division of Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the
</TABLE>
Prospectus Page 2
<PAGE>
AIM EUROPE GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
funds in The AIM Family of Funds on May 29, 1998; and (e) any of the companies composing or
affiliated with AMVESCAP PLC.
Pursuant to a separate prospectus, the Fund also offers Class A and Class B shares, which represent
interests in the Fund. The Class A and Class B shares have different distribution arrangements.
Initial investments in Advisor Class shares must be at least $500 and additional investments must be
at least $50. The distributor of the Advisor Class shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase Shares."
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Advisor Class shares of the Fund may be exchanged for Advisor Class shares of certain
Funds in The AIM Family of Funds in the manner and subject to the policies and charges set forth
herein. See "Exchange Privilege."
Redeeming Shares: Advisor Class shareholders of the Fund may redeem all or a portion of their shares at net asset value
on any business day. See "How to Redeem Shares."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
The Fund invests primarily in foreign securities. Investments in foreign securities involve risks
relating to political and economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates also may affect the
Fund's net asset value, earnings and gains and losses realized on sales of securities.
The Fund invests a significant portion of its assets in issuers in a particular country or region of
the world. As a result, the Fund may be subject to greater risks and may experience greater
volatility than a fund that is more broadly diversified geographically.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 3
<PAGE>
AIM EUROPE GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Advisor Class shares of the Fund are reflected
in the following table (1):
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION COSTS:
Maximum sales charge on
purchases (as a % of
offering price)............ None
Sales charges on reinvested
distributions to
shareholders............... None
Maximum deferred sales
charges (as a % of net
asset value at time of
purchase or sale, whichever
is less)................... None
Redemption charges.......... None
Exchange fees............... None
ANNUAL FUND OPERATING EXPENSES
(2):
(AS A % OF AVERAGE NET
ASSETS)
Investment management and
administration fees........ .97%
12b-1 distribution and
service fees............... None
Other expenses (after
reimbursements)............ .57%
---------
Total Fund Operating
Expenses................... 1.54%
---------
---------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (3):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Advisor Class shares....................................................... $16 $49 $85 $185
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
(2) Expenses are based on the Fund's fiscal year ended December 31, 1997. "Other
expenses" include custody, transfer agent, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information. Investors purchasing Advisor Class shares
through financial planners, trust companies, bank trust departments or
registered investment advisers, or under a "wrap fee" program, will be
subject to additional fees charged by such entities or by the sponsors of
such programs. Where any account advised by one of the companies composing
or affiliated with AMVESCAP PLC invests in Advisor Class shares of the Fund,
such account shall not be subject to duplicative advisory fees.
(3) THE "HYPOTHETICAL EXAMPLE" SET FORTH ABOVE IS NOT A REPRESENTATION OF PAST
OR FUTURE EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the
assumption in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 4
<PAGE>
AIM EUROPE GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information.
AIM EUROPE GROWTH FUND
(FORMERLY GT GLOBAL EUROPE GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's yield and total return. The performance
of the Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 5
<PAGE>
AIM EUROPE GROWTH FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
THE EUROPE FUND
The Fund seeks long-term growth of capital. It seeks its objective by investing,
under normal circumstances, at least 65% of its total assets in equity
securities of issuers domiciled in its Primary Investment Area, as described
below. There can be no assurance that the Fund will achieve its investment
objective. Equity securities in which the Fund may invest include common stocks,
preferred stocks, convertible debt securities and warrants to acquire such
securities. The Fund's Primary Investment Areas include the following countries:
Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland,
Turkey and the United Kingdom.
Because the development of the world's economies and stock markets is rapidly
evolving, from time to time the Board of Trustees may add or delete countries
from the Fund's Primary Investment Area.
The Fund is a regional fund for investors interested in a more geographically
concentrated investment but still desiring to diversify across multiple markets.
The Fund may invest up to 35% of its total assets in the equity securities of
issuers domiciled outside of its Primary Investment Area. Such investments may
include: (a) securities of issuers in countries that are not located in the
Primary Investment Area but are linked by tradition, economic markets, cultural
similarities or geography to the countries in such Primary Investment Area; and
(b) securities of issuers located elsewhere in the world that have operations in
the Primary Investment Area or that stand to benefit from political and economic
events in the Primary Investment Area.
The Fund may invest up to 35% of its total assets in debt securities, including
U.S. and foreign government securities and corporate debt securities, Samurai
and Yankee bonds, Eurobonds and Depository Receipts. The Fund will limit its
purchases of debt securities to investment grade obligations. "Investment grade"
debt refers to those securities rated within one of the four highest ratings
categories by Moody's Investors Service, Inc. ("Moody's") or by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or, if not
similarly rated by any other nationally recognized statistical rating
organization ("NRSRO"), deemed by the Sub-adviser to be of equivalent quality.
Debt rated Baa by Moody's, which is the lowest category of investment grade
debt, is considered by Moody's to have speculative characteristics. See the
Statement of Additional Information for a description of Moody's and S&P
ratings.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Fund, the Sub-adviser seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth rates. The Sub-adviser further
attempts to identify those companies in such countries and industries that are
best positioned and managed to take advantage of these economic and political
factors. The Sub-adviser intends to invest in such markets only after balancing
the potential for growth of selected companies in each market relative to the
risks of investing in each such country. Among the factors to be considered are
that several of the markets are so-called developing countries, and their
economies and markets are less developed and more prone to uncertainty,
instability and risk than those of the other markets in which the Fund invests.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
Prospectus Page 6
<PAGE>
AIM EUROPE GROWTH FUND
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
currency units are evaluated on the strength of the particular currency against
the U.S. dollar as well as on the current and expected levels of interest rates
in the country or countries. In addition to the foregoing, the Fund may seek to
take advantage of differences in relative values of fixed income securities
among various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency units
such as Euros) and/or high quality debt securities or money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, most or all investments of the Fund may be made in
the United States and denominated in U.S. dollars. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units) and may invest in high
quality foreign or domestic money market instruments. For a description of money
market instruments, see "Temporary Defensive Strategies" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions. The Fund may
borrow up to 33 1/3% of its total assets. However, no additional investments
will be made if the Fund's borrowings exceed 5% of its total assets. Any
borrowing by the Fund may cause greater fluctuation in the value of its shares
than would be the case if the Fund did not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's
Prospectus Page 7
<PAGE>
AIM EUROPE GROWTH FUND
sale of securities together with its commitment (for which the Fund may receive
a fee) to purchase similar, but not identical, securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is made. While a loan is outstanding, the borrower must maintain with the
Fund's custodian collateral consisting of cash, U.S. government securities or
certain irrevocable letters of credit equal to at least the value of the
borrowed securities, plus any accrued interest or such other collateral as
permitted by the Fund's investment program and regulatory agencies, and as
approved by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Currency Strategies" herein and the Statement of Additional Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Funds also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate
Prospectus Page 8
<PAGE>
AIM EUROPE GROWTH FUND
futures contracts and options thereon to hedge the debt portion of its portfolio
against changes in the general level of interest rates.
DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign issuers in the
form of ADRs or other similar securities convertible into securities of foreign
issuers. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs are receipts
typically issued by a United States bank or trust company evidencing ownership
of the underlying securities. Generally, ADRs in registered form are designed
for use in U.S. securities markets. See "Investment Objectives and Policies --
Depository Receipts" in the Statement of Additional Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Company's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
FOREIGN INVESTING. The Fund invests primarily in foreign securities. Investing
in foreign securities entails certain risks. The securities of non-U.S. issuers
generally will not be registered with, nor will the issuers thereof be subject
to, the reporting requirements of the SEC. Accordingly, there may be less
publicly available information about foreign securities and issuers than is
available about domestic securities and issuers. Foreign companies generally are
not subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
Securities of some foreign companies are less liquid and their prices may be
more volatile than securities of comparable domestic companies. In addition,
certain costs attributable to foreign investing, such as custody charges, are
higher than those attributable to domestic investing. The Fund's interest and
dividends from foreign issuers may be subject to non-U.S. withholding taxes,
thereby reducing its net investment income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the repatriation of
assets of the Fund, political or social instability, or diplomatic developments
that could affect their investments in those countries. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, rate of
savings and capital reinvestment, resource self-sufficiency and balance of
payments positions.
Prospectus Page 9
<PAGE>
AIM EUROPE GROWTH FUND
Because the Fund may invest substantially in securities denominated in
currencies other than the U.S. dollar, and because it may hold foreign
currencies, it will be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between such currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Fund's shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund. Currencies generally are
evaluated on the basis of fundamental economic criteria (e.g., relative
inflation and interest rate levels and trends, growth rate forecasts, balance of
payments status and economic policies) as well as technical and political data.
The exchange rates between the U.S. dollar and other currencies are determined
by supply and demand in the currency exchange markets, the international balance
of payments, governmental intervention, speculation and other economic and
political conditions. If the currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, a decline in the exchange rate of the currency would
adversely affect the value of the security expressed in U.S. dollars.
CONCENTRATION. The Fund invests a significant portion of its assets in a
particular region of the world. As a result the Fund may be subject to greater
risks and may experience greater volatility than a fund that is more broadly
diversified geographically.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, the
Fund might not enter into any such transactions. Options, futures and foreign
currency transactions, the Fund involve certain risks, which include: (1)
dependence on the Sub-adviser's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
or options thereon or to use forward currency contracts are different from those
needed to select the securities in which the Fund invests; (4) lack of assurance
that a liquid secondary market will exist for any particular option, futures
contract or option thereon at any particular time; (5) the possible loss of
principal under certain conditions; and (6) the possible inability of the Fund
to purchase or sell a portfolio security at a time when it would otherwise be
favorable for it to do so, or the possible need for the Fund to sell a security
at a disadvantageous time, due to the need for the Fund to maintain "cover" or
to set aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund including the
investment advisory and administrative services agreement with AIM, the
investment sub-advisory and sub-administration agreement between AIM and the
Sub-adviser, the agreements with AIM Distributors regarding distribution of the
Fund's shares, the custody agreement and the transfer agency agreement. The
day-to-day operations of the Fund are delegated to the officers of the Trust,
subject always to the investment objective and policies of the Fund and to the
general supervision of the Trust's Board. See "Trustees and Executive
Prospectus Page 10
<PAGE>
AIM EUROPE GROWTH FUND
Officers" in the Statement of Additional Information for information on the
Trustees of the Trust.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million and .90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administrative fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 1.65%
of the average daily net assets of the Fund's Advisor Class shares.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Europe Fund pursuant to a master investment management
and administration agreement, dated as of May 29, 1998 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises approximately 90 investment company portfolios encompassing a
broad range of investment objectives. The Sub-adviser 50 California Street, 27th
Floor, San Francisco, California 94111, and 1166 Avenue of the Americas, New
York, New York 10036, serves as the sub-adviser to the above Fund pursuant to an
investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Fund, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
Prospectus Page 11
<PAGE>
AIM EUROPE GROWTH FUND
The investment professionals primarily responsible for the portfolio management
of the Fund is as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Nicholas J. Ford Portfolio Manager since Portfolio Manager for the Sub-adviser since February 1998 and
London 1998 Portfolio Manager for INVESCO GT Asset Management PLC (London), an
affiliate of the Sub-adviser since 1996. Director of Equities for
Lehman Brothers Global Asset Management PLC (London) from 1994 to
1996. Portfolio Manager and Head of European Equities for Hill
Samuel Investment Management PLC (London) from 1990 to 1994.
</TABLE>
------------------------
In placing orders for the Fund's portfolio transactions, the Sub-adviser seeks
to obtain the best net results. Consistent with its obligation to obtain the
best net results, the Sub-adviser may consider a broker/dealer's sale of shares
of the AIM Funds as a factor in considering through whom portfolio transactions
will be effected. Brokerage transactions for the Fund may be executed through
affiliates of AIM or the Sub-adviser. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Fund will bear directly and could result in the realization of
net capital gains that would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 (the "Distribution Agreement"), with AIM Distributors, a registered
broker-dealer and a wholly owned subsidiary of AIM, to act as the distributor of
Advisor Class shares of the Fund. Certain Trustees and officers of the Trust are
affiliated with AIM Distributors.
The Distribution Agreement provides AIM Distributors with the exclusive right to
distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of G.T. Global Growth Series, a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series or portfolios
of the Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the
Prospectus Page 12
<PAGE>
AIM EUROPE GROWTH FUND
outstanding shares. Any Trustee may call a special meeting of shareholders for
any purpose. Furthermore, Trustees shall promptly call a meeting of shareholders
solely for the purpose of removing one or more Trustees when requested in
writing to do so by shareholders holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 13
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several
of which offer Advisor Class shares. Only Advisor Class shares are offered
through this Prospectus. Advisor Class shares are available from the following
funds (collectively, the "Advisor Class Funds"):
<TABLE>
<S> <C>
AIM AMERICA VALUE FUND AIM GLOBAL RESOURCES FUND
AIM DEVELOPING MARKETS FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM DOLLAR FUND AIM GLOBAL TRENDS FUND
AIM EMERGING MARKETS FUND AIM INTERNATIONAL GROWTH FUND
AIM EUROPE GROWTH FUND AIM JAPAN GROWTH FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM LATIN AMERICAN GROWTH FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM MID CAP GROWTH FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM NEW PACIFIC GROWTH FUND
AIM GLOBAL GROWTH & INCOME FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL HEALTH CARE FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL HIGH INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through
Financial Advisers (as defined herein) who have entered into agreements with
A I M Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor
Class shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
for Advisor Class shares is $500.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Advisor Class shares of any Advisor Class Funds not named on the cover of
this Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered
A-1
<PAGE>
AIM INVESTOR'S GUIDE
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (800) 347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
Shareholder Name, Shareholder Account Number
OBI: (70 character limit)
</TABLE>
It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
In addition to the Advisor Class Funds, the AIM Funds consist of the
following funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND,
AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL
ESTATE FUND, AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED
FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM
CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND,
AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED
MATURITY TREASURY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM
SELECT GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND
OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
VALUE FUND and AIM WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE
GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with
the Advisor Class Funds, the "Multiple Class Funds." For information on
purchasing any of the AIM Funds and to receive a prospectus, please call (800)
347-4246. Net asset value is determined in the manner described under the
caption "Determination of Net Asset Value."
Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee"
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares.
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Investors in wrap fee programs and advisory accounts may only purchase Advisor
Class shares through Financial Advisers who have entered into agreements with
AIM Distributors. Investors may be charged a fee by their agents or brokers for
effecting transactions in Advisor Class shares.
AIM Distributors may, from time to time, pay a bonus or other consideration
or incentive to dealers who sell a minimum dollar amount of the shares of the
AIM Funds during a specified period of time. In some instances, these incentives
may be offered only to certain dealers who have sold or may sell significant
amounts of shares. At the option of the dealer, such incentives may take the
form of payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND
uses the amortized cost method of valuing the securities it holds and rounds its
per share net asset value to the nearest whole cent, it is anticipated that the
net asset value of the shares of that fund will remain constant at $1.00 per
share. However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00
net asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of
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AIM INVESTOR'S GUIDE
redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
[SPECIAL PLANS
Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of Advisor Class Funds. The Program automatically
rebalances holdings of Advisor Class Funds to the established allocation on a
periodic basis. Under the Program, a shareholder may predesignate, on a
percentage basis, how the total value of his or her holdings in a minimum of
two, and a maximum of ten, Advisor Class Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more Advisor Class Funds in the shareholder's Personal
Portfolio for shares of the same class(es) of one or more other Advisor Class
Funds in the shareholder's Personal Portfolio. See "Exchange Privilege." If
shares of the Advisor Class Fund(s) in a shareholder's Personal Portfolio have
appreciated during a rebalancing period, the Program will result in shares of
Advisor Class Fund(s) that have appreciated most during the period being
exchanged for shares of Advisor Class Fund(s) that have appreciated least. SUCH
EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR
LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions." Participation in
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AIM INVESTOR'S GUIDE
the Program does not assure that a shareholder will profit from purchases under
the Program nor does it prevent or lessen losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular Advisor Class
Fund would be 2% or less. In predesignating percentages, shareholders must use
whole percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an
Advisor Class Fund's shares. The AIM Funds and AIM Distributors reserve the
right to modify, suspend, or terminate the Program at any time on 60 days' prior
written notice to shareholders. A request to participate in the Program must be
received in good order at least five business days prior to the next rebalancing
date. Once a shareholder establishes the Program for his or her Personal
Portfolio, a shareholder cannot cancel or change which rebalancing frequency,
which Advisor Class Funds or what allocation percentages are assigned to the
Program, unless canceled or changed in writing and received by the Transfer
Agent in good order at least five business days prior to the rebalancing date.
Certain dealers/financial institutions may charge a fee for establishing
accounts relating to the Program. Investors should contact their
dealers/financial institutions or AIM Distributors for more information.]
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the
Advisor Class Funds may participate in an exchange privilege as described below.
AIM Distributors acts as distributor for the Advisor Class Funds which represent
a range of different investment objectives and policies.
Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor Class Fund acquired through exchange
must be qualified for sale in the state in which the shareholder resides; (c)
the exchange must be made between accounts having identical registrations and
addresses; (d) the full amount of the purchase price for the shares being
exchanged must have already been received by the fund; (e) the account from
which shares have been exchanged must be coded as having a certified taxpayer
identification number on file or, in the alternative, an appropriate IRS Form
W-8 (certificate of foreign status) or Form W-9 (certifying exempt status) must
have been received by the fund; (f) newly acquired shares (through either an
initial or subsequent investment) are held in an account for at least ten
business days, and all other shares are held in an account for at least one day,
prior to the exchange; and (g) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the Advisor
Class Funds.
THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but
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AIM INVESTOR'S GUIDE
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that an Advisor Class Fund would be materially
disadvantaged by an immediate transfer of the proceeds of the exchange. If a
shareholder is exchanging into an Advisor Class Fund that declares daily
dividends ("Dividends, Distributions and Tax Matters -- Dividends and
Distributions," below), and the release of the exchange proceeds is delayed for
the foregoing five-day period, such shareholder will not begin to accrue
dividends until the sixth business day after the exchange. Advisor Class shares
purchased by check may not be exchanged until it is determined that the check
has cleared, which may take up to ten business days from the date that the check
is received. See "Terms and Conditions of Purchase of the AIM Funds -- Timing of
Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. A shareholder may give exchange information to his
Financial Adviser. If a shareholder does not wish to allow telephone exchanges
by any person in his account, he should decline that option on the account
application. AIM Distributors has made arrangements with certain dealers and
investment advisory firms to accept telephone instructions to exchange shares
between any of the Advisor Class Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the Advisor Class Funds, including the condition that any such
dealer or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/ financial institutions may charge service fees for handling
repurchase transactions.
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
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AIM INVESTOR'S GUIDE
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in his account, he should decline that option on the account application.
The telephone redemption feature can be used only if: (a) the redemption
proceeds are to be mailed to the address of record or transferred electronically
or wired to the pre-authorized bank account; (b) there has been no change of
address of record on the account within the preceding 30 days; (c) the shares to
be redeemed are not in certificate form; (d) the person requesting the
redemption can provide proper identification information, and (e) the proceeds
of the redemption do not exceed $50,000. AIM Distributors has made arrangements
with certain dealers and investment advisors to accept telephone instructions
for the redemption of shares. AIM Distributors reserves the right to impose
conditions on these dealers and investment advisors, including the condition
that they enter into agreements (which contain additional conditions with
respect to the redemption of shares) with AIM Distributors. The Transfer Agent
and AIM Distributors will not be liable for any loss, expense or cost arising
out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's taxpayer identification
number and current address, and mailings of confirmations promptly after the
transaction.
TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the
Advisor Class Funds are redeemed at their net asset value next computed after a
request for redemption in proper form (including signature guarantees and other
required documentation for written redemptions) is received by the Transfer
Agent or certain financial institutions (or their designees) who are authorized
to accept redemption orders on behalf of the AIM Funds, provided that such
orders are transmitted to the Transfer Agent prior to the time set for receipt
of such orders. Orders for the redemption of Advisor Class shares received on
any business day of an AIM Fund will be confirmed at the price determined as of
the close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the
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proceeds are to be sent to the address of record. These requirements may be
waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
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DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each Advisor Class Fund's policy regarding the payment of dividends and
distributions is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
Dividends on Advisor Class shares of an Advisor Class Fund are expected to
be higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
A-9
<PAGE>
AIM INVESTOR'S GUIDE
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares. With respect to tax-exempt shareholders, dividends and distributions
from the AIM Funds are not subject to federal income taxation to the extent
permitted under the applicable tax exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
A-10
<PAGE>
AIM INVESTOR'S GUIDE
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM MID CAP GROWTH
FUND, AIM SMALL CAP EQUITY FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each Advisor Class Fund's transfer
agent and dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If
A-11
<PAGE>
AIM INVESTOR'S GUIDE
several members of a household own shares of the same fund, only one annual or
semi-annual report will be mailed to that address. To receive additional copies,
please call (800) 347-4246, or write to A I M Distributors, Inc., P.O. Box 4739,
Houston, Texas 77210-4739. A Statement of Additional Information has been filed
with the SEC and is available upon request and without charge, by writing or
calling AIM Distributors. The SEC maintains a Web site at http://www.sec.gov
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding the Fund. This Prospectus omits
certain information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from this
Prospectus, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
A-12
<PAGE>
AIM EUROPE GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM INTERNATIONAL GROWTH FUND:
ADVISOR CLASS
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM International Growth Fund (the
"Fund"), which is one of several series investment portfolios comprising AIM
Growth Series (the "Trust"), an open-end, series, management investment company.
The Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of issuers domiciled in its Primary
Investment Area (as defined herein).
This Prospectus sets forth concisely the information about the Fund prospective
investors should know before investing. It should be read and retained for
future reference. A Statement of Additional Information, dated September 8,
1998, has been filed with the Securities and Exchange Commission ("SEC") and is
incorporated herein by reference. The Statement of Additional Information is
available without charge upon written request to the Trust at 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173, or by calling (800) 347-4246. The SEC
maintains a Web site at http://www.sec.gov that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. Additional information about the Fund may also
be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM INTERNATIONAL GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 5
Investment Objective and Policies......................................................... 6
Risk Factors.............................................................................. 9
Management................................................................................ 12
Other Information......................................................................... 14
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C>
The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of issuers
domiciled in its Primary Investment Area (as defined herein).
Investment Managers: The Fund is managed by AIM Advisors, Inc. ("AIM") and is sub-
advised by INVESCO (NY), Inc. (the "Sub-adviser"). AIM and the
Sub-adviser and their worldwide asset management affiliates
provide investment management and/or administrative services to
institutional, corporate and individual clients around the world.
AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries
are an independent investment management group that has a
significant presence in the institutional and retail segment of
the investment management industry in North America and Europe,
and a growing presence in Asia. AIM was organized in 1976 and,
together with its Subsidiaries, currently advises approximately
90 investment company portfolios.
Purchasing Shares: Advisor Class shares are offered through this Prospectus to (a)
trustees or other fiduciaries purchasing shares for employee
benefit plans which are sponsored by organizations which have at
least 1,000 employees; (b) any account with assets of at least
$10,000 if (i) a financial planner, trust company, bank trust
department or registered investment adviser has investment
discretion over such account, and (ii) the account holder pays
such person as compensation for its advice and other services an
annual fee of at least 0.50% on the assets in the account; (c)
any account with assets of a least $10,000 if (i) such account is
established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least
0.50% on the assets in the account; (d) accounts advised by the
Sub-adviser or one of the companies formerly affiliated with the
Asset Management Division of Liechtenstein Global Trust AG,
</TABLE>
Prospectus Page 2
<PAGE>
AIM INTERNATIONAL GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
provided such accounts were invested in Advisor Class shares of
any of the funds in The AIM Family of Funds on May 29, 1998; and
(e) any of the companies affiliated with AMVESCAP PLC. Pursuant
to a separate prospectus, the Fund also offers Class A and Class
B shares, which represent interests in the Fund. The Class A and
Class B shares have different distribution arrangements.
Initial investments in Advisor Class shares must be at least $500
and additional investments must be at least $50. The distributor
of the Advisor Class shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How
to Purchase Shares."
Exchange Privilege: The Fund is among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds"). Advisor
Class shares of the Fund may be exchanged for Advisor Class
shares of certain funds in The AIM Family of Funds in the manner
and subject to the policies and charges set forth herein. See
"Exchange Privilege."
Redeeming Shares: Advisor Class shareholders of the Fund may redeem all or a
portion of their shares at net asset value on any business day.
See "How to Redeem Shares."
Distributions: The Fund currently declares and pays dividends from net
investment income, if any, on an annual basis. The Fund makes
distributions of realized capital gains, if any, on an annual
basis. Dividends and distributions of the Fund may be reinvested
at net asset value without payment of a sales charge in the
Fund's shares or may be invested in shares of the other funds in
The AIM Family of Funds. See "Dividends, Distributions and Tax
Matters."
Risk Factors: There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting
fluctuations in the market value of its securities.
The Fund invests primarily in foreign securities. Investments in
foreign securities involve risks relating to political and
economic developments abroad and the differences between the
regulations to which U.S. and foreign issuers are subject.
Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency
exchange rates also may affect the Fund's net asset value,
earnings and gains and losses realized on sales of securities.
The Fund may engage in certain foreign currency, options and
futures transactions to attempt to hedge against the overall
level of investment or currency risk associated with its present
or planned investments. Such transactions involve certain risks
and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 3
<PAGE>
AIM INTERNATIONAL GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Advisor Class shares of the Fund are reflected
in the following table (1):
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION COSTS:
Maximum sales charge on
purchases (as a % of
offering price)............ None
Sales charges on reinvested
distributions to
shareholders............... None
Maximum deferred sales
charge (as a % of net asset
value at time of purchase
or sale, whichever is
less)...................... None
Redemption charges.......... None
Exchange fees............... None
ANNUAL FUND OPERATING EXPENSES
(2):
(AS A % OF AVERAGE NET
ASSETS)
Investment management and
administration fees........ .98%
12b-1 distribution and
service fees............... None
Other expenses.............. .49%
---------
Total Fund Operating
Expenses................... 1.47%
---------
---------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (3):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
ADVISOR CLASS SHARES....................................................... $15 $47 $81 $177
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
(2) Expenses are based on the Funds' fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 1.65% of the average daily net assets of the
Fund's Advisor Class shares. "Other expenses" include custody, transfer
agent, legal, audit and other operating expenses. See "Management" herein
and the Statement of Additional Information for more information. Investors
purchasing Advisor Class shares through financial planners, trust companies,
bank trust departments or registered investment advisers, or under a "wrap
fee" program, will be subject to additional fees charged by such entities or
by the sponsors of such programs. Where any account advised by one of the
companies affiliated with AMVESCAP PLC invests in Advisor Class shares of a
Fund, such account shall not be subject to duplicative advisory fees.
(3) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT
EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the assumption
in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 4
<PAGE>
AIM INTERNATIONAL GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information.
AIM INTERNATIONAL GROWTH FUND
(FORMERLY GT GLOBAL INTERNATIONAL GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 5
<PAGE>
AIM INTERNATIONAL GROWTH FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The Fund seeks long-term growth of capital. The Fund seeks its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of issuers domiciled in its Primary Investment Area, as
described below. Equity securities in which the Fund may invest include common
stocks, preferred stocks, convertible debt securities and warrants to acquire
such securities. The Fund's Primary Investment Area includes the following
countries: Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile,
Colombia, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India,
Indonesia, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, the
Netherlands, New Zealand, Norway, Pakistan, Peru, the Philippines, Portugal,
Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan,
Thailand, Turkey, the United Kingdom and Venezuela but not the United States.
There can be no assurance that the Fund will achieve its investment objective.
Because the development of the world's economies and stock markets is rapidly
evolving, from time to time the Board of Trustees may add or delete countries
from the Fund's Primary Investment Area.
The Fund is intended for investors seeking to complement their U.S. equity
investments with a professionally managed non-U.S. portfolio. The Fund may
invest up to 35% of its total assets in the equity securities of issuers
domiciled outside of its Primary Investment Area. Such investments may include:
(a) securities of issuers in countries that are not located in the Primary
Investment Area but are linked by tradition, economic markets, cultural
similarities or geography to the countries in such Primary Investment Area; and
(b) securities of issuers located elsewhere in the world that have operations in
the Primary Investment Area or that stand to benefit from political and economic
events in the Primary Investment Area.
Under normal circumstances, the assets of the Fund are invested in the equity
securities of issuers domiciled in at least three different countries.
The Fund may invest up to 35% of its total assets in debt securities, including
U.S. and foreign government securities and corporate debt securities, Samurai
and Yankee bonds, Eurobonds and Depository Receipts. The issuers of such debt
securities may or may not be domiciled in the primary Investment Area of the
Fund. The Fund will limit its purchases of debt securities to investment grade
obligations. "Investment grade" debt refers to those securities rated within one
of the four highest ratings categories by Moody's Investors Service, Inc.
("Moody's") or by Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. ("S&P"), or, if not similarly rated by any other nationally recognized
statistical rating organization ("NRSRO"), deemed by the Sub-adviser to be of
equivalent quality. Debt rated Baa by Moody's, which is the lowest category of
investment grade debt, is considered by Moody's to have speculative
characteristics. See the Statement of Additional Information for a description
of Moody's and S&P ratings.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Fund, the Sub-adviser seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth rates. The Sub-adviser further
attempts to identify those companies in such countries and industries that are
best positioned and managed to take advantage of these economic and political
factors. The Sub-adviser intends to invest in such markets only after balancing
the potential for growth of selected companies in each market relative to the
risks of investing in each such country. Among the factors to be considered are
that several of the markets are so-called developing countries, and their
economies and markets are less developed and more prone to uncertainty,
instability and risk than those of the other markets in which the Fund invests.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
Prospectus Page 6
<PAGE>
AIM INTERNATIONAL GROWTH FUND
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
currency units are evaluated on the strength of the particular currency against
the U.S. dollar as well as on the current and expected levels of interest rates
in the country or countries. In addition to the foregoing, the Fund may seek to
take advantage of differences in relative values of fixed income securities
among various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency units
such as Euros) and/or high quality debt securities or money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, most or all investments of the Fund may be made in
the United States and denominated in U.S. dollars. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units such as Euros) and may invest
in high quality foreign or domestic money market instruments. For a description
of money market instruments, see "Temporary Defensive Strategies" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Fund may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Fund's borrowings
Prospectus Page 7
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AIM INTERNATIONAL GROWTH FUND
exceed 5% of its total assets. Any borrowing by the Fund may cause greater
fluctuation in the value of its shares than would be the case if the Fund did
not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is made. While a loan is outstanding, the borrower must maintain with the
Fund's custodian collateral consisting of cash, U.S. government securities or
certain irrevocable letters of credit equal to at least the value of the
borrowed securities, plus any accrued interest or such other collateral as
permitted by the Fund's investment program and regulatory agencies, and as
approved by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Forward Currency Contracts" herein and "Options, Futures and Currency
Strategies" in the Statement of Additional Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Prospectus Page 8
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AIM INTERNATIONAL GROWTH FUND
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Fund also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
AMERICAN DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in U.S. securities markets. See "Investment
Objectives and Policies -- Depository Receipts" in the Statement of Additional
Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Trust's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
FOREIGN INVESTING. The Fund invests primarily in foreign securities. Investing
in foreign securities entails certain risks. The securities of non-U.S. issuers
generally will not be registered with, nor will the issuers thereof be subject
to, the reporting requirements of the SEC. Accordingly, there may be less
publicly available information about foreign securities and issuers than is
available about domestic securities and issuers. Foreign companies generally are
not subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
Securities of some foreign companies are less liquid and their prices may be
more volatile than securities of comparable domestic companies. In addition,
certain costs attributable to foreign investing, such as custody charges, are
higher than those attributable to domestic investing. The Fund's interest and
dividends from foreign issuers may be subject to non-U.S. withholding taxes,
thereby reducing its net investment income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the repatriation of
Prospectus Page 9
<PAGE>
AIM INTERNATIONAL GROWTH FUND
assets of the Fund, political or social instability, or diplomatic developments
that could affect their investments in those countries. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, rate of
savings and capital reinvestment, resource self-sufficiency and balance of
payments positions.
Because the Fund may invest substantially in securities denominated in
currencies other than the U.S. dollar, and because it may hold foreign
currencies, it will be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between such currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Fund's shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund. Currencies generally are
evaluated on the basis of fundamental economic criteria (e.g., relative
inflation and interest rate levels and trends, growth rate forecasts, balance of
payments status and economic policies) as well as technical and political data.
The exchange rates between the U.S. dollar and other currencies are determined
by supply and demand in the currency exchange markets, the international balance
of payments, governmental intervention, speculation and other economic and
political conditions. If the currency in which a security is denominated
appreciates against the U.S. dollar, the dollar value of the security will
increase. Conversely, a decline in the exchange rate of the currency would
adversely affect the value of the security expressed in U.S. dollars.
INVESTING IN EMERGING MARKETS. Because of the special risks associated with
investing in emerging markets, an investment in the Fund, should be considered
speculative. Investors are strongly advised to consider carefully the special
risks involved in emerging markets, which are in addition to the usual risks of
investing in developed foreign markets around the world.
Investing in emerging markets involves risks relating to potential political and
economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation in any
emerging market, the Fund could lose its entire investment in that market.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
Economies in emerging markets generally are dependent heavily upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by the countries
with which they trade. These economies also have been and may continue to be
affected adversely by economic conditions in the countries in which they trade.
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
In addition, brokerage commissions, custodial services and other costs relating
to investment in foreign markets generally are more expensive than in the United
States, particularly with respect to emerging markets. Such markets have
different settlement and clearance procedures. In certain markets there have
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the Fund to make intended securities purchases due to settlement
problems could cause the Fund to forego attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, in possible liability to the purchaser.
In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occurred in certain countries.
Prospectus Page 10
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AIM INTERNATIONAL GROWTH FUND
The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Fund's portfolio securities in such
markets may not be readily available. Section 22(e) of the 1940 Act permits a
registered investment company to suspend redemption of its shares for any period
during which an emergency exists, as determined by the SEC. Accordingly, when
the Fund believes that appropriate circumstances warrant, it will promptly apply
to the SEC for a determination that an emergency exists within the meaning of
Section 22(e). During the period commencing from the Fund's identification of
such conditions until the date of SEC action, the portfolio securities of the
Fund in the affected markets will be valued at fair value as determined in good
faith by or under the direction of the Trust's Board of Trustees.
PACIFIC REGION COUNTRIES. The Fund may invest significantly in equity securities
of issuers located in Pacific region countries. Certain of the risks associated
with international investments are heightened for investments in Pacific region
countries. For example, some of the currencies of Pacific region countries have
experienced steady devaluations relative to the U.S. dollar, and major
adjustments have been made periodically in certain such currencies. Moreover,
recent currency devaluations in some Pacific region countries have resulted in
high interest rate levels and sharp reductions in economic activity and have
diminished prospects for short-term growth in corporate earnings. Certain
countries, such as India, face serious exchange constraints. Jurisdictional
disputes also exist between South Korea and North Korea.
In addition, Hong Kong reverted to Chinese administration on July 1, 1997. The
long-term effects of this reversion are not known at this time. However, the
Fund's investments in Hong Kong may now be subject to the same or similar risks
as any investment in China. Investments in Hong Kong may be subject to
expropriation, nationalization or confiscation, in which case the Fund could
lose its entire investment in Hong Kong, if any. In addition, the reversion of
Hong Kong also presents a risk that the Hong Kong dollar will be devalued and a
risk of possible loss of investor confidence in Hong Kong's currency, stock
market and economy.
OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACTS. Although the Fund is authorized
to enter into options, futures and forward currency transactions, the Fund might
not enter into any such transactions. Options, futures and foreign currency
transactions involve certain risks, which include: (1) dependence on the
Sub-adviser's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts or options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
Prospectus Page 11
<PAGE>
AIM INTERNATIONAL GROWTH FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund, including
the investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund are delegated to the officers of the Trust, subject
always to the investment objective and policies of the Fund and to the general
supervision of the Trust's Board. See "Trustees and Executive Officers" in the
Statement of Additional Information for information on the Trustees of the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million and .90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 1.65%
of the average daily net assets of the Fund's Advisor Class shares.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement, dated as of May 29, 1998 (the "Advisory Agreement").
AIM was organized in 1976 and, together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. The Sub-adviser, 50 California Street, 27th
Floor, San Francisco, California 94111, and 1166 Avenue of the Americas, New
York, New York 10036, serves as the sub-adviser to the Fund pursuant to an
investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
Prospectus Page 12
<PAGE>
AIM INTERNATIONAL GROWTH FUND
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Fund, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professionals primarily responsible for the portfolio management
of the Fund are as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Roger Yates Portfolio Manager since Global Chief Investment Officer for the Sub-adviser and INVESCO GT
London 1996 Asset Management PLC (London) ("GT Asset Management"), an affiliate
of the Sub-adviser, since October 1997. International Chief
Investment Officer for the Sub-adviser and GT Asset Management from
September 1996 to October 1997. Chief Investment Officer and
Portfolio Manager for Europe and the United Kingdom for the
Sub-adviser and GT Asset Management from 1994 to September 1996.
Investment Manager for Morgan Grenfell Asset Management from 1988 to
1994.
Michael Lindsell Portfolio Manager since Head of Investment Strategy for Global Equities for the Sub-adviser
London 1992 since 1996. Chief Investment Officer for Japan for INVESCO GT Asset
Management Asia Ltd. (Hong Kong) and Portfolio Manager for the
Sub-adviser from 1992 to 1996. Director of Warburg Asset Management
(Tokyo) prior thereto.
</TABLE>
------------------------
In placing orders for the Fund's portfolio securities transactions, the
Sub-adviser seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-adviser may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions for the Fund may
be executed through affiliates of AIM or the Sub-adviser. High portfolio
turnover (over 100%) involves correspondingly greater brokerage commissions and
other transaction costs that the Fund will bear directly and could result in the
realization of net capital gains that would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 (the "Distribution Agreement"), with AIM Distributors, a registered
broker-dealer and a wholly owned subsidiary of AIM, to act as the distributor of
the Advisor Class shares of the Fund. Certain Trustees and officers of the Trust
are affiliated with AIM Distributors.
The Distribution Agreement provides AIM Distributors with the exclusive right to
distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
Prospectus Page 13
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AIM INTERNATIONAL GROWTH FUND
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of "G.T. Global Growth Series," a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series or portfolios
of the Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 14
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several
of which offer Advisor Class shares. Only Advisor Class shares are offered
through this Prospectus. Advisor Class shares are available from the following
funds (collectively, the "Advisor Class Funds"):
<TABLE>
<S> <C>
AIM AMERICA VALUE FUND AIM GLOBAL RESOURCES FUND
AIM DEVELOPING MARKETS FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM DOLLAR FUND AIM GLOBAL TRENDS FUND
AIM EMERGING MARKETS FUND AIM INTERNATIONAL GROWTH FUND
AIM EUROPE GROWTH FUND AIM JAPAN GROWTH FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM LATIN AMERICAN GROWTH FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM MID CAP GROWTH FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM NEW PACIFIC GROWTH FUND
AIM GLOBAL GROWTH & INCOME FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL HEALTH CARE FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL HIGH INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through
Financial Advisers (as defined herein) who have entered into agreements with
A I M Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor
Class shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
for Advisor Class shares is $500.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Advisor Class shares of any Advisor Class Funds not named on the cover of
this Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered
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AIM INVESTOR'S GUIDE
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (800) 347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
Shareholder Name, Shareholder Account Number
OBI: (70 character limit)
</TABLE>
It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
In addition to the Advisor Class Funds, the AIM Funds consist of the
following funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND,
AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL
ESTATE FUND, AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED
FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM
CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND,
AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED
MATURITY TREASURY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM
SELECT GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND
OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
VALUE FUND and AIM WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE
GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with
the Advisor Class Funds, the "Multiple Class Funds." For information on
purchasing any of the AIM Funds and to receive a prospectus, please call (800)
347-4246. Net asset value is determined in the manner described under the
caption "Determination of Net Asset Value."
Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee"
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares.
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AIM INVESTOR'S GUIDE
Investors in wrap fee programs and advisory accounts may only purchase Advisor
Class shares through Financial Advisers who have entered into agreements with
AIM Distributors. Investors may be charged a fee by their agents or brokers for
effecting transactions in Advisor Class shares.
AIM Distributors may, from time to time, pay a bonus or other consideration
or incentive to dealers who sell a minimum dollar amount of the shares of the
AIM Funds during a specified period of time. In some instances, these incentives
may be offered only to certain dealers who have sold or may sell significant
amounts of shares. At the option of the dealer, such incentives may take the
form of payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND
uses the amortized cost method of valuing the securities it holds and rounds its
per share net asset value to the nearest whole cent, it is anticipated that the
net asset value of the shares of that fund will remain constant at $1.00 per
share. However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00
net asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of
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AIM INVESTOR'S GUIDE
redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
[SPECIAL PLANS
Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of Advisor Class Funds. The Program automatically
rebalances holdings of Advisor Class Funds to the established allocation on a
periodic basis. Under the Program, a shareholder may predesignate, on a
percentage basis, how the total value of his or her holdings in a minimum of
two, and a maximum of ten, Advisor Class Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more Advisor Class Funds in the shareholder's Personal
Portfolio for shares of the same class(es) of one or more other Advisor Class
Funds in the shareholder's Personal Portfolio. See "Exchange Privilege." If
shares of the Advisor Class Fund(s) in a shareholder's Personal Portfolio have
appreciated during a rebalancing period, the Program will result in shares of
Advisor Class Fund(s) that have appreciated most during the period being
exchanged for shares of Advisor Class Fund(s) that have appreciated least. SUCH
EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR
LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions." Participation in
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AIM INVESTOR'S GUIDE
the Program does not assure that a shareholder will profit from purchases under
the Program nor does it prevent or lessen losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular Advisor Class
Fund would be 2% or less. In predesignating percentages, shareholders must use
whole percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an
Advisor Class Fund's shares. The AIM Funds and AIM Distributors reserve the
right to modify, suspend, or terminate the Program at any time on 60 days' prior
written notice to shareholders. A request to participate in the Program must be
received in good order at least five business days prior to the next rebalancing
date. Once a shareholder establishes the Program for his or her Personal
Portfolio, a shareholder cannot cancel or change which rebalancing frequency,
which Advisor Class Funds or what allocation percentages are assigned to the
Program, unless canceled or changed in writing and received by the Transfer
Agent in good order at least five business days prior to the rebalancing date.
Certain dealers/financial institutions may charge a fee for establishing
accounts relating to the Program. Investors should contact their
dealers/financial institutions or AIM Distributors for more information.]
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the
Advisor Class Funds may participate in an exchange privilege as described below.
AIM Distributors acts as distributor for the Advisor Class Funds which represent
a range of different investment objectives and policies.
Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor Class Fund acquired through exchange
must be qualified for sale in the state in which the shareholder resides; (c)
the exchange must be made between accounts having identical registrations and
addresses; (d) the full amount of the purchase price for the shares being
exchanged must have already been received by the fund; (e) the account from
which shares have been exchanged must be coded as having a certified taxpayer
identification number on file or, in the alternative, an appropriate IRS Form
W-8 (certificate of foreign status) or Form W-9 (certifying exempt status) must
have been received by the fund; (f) newly acquired shares (through either an
initial or subsequent investment) are held in an account for at least ten
business days, and all other shares are held in an account for at least one day,
prior to the exchange; and (g) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the Advisor
Class Funds.
THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but
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AIM INVESTOR'S GUIDE
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that an Advisor Class Fund would be materially
disadvantaged by an immediate transfer of the proceeds of the exchange. If a
shareholder is exchanging into an Advisor Class Fund that declares daily
dividends ("Dividends, Distributions and Tax Matters -- Dividends and
Distributions," below), and the release of the exchange proceeds is delayed for
the foregoing five-day period, such shareholder will not begin to accrue
dividends until the sixth business day after the exchange. Advisor Class shares
purchased by check may not be exchanged until it is determined that the check
has cleared, which may take up to ten business days from the date that the check
is received. See "Terms and Conditions of Purchase of the AIM Funds -- Timing of
Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. A shareholder may give exchange information to his
Financial Adviser. If a shareholder does not wish to allow telephone exchanges
by any person in his account, he should decline that option on the account
application. AIM Distributors has made arrangements with certain dealers and
investment advisory firms to accept telephone instructions to exchange shares
between any of the Advisor Class Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the Advisor Class Funds, including the condition that any such
dealer or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/ financial institutions may charge service fees for handling
repurchase transactions.
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
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AIM INVESTOR'S GUIDE
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in his account, he should decline that option on the account application.
The telephone redemption feature can be used only if: (a) the redemption
proceeds are to be mailed to the address of record or transferred electronically
or wired to the pre-authorized bank account; (b) there has been no change of
address of record on the account within the preceding 30 days; (c) the shares to
be redeemed are not in certificate form; (d) the person requesting the
redemption can provide proper identification information, and (e) the proceeds
of the redemption do not exceed $50,000. AIM Distributors has made arrangements
with certain dealers and investment advisors to accept telephone instructions
for the redemption of shares. AIM Distributors reserves the right to impose
conditions on these dealers and investment advisors, including the condition
that they enter into agreements (which contain additional conditions with
respect to the redemption of shares) with AIM Distributors. The Transfer Agent
and AIM Distributors will not be liable for any loss, expense or cost arising
out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's taxpayer identification
number and current address, and mailings of confirmations promptly after the
transaction.
TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the
Advisor Class Funds are redeemed at their net asset value next computed after a
request for redemption in proper form (including signature guarantees and other
required documentation for written redemptions) is received by the Transfer
Agent or certain financial institutions (or their designees) who are authorized
to accept redemption orders on behalf of the AIM Funds, provided that such
orders are transmitted to the Transfer Agent prior to the time set for receipt
of such orders. Orders for the redemption of Advisor Class shares received on
any business day of an AIM Fund will be confirmed at the price determined as of
the close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the
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AIM INVESTOR'S GUIDE
proceeds are to be sent to the address of record. These requirements may be
waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each Advisor Class Fund's policy regarding the payment of dividends and
distributions is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
Dividends on Advisor Class shares of an Advisor Class Fund are expected to
be higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
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AIM INVESTOR'S GUIDE
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares. With respect to tax-exempt shareholders, dividends and distributions
from the AIM Funds are not subject to federal income taxation to the extent
permitted under the applicable tax exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
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<PAGE>
AIM INVESTOR'S GUIDE
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM MID CAP GROWTH
FUND, AIM SMALL CAP EQUITY FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each Advisor Class Fund's transfer
agent and dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If
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AIM INVESTOR'S GUIDE
several members of a household own shares of the same fund, only one annual or
semi-annual report will be mailed to that address. To receive additional copies,
please call (800) 347-4246, or write to A I M Distributors, Inc., P.O. Box 4739,
Houston, Texas 77210-4739. A Statement of Additional Information has been filed
with the SEC and is available upon request and without charge, by writing or
calling AIM Distributors. The SEC maintains a Web site at http://www.sec.gov
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding the Fund. This Prospectus omits
certain information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from this
Prospectus, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
A-12
<PAGE>
AIM INTERNATIONAL GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM JAPAN GROWTH FUND
ADVISOR CLASS
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM Japan Growth Fund (the "Fund"),
which is one of several series investment portfolios comprising AIM Growth
Series (the "Trust"), an open-end, series, management investment company. The
Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of issuers domiciled in Japan.
The Fund is managed by A I M Advisors, Inc. ("AIM") and is sub-advised and
sub-administered by INVESCO (NY), Inc. (the "Sub-adviser"). AIM and the
Sub-adviser and their worldwide asset management affiliates provide investment
management and/or administrative services to institutional, corporate and
individual clients around the world. AIM and the Sub-adviser are both indirect
wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are
an independent investment management group that has a significant presence in
the institutional and retail segment of the investment management industry in
North America and Europe, and a growing presence in Asia.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM JAPAN GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 5
Investment Objective and Policies......................................................... 6
Risk Factors.............................................................................. 9
Management................................................................................ 11
Other Information......................................................................... 12
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of issuers domiciled in Japan.
Investment Managers: The Fund is managed by AIM Advisors, Inc. ("AIM") and is sub-advised by INVESCO (NY), Inc. (the
"Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate and individual
clients around the world. AIM and the Sub-adviser are both indirect wholly owned subsidiaries of
AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment management group that
has a significant presence in the institutional and retail segment of the investment management
industry in North America and Europe, and a growing presence in Asia. AIM was organized in 1976 and,
together with its subsidiaries, currently advises approximately 90 investment company portfolios.
Purchasing Shares: Advisor Class shares are offered through this Prospectus to (a) trustees or other fiduciaries
purchasing shares for employee benefit plans which are sponsored by organizations which have at least
1,000 employees; (b) any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment adviser has investment discretion over such
account, and (ii) the account holder pays such person as compensation for its advice and other
services an annual fee of at least 0.50% on the assets in the account; (c) any account with assets of
at least $10,000 if (i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the assets in the account;
(d) accounts advised by the Sub-adviser or one of the companies formerly affiliated with the Asset
Management Division of Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998; and (e) any of the
companies affiliated with AMVESCAP PLC.
</TABLE>
Prospectus Page 2
<PAGE>
AIM JAPAN GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Pursuant to a separate prospectus, the Fund also offers Class A and Class B shares, which represent
interests in the Fund. The Class A and Class B shares have different distribution arrangements.
Initial investments in Advisor Class shares must be at least $500 and additional investments must be
at least $50. The distributor of the Advisor Class shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase Shares."
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Advisor Class shares of the Fund may be exchanged for Advisor Class shares of certain
funds in The AIM Family of Funds in the manner and subject to the policies and charges set forth
herein. See "Exchange Privilege."
Redeeming Shares: Advisor Class shareholders of the Fund may redeem all or a portion of their shares at net asset value
on any business day. See "How to Redeem Shares."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
Reinvestment: Dividends and other distributions may be reinvested automatically in Advisor Class shares or in
Advisor Class shares of other AIM/GT Funds without a sales charge.
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
The Fund invests primarily in foreign securities. Investments in foreign securities involve risks
relating to political and economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates also may affect the
Fund's net asset value, earnings and gains and losses realized on sales of securities.
The Fund invests a significant portion of its assets in issuers in a particular country. As a result,
the Fund may be subject to greater risks and may experience greater volatility than a fund that is
more broadly diversified geographically.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 3
<PAGE>
AIM JAPAN GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Advisor Class shares of the Fund are reflected
in the following table (1):
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION COSTS:
Maximum sales charge on purchases (as a % of offering price)............................................. None
Sales charges on reinvested distributions to shareholders................................................ None
Maximum deferred sales charge (as a % of net asset value at time of purchase or sale, whichever is
less)................................................................................................... None
Redemption charges....................................................................................... None
Exchange fees............................................................................................ None
ANNUAL FUND OPERATING EXPENSES (2):
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees............................................................ .98%
12b-1 distribution and service fees...................................................................... None
Other expenses (after reimbursements).................................................................... .67%
-----
Total Fund Operating Expenses............................................................................ 1.65%
-----
-----
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (3):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Advisor Class shares....................................................... $17 $52 $90 $197
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
(2) Expenses are based on the Fund's fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's expenses to the
annual rate of 1.65% of the average daily net assets of the Fund's Advisor
Class shares to the annual rate of 1.40% of the average daily net assets of
the Fund's Advisor Class shares. "Other expenses" include custody, transfer
agent, legal, audit and other operating expenses. See "Management" herein
and the Statement of Additional Information for more information. Without
reimbursements, "Other expenses" and "Total Fund Operating Expenses" would
have been 0.73% and 1.71%, respectively, for the Advisor Class shares of the
Fund. Investors purchasing Advisor Class shares through financial planners,
trust companies, bank trust departments or registered investment advisers,
or under a "wrap fee" program, will be subject to additional fees charged by
such entities or by the sponsors of such programs. Where any account advised
by one of the companies affiliated with AMVESCAP PLC invests in Advisor
Class shares of the Fund, such account shall not be subject to duplicative
advisory fees.
(3) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND INDIRECT
EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the assumption
in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 4
<PAGE>
AIM JAPAN GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information.
The financial statements and notes for [ ] have been audited by
[ ], independent accountants, whose reports thereon appear in the
Statement of Additional Information.
Information presented below for the periods ended December 31, 1991 and prior
thereto was audited by other auditors, which served as the Funds' independent
certified public accountants for those periods.
AIM JAPAN GROWTH FUND
(FORMERLY GT GLOBAL JAPAN GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 5
<PAGE>
AIM JAPAN GROWTH FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The Fund seeks long-term growth of capital. The Fund seeks its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of issuers domiciled in Japan. Equity securities in which the
Fund may invest include common stocks, preferred stocks, convertible debt
securities and warrants to acquire such securities. There can be no assurance
that the Fund will achieve its investment objective.
The Fund is designed for investors wishing to concentrate their investment in
the Japanese market but still desiring the professional management, liquidity
and diversification afforded by a mutual fund.
The Japan Fund may invest up to 35% of its total assets in the equity securities
of issuers domiciled outside of Japan. Such investments may include: (a)
securities of issuers in countries that are not located in Japan but are linked
by tradition, economic markets, cultural similarities or geography to Japan; and
(b) securities of issuers located elsewhere in the world that have operations in
Japan or that stand to benefit from political and economic events in Japan.
The Fund may invest up to 35% of its total assets in debt securities, including
U.S. and foreign government securities and corporate debt securities, Samurai
and Yankee bonds, Eurobonds and Depository Receipts. The issuers of such debt
securities may or may not be domiciled in Japan. The Fund will limit its
purchases of debt securities to investment grade obligations. "Investment grade"
debt refers to those securities rated within one of the four highest ratings
categories by Moody's Investors Service, Inc. ("Moody's") or by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or, if not
similarly rated by any other nationally recognized statistical rating
organization ("NRSRO"), deemed by the Sub-adviser to be of equivalent quality.
Debt rated Baa by Moody's, which is the lowest category of investment grade
debt, is considered by Moody's to have speculative characteristics. See the
Statement of Additional Information for a description of Moody's and S&P
ratings.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Fund, the Sub-adviser seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth rates. The Sub-adviser further
attempts to identify those companies in such countries and industries that are
best positioned and managed to take advantage of these economic and political
factors. The Sub-adviser intends to invest in such markets only after balancing
the potential for growth of selected companies in each market relative to the
risks of investing in each such country. Among the factors to be considered are
that several of the markets are so-called developing countries, and their
economies and markets are less developed and more prone to uncertainty,
instability and risk than those of the other markets in which the Fund invests.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in Japan if it is (a) organized under the laws of, or has its principal office
in Japan or (b) normally derives 50% or more of its total revenues from business
in Japan, provided that, in the Sub-adviser's view, the value of such issuer's
securities tends to reflect Japan's development to a greater extent than
developments elsewhere. However, these are not absolute requirements, and
certain companies incorporated in Japan and considered by the Sub-adviser to be
located in Japan may have substantial foreign operations or subsidiaries and/or
export sales exceeding in size the assets or sales in Japan.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies
Prospectus Page 6
<PAGE>
AIM JAPAN GROWTH FUND
other than the U.S. dollar or in multinational currency units are evaluated on
the strength of the particular currency against the U.S. dollar as well as on
the current and expected levels of interest rates in the country or countries.
In addition to the foregoing, the Fund may seek to take advantage of differences
in relative values of fixed income securities among various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency units
such as Euros) and/or high quality debt securities or money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, most or all investments of the Fund may be made in
the United States and denominated in U.S. dollars. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units such as Euros) and may invest
in high quality foreign or domestic money market instruments. For a description
of money market instruments, see "Temporary Defensive Strategies" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Fund may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Fund's borrowings exceed 5% of its
total assets. Any borrowing by the Fund may cause greater fluctuation in the
value of its shares than would be the case if the Fund did not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is
Prospectus Page 7
<PAGE>
AIM JAPAN GROWTH FUND
made. While a loan is outstanding, the borrower must maintain with the Fund's
custodian collateral consisting of cash, U.S. government securities or certain
irrevocable letters of credit equal to at least the value of the borrowed
securities, plus any accrued interest or such other collateral as permitted by
the Fund's investment program and regulatory agencies, and as approved by the
Board. The risks in lending portfolio securities, as with other extensions of
secured credit, consist of possible delay in receiving additional collateral or
in recovery of the securities and possible loss of rights in the collateral
should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Forward Currency Strategies" herein and the Statement of Additional
Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Funds also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
AMERICAN DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in
Prospectus Page 8
<PAGE>
AIM JAPAN GROWTH FUND
U.S. securities markets. See "Investment Objectives and Policies -- Depository
Receipts" in the Statement of Additional Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Trust's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
FOREIGN INVESTING. The Fund invests primarily in foreign securities. Investing
in foreign securities entails certain risks. The securities of non-U.S. issuers
generally will not be registered with, nor will the issuers thereof be subject
to, the reporting requirements of the SEC. Accordingly, there may be less
publicly available information about foreign securities and issuers than is
available about domestic securities and issuers. Foreign companies generally are
not subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
Securities of some foreign companies are less liquid and their prices may be
more volatile than securities of comparable domestic companies. In addition,
certain costs attributable to foreign investing, such as custody charges, are
higher than those attributable to domestic investing. The Fund's interest and
dividends from foreign issuers may be subject to non-U.S. withholding taxes,
thereby reducing its net investment income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the repatriation of
assets of the Fund, political or social instability, or diplomatic developments
that could affect their investments in those countries. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, rate of
savings and capital reinvestment, resource self-sufficiency and balance of
payments positions.
Because the Fund may invest substantially in securities denominated in
currencies other than the U.S. dollar, and because it may hold foreign
currencies, it will be affected favorably or unfavorably by exchange control
regulations or changes in the exchange rates between such currencies and the
U.S. dollar. Changes in currency exchange rates will influence the value of the
Fund's shares, and also may affect the value of dividends and interest earned by
the Fund and gains and losses realized by the Fund. Currencies generally are
evaluated on the basis of fundamental economic criteria (e.g., relative
inflation and interest rate levels and trends, growth rate forecasts, balance of
payments status and economic policies) as well as technical and
Prospectus Page 9
<PAGE>
AIM JAPAN GROWTH FUND
political data. The exchange rates between the U.S. dollar and other currencies
are determined by supply and demand in the currency exchange markets, the
international balance of payments, governmental intervention, speculation and
other economic and political conditions. If the currency in which a security is
denominated appreciates against the U.S. dollar, the dollar value of the
security will increase. Conversely, a decline in the exchange rate of the
currency would adversely affect the value of the security expressed in U.S.
dollars.
CONCENTRATION. The Fund invests a significant portion of its assets in a
particular country. As a result, the Fund may be subject to greater risks and
may experience greater volatility than a fund that is more broadly diversified
geographically.
JAPAN. The Fund invests primarily in equity securities of issuers domiciled in
Japan. Accordingly, the Fund's performance will be closely tied to economic and
political conditions in Japan, and its performance is expected to be more
volatile than more geographically diversified funds. Changes in regulatory, tax
or economic policy in Japan could significantly affect the Japanese securities
markets and therefore the Fund's performance.
Japan's economic growth has declined significantly since 1990. The general
government position has deteriorated as result of weakening economic growth and
stimulative measures taken to support economic activity and to restore financial
stability. Although the decline in interest rates and fiscal stimulation
packages have helped to contain recessionary forces, uncertainties remain. Japan
is also heavily dependent upon international trade, so its economy is especially
sensitive to trade barriers and disputes.
The common stocks of many Japanese companies trade at high price-earnings
ratios, which may be attributable in part to inefficiencies associated with
Japanese corporate operations. Differences in accounting methods make it
difficult to compare the earnings of Japanese companies with those of companies
in other countries, especially the United States. In general, however, reported
net income in Japan is understated relative to U.S. accounting standards and
this is one reason why price-earnings ratios of the stocks of Japanese companies
have tended historically to be higher than those for U.S. stocks. In addition,
Japanese companies have tended to have higher growth rates than U.S. companies,
and Japanese interest rates have generally been lower than in the United States,
both of which factors tend to result in lower discount rates and higher
price-earnings ratios in Japan than in the United States.
The Japanese securities markets are less regulated than those in the United
States. Evidence has emerged from time to time of distortion of market prices to
serve political or other purposes. Shareholders' rights are also not always
equally enforced.
In addition, Japan's banking industry is undergoing problems related to bad
loans and declining values in real estate.
OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACTS. Although the Fund is authorized
to enter into options, futures and forward currency transactions it might not
enter into any such transactions. Options, futures and foreign currency
transactions involve certain risks, which include: (1) dependence on the
Sub-adviser's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts or options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
Prospectus Page 10
<PAGE>
AIM JAPAN GROWTH FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund, including
the investment management and administrative services agreement with AIM, the
investment sub-advisory and sub-administration agreement between AIM and the
Sub-adviser, the agreements with AIM Distributors regarding distribution of the
Fund's shares, the custody agreement and the transfer agency agreement. The
day-to-day operations of the Fund are delegated to the officers of the Trust,
subject always to the investment objective and policies of the Fund and to the
general supervision of the Trust's Board. See "Trustees and Executive Officers"
in the Statement of Additional Information for information on the Trustees of
the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million and .90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund and the
Portfolio are higher than those paid by most mutual funds. The Fund and
Portfolio pay all expenses not assumed by AIM, the Sub-adviser, AIM Distributors
or other agents. The Fund pays all expenses not assumed by AIM, the Sub-adviser,
AIM Distributors or other agents. AIM has undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the maximum annual rate of 1.65% of the average daily net assets of
the Fund's Advisor Class shares.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administrative services agreement, dated as of May 29, 1998 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises approximately 90 investment company portfolios encompassing a
broad range of investment objectives. The Sub-adviser, 50 California Street,
27th Floor, San Francisco, California 94111, and 1166 Avenue of the Americas,
New York, New York 10036, serves as the sub-adviser to the Fund pursuant to an
investment sub-advisory and sub-administrative agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment
Prospectus Page 11
<PAGE>
AIM JAPAN GROWTH FUND
management and/or administrative services to institutional, corporate and
individual clients around the world. AIM and the Sub-adviser are both indirect
wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are
an independent investment management group that has a significant presence in
the institutional and retail segment of the investment management industry in
North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Fund, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Andrew Callender Portfolio Manager since Head of Investments for Japan and Portfolio Manager for the
Tokyo 1997 Sub-adviser and INVESCO GT Asset Management Japan Ltd. (Tokyo), an
affiliate of the Sub-adviser since 1997. Portfolio Manager for
INVESCO GT Asset Management Japan Ltd. from 1990 to 1997.
</TABLE>
------------------------
In placing orders for the Fund's portfolio securities transactions, the
Sub-adviser seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-adviser may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions for the Fund may
be executed through affiliates of AIM or the Sub-adviser. High portfolio
turnover (over 100%) involves correspondingly greater brokerage commissions and
other transaction costs that the Fund will bear directly and could result in the
realization of net capital gains that would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 (the "Distribution Agreement"), with AIM Distributors, a registered
broker-dealer and a wholly owned subsidiary of AIM, to act as the distributor of
Advisor Class shares of the Fund. Certain Trustees and officers of the Trust are
affiliated with AIM Distributors.
The Distribution Agreement provides AIM Distributors with the exclusive right to
distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Company acquired the assets of and assumed
the liabilities of "G.T. Global Growth Series", a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series or portfolios
of the Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects
Prospectus Page 12
<PAGE>
AIM JAPAN GROWTH FUND
the specific interest of the Fund only, such as approval of the Fund's
investment management arrangements. In addition, shares of a particular class of
the Fund may vote on matters affecting only that class. The shares of the Fund
and of the Trust's other series will be voted in the aggregate on other matters,
such as the election of Trustees and ratification of the selection of the
Trust's independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 13
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several
of which offer Advisor Class shares. Only Advisor Class shares are offered
through this Prospectus. Advisor Class shares are available from the following
funds (collectively, the "Advisor Class Funds"):
<TABLE>
<S> <C>
AIM AMERICA VALUE FUND AIM GLOBAL RESOURCES FUND
AIM DEVELOPING MARKETS FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM DOLLAR FUND AIM GLOBAL TRENDS FUND
AIM EMERGING MARKETS FUND AIM INTERNATIONAL GROWTH FUND
AIM EUROPE GROWTH FUND AIM JAPAN GROWTH FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM LATIN AMERICAN GROWTH FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM MID CAP GROWTH FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM NEW PACIFIC GROWTH FUND
AIM GLOBAL GROWTH & INCOME FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL HEALTH CARE FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL HIGH INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through
Financial Advisers (as defined herein) who have entered into agreements with
A I M Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor
Class shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
for Advisor Class shares is $500.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Advisor Class shares of any Advisor Class Funds not named on the cover of
this Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered
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AIM INVESTOR'S GUIDE
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (800) 347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
Shareholder Name, Shareholder Account Number
OBI: (70 character limit)
</TABLE>
It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
In addition to the Advisor Class Funds, the AIM Funds consist of the
following funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND,
AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL
ESTATE FUND, AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED
FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM
CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND,
AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED
MATURITY TREASURY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM
SELECT GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND
OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
VALUE FUND and AIM WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE
GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with
the Advisor Class Funds, the "Multiple Class Funds." For information on
purchasing any of the AIM Funds and to receive a prospectus, please call (800)
347-4246. Net asset value is determined in the manner described under the
caption "Determination of Net Asset Value."
Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee"
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares.
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AIM INVESTOR'S GUIDE
Investors in wrap fee programs and advisory accounts may only purchase Advisor
Class shares through Financial Advisers who have entered into agreements with
AIM Distributors. Investors may be charged a fee by their agents or brokers for
effecting transactions in Advisor Class shares.
AIM Distributors may, from time to time, pay a bonus or other consideration
or incentive to dealers who sell a minimum dollar amount of the shares of the
AIM Funds during a specified period of time. In some instances, these incentives
may be offered only to certain dealers who have sold or may sell significant
amounts of shares. At the option of the dealer, such incentives may take the
form of payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND
uses the amortized cost method of valuing the securities it holds and rounds its
per share net asset value to the nearest whole cent, it is anticipated that the
net asset value of the shares of that fund will remain constant at $1.00 per
share. However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00
net asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of
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<PAGE>
AIM INVESTOR'S GUIDE
redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
[SPECIAL PLANS
Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of Advisor Class Funds. The Program automatically
rebalances holdings of Advisor Class Funds to the established allocation on a
periodic basis. Under the Program, a shareholder may predesignate, on a
percentage basis, how the total value of his or her holdings in a minimum of
two, and a maximum of ten, Advisor Class Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more Advisor Class Funds in the shareholder's Personal
Portfolio for shares of the same class(es) of one or more other Advisor Class
Funds in the shareholder's Personal Portfolio. See "Exchange Privilege." If
shares of the Advisor Class Fund(s) in a shareholder's Personal Portfolio have
appreciated during a rebalancing period, the Program will result in shares of
Advisor Class Fund(s) that have appreciated most during the period being
exchanged for shares of Advisor Class Fund(s) that have appreciated least. SUCH
EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR
LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions." Participation in
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<PAGE>
AIM INVESTOR'S GUIDE
the Program does not assure that a shareholder will profit from purchases under
the Program nor does it prevent or lessen losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular Advisor Class
Fund would be 2% or less. In predesignating percentages, shareholders must use
whole percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an
Advisor Class Fund's shares. The AIM Funds and AIM Distributors reserve the
right to modify, suspend, or terminate the Program at any time on 60 days' prior
written notice to shareholders. A request to participate in the Program must be
received in good order at least five business days prior to the next rebalancing
date. Once a shareholder establishes the Program for his or her Personal
Portfolio, a shareholder cannot cancel or change which rebalancing frequency,
which Advisor Class Funds or what allocation percentages are assigned to the
Program, unless canceled or changed in writing and received by the Transfer
Agent in good order at least five business days prior to the rebalancing date.
Certain dealers/financial institutions may charge a fee for establishing
accounts relating to the Program. Investors should contact their
dealers/financial institutions or AIM Distributors for more information.]
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the
Advisor Class Funds may participate in an exchange privilege as described below.
AIM Distributors acts as distributor for the Advisor Class Funds which represent
a range of different investment objectives and policies.
Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor Class Fund acquired through exchange
must be qualified for sale in the state in which the shareholder resides; (c)
the exchange must be made between accounts having identical registrations and
addresses; (d) the full amount of the purchase price for the shares being
exchanged must have already been received by the fund; (e) the account from
which shares have been exchanged must be coded as having a certified taxpayer
identification number on file or, in the alternative, an appropriate IRS Form
W-8 (certificate of foreign status) or Form W-9 (certifying exempt status) must
have been received by the fund; (f) newly acquired shares (through either an
initial or subsequent investment) are held in an account for at least ten
business days, and all other shares are held in an account for at least one day,
prior to the exchange; and (g) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the Advisor
Class Funds.
THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but
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AIM INVESTOR'S GUIDE
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that an Advisor Class Fund would be materially
disadvantaged by an immediate transfer of the proceeds of the exchange. If a
shareholder is exchanging into an Advisor Class Fund that declares daily
dividends ("Dividends, Distributions and Tax Matters -- Dividends and
Distributions," below), and the release of the exchange proceeds is delayed for
the foregoing five-day period, such shareholder will not begin to accrue
dividends until the sixth business day after the exchange. Advisor Class shares
purchased by check may not be exchanged until it is determined that the check
has cleared, which may take up to ten business days from the date that the check
is received. See "Terms and Conditions of Purchase of the AIM Funds -- Timing of
Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. A shareholder may give exchange information to his
Financial Adviser. If a shareholder does not wish to allow telephone exchanges
by any person in his account, he should decline that option on the account
application. AIM Distributors has made arrangements with certain dealers and
investment advisory firms to accept telephone instructions to exchange shares
between any of the Advisor Class Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the Advisor Class Funds, including the condition that any such
dealer or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/ financial institutions may charge service fees for handling
repurchase transactions.
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
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AIM INVESTOR'S GUIDE
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in his account, he should decline that option on the account application.
The telephone redemption feature can be used only if: (a) the redemption
proceeds are to be mailed to the address of record or transferred electronically
or wired to the pre-authorized bank account; (b) there has been no change of
address of record on the account within the preceding 30 days; (c) the shares to
be redeemed are not in certificate form; (d) the person requesting the
redemption can provide proper identification information, and (e) the proceeds
of the redemption do not exceed $50,000. AIM Distributors has made arrangements
with certain dealers and investment advisors to accept telephone instructions
for the redemption of shares. AIM Distributors reserves the right to impose
conditions on these dealers and investment advisors, including the condition
that they enter into agreements (which contain additional conditions with
respect to the redemption of shares) with AIM Distributors. The Transfer Agent
and AIM Distributors will not be liable for any loss, expense or cost arising
out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's taxpayer identification
number and current address, and mailings of confirmations promptly after the
transaction.
TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the
Advisor Class Funds are redeemed at their net asset value next computed after a
request for redemption in proper form (including signature guarantees and other
required documentation for written redemptions) is received by the Transfer
Agent or certain financial institutions (or their designees) who are authorized
to accept redemption orders on behalf of the AIM Funds, provided that such
orders are transmitted to the Transfer Agent prior to the time set for receipt
of such orders. Orders for the redemption of Advisor Class shares received on
any business day of an AIM Fund will be confirmed at the price determined as of
the close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the
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AIM INVESTOR'S GUIDE
proceeds are to be sent to the address of record. These requirements may be
waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each Advisor Class Fund's policy regarding the payment of dividends and
distributions is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
Dividends on Advisor Class shares of an Advisor Class Fund are expected to
be higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
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AIM INVESTOR'S GUIDE
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares. With respect to tax-exempt shareholders, dividends and distributions
from the AIM Funds are not subject to federal income taxation to the extent
permitted under the applicable tax exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
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AIM INVESTOR'S GUIDE
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM MID CAP GROWTH
FUND, AIM SMALL CAP EQUITY FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each Advisor Class Fund's transfer
agent and dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If
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AIM INVESTOR'S GUIDE
several members of a household own shares of the same fund, only one annual or
semi-annual report will be mailed to that address. To receive additional copies,
please call (800) 347-4246, or write to A I M Distributors, Inc., P.O. Box 4739,
Houston, Texas 77210-4739. A Statement of Additional Information has been filed
with the SEC and is available upon request and without charge, by writing or
calling AIM Distributors. The SEC maintains a Web site at http://www.sec.gov
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding the Fund. This Prospectus omits
certain information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from this
Prospectus, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
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<PAGE>
AIM JAPAN GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM MID CAP GROWTH FUND
ADVISOR CLASS
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM Mid Cap Growth Fund (the "Fund"),
which is one of several series investment portfolios comprising AIM Growth
Series (the "Trust"), an open-end, series, management investment company. The
Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of companies domiciled in the United
States that, at the time of purchase, have market capitalizations of $1 billion
to $5 billion ("U.S. mid cap companies").
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon request to the Trust at 11 Greenway
Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800) 347-4246. The
SEC maintains a Web site at http://www.sec.gov that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. Additional information about the Fund may also
be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM MID CAP GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 5
Investment Objective and Policies......................................................... 6
Risk Factors.............................................................................. 9
Management................................................................................ 10
Other Information......................................................................... 12
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of U.S. mid cap companies.
Investment Managers: The Fund is managed by A I M Advisors, Inc. ("AIM") and is sub-advised and sub-administered by
INVESCO (NY), Inc. (the "Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management
affiliates provide investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment
management group that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing presence in Asia. AIM was
organized in 1976 and, together with its subsidiaries, currently advises approximately 90 investment
company portfolios.
Purchasing Shares: Advisor Class shares are offered through this Prospectus to (a) trustees or other fiduciaries
purchasing shares for employee benefit plans which are sponsored by organizations which have at least
1,000 employees; (b) any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment adviser has investment discretion over such
account, and (ii) the account holder pays such person as compensation for its advice and other
services an annual fee of at least 0.50% on the assets in the account; (c) any account with assets of
a least $10,000 if (i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the assets in the account;
(d) accounts advised by the Sub-adviser or one of the companies formerly affiliated with the Asset
Management Division of Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the
</TABLE>
Prospectus Page 2
<PAGE>
AIM MID CAP GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
funds in The AIM Family of Funds on May 29, 1998; and (e) any of the companies composing or
affiliated with AMVESCAP PLC. Pursuant to a separate prospectus, the Fund also offers Class A and
Class B shares, which represent interests in the Fund. The Class A and Class B shares have different
distribution arrangements.
Initial investments in Advisor Class shares must be at least $500 and additional investments must be
at least $50. The distributor of the Advisor Class shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase Shares."
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Advisor Class shares of the Fund may be exchanged for Advisor Class shares of certain
Funds in the AIM Family of Funds in the manner and subject to the policies and charges set forth
herein. See "Exchange Privilege."
Redeeming Shares: Advisor Class shareholders of the Fund may redeem all or a portion of their shares at net asset value
on any business day. See "How to Redeem Shares."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 3
<PAGE>
AIM MID CAP GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Advisor Class shares of the Fund are reflected
in the following table (1):
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION COSTS:
<S> <C>
Maximum sales charge on purchases (as a % of
offering price)................................ None
Sales charges on reinvested distributions to
shareholders................................... None
Maximum deferred sales charges (as a % of net
asset value at time of purchase or sale,
whichever is less)............................. None
Redemption charges.............................. None
Exchange fees................................... None
ANNUAL FUND OPERATING EXPENSES (2):
(AS A % OF AVERAGE NET ASSETS)
Investment management and administration fees... .72%
12b-1 distribution and service fees............. None
Other expenses (after reimbursements)........... .41%
---------
Total Fund Operating Expenses................... 1.13%
---------
---------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (3):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Advisor Class shares....................................... $12 $36 $63 $138
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
(2) Expenses are based on the Fund's fiscal year ended December 31, 1997. "Other
expenses" include custody, transfer agent, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information. Investors purchasing Advisor Class shares
through financial planners, trust companies, bank trust departments or
registered investment advisers, or under a "wrap fee" program, will be
subject to additional fees charged by such entities or by the sponsors of
such programs. Where any account advised by one of the companies composing
or affiliated with AMVESCAP PLC invests in Advisor Class shares of the Fund,
such account shall not be subject to duplicative advisory fees.
(3) THE "HYPOTHETICAL EXAMPLE" SET FORTH ABOVE IS NOT A REPRESENTATION OF PAST
OR FUTURE EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the
assumption in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 4
<PAGE>
AIM MID CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. The financial statements and notes for
[ ] have been audited by [ ], independent accountants, whose
reports thereon appear in the Statement of Additional Information. Information
presented below for the periods ended December 31, 1991 and prior thereto was
audited by other auditors, which served as the Funds' independent certified
public accountants for those periods.
AIM MID CAP GROWTH FUND
(FORMERLY GT GLOBAL AMERICA MID CAP GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 5
<PAGE>
AIM MID CAP GROWTH FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Mid Cap Fund is long term growth of capital.
There can be no assurance that the Fund will achieve its investment objective.
The Fund seeks its investment objective by investing, under normal
circumstances, at least 65% of its total assets in equity securities of U.S. mid
cap companies. Equity securities in which the Fund may invest include common
stocks, preferred stocks, convertible debt securities and warrants to acquire
such securities. The Fund may also invest up to 35% of its total assets in the
equity securities of (a) issuers domiciled in the United States that, at the
time of purchase, have market capitalizations of less than $1 billion or greater
than $5 billion; and (b) issuers domiciled outside the United States, including
(i) issuers linked by tradition, economic markets, cultural similarities or
geography to the United States; and (ii) issuers located elsewhere in the world
that have operations in the United States or that stand to benefit from
political or economic events in the United States. In addition, the Fund may
invest up to 35% of its total assets in investment grade debt securities,
including U.S. and foreign government securities and corporate debt securities,
Samurai and Yankee bonds, Euro bonds and Depositary Receipts. The issuers of
such debt securities may or may not be domiciled in the United States.
For purposes of this Prospectus, market capitalization means the total market
value of a company's outstanding common stock. There is no necessary correlation
between market capitalization and the financial attributes (such as level of
assets, revenues or income) often used to measure a company's size.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In selecting equity securities for the Fund, the Sub-adviser uses a multi-stage
process to identify companies that possess sustainable above average growth at
an attractive offering price. The process for selecting mid cap growth stocks
consists of four components: asset allocation, industry diversification, stock
selection and quality control. The Sub-adviser tracks individual companies and
categorizes them into industry groups. Purchases and sales of individual
securities are based on the ratings established by the Sub-adviser on a weekly
basis. Stocks ranked in the top 30% are buys, and the bottom 30% are sells. The
quality control process ensures consistency with the industry and asset
allocation guidelines as well as stock guidelines. There is no assurance that
this process will produce better or more consistent results than other
investment processes.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
currency units (such as Euros) are evaluated on the strength of the particular
currency against the U.S. dollar as well as on the current and expected levels
of interest rates in the country or countries. In addition to the foregoing, the
Fund may seek to take advantage of differences in relative values of fixed
income securities among various countries.
Prospectus Page 6
<PAGE>
AIM MID CAP GROWTH FUND
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency
units) and/or high quality debt securities or money market instruments issued by
corporations or the U.S. or a foreign government. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units) and may invest in high
quality foreign or domestic money market instruments. For a description of money
market instruments, see "Temporary Defensive Strategies" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions. The Fund may
borrow up to 33 1/3% of its total assets. However, no additional investments
will be made if the Fund's borrowings exceed 5% of its total assets. Any
borrowing by the Fund may cause greater fluctuation in the value of its shares
than would be the case if the Fund did not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which the Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is made. While a loan is outstanding, the borrower must maintain with the
Fund's custodian collateral consisting of cash, U.S. government securities or
certain irrevocable letters of credit equal to at least the value of the
borrowed securities, plus any accrued interest or such other collateral as
permitted by the Fund's investment program and regulatory agencies, and as
approved by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights
Prospectus Page 7
<PAGE>
AIM MID CAP GROWTH FUND
in the collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Currency Strategies" herein and the Statement of Additional Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Fund also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign issuers in the
form of ADRs or other similar securities convertible into securities of foreign
issuers. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs are receipts
typically issued by a United States bank or trust company evidencing ownership
of the underlying securities. Generally, ADRs in registered form are designed
for use in U.S. securities markets. See "Investment Objectives and Policies --
Depository Receipts" in the Statement of Additional Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund
Prospectus Page 8
<PAGE>
AIM MID CAP GROWTH FUND
has adopted certain investment limitations that also may not be changed without
shareholder approval. A complete description of these limitations is included in
the Statement of Additional Information. Unless specifically noted, the Fund's
investment policies described in this Prospectus and in the Statement of
Additional Information are not fundamental policies and may be changed by vote
of the Company's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
CONCENTRATION. The Fund invests a significant portion of its assets in a
particular country or region of the world. As a result, the Fund may be subject
to greater risks and may experience greater volatility than a fund that is more
broadly diversified geographically.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions, it
might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-adviser's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts or options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
Prospectus Page 9
<PAGE>
AIM MID CAP GROWTH FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund, including
the investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund are delegated to the officers of the Trust, subject
always to the investment objective and policies of the Fund and to the general
supervision of the Trust's Board, See "Trustees and Executive Officers" in the
Statement of Additional Information for information on the Trustees of the
Trust.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .725% on the first $500 million, .70% on the next $500 million, .675% on the
next $500 million, and .65% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 1.40%
of the average daily net assets of the Fund's Advisor Class shares.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment advisory
agreement, dated as of May 29, 1998 (the "Advisory Agreement"). AIM was
organized in 1976 and, together with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. The Sub-adviser, 50 California Street, 27th Floor, San
Francisco, California 94111, and 1166 Avenue of the Americas, New York, New York
10036, serves as the sub-adviser to the Fund pursuant to an investment
sub-advisory and sub-administration agreement dated as of May 29, 1998. Prior to
May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset Management, Inc.
On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the former indirect
parent organization of the Sub-adviser, consummated a purchase agreement with
AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset Management
Division, which included the Sub-adviser and certain other affiliates. As a
result of this transaction, the Sub-adviser is now an indirect wholly owned
subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and its worldwide
asset management affiliates provided investment management and/or administrative
services to institutional, corporate and individual clients around the world
since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP
Prospectus Page 10
<PAGE>
AIM MID CAP GROWTH FUND
PLC. AMVESCAP PLC and its subsidiaries are an independent investment management
group that has a significant presence in the institutional and retail segment of
the investment management industry in North America and Europe, and a growing
presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Fund, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Brent W. Clum Portfolio Manager since Portfolio Manager for the Sub-adviser since 1997. Senior Equity
New York 1997 Research Analyst for the Sub-adviser since 1995. Employed by
Chancellor Capital Management, Inc., a predecessor of the
Sub-adviser from 1995 to October 1996. Vice President and Analyst at
T. Rowe Price from 1990 to 1995. Chartered Financial Analyst and
Certified Public Accountant.
</TABLE>
------------------------
With respect to the Fund, the Sub-adviser utilizes a team approach that relies
on its bottom-up, research-intensive, process-driven stock selection capability
to build the various investment portfolios. The Sub-adviser's disciplined
process combines the inputs of analysts performing fundamental and quantitative
research, various committees that set the Sub-adviser's firmwide economic
forecasts and sector and industry allocations and portfolio management teams
responsible for stock selection decisions. While individual members of the Sub-
adviser's investment team are assigned primary responsibility for the day-to-day
management of the Fund, along with similarly managed accounts, it is reviewed on
a regular basis by the applicable investment team to monitor compliance with
applicable investment guidelines.
In placing orders for the Fund's portfolio transactions, the Sub-adviser seeks
to obtain the best net results. Consistent with its obligation to obtain the
best net results, the Sub-adviser may consider a broker/dealer's sale of shares
of the AIM Funds as a factor in considering through whom portfolio transactions
will be effected. Brokerage transactions for the Fund may be executed through
affiliates of AIM or the Sub-adviser. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Fund will bear directly and could result in the realization of
net capital gains that would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 (the "Distribution Agreement"), with AIM Distributors, a registered
broker-dealer and a wholly owned subsidiary of AIM, to act as the distributor of
Advisor Class shares of the Fund. Certain Trustees and officers of the Trust are
affiliated with AIM Distributors.
The Distribution Agreement provides AIM Distributors with the exclusive right to
distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
Prospectus Page 11
<PAGE>
AIM MID CAP GROWTH FUND
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of G.T. Global Growth Series, a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series or portfolios
of the Trust.
From time to time the Trust may establish other funds, each corresponding to a
distinct investment portfolio and a distinct series of the Trust's shares of
beneficial interest. Shares of each Fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 12
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several
of which offer Advisor Class shares. Only Advisor Class shares are offered
through this Prospectus. Advisor Class shares are available from the following
funds (collectively, the "Advisor Class Funds"):
<TABLE>
<S> <C>
AIM AMERICA VALUE FUND AIM GLOBAL RESOURCES FUND
AIM DEVELOPING MARKETS FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM DOLLAR FUND AIM GLOBAL TRENDS FUND
AIM EMERGING MARKETS FUND AIM INTERNATIONAL GROWTH FUND
AIM EUROPE GROWTH FUND AIM JAPAN GROWTH FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM LATIN AMERICAN GROWTH FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM MID CAP GROWTH FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM NEW PACIFIC GROWTH FUND
AIM GLOBAL GROWTH & INCOME FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL HEALTH CARE FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL HIGH INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through
Financial Advisers (as defined herein) who have entered into agreements with
A I M Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor
Class shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
for Advisor Class shares is $500.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Advisor Class shares of any Advisor Class Funds not named on the cover of
this Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered
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AIM INVESTOR'S GUIDE
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (800) 347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
Shareholder Name, Shareholder Account Number
OBI: (70 character limit)
</TABLE>
It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
In addition to the Advisor Class Funds, the AIM Funds consist of the
following funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND,
AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL
ESTATE FUND, AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED
FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM
CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND,
AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED
MATURITY TREASURY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM
SELECT GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND
OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
VALUE FUND and AIM WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE
GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with
the Advisor Class Funds, the "Multiple Class Funds." For information on
purchasing any of the AIM Funds and to receive a prospectus, please call (800)
347-4246. Net asset value is determined in the manner described under the
caption "Determination of Net Asset Value."
Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee"
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares.
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AIM INVESTOR'S GUIDE
Investors in wrap fee programs and advisory accounts may only purchase Advisor
Class shares through Financial Advisers who have entered into agreements with
AIM Distributors. Investors may be charged a fee by their agents or brokers for
effecting transactions in Advisor Class shares.
AIM Distributors may, from time to time, pay a bonus or other consideration
or incentive to dealers who sell a minimum dollar amount of the shares of the
AIM Funds during a specified period of time. In some instances, these incentives
may be offered only to certain dealers who have sold or may sell significant
amounts of shares. At the option of the dealer, such incentives may take the
form of payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND
uses the amortized cost method of valuing the securities it holds and rounds its
per share net asset value to the nearest whole cent, it is anticipated that the
net asset value of the shares of that fund will remain constant at $1.00 per
share. However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00
net asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of
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AIM INVESTOR'S GUIDE
redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
[SPECIAL PLANS
Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of Advisor Class Funds. The Program automatically
rebalances holdings of Advisor Class Funds to the established allocation on a
periodic basis. Under the Program, a shareholder may predesignate, on a
percentage basis, how the total value of his or her holdings in a minimum of
two, and a maximum of ten, Advisor Class Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more Advisor Class Funds in the shareholder's Personal
Portfolio for shares of the same class(es) of one or more other Advisor Class
Funds in the shareholder's Personal Portfolio. See "Exchange Privilege." If
shares of the Advisor Class Fund(s) in a shareholder's Personal Portfolio have
appreciated during a rebalancing period, the Program will result in shares of
Advisor Class Fund(s) that have appreciated most during the period being
exchanged for shares of Advisor Class Fund(s) that have appreciated least. SUCH
EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR
LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions." Participation in
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AIM INVESTOR'S GUIDE
the Program does not assure that a shareholder will profit from purchases under
the Program nor does it prevent or lessen losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular Advisor Class
Fund would be 2% or less. In predesignating percentages, shareholders must use
whole percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an
Advisor Class Fund's shares. The AIM Funds and AIM Distributors reserve the
right to modify, suspend, or terminate the Program at any time on 60 days' prior
written notice to shareholders. A request to participate in the Program must be
received in good order at least five business days prior to the next rebalancing
date. Once a shareholder establishes the Program for his or her Personal
Portfolio, a shareholder cannot cancel or change which rebalancing frequency,
which Advisor Class Funds or what allocation percentages are assigned to the
Program, unless canceled or changed in writing and received by the Transfer
Agent in good order at least five business days prior to the rebalancing date.
Certain dealers/financial institutions may charge a fee for establishing
accounts relating to the Program. Investors should contact their
dealers/financial institutions or AIM Distributors for more information.]
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the
Advisor Class Funds may participate in an exchange privilege as described below.
AIM Distributors acts as distributor for the Advisor Class Funds which represent
a range of different investment objectives and policies.
Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor Class Fund acquired through exchange
must be qualified for sale in the state in which the shareholder resides; (c)
the exchange must be made between accounts having identical registrations and
addresses; (d) the full amount of the purchase price for the shares being
exchanged must have already been received by the fund; (e) the account from
which shares have been exchanged must be coded as having a certified taxpayer
identification number on file or, in the alternative, an appropriate IRS Form
W-8 (certificate of foreign status) or Form W-9 (certifying exempt status) must
have been received by the fund; (f) newly acquired shares (through either an
initial or subsequent investment) are held in an account for at least ten
business days, and all other shares are held in an account for at least one day,
prior to the exchange; and (g) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the Advisor
Class Funds.
THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but
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AIM INVESTOR'S GUIDE
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that an Advisor Class Fund would be materially
disadvantaged by an immediate transfer of the proceeds of the exchange. If a
shareholder is exchanging into an Advisor Class Fund that declares daily
dividends ("Dividends, Distributions and Tax Matters -- Dividends and
Distributions," below), and the release of the exchange proceeds is delayed for
the foregoing five-day period, such shareholder will not begin to accrue
dividends until the sixth business day after the exchange. Advisor Class shares
purchased by check may not be exchanged until it is determined that the check
has cleared, which may take up to ten business days from the date that the check
is received. See "Terms and Conditions of Purchase of the AIM Funds -- Timing of
Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. A shareholder may give exchange information to his
Financial Adviser. If a shareholder does not wish to allow telephone exchanges
by any person in his account, he should decline that option on the account
application. AIM Distributors has made arrangements with certain dealers and
investment advisory firms to accept telephone instructions to exchange shares
between any of the Advisor Class Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the Advisor Class Funds, including the condition that any such
dealer or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/ financial institutions may charge service fees for handling
repurchase transactions.
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
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AIM INVESTOR'S GUIDE
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in his account, he should decline that option on the account application.
The telephone redemption feature can be used only if: (a) the redemption
proceeds are to be mailed to the address of record or transferred electronically
or wired to the pre-authorized bank account; (b) there has been no change of
address of record on the account within the preceding 30 days; (c) the shares to
be redeemed are not in certificate form; (d) the person requesting the
redemption can provide proper identification information, and (e) the proceeds
of the redemption do not exceed $50,000. AIM Distributors has made arrangements
with certain dealers and investment advisors to accept telephone instructions
for the redemption of shares. AIM Distributors reserves the right to impose
conditions on these dealers and investment advisors, including the condition
that they enter into agreements (which contain additional conditions with
respect to the redemption of shares) with AIM Distributors. The Transfer Agent
and AIM Distributors will not be liable for any loss, expense or cost arising
out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's taxpayer identification
number and current address, and mailings of confirmations promptly after the
transaction.
TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the
Advisor Class Funds are redeemed at their net asset value next computed after a
request for redemption in proper form (including signature guarantees and other
required documentation for written redemptions) is received by the Transfer
Agent or certain financial institutions (or their designees) who are authorized
to accept redemption orders on behalf of the AIM Funds, provided that such
orders are transmitted to the Transfer Agent prior to the time set for receipt
of such orders. Orders for the redemption of Advisor Class shares received on
any business day of an AIM Fund will be confirmed at the price determined as of
the close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the
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AIM INVESTOR'S GUIDE
proceeds are to be sent to the address of record. These requirements may be
waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each Advisor Class Fund's policy regarding the payment of dividends and
distributions is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
Dividends on Advisor Class shares of an Advisor Class Fund are expected to
be higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
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AIM INVESTOR'S GUIDE
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares. With respect to tax-exempt shareholders, dividends and distributions
from the AIM Funds are not subject to federal income taxation to the extent
permitted under the applicable tax exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
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AIM INVESTOR'S GUIDE
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM MID CAP GROWTH
FUND, AIM SMALL CAP EQUITY FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each Advisor Class Fund's transfer
agent and dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If
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AIM INVESTOR'S GUIDE
several members of a household own shares of the same fund, only one annual or
semi-annual report will be mailed to that address. To receive additional copies,
please call (800) 347-4246, or write to A I M Distributors, Inc., P.O. Box 4739,
Houston, Texas 77210-4739. A Statement of Additional Information has been filed
with the SEC and is available upon request and without charge, by writing or
calling AIM Distributors. The SEC maintains a Web site at http://www.sec.gov
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding the Fund. This Prospectus omits
certain information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from this
Prospectus, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
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<PAGE>
AIM MID CAP GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM NEW PACIFIC GROWTH FUND:
ADVISOR CLASS
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM New Pacific Growth Fund (the
"Fund"), which is one of several series investment portfolios comprising AIM
Growth Series (the "Trust"), an open-end, series, management investment company.
The Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of issuers domiciled in its Primary
Investment Area (as defined herein).
This Prospectus sets forth concisely the information about the Fund prospective
investors should know before investing. It should be read and retained for
future reference. A Statement of Additional Information, dated September 8,
1998, has been filed with the Securities and Exchange Commission ("SEC") and is
incorporated herein by reference. The Statement of Additional Information is
available without charge upon written request to the Trust at 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173, or by calling (800) 347-4246. The SEC
maintains a Web site at http://www.sec.gov that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. Additional information about the Fund may also
be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM NEW PACIFIC GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 6
Investment Object and Policies............................................................ 7
Risk Factors.............................................................................. 10
Management................................................................................ 13
Other Information......................................................................... 15
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of issuers domiciled in its Primary Investment Area
(as defined herein).
Investment Managers: The Fund is managed by A I M Advisors, Inc. ("AIM") and is sub-advised by INVESCO (NY), Inc. (the
"Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate and individual
clients around the world. AIM and the Sub-adviser are both indirect wholly owned subsidiaries of
AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment management group that
has a significant presence in the institutional and retail segment of the investment management
industry in North America and Europe, and a growing presence in Asia. AIM was organized in 1976 and,
together with its subsidiaries, currently advises approximately 90 investment company portfolios.
</TABLE>
Prospectus Page 2
<PAGE>
AIM NEW PACIFIC GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Purchasing Shares: Advisor Class shares are offered through this Prospectus to (a) trustees or other fiduciaries
purchasing shares for employee benefit plans which are sponsored by organizations which have at least
1,000 employees; (b) any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment adviser has investment discretion over such
account, and (ii) the account holder pays such person as compensation for its advice and other
services an annual fee of at least 0.50% on the assets in the account; (c) any account with assets of
a least $10,000 if (i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the assets in the account;
(d) accounts advised by the Sub-adviser or one of the companies formerly affiliated with the Asset
Management Division of Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998; and (e) any of the
companies affiliated with AMVESCAP PLC. Pursuant to a separate prospectus, the Fund also offers Class
A and Class B shares, which represent interests in the Fund. The Class A and Class B shares have
different distribution arrangements.
Initial investments in Advisor Class shares must be at least $500 and additional investments must be
at least $50. The distributor of the Advisor Class shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase Shares."
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Advisor Class shares of the Fund may be exchanged for Advisor Class shares of certain
funds in The AIM Family of Funds in the manner and subject to the policies and charges set forth
herein. See "Exchange Privilege."
Redeeming Shares: Advisor Class shareholders of the Fund may redeem all or a portion of their shares at net asset value
on any business day. See "How to Redeem Shares."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
</TABLE>
Prospectus Page 3
<PAGE>
AIM NEW PACIFIC GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund invests primarily in foreign securities. Investments in foreign securities involve risks
relating to political and economic developments abroad and the differences between the regulations to
which U.S. and foreign issuers are subject. Individual foreign economies also may differ favorably or
unfavorably from the U.S. economy. Changes in foreign currency exchange rates also may affect the
Fund's net asset value, earnings and gains and losses realized on sales of securities.
The Fund invests a significant portion of its assets in issuers in a particular region of the world.
As a result, the Fund may be subject to greater risks and may experience greater volatility than a
fund that is more broadly diversified geographically.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 4
<PAGE>
AIM NEW PACIFIC GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Advisor Class shares of the Fund are reflected
in the following table (1):
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION COSTS:
Maximum sales charge on
purchases (as a % of
offering price)............ None
Sales charges on reinvested
distributions to
shareholders............... None
Maximum deferred sales
charges (as a % of net
asset value at time of
purchase or sale, whichever
is less)................... None
Redemption charges.......... None
Exchange fees............... None
ANNUAL FUND OPERATING EXPENSES
(2):
(AS A % OF AVERAGE NET
ASSETS)
Investment management and
administration fees........ .97%
12b-1 distribution and
service fees............... None
Other expenses.............. .61%
-----------
Total Fund Operating
Expenses................... 1.58%
-----------
-----------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (3):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Advisor Class shares....................................................... $16 $50 $87 $189
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
(2) Expenses are based on the Fund's fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 1.65% of the average daily net assets of the
Fund's Advisor Class shares. "Other expenses" include custody, transfer
agent, legal, audit and other operating expenses. See "Management" herein
and the Statement of Additional Information for more information. Investors
purchasing Advisor Class shares through financial planners, trust companies,
bank trust departments or registered investment advisers, or under a "wrap
fee" program, will be subject to additional fees charged by such entities or
by the sponsors of such programs. Where any account advised by one of the
companies affiliated with AMVESCAP PLC invests in Advisor Class shares of
the Fund, such account shall not be subject to duplicative advisory fees.
(3) THE "HYPOTHETICAL EXAMPLE" SET FORTH ABOVE IS NOT A REPRESENTATION OF PAST
OR FUTURE EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the
assumption in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 5
<PAGE>
AIM NEW PACIFIC GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. [The financial statements and notes for
[ ] have been audited by [ ], independent accountants, whose reports
thereon appear in the Statement of Additional Information. Information presented
below for the periods ended December 31, 1991 and prior thereto was audited by
other auditors, which served as the Funds' independent certified public
accountants for those periods.]
AIM NEW PACIFIC GROWTH FUND
(FORMERLY GT GLOBAL NEW PACIFIC GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return. The Fund's total return shows its
overall change in value, including changes in share price and assuming all the
Fund's dividends and capital gain distributions are reinvested. A cumulative
total return reflects the Fund's performance over a stated period of time. An
average annual total return reflects the hypothetical compounded annual rate of
return that would have produced the same cumulative total return if the Fund's
performance had been constant over the entire period. BECAUSE AVERAGE ANNUAL
RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN, INVESTORS SHOULD
RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL YEAR-BY-YEAR RESULTS. To
illustrate the components of overall performance, the Fund may separate its
cumulative and average annual returns into income results and capital gains or
losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 6
<PAGE>
AIM NEW PACIFIC GROWTH FUND
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
The Fund seeks long-term growth of capital. The Fund seeks its objective by
investing, under normal circumstances, at least 65% of its total assets in
equity securities of issuers domiciled in its Primary Investment Area, as
described below. Equity securities in which these Funds may invest include
common stocks, preferred stocks, convertible debt securities and warrants to
acquire such securities. The Fund's Primary Investment Areas include the
following countries: Australia, Hong Kong, India, Indonesia, Malaysia, New
Zealand, Pakistan, the Philippines, Singapore, South Korea, Taiwan and Thailand.
Because the development of the world's economies and stock markets is rapidly
evolving, from time to time the Board of Trustees may add or delete countries
from the Fund's Primary Investment Area. There can be no assurance that the Fund
will achieve its investment objective.
The Fund is a regional fund for investors interested in a more geographically
concentrated investment but still desiring to diversify across multiple markets.
The Fund may invest up to 35% of its total assets in the equity securities of
issuers domiciled outside of its Primary Investment Area. Such investments may
include: (a) securities of issuers in countries that are not located in the
Primary Investment Area but are linked by tradition, economic markets, cultural
similarities or geography to the countries in such Primary Investment Area; and
(b) securities of issuers located elsewhere in the world that have operations in
the Primary Investment Area or that stand to benefit from political and economic
events in the Primary Investment Area.
The Fund may invest up to 35% of its total assets in debt securities, including
U.S. and foreign government securities and corporate debt securities, Samurai
and Yankee bonds, Eurobonds and Depository Receipts. The issuers of such debt
securities may or may not be domiciled in the Primary Investment Area of the
Fund. The Fund will limit its purchases of debt securities to investment grade
obligations. "Investment grade" debt refers to those securities rated within one
of the four highest ratings categories by Moody's Investors Service, Inc.
("Moody's") or by Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. ("S&P"), or, if not similarly rated by any other nationally recognized
statistical rating organization ("NRSRO"), deemed by the Sub-adviser to be of
equivalent quality. Debt rated Baa by Moody's, which is the lowest category of
investment grade debt, is considered by Moody's to have speculative
characteristics. See the Statement of Additional Information for a description
of Moody's and S&P ratings.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Fund, the Sub-adviser seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth rates. The Sub-adviser further
attempts to identify those companies in such countries and industries that are
best positioned and managed to take advantage of these economic and political
factors. The Sub-adviser intends to invest in such markets only after balancing
the potential for growth of selected companies in each market relative to the
risks of investing in each such country. Among the factors to be considered are
that several of the markets are so-called developing countries, and their
economies and markets are less developed and more prone to uncertainty,
instability and risk than those of the other markets in which the Fund invests.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to refect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis
Prospectus Page 7
<PAGE>
AIM NEW PACIFIC GROWTH FUND
of its views as to the best values then currently available in the marketplace.
Such values are a function of yield, maturity, issue classification and quality
characteristics, coupled with expectations regarding the economy, movements in
the general level and term of interest rates, currency values, political
developments, and variations in the supply of funds available for investment in
the world bond market relative to the demands placed upon it. If market interest
rates decline, fixed income securities generally appreciate in value and vice
versa. Fixed income securities denominated in currencies other than the U.S.
dollar or in multinational currency units are evaluated on the strength of the
particular currency against the U.S. dollar as well as on the current and
expected levels of interest rates in the country or countries. In addition to
the foregoing, the Fund may seek to take advantage of differences in relative
values of fixed income securities among various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency units
such as Euros) and/or high quality debt securities or money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, most or all investments of the Fund may be made in
the United States and denominated in U.S. dollars. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units such as Euros) and may invest
in high quality foreign or domestic money market instruments. For a description
of money market instruments, see "Temporary Defensive Strategies" in the
"Investment Objectives and Policies" section of the Statement of Additional
Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Fund may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Fund's borrowings exceed 5% of its
total assets. Any borrowing by the Fund may cause greater fluctuation in the
value of its shares than would be the case if the Fund did not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment
Prospectus Page 8
<PAGE>
AIM NEW PACIFIC GROWTH FUND
(for which the Fund may receive a fee) to purchase similar, but not identical,
securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is made. While a loan is outstanding, the borrower must maintain with the
Fund's custodian collateral consisting of cash, U.S. government securities or
certain irrevocable letters of credit equal to at least the value of the
borrowed securities, plus any accrued interest or such other collateral as
permitted by the Fund's investment program and regulatory agencies, and as
approved by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Currency Strategies" herein and the Statement of Additional Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Fund also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
Prospectus Page 9
<PAGE>
AIM NEW PACIFIC GROWTH FUND
AMERICAN DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in U.S. securities markets. See "Investment
Objectives and Policies -- Depository Receipts" in the Statement of Additional
Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Trust's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
FOREIGN INVESTING. The Fund invests primarily in foreign securities. Investing
in foreign securities entails certain risks. The securities of non-U.S. issuers
generally will not be registered with, nor will the issuers thereof be subject
to, the reporting requirements of the SEC. Accordingly, there may be less
publicly available information about foreign securities and issuers than is
available about domestic securities and issuers. Foreign companies generally are
not subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic companies.
Securities of some foreign companies are less liquid and their prices may be
more volatile than securities of comparable domestic companies. In addition,
certain costs attributable to foreign investing, such as custody charges, are
higher than those attributable to domestic investing. The Fund's interest and
dividends from foreign issuers may be subject to non-U.S. withholding taxes,
thereby reducing its net investment income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the repatriation of
assets of the Fund, political or social instability, or diplomatic developments
that could affect their investments in those countries. Moreover, individual
foreign economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross national product, rate of inflation, rate of
savings and capital reinvestment, resource self-sufficiency and balance of
payments positions.
Because the Fund may invest substantially in securities denominated in
currencies other than the U.S. dollar, and because it may hold foreign
currencies, it will be affected favorably or unfavorably by exchange control
regulations or changes in the
Prospectus Page 10
<PAGE>
AIM NEW PACIFIC GROWTH FUND
exchange rates between such currencies and the U.S. dollar. Changes in currency
exchange rates will influence the value of the Fund's shares, and also may
affect the value of dividends and interest earned by the Fund and gains and
losses realized by the Fund. Currencies generally are evaluated on the basis of
fundamental economic criteria (e.g., relative inflation and interest rate levels
and trends, growth rate forecasts, balance of payments status and economic
policies) as well as technical and political data. The exchange rates between
the U.S. dollar and other currencies are determined by supply and demand in the
currency exchange markets, the international balance of payments, governmental
intervention, speculation and other economic and political conditions. If the
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the currency would adversely affect the value of the security
expressed in U.S. dollars.
INVESTING IN EMERGING MARKETS. Because of the special risks associated with
investing in emerging markets, an investment in the Fund should be considered
speculative. Investors are strongly advised to consider carefully the special
risks involved in emerging markets, which are in addition to the usual risks of
investing in developed foreign markets around the world.
Investing in emerging markets involves risks relating to potential political and
economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation in any
emerging market, the Fund could lose its entire investment in that market.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
Economies in emerging markets generally are dependent heavily upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by the countries
with which they trade. These economies also have been and may continue to be
affected adversely by economic conditions in the countries in which they trade.
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
In addition, brokerage commissions, custodial services and other costs relating
to investment in foreign markets generally are more expensive than in the United
States, particularly with respect to emerging markets. Such markets have
different settlement and clearance procedures. In certain markets there have
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the Fund to make intended securities purchases due to settlement
problems could cause the Fund to forego attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, in possible liability to the purchaser.
In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occurred in certain countries.
The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Fund's portfolio securities in such
markets may not be readily available. Section 22(e) of the 1940 Act permits a
registered investment company to suspend redemption of its shares for any period
during which an emergency exists, as determined by the SEC. Accordingly, when
the Fund believes that appropriate circumstances warrant, it will promptly apply
to the SEC for a determination that an emergency exists within the meaning of
Section 22(e). During the period commencing from the Fund's identification of
such conditions
Prospectus Page 11
<PAGE>
AIM NEW PACIFIC GROWTH FUND
until the date of SEC action, the portfolio securities of the Fund in the
affected markets will be valued at fair value as determined in good faith by or
under the direction of the Trust's Board of Trustees.
CONCENTRATION. The Fund invests a significant portion of its assets in a
particular region of the world. As a result, the Fund may be subject to greater
risks and may experience greater volatility than a fund that is more broadly
diversified geographically.
PACIFIC REGION COUNTRIES. The Fund invests primarily in equity securities of
issuers located in Pacific region countries other than Japan. Certain of the
risks associated with international investments are heightened for investments
in Pacific region countries. For example, some of the currencies of Pacific
region countries have experienced steady devaluations relative to the U.S.
dollar, and major adjustments have been made periodically in certain such
currencies. Moreover, recent currency devaluations in some Pacific region
countries have resulted in high interest rate levels and sharp reductions in
economic activity and have diminished prospects for short-term growth in
corporate earnings. Certain countries, such as India, face serious exchange
constraints. Jurisdictional disputes also exist between South Korea and North
Korea.
In addition, Hong Kong reverted to Chinese administration on July 1, 1997. The
long-term effects of this reversion are not known at this time. However, the
Fund's investments in Hong Kong may now be subject to the same or similar risks
as any investment in China. Investments in Hong Kong may be subject to
expropriation, nationalization or confiscation, in which case the Fund could
lose its entire investment in Hong Kong, if any. In addition, the reversion of
Hong Kong also presents a risk that the Hong Kong dollar will be devalued and a
risk of possible loss of investor confidence in Hong Kong's currency, stock
market and economy.
OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACTS. Although the Fund is authorized
to enter into options, futures and forward currency transactions, it might not
enter into any such transactions. Options, futures and foreign currency
transactions involve certain risks, which include: (1) dependence on the
Sub-adviser's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts or options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund or Portfolio to maintain
"cover" or to set aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
Prospectus Page 12
<PAGE>
AIM NEW PACIFIC GROWTH FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund, including
the investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund are delegated to the officers of the Trust, subject
always to the investement objective and policies of the Fund and to the general
supervision of the Trust's Board. See "Trustees and Executive Officers" in the
Statement of Additional Information for information on the Trustees of the Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million and .90% on amounts thereafter. Out of the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and sub-
administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administration fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 1.65%
of the average daily net assets of the Fund's Advisor Class shares.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement, dated as of May 29, 1998 (the "Advisory Agreement").
AIM was organized in 1976 and, together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. The Sub-adviser, 50 California Street, 27th
Floor, San Francisco, California 94111, and 1166 Avenue of the Americas, New
York, New York 10036, serves as the sub-adviser to the Fund pursuant to an
investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP
Prospectus Page 13
<PAGE>
AIM NEW PACIFIC GROWTH FUND
PLC. AMVESCAP PLC and its subsidiaries are an independent investment management
group that has a significant presence in the institutional and retail segment of
the investment management industry in North America and Europe, and a growing
presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Funds, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professional primarily responsible for the portfolio management
of the Fund is as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Anna Tong Portfolio Manager since Portfolio Manager for the Sub-adviser since June 1998 and a Managing
Hong Kong 1998 Director and Chief Investment Officer for INVESCO Asia Ltd. (Hong
Kong) ("INVESCO Asia") since April 1997. Managing Director for
INVESCO International (FE) Ltd. (Hong Kong) and a Director of
INVESCO Investment Management (HK) Ltd. (Hong Kong) since March
1985. INVESCO Asia, INVESCO International (FE) Ltd. and INVESCO
Investment Management (HK) Ltd. are affiliates of the Sub-adviser.
Sammy Lau Portfolio Manager since Portfolio Manager for the Sub-adviser since June 1998 and a Director
Hong Kong 1998 of INVESCO Asia since January 1996. Associate Director of INVESCO
Asia from December 1994 to January 1996. Associate at J.P. Morgan
(Hong Kong) from November 1993 to November 1994. Investment Manager
for Baring International Asset Admin Ltd. (Hong Kong) from June 1990
to October 1993.
</TABLE>
------------------------
In placing orders for the Fund's portfolio securities transactions, the
Sub-adviser seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-adviser may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions for the Fund may
be executed through affiliates of AIM or the Sub-adviser. High portfolio
turnover (over 100%) involves correspondingly greater brokerage commissions and
other transaction costs that the Fund will bear directly and could result in the
realization of net capital gains that would be taxable when distributed to
shareholders. See "Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 (the 'Distribution Agreement"), with AIM Distributors, a registered
broker-dealer and a wholly owned subsidiary of AIM, to act as the distributor of
the Advisor Class shares of the Fund. Certain Trustees and officers of the Trust
are affiliated with AIM Distributors.
The Distribution Agreement provides AIM Distributors with the exclusive right to
distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of "G.T. Global Growth
Prospectus Page 14
<PAGE>
AIM NEW PACIFIC GROWTH FUND
Series," a Massachusetts business trust. The Fund constitutes one of the eight
separate and distinct series or portfolios of the Trust. From time to time the
Trust may establish additional funds, each corresponding to a distinct
investment portfolio and a distinct series of the Trust's shares of beneficial
interest. Shares of each fund are entitled to one vote per share (with
proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 15
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several
of which offer Advisor Class shares. Only Advisor Class shares are offered
through this Prospectus. Advisor Class shares are available from the following
funds (collectively, the "Advisor Class Funds"):
<TABLE>
<S> <C>
AIM AMERICA VALUE FUND AIM GLOBAL RESOURCES FUND
AIM DEVELOPING MARKETS FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM DOLLAR FUND AIM GLOBAL TRENDS FUND
AIM EMERGING MARKETS FUND AIM INTERNATIONAL GROWTH FUND
AIM EUROPE GROWTH FUND AIM JAPAN GROWTH FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM LATIN AMERICAN GROWTH FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM MID CAP GROWTH FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM NEW PACIFIC GROWTH FUND
AIM GLOBAL GROWTH & INCOME FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL HEALTH CARE FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL HIGH INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through
Financial Advisers (as defined herein) who have entered into agreements with
A I M Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor
Class shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
for Advisor Class shares is $500.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Advisor Class shares of any Advisor Class Funds not named on the cover of
this Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered
A-1
<PAGE>
AIM INVESTOR'S GUIDE
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (800) 347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
Shareholder Name, Shareholder Account Number
OBI: (70 character limit)
</TABLE>
It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
In addition to the Advisor Class Funds, the AIM Funds consist of the
following funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND,
AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL
ESTATE FUND, AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED
FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM
CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND,
AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED
MATURITY TREASURY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM
SELECT GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND
OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
VALUE FUND and AIM WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE
GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with
the Advisor Class Funds, the "Multiple Class Funds." For information on
purchasing any of the AIM Funds and to receive a prospectus, please call (800)
347-4246. Net asset value is determined in the manner described under the
caption "Determination of Net Asset Value."
Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee"
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares.
A-2
<PAGE>
AIM INVESTOR'S GUIDE
Investors in wrap fee programs and advisory accounts may only purchase Advisor
Class shares through Financial Advisers who have entered into agreements with
AIM Distributors. Investors may be charged a fee by their agents or brokers for
effecting transactions in Advisor Class shares.
AIM Distributors may, from time to time, pay a bonus or other consideration
or incentive to dealers who sell a minimum dollar amount of the shares of the
AIM Funds during a specified period of time. In some instances, these incentives
may be offered only to certain dealers who have sold or may sell significant
amounts of shares. At the option of the dealer, such incentives may take the
form of payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND
uses the amortized cost method of valuing the securities it holds and rounds its
per share net asset value to the nearest whole cent, it is anticipated that the
net asset value of the shares of that fund will remain constant at $1.00 per
share. However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00
net asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of
A-3
<PAGE>
AIM INVESTOR'S GUIDE
redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
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[SPECIAL PLANS
Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of Advisor Class Funds. The Program automatically
rebalances holdings of Advisor Class Funds to the established allocation on a
periodic basis. Under the Program, a shareholder may predesignate, on a
percentage basis, how the total value of his or her holdings in a minimum of
two, and a maximum of ten, Advisor Class Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more Advisor Class Funds in the shareholder's Personal
Portfolio for shares of the same class(es) of one or more other Advisor Class
Funds in the shareholder's Personal Portfolio. See "Exchange Privilege." If
shares of the Advisor Class Fund(s) in a shareholder's Personal Portfolio have
appreciated during a rebalancing period, the Program will result in shares of
Advisor Class Fund(s) that have appreciated most during the period being
exchanged for shares of Advisor Class Fund(s) that have appreciated least. SUCH
EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR
LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions." Participation in
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AIM INVESTOR'S GUIDE
the Program does not assure that a shareholder will profit from purchases under
the Program nor does it prevent or lessen losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular Advisor Class
Fund would be 2% or less. In predesignating percentages, shareholders must use
whole percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an
Advisor Class Fund's shares. The AIM Funds and AIM Distributors reserve the
right to modify, suspend, or terminate the Program at any time on 60 days' prior
written notice to shareholders. A request to participate in the Program must be
received in good order at least five business days prior to the next rebalancing
date. Once a shareholder establishes the Program for his or her Personal
Portfolio, a shareholder cannot cancel or change which rebalancing frequency,
which Advisor Class Funds or what allocation percentages are assigned to the
Program, unless canceled or changed in writing and received by the Transfer
Agent in good order at least five business days prior to the rebalancing date.
Certain dealers/financial institutions may charge a fee for establishing
accounts relating to the Program. Investors should contact their
dealers/financial institutions or AIM Distributors for more information.]
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EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the
Advisor Class Funds may participate in an exchange privilege as described below.
AIM Distributors acts as distributor for the Advisor Class Funds which represent
a range of different investment objectives and policies.
Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor Class Fund acquired through exchange
must be qualified for sale in the state in which the shareholder resides; (c)
the exchange must be made between accounts having identical registrations and
addresses; (d) the full amount of the purchase price for the shares being
exchanged must have already been received by the fund; (e) the account from
which shares have been exchanged must be coded as having a certified taxpayer
identification number on file or, in the alternative, an appropriate IRS Form
W-8 (certificate of foreign status) or Form W-9 (certifying exempt status) must
have been received by the fund; (f) newly acquired shares (through either an
initial or subsequent investment) are held in an account for at least ten
business days, and all other shares are held in an account for at least one day,
prior to the exchange; and (g) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the Advisor
Class Funds.
THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but
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under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that an Advisor Class Fund would be materially
disadvantaged by an immediate transfer of the proceeds of the exchange. If a
shareholder is exchanging into an Advisor Class Fund that declares daily
dividends ("Dividends, Distributions and Tax Matters -- Dividends and
Distributions," below), and the release of the exchange proceeds is delayed for
the foregoing five-day period, such shareholder will not begin to accrue
dividends until the sixth business day after the exchange. Advisor Class shares
purchased by check may not be exchanged until it is determined that the check
has cleared, which may take up to ten business days from the date that the check
is received. See "Terms and Conditions of Purchase of the AIM Funds -- Timing of
Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. A shareholder may give exchange information to his
Financial Adviser. If a shareholder does not wish to allow telephone exchanges
by any person in his account, he should decline that option on the account
application. AIM Distributors has made arrangements with certain dealers and
investment advisory firms to accept telephone instructions to exchange shares
between any of the Advisor Class Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the Advisor Class Funds, including the condition that any such
dealer or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
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HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/ financial institutions may charge service fees for handling
repurchase transactions.
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
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AIM INVESTOR'S GUIDE
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in his account, he should decline that option on the account application.
The telephone redemption feature can be used only if: (a) the redemption
proceeds are to be mailed to the address of record or transferred electronically
or wired to the pre-authorized bank account; (b) there has been no change of
address of record on the account within the preceding 30 days; (c) the shares to
be redeemed are not in certificate form; (d) the person requesting the
redemption can provide proper identification information, and (e) the proceeds
of the redemption do not exceed $50,000. AIM Distributors has made arrangements
with certain dealers and investment advisors to accept telephone instructions
for the redemption of shares. AIM Distributors reserves the right to impose
conditions on these dealers and investment advisors, including the condition
that they enter into agreements (which contain additional conditions with
respect to the redemption of shares) with AIM Distributors. The Transfer Agent
and AIM Distributors will not be liable for any loss, expense or cost arising
out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's taxpayer identification
number and current address, and mailings of confirmations promptly after the
transaction.
TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the
Advisor Class Funds are redeemed at their net asset value next computed after a
request for redemption in proper form (including signature guarantees and other
required documentation for written redemptions) is received by the Transfer
Agent or certain financial institutions (or their designees) who are authorized
to accept redemption orders on behalf of the AIM Funds, provided that such
orders are transmitted to the Transfer Agent prior to the time set for receipt
of such orders. Orders for the redemption of Advisor Class shares received on
any business day of an AIM Fund will be confirmed at the price determined as of
the close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the
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AIM INVESTOR'S GUIDE
proceeds are to be sent to the address of record. These requirements may be
waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
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DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each Advisor Class Fund's policy regarding the payment of dividends and
distributions is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
Dividends on Advisor Class shares of an Advisor Class Fund are expected to
be higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
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TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares. With respect to tax-exempt shareholders, dividends and distributions
from the AIM Funds are not subject to federal income taxation to the extent
permitted under the applicable tax exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
A-10
<PAGE>
AIM INVESTOR'S GUIDE
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM MID CAP GROWTH
FUND, AIM SMALL CAP EQUITY FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each Advisor Class Fund's transfer
agent and dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If
A-11
<PAGE>
AIM INVESTOR'S GUIDE
several members of a household own shares of the same fund, only one annual or
semi-annual report will be mailed to that address. To receive additional copies,
please call (800) 347-4246, or write to A I M Distributors, Inc., P.O. Box 4739,
Houston, Texas 77210-4739. A Statement of Additional Information has been filed
with the SEC and is available upon request and without charge, by writing or
calling AIM Distributors. The SEC maintains a Web site at http://www.sec.gov
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding the Fund. This Prospectus omits
certain information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from this
Prospectus, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
A-12
<PAGE>
AIM NEW PACIFIC GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM SMALL CAP EQUITY FUND
ADVISOR CLASS
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM Small Cap Equity Fund (the
"Fund"), which is one of several series investment portfolios comprising AIM
Growth Series (the "Trust"), an open-end, series, management investment company.
The Fund is a diversified portfolio which seeks long-term capital appreciation
by investing all of its investable assets in the Small Cap Portfolio (the
"Portfolio"), which, in turn, invests primarily in equity securities of
companies domiciled in the United States that, at the time of purchase, have
market capitalizations of up to $1 billion ("U.S. small cap companies").
The Portfolio's investment objective is identical to that of the Fund. The
investment experience of the Fund will correspond directly with the investment
experience of the Portfolio.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the Fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM SMALL CAP EQUITY FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 2
Financial Highlights...................................................................... 5
Investment Objective and Policies......................................................... 6
Risk Factors.............................................................................. 9
Management................................................................................ 10
Other Information......................................................................... 12
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund and the Portfolio: The Fund is a diversified series of the Trust. The Portfolio is a diversified series of Growth
Portfolio. The Fund seeks long-term capital appreciation. The Fund invests all of its investable
assets in the Portfolio, which, in turn, invests primarily in equity securities of U.S. small cap
companies.
Investment Managers: The Portfolio is managed by A I M Advisors, Inc. ("AIM") and is sub-advised by INVESCO (NY), Inc.
(the "Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate and individual
clients around the world. AIM and the Sub-adviser are both indirect wholly owned subsidiaries of
AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment management group that
has a significant presence in the institutional and retail segment of the investment management
industry in North America and Europe, and a growing presence in Asia. AIM was organized in 1976 and,
together with its subsidiaries, currently advises approximately 90 investment company portfolios.
Purchasing Shares: Advisor Class shares are offered through this Prospectus to (a) trustees or other fiduciaries
purchasing shares for employee benefit plans which are sponsored by organizations which have at least
1,000 employees; (b) any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment adviser has investment discretion over such
account, and (ii) the account holder pays such person as compensation for its advice and other
services an annual fee of at least 0.50% on the assets in the account; (c) any account with assets of
a least $10,000 if (i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the assets in the account;
(d) accounts advised by the Sub-advisor or one of the companies formerly affiliated with the Asset
Management Division of Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the
</TABLE>
Prospectus Page 2
<PAGE>
AIM SMALL CAP EQUITY FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
funds in The AIM Family of Funds on May 29, 1998; and (e) any of the companies affiliated with
AMVESCAP PLC. Pursuant to a separate prospectus, the Fund also offers Class A and Class B shares,
which represent interests in the Fund. The Class A and Class B shares have different distribution
arrangements.
Initial investments in Advisor Class shares must be at least $500 and additional investments must be
at least $50. The distributor of the Advisor Class shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase Shares."
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, " The AIM Family
of Funds"). Advisor Class shares of the Fund may be exchanged for Advisor Class shares of certain
funds in The AIM Family of Funds in the manner and subject to the policies and charges set forth
herein. See "Exchange Privilege."
Redeeming Shares: Advisor Class shareholders of the Fund may redeem all or a portion of their shares at net asset value
on any business day. See "How to Redeem Shares."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
Risk Factors: There is no assurance that the Fund or the Portfolio will achieve its investment objective. The
Fund's net asset value will fluctuate, reflecting fluctuations in the market value of the Portfolio's
securities.
The Portfolio may engage in certain options and futures transactions to attempt to hedge against the
overall level of investment risk associated with its present or planned investments. Such
transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 3
<PAGE>
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Advisor Class shares of the Fund are reflected
in the following table (1):
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION COSTS:
Maximum sales charge on
purchases (as a % of
offering price)............ None
Sales charges on reinvested
distributions to
shareholders............... None
Maximum deferred sales
charge (as a % of net asset
value at time of purchase
or sale, whichever is
less)...................... None
Redemption charges.......... None
Exchange fees............... None
ANNUAL FUND OPERATING EXPENSES
(2):
(AS A % OF AVERAGE NET
ASSETS)
Investment management and
administration fees........ .73%
12b-1 distribution and
service fees............... None
Other expenses (after
reimbursements)............ .67%
---------
Total Fund Operating
Expenses................... 1.40%
---------
---------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (3):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Advisor Class shares....................................................... $14 $45 $77 $169
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
(2) Expenses are based on the Fund's fiscal year ended December 31, 1997
restated to reflect AIM's undertaking to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rate of 1.40% of the average daily net assets of the
Fund's Advisor Class shares. "Other expenses" include custody, transfer
agent, legal, audit and other operating expenses. See "Management" herein
and the Statement of Additional Information for more information. Without
reimbursements, "Other expenses" and "Total Fund Operating Expenses" would
have been 1.44% and 2.17%, respectively, for the Advisor Class shares of the
Fund (including its share of the expenses of the Portfolio). Investors
purchasing Advisor Class shares through financial planners, trust companies,
bank trust departments or registered investment advisers, or under a "wrap
fee" program, will be subject to additional fees charged by such entities or
by the sponsors of such programs. Where any account advised by one of the
companies affiliated with AMVESCAP PLC invests in Advisor Class shares of
the Fund, such account shall not be subject to duplicative advisory fees.
The Board of Trustees of the Trust believes that the aggregate per share
expenses of the Fund and of the Portfolio will be approximately equal to the
expenses the Fund would incur if its assets were invested directly in the
type of securities being held by the Portfolio.
(3) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF PAST OR FUTURE
EXPENSES. THE FUND'S AND THE PORTFOLIO'S ACTUAL EXPENSES, AND AN INVESTOR'S
DIRECT AND INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The
table and the assumption in the Hypothetical Example of a 5% annual return
are required by regulations of the SEC applicable to all mutual funds. The
5% annual return is not a prediction of and does not represent the Fund's or
the Portfolio's projected or actual performance.
Prospectus Page 4
<PAGE>
AIM SMALL CAP EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information. Information presented below for the periods
ended December 31, 1991 and prior thereto was audited by other auditors, which
served as the Fund's independent certified public accountants for those periods.
The financial statements and notes for [ ] have been audited by [ ],
independent accountants, whose reports thereon appear in the Statement of
Additional Information.
AIM SMALL CAP EQUITY FUND
(FORMERLY GT GLOBAL AMERICA SMALL CAP GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 5
<PAGE>
AIM SMALL CAP EQUITY FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The investment objective of the Fund is long term capital appreciation. The Fund
seeks its investment objective by investing all of its investable assets in the
Portfolio, which, in turn, normally invests at least 65% of its total assets in
equity securities, including common stocks, preferred stocks, convertible debt
securities and warrants of U.S. small cap companies. The remainder of the
Portfolio's assets may be invested in common stocks, preferred stocks,
convertible debt securities and warrants of companies domiciled in the United
States that, at the time of purchase, have market capitalizations of greater
than $1 billion and non-convertible debt securities, U.S. government securities
and high quality money market instruments, such as U.S. government obligations,
high grade commercial paper, bank certificates of deposit and bankers'
acceptances, of issuers domiciled in the United States. The Portfolio also may
invest up to 10% of its total assets in securities of foreign issuers in the
form of American Depository Receipts ("ADRs") or other similar securities
convertible into securities of foreign issuers. There can be no assurance that
the Fund or the Portfolio will achieve its investment objective.
The debt obligations that the Portfolio may invest in are limited to U.S.
government securities and corporate debt securities of issuers domiciled in the
United States. The Portfolio will limit its purchases of debt securities to
investment grade obligations, as defined above.
For purposes of this Prospectus, market capitalization means the total market
value of a company's outstanding common stock. There is no necessary correlation
between market capitalization and the financial attributes (such as level of
assets, revenues or income) often used to measure a company's size.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In selecting equity securities for the Portfolio, the Sub-adviser uses a
multi-stage process to identify companies that possess sustainable above average
growth at an attractive offering price. The process for selecting small cap
growth stocks consists of four components: asset allocation, industry
diversification, stock selection and quality control. The Sub-adviser tracks
individual companies and categorizes them into industry groups. Purchases and
sales of individual securities are based on the ratings established by the
Sub-adviser on a weekly basis. Stocks ranked in the top 30% are buys, and the
bottom 30% are sells. The quality control process ensures consistency with the
industry and asset allocation guidelines as well as stock guidelines. There is
no assurance that this process will produce better or more consistent results
than other investment processes.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it is (a) organized under the laws of, or has its
principal office in, a particular country or (b) normally derives 50% or more of
its total revenues from business in that country, provided that, in the Sub-
adviser's view, the value of such issuer's securities tends to reflect such
country's development to a greater extent than developments elsewhere. However,
these are not absolute requirements, and certain companies incorporated in a
particular country and considered by the Sub-adviser to be located in that
country may have substantial foreign operations or subsidiaries and/or export
sales exceeding in size the assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
currency units (such as Euros) are evaluated on the strength of the particular
currency against the U.S. dollar as well as on the current and expected levels
of interest rates in the country or countries.
Prospectus Page 6
<PAGE>
AIM SMALL CAP EQUITY FUND
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Portfolio may invest less than 65% of
its total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Portfolio may hold U.S. dollars and/or
may invest any portion of its assets in high quality domestic debt securities or
high quality money market instruments. To the extent the Portfolio adopts a
temporary defensive position, it will not be invested so as to achieve directly
its investment objective.
In addition, the Portfolio may hold U.S. dollars and may invest in domestic debt
securities or high quality money market instruments pending investment of
proceeds from new sales of Fund shares, or to meet its ordinary daily cash
needs. For a description of money market instruments, see "Temporary Defensive
Strategies" in the "Investment Objectives and Policies" section of the Statement
of Additional Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Portfolio may invest up to
10% of its total assets in other investment companies. As a shareholder in an
investment company, the Portfolio would bear its ratable share of that
investment company's expenses, including its advisory and administration fees.
At the same time, the Portfolio would continue to pay its own management fees
and other expenses. AIM and the Sub-adviser will waive their advisory fees to
the extent that the Portfolio invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Portfolio
may be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Portfolio
may borrow from banks or may borrow through reverse repurchase agreements and
"roll" transactions in connection with meeting requests for the redemption of
the Fund's shares. The Portfolio also may borrow up to 5% of its total assets
for temporary or emergency purposes other than to meet redemptions of the Fund's
shares. The Portfolio may borrow up to 33 1/3% of its total assets. However, no
additional investments will be made if the Portfolio's borrowings exceed 5% of
its total assets. Any borrowing by the Portfolio may cause greater fluctuation
in the value of the Fund's shares than would be the case if the Portfolio did
not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Portfolio
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Portfolio's sale of securities together with
its commitment (for which the Portfolio may receive a fee) to purchase similar,
but not identical, securities at a future date.
SECURITIES LENDING. The Portfolio may lend its portfolio securities to
broker/dealers or to other institutional investors. Securities lending allows
the Portfolio to retain ownership of the securities loaned and, at the same
time, enhance the Fund's total return. The Portfolio limits its loans of
portfolio securities to an aggregate of 30% of the value of its total assets,
measured at the time any such loan is made. While a loan is outstanding, the
borrower must maintain with the Portfolio's custodian collateral consisting of
cash, U.S. government securities or certain irrevocable letters of credit equal
to at least the value of the borrowed securities, plus any accrued interest or
such other collateral as permitted by the Fund's investment program and
regulatory agencies, and as approved by the Board. The risks in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delay in receiving additional collateral or in recovery of the
securities and
Prospectus Page 7
<PAGE>
AIM SMALL CAP EQUITY FUND
possible loss of rights in the collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Portfolio may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Portfolio will
purchase or sell when-issued securities or enter into forward commitments only
with the intention of actually receiving or delivering the securities, as the
case may be. No income accrues on securities that have been purchased pursuant
to a forward commitment or on a when-issued basis prior to delivery to the
Portfolio. If the Portfolio disposes of the right to acquire a when-issued
security prior to its acquisition or disposes of its right to deliver or receive
against a forward commitment, it may incur a gain or loss. At the time the
Portfolio enters into a transaction on a when-issued or forward commitment
basis, the Portfolio will segregate cash or liquid securities equal to the value
of the when-issued or forward commitment securities with its custodian and will
mark to market daily such assets. There is a risk that the securities may not be
delivered and that the Portfolio may incur a loss.
OPTIONS AND FUTURES TRANSACTIONS. The Portfolio may use options on securities,
options on indices, futures contracts and options on futures contracts to
attempt to hedge against the overall level of investment risk normally
associated with its portfolio. These instruments are often referred to as
"derivatives," which may be defined as financial instruments whose performance
is derived, at least in part, from the performance of another asset (such as a
security or an index of securities). The Portfolio may enter into such
instruments up to the full value of its portfolio assets. See "Risk Factors --
Options and Futures Strategies" herein and "Options, Futures and Currency
Strategies" in the Statement of Additional Information.
In addition, the Portfolio may purchase and sell put and call options on equity
and debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Portfolio or that the Sub-adviser intends to include in
the Portfolio's holdings. The Portfolio also may buy and sell put and call
options on stock indexes to hedge against overall fluctuations in the securities
markets or market sectors generally or in a specific market sector.
Further, the Portfolio may sell stock index futures contracts and may purchase
put options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Portfolio's holdings. The Portfolio also may purchase stock index futures
contracts and purchase call options or write put options on such contracts to
hedge against a general stock market or market sector advance and thereby
attempt to lessen the cost of future securities acquisitions. The Portfolio may
use interest rate futures contracts and options thereon to hedge the debt
portion of its portfolio against changes in the general level of interest rates.
AMERICAN DEPOSITORY RECEIPTS. The Portfolio may invest in securities of foreign
issuers in the form of ADRs or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company evidencing ownership of the underlying securities. Generally, ADRs in
registered form are designed for use in U.S. securities markets. See "Investment
Objectives and Policies -- Depository Receipts" in the Statement of Additional
Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Trust's Board of Trustees, without shareholder approval. The investment policies
of the Fund are identical to the investment policies of the Portfolio.
The approval of the Fund and of other investors in the Portfolio, if any, is not
required to change the
Prospectus Page 8
<PAGE>
AIM SMALL CAP EQUITY FUND
investment objective, policies or limitations of the Portfolio, unless otherwise
specified. Written notice shall be provided to shareholders of the Fund thirty
days prior to any changes in the Portfolio's investment objective. If a
percentage restriction on investment or utilization of assets in an investment
policy or restriction is adhered to at the time an investment is made, a later
change in percentage ownership of a security or kind of securities resulting
from changing market values or a similar type of event will not be considered a
violation of the Fund's or Portfolio's investment policies or restrictions.
OTHER INFORMATION REGARDING THE PORTFOLIO. As previously described, the Fund,
unlike mutual funds that directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio, which is a separate investment company.
Because the Fund will invest only in the Portfolio, the Fund's shareholders will
acquire only an indirect interest in the investments of the Portfolio.
The Fund may redeem its investment in the Portfolio at any time, if the Board of
Trustees of the Trust determines that it is in the best interests of the Fund
and its shareholders to do so. A change in the Portfolio's investment objective,
policies or limitations that is not approved by the Board or shareholders of the
Fund could require the Fund to redeem its interest in the Portfolio. Any such
redemption could result in a distribution in kind of portfolio securities (as
opposed to a cash distribution) by the Portfolio. In addition, a distribution in
kind could result in a less diversified portfolio of investments for the Fund
and could adversely affect its liquidity. Should such a distribution occur, the
Fund could incur brokerage fees or other transaction costs in converting such
securities to cash. Upon redemption, the Board would consider what action might
be taken, including the investment of all the investable assets of the Fund in
another pooled investment entity having substantially the same investment
objective as the Fund or the direct retention by the Fund of its own investment
adviser and/or subadviser to manage its assets in accordance with its investment
objective, policies and limitations discussed herein.
In addition to selling an interest therein to the Fund, the Portfolio may sell
interests therein to other non-affiliated investment companies and/or other
institutional investors. All institutional investors in the Portfolio will pay a
proportionate share of the Portfolio's expenses and will invest in the Portfolio
on the same terms and conditions. However, if another investment company invests
any or all of its assets in the Portfolio, it would not be required to sell its
shares at the same public offering price as the Fund and may charge different
sales commissions. Therefore, investors in the Fund may experience different
returns than investors in another investment company that invests exclusively in
the Portfolio. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio.
The Fund may be materially affected by the actions of other large investors, if
any, in the Portfolio. For example, as with all open-end investment companies,
if a large investor were to redeem its interest in the Portfolio, (1) the
Portfolio's remaining investors could experience higher pro rata operating
expenses, thereby producing lower returns, and (2) the Portfolio's security
holdings may become less diverse, resulting in increased risk. Institutional
investors in the Portfolio that have a greater pro rata ownership interest in
the Portfolio than the Fund could have effective voting control over the
operation of the Portfolio.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund or the Portfolio will achieve its
investment objective. The Fund's net asset value will fluctuate, reflecting
fluctuations in the market value of the Portfolio's securities. Equity
securities, particularly common stocks, generally represent the most junior
position in an issuer's capital structure and entitle holders to an interest in
the assets of an issuer, if any, remaining after all more senior claims have
been satisfied. In addition, the value of debt securities held by the Portfolio
will fluctuate with changes in the perceived creditworthiness of the issuers of
such securities and interest rates.
Prospectus Page 9
<PAGE>
AIM SMALL CAP EQUITY FUND
SMALL CAP COMPANIES. The Portfolio invests primarily in equity securities of
U.S. small cap companies. Small cap companies may be more vulnerable than larger
companies to adverse business, economic or market developments. Small cap
companies may also have more limited product lines, markets or financial
resources than companies with larger capitalizations, and may be more dependent
on a relatively small management group. In addition, small cap companies may not
be well-known to the investing public, may not have institutional ownership and
may have only cyclical, static or moderate growth prospects. Most small cap
company stocks pay low or no dividends. Securities of small cap companies are
generally less liquid and their prices more volatile than those of securities of
larger companies. The securities of some small cap companies may not be widely
traded, and the Portfolio's position in securities of such companies may be
substantial in relation to the market for such securities. Accordingly, it may
be difficult for the Portfolio to dispose of securities of these small cap
companies at prevailing market prices in order to meet redemptions.
OPTIONS AND FUTURES TRANSACTIONS. Although the Portfolio is authorized to enter
into options and futures transactions, the Portfolio might not enter into any
such transactions. Options and futures transactions involve certain risks, which
include: (1) dependence on the Sub-adviser's ability to predict movements in the
prices of individual securities, fluctuations in the general securities markets
or in the appropriate market sector and movements in interest rates; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, futures contracts or options thereon and movements in the price of the
security hedged or used for cover; (3) the fact that skills and techniques
needed to trade options, futures contracts or options thereon are different from
those needed to select the securities in which the Portfolio invests; (4) lack
of assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any particular time; (5) the
possible loss of principal under certain conditions; and (6) the possible
inability of the Portfolio to purchase or sell a portfolio security at a time
when it would otherwise be favorable for it to do so, or the possible need for
the Portfolio to sell a security at a disadvantageous time, due to the need for
the Portfolio to maintain "cover" or to set aside securities in connection with
hedging transactions.
ILLIQUID SECURITIES. The Portfolio may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's and the Portfolio's Boards of Trustees have overall responsibility
for the operation of the Fund and the Portfolio, respectively. The Trust's and
Portfolio's Boards of Trustees have approved all significant agreements between
the Trust and the Portfolio on the one side and persons or companies furnishing
services to the Fund and the Portfolio on the other, including the investment
management and administrative services agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and the transfer agency agreement. The day-to-day
operations of the Fund and the Portfolio are delegated to the officers of the
Trust and the Portfolio, subject always to the investment objective and policies
of the Fund and the Portfolio and to the general supervision of the Boards. See
"Trustees and Executive Officers" in the Statement of Additional Information for
information on the Trust's and the Portfolio's Trustees.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Portfolio include, but are not
limited to, determining the composition of the investment holdings of the
Portfolio and placing orders to buy, sell or hold particular securities. In
addition, AIM and the Sub-adviser provide
Prospectus Page 10
<PAGE>
AIM SMALL CAP EQUITY FUND
the following administrative services to the Fund and the Portfolio: furnishing
corporate officers and clerical staff; providing office space, services and
equipment; and supervising all matters relating to the Fund's and the
Portfolio's operations.
The Fund pays AIM administration fees, computed daily and paid monthly, at the
annualized rate of 0.25% of the Fund's average daily net assets. AIM has
appointed the Sub-adviser as the Fund's sub-administrator. In addition, the Fund
bears its pro rata portion of the investment management and administration fees
paid by the Portfolio to AIM and the Sub-adviser. The Portfolio pays AIM such
fees, computed daily and paid monthly, based on the average daily net assets of
the Portfolio, at the annualized rate of .475% on the first $500 million, .45%
on the next $500 million, .425% on the next $500 million and .40% on all amounts
thereafter. Out of its aggregate fees payable by the Fund and the Portfolio, AIM
pays the Sub-adviser sub-advisory and sub-administration fees equal to 40% of
the aggregate fees AIM receives from the Fund and the Portfolio. The investment
management and administration fees paid by the Fund and the Portfolio are higher
than those paid by most mutual funds. The Fund and Portfolio pay all expenses
not assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 1.40%
of the average daily net assets of the Fund's Advisor Class shares.
The Sub-adviser also serves as the Fund's and the Portfolio's pricing and
accounting agent. For these services the Sub-adviser receives a fee consisting
of 0.03% of the first $5 billion of assets, and 0.02% of the assets in excess of
$5 billion, of the AIM Funds that are sub-advised by the Sub-adviser (other than
AIM Eastern Europe Fund). Each of these funds, including the Fund and the
Portfolio, pays an amount based upon its relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Portfolio pursuant to a master investment management
and administration agreement, dated as of May 29, 1998 (the "Advisory
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises approximately 90 investment company portfolios encompassing a
broad range of investment objectives. The Sub-adviser, 50 California Street,
27th Floor, San Francisco, California 94111, and 1166 Avenue of the Americas,
New York, New York 10036, serves as the sub-adviser to the Portfolio pursuant to
an investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Portfolio, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
Prospectus Page 11
<PAGE>
AIM SMALL CAP EQUITY FUND
The investment professional primarily responsible for the portfolio management
of the Portfolio is as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE PORTFOLIO PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Mark J. Cunneen Portfolio Manager since Portfolio Manager for the Sub-adviser since December 1992. Employed
New York 1997 by Chancellor Capital Management, Inc., a predecessor of the
Sub-adviser, from December 1992 to October 1996.
</TABLE>
------------------------
With respect to the Portfolio the Sub-adviser utilizes a team approach that
relies on its bottom-up, research-intensive, process-driven stock selection
capability to build various investment portfolios. The Sub-adviser's disciplined
process combines the inputs of analysts performing fundamental and quantitative
research, various committees that set the Sub-adviser's firmwide economic
forecasts and sector and industry allocations and portfolio management teams
responsible for stock selection decisions. While individual member(s) of the
Sub-adviser's investment team are assigned primary responsibility for the
day-to-day management of the Portfolio along with similarly managed accounts,
the Portfolio is reviewed on a regular basis by the applicable investment team
to monitor compliance with applicable investment guidelines.
In placing orders for the Portfolio's portfolio securities transactions, the
Sub-adviser seeks to obtain the best net results. Consistent with its obligation
to obtain the best net results, the Sub-adviser may consider a broker/dealer's
sale of shares of the AIM Funds as a factor in considering through whom
portfolio transactions will be effected. Brokerage transactions for the
Portfolio may be executed through affiliates of AIM or the Sub-adviser. High
portfolio turnover (over 100%) involves correspondingly greater brokerage
commissions and other transaction costs that the Portfolio will bear directly
and could result in the realization of net capital gains that would be taxable
when distributed to shareholders. See "Dividends, Distributions and Tax
Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 (the "Distribution Agreement"), with AIM Distributors, a registered
broker-dealer and a wholly owned subsidiary of AIM, to act as the distributor of
Advisor Class shares of the Fund. Certain Trustees and officers of the Trust are
affiliated with AIM Distributors.
The Distribution Agreement provides AIM Distributors with the exclusive right to
distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of G.T. Global Growth Series, a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series portfolios of
the Trust.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of its investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and the
Trust's other series will be voted in the aggregate on other
Prospectus Page 12
<PAGE>
AIM SMALL CAP EQUITY FUND
matters, such as the election of Trustees and ratification of the selection of
the Trust's independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
ORGANIZATION OF THE PORTFOLIO. The Portfolio is organized as a subtrust of
Growth Portfolio, a Delaware business trust. Under Delaware law, the Fund and
other entities investing in the Portfolio enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances an investor in
the Portfolio may be held liable for the Portfolio's obligations. However,
Growth Portfolio's Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Portfolio and requires that notice of
such disclaimer be given in each agreement, obligation or instrument entered
into or executed by the Portfolio or a trustee. The Agreement and Declaration of
Trust also provides for indemnification from the Portfolio property for all
losses and expenses of any shareholder held personally liable for the
Portfolio's obligations. Thus the risk of an investor incurring financial loss
on account of such liability is limited to circumstances in which the Portfolio
itself would be unable to meet its obligations and where the other party was
held not to be bound by the disclaimer.
Whenever the Fund is requested to vote on any proposal of the Portfolio, the
Fund will hold a meeting of the Fund's shareholders and will cast its vote as
instructed by its shareholders. Shares for which no voting instructions are
received will be voted in the same proportion as the shares for which voting
instructions are received.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust, to the Fund and
to the Portfolio.
Prospectus Page 13
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several
of which offer Advisor Class shares. Only Advisor Class shares are offered
through this Prospectus. Advisor Class shares are available from the following
funds (collectively, the "Advisor Class Funds"):
<TABLE>
<S> <C>
AIM AMERICA VALUE FUND AIM GLOBAL RESOURCES FUND
AIM DEVELOPING MARKETS FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM DOLLAR FUND AIM GLOBAL TRENDS FUND
AIM EMERGING MARKETS FUND AIM INTERNATIONAL GROWTH FUND
AIM EUROPE GROWTH FUND AIM JAPAN GROWTH FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM LATIN AMERICAN GROWTH FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM MID CAP GROWTH FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM NEW PACIFIC GROWTH FUND
AIM GLOBAL GROWTH & INCOME FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL HEALTH CARE FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL HIGH INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through
Financial Advisers (as defined herein) who have entered into agreements with
A I M Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor
Class shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
for Advisor Class shares is $500.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Advisor Class shares of any Advisor Class Funds not named on the cover of
this Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered
A-1
<PAGE>
AIM INVESTOR'S GUIDE
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (800) 347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
Shareholder Name, Shareholder Account Number
OBI: (70 character limit)
</TABLE>
It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
In addition to the Advisor Class Funds, the AIM Funds consist of the
following funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND,
AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL
ESTATE FUND, AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED
FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM
CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND,
AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED
MATURITY TREASURY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM
SELECT GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND
OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
VALUE FUND and AIM WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE
GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with
the Advisor Class Funds, the "Multiple Class Funds." For information on
purchasing any of the AIM Funds and to receive a prospectus, please call (800)
347-4246. Net asset value is determined in the manner described under the
caption "Determination of Net Asset Value."
Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee"
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares.
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Investors in wrap fee programs and advisory accounts may only purchase Advisor
Class shares through Financial Advisers who have entered into agreements with
AIM Distributors. Investors may be charged a fee by their agents or brokers for
effecting transactions in Advisor Class shares.
AIM Distributors may, from time to time, pay a bonus or other consideration
or incentive to dealers who sell a minimum dollar amount of the shares of the
AIM Funds during a specified period of time. In some instances, these incentives
may be offered only to certain dealers who have sold or may sell significant
amounts of shares. At the option of the dealer, such incentives may take the
form of payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND
uses the amortized cost method of valuing the securities it holds and rounds its
per share net asset value to the nearest whole cent, it is anticipated that the
net asset value of the shares of that fund will remain constant at $1.00 per
share. However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00
net asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of
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AIM INVESTOR'S GUIDE
redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
[SPECIAL PLANS
Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of Advisor Class Funds. The Program automatically
rebalances holdings of Advisor Class Funds to the established allocation on a
periodic basis. Under the Program, a shareholder may predesignate, on a
percentage basis, how the total value of his or her holdings in a minimum of
two, and a maximum of ten, Advisor Class Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more Advisor Class Funds in the shareholder's Personal
Portfolio for shares of the same class(es) of one or more other Advisor Class
Funds in the shareholder's Personal Portfolio. See "Exchange Privilege." If
shares of the Advisor Class Fund(s) in a shareholder's Personal Portfolio have
appreciated during a rebalancing period, the Program will result in shares of
Advisor Class Fund(s) that have appreciated most during the period being
exchanged for shares of Advisor Class Fund(s) that have appreciated least. SUCH
EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR
LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions." Participation in
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AIM INVESTOR'S GUIDE
the Program does not assure that a shareholder will profit from purchases under
the Program nor does it prevent or lessen losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular Advisor Class
Fund would be 2% or less. In predesignating percentages, shareholders must use
whole percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an
Advisor Class Fund's shares. The AIM Funds and AIM Distributors reserve the
right to modify, suspend, or terminate the Program at any time on 60 days' prior
written notice to shareholders. A request to participate in the Program must be
received in good order at least five business days prior to the next rebalancing
date. Once a shareholder establishes the Program for his or her Personal
Portfolio, a shareholder cannot cancel or change which rebalancing frequency,
which Advisor Class Funds or what allocation percentages are assigned to the
Program, unless canceled or changed in writing and received by the Transfer
Agent in good order at least five business days prior to the rebalancing date.
Certain dealers/financial institutions may charge a fee for establishing
accounts relating to the Program. Investors should contact their
dealers/financial institutions or AIM Distributors for more information.]
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the
Advisor Class Funds may participate in an exchange privilege as described below.
AIM Distributors acts as distributor for the Advisor Class Funds which represent
a range of different investment objectives and policies.
Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor Class Fund acquired through exchange
must be qualified for sale in the state in which the shareholder resides; (c)
the exchange must be made between accounts having identical registrations and
addresses; (d) the full amount of the purchase price for the shares being
exchanged must have already been received by the fund; (e) the account from
which shares have been exchanged must be coded as having a certified taxpayer
identification number on file or, in the alternative, an appropriate IRS Form
W-8 (certificate of foreign status) or Form W-9 (certifying exempt status) must
have been received by the fund; (f) newly acquired shares (through either an
initial or subsequent investment) are held in an account for at least ten
business days, and all other shares are held in an account for at least one day,
prior to the exchange; and (g) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the Advisor
Class Funds.
THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but
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AIM INVESTOR'S GUIDE
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that an Advisor Class Fund would be materially
disadvantaged by an immediate transfer of the proceeds of the exchange. If a
shareholder is exchanging into an Advisor Class Fund that declares daily
dividends ("Dividends, Distributions and Tax Matters -- Dividends and
Distributions," below), and the release of the exchange proceeds is delayed for
the foregoing five-day period, such shareholder will not begin to accrue
dividends until the sixth business day after the exchange. Advisor Class shares
purchased by check may not be exchanged until it is determined that the check
has cleared, which may take up to ten business days from the date that the check
is received. See "Terms and Conditions of Purchase of the AIM Funds -- Timing of
Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. A shareholder may give exchange information to his
Financial Adviser. If a shareholder does not wish to allow telephone exchanges
by any person in his account, he should decline that option on the account
application. AIM Distributors has made arrangements with certain dealers and
investment advisory firms to accept telephone instructions to exchange shares
between any of the Advisor Class Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the Advisor Class Funds, including the condition that any such
dealer or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
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HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/ financial institutions may charge service fees for handling
repurchase transactions.
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
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AIM INVESTOR'S GUIDE
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in his account, he should decline that option on the account application.
The telephone redemption feature can be used only if: (a) the redemption
proceeds are to be mailed to the address of record or transferred electronically
or wired to the pre-authorized bank account; (b) there has been no change of
address of record on the account within the preceding 30 days; (c) the shares to
be redeemed are not in certificate form; (d) the person requesting the
redemption can provide proper identification information, and (e) the proceeds
of the redemption do not exceed $50,000. AIM Distributors has made arrangements
with certain dealers and investment advisors to accept telephone instructions
for the redemption of shares. AIM Distributors reserves the right to impose
conditions on these dealers and investment advisors, including the condition
that they enter into agreements (which contain additional conditions with
respect to the redemption of shares) with AIM Distributors. The Transfer Agent
and AIM Distributors will not be liable for any loss, expense or cost arising
out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's taxpayer identification
number and current address, and mailings of confirmations promptly after the
transaction.
TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the
Advisor Class Funds are redeemed at their net asset value next computed after a
request for redemption in proper form (including signature guarantees and other
required documentation for written redemptions) is received by the Transfer
Agent or certain financial institutions (or their designees) who are authorized
to accept redemption orders on behalf of the AIM Funds, provided that such
orders are transmitted to the Transfer Agent prior to the time set for receipt
of such orders. Orders for the redemption of Advisor Class shares received on
any business day of an AIM Fund will be confirmed at the price determined as of
the close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the
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proceeds are to be sent to the address of record. These requirements may be
waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
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DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each Advisor Class Fund's policy regarding the payment of dividends and
distributions is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
Dividends on Advisor Class shares of an Advisor Class Fund are expected to
be higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
A-9
<PAGE>
AIM INVESTOR'S GUIDE
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares. With respect to tax-exempt shareholders, dividends and distributions
from the AIM Funds are not subject to federal income taxation to the extent
permitted under the applicable tax exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
A-10
<PAGE>
AIM INVESTOR'S GUIDE
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM MID CAP GROWTH
FUND, AIM SMALL CAP EQUITY FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each Advisor Class Fund's transfer
agent and dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If
A-11
<PAGE>
AIM INVESTOR'S GUIDE
several members of a household own shares of the same fund, only one annual or
semi-annual report will be mailed to that address. To receive additional copies,
please call (800) 347-4246, or write to A I M Distributors, Inc., P.O. Box 4739,
Houston, Texas 77210-4739. A Statement of Additional Information has been filed
with the SEC and is available upon request and without charge, by writing or
calling AIM Distributors. The SEC maintains a Web site at http://www.sec.gov
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding the Fund. This Prospectus omits
certain information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from this
Prospectus, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
A-12
<PAGE>
AIM SMALL CAP EQUITY FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
[LOGO]
AIM WORLDWIDE GROWTH FUND:
ADVISOR CLASS
PROSPECTUS -- SEPTEMBER 8, 1998
- --------------------------------------------------------------------------------
This Prospectus contains information about AIM Worldwide Growth Fund (the
"Fund"), which is one of several series investment portfolios comprising AIM
Growth Series (the "Trust"), an open-end, series, management investment company.
The Fund is a diversified portfolio which seeks long-term growth of capital by
investing primarily in equity securities of issuers domiciled anywhere in the
world.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. It should be read and
retained for future reference. A Statement of Additional Information, dated
September 8, 1998, has been filed with the Securities and Exchange Commission
("SEC") and, is incorporated herein by reference. The Statement of Additional
Information is available without charge upon written request to the Trust at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173, or by calling (800)
347-4246. The SEC maintains a Web site at http://www.sec.gov that contains the
Statement of Additional Information, material incorporated by reference, and
other information regarding the Fund. Additional information about the fund may
also be obtained from http://www.aimfunds.com.
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUND'S SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM WORLDWIDE GROWTH FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Summary................................................................................... 3
Financial Highlights...................................................................... 6
Investment Objective and Policies......................................................... 7
Risk Factors.............................................................................. 10
Management................................................................................ 13
Other Information......................................................................... 15
</TABLE>
- --------------------------------------------------------------------------------
SUMMARY
- ------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of the Trust.
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests primarily in equity securities of issuers domiciled in its Primary Investment Area
(as defined herein).
Investment Managers: The Fund is managed by AIM Advisors, Inc. ("AIM") and is sub-advised and sub-administered by INVESCO
(NY), Inc. (the "Sub-adviser"). AIM and the Sub-adviser and their worldwide asset management
affiliates provide investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both indirect wholly owned
subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are an independent investment
management group that has a significant presence in the institutional and retail segment of the
investment management industry in North America and Europe, and a growing presence in Asia. AIM was
organized in 1976 and, together with its subsidiaries, currently advises approximately 90 investment
company portfolios.
</TABLE>
Prospectus Page 2
<PAGE>
AIM WORLDWIDE GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Purchasing Shares: Advisor Class shares are offered through this Prospectus to (a) trustees or other fiduciaries
purchasing shares for employee benefit plans which are sponsored by organizations which have at least
1,000 employees; (b) any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment adviser has investment discretion over such
account, and (ii) the account holder pays such person as compensation for its advice and other
services an annual fee of at least 0.50% on the assets in the account; (c) any account with assets of
a least $10,000 if (i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least 0.50% on the assets in the account;
(d) accounts advised by the Sub-adviser or one of the companies formerly affiliated with the Asset
Management Division of Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the funds in The AIM Family of Funds on May 29, 1998; and (e) any of the
companies composing or affiliated with AMVESCAP PLC.
Pursuant to a separate prospectus, the Fund also offers Class A and Class B shares, which represent
interests in the Fund. The Class A and Class B shares have different distribution arrangements.
Initial investments in Advisor Class shares must be at least $500 and additional investments must be
at least $50. The distributor of the Advisor Class shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, TX 77210-4739. See "How to Purchase Shares."
Exchange Privilege: The Fund is among those mutual funds distributed by AIM Distributors (collectively, "The AIM Family
of Funds"). Advisor Class shares of the Fund may be exchanged for Advisor Class shares of certain
funds in the AIM Family of Funds in the manner and subject to the policies and charges set forth
herein. See "Exchange Privilege."
Redeeming Shares: Advisor Class shareholders of the Fund may redeem all or a portion of their shares at net asset value
on any business day. See "How to Redeem Shares."
Distributions: The Fund currently declares and pays dividends from net investment income, if any, on an annual
basis. The Fund makes distributions of realized capital gains, if any, on an annual basis. Dividends
and distributions of the Fund may be reinvested at net asset value without payment of a sales charge
in the Fund's shares or may be invested in shares of the other funds in The AIM Family of Funds. See
"Dividends, Distributions and Tax Matters."
Risk Factors: There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the market value of its securities.
</TABLE>
Prospectus Page 3
<PAGE>
AIM WORLDWIDE GROWTH FUND
SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
The Fund may invest a significant portion of its assets in foreign securities. Investments in foreign
securities involve risks relating to political and economic developments abroad and the differences
between the regulations to which U.S. and foreign issuers are subject. Individual foreign economies
also may differ favorably or unfavorably from the U.S. economy. Changes in foreign currency exchange
rates also may affect the Fund's net asset value, earnings and gains and losses realized on sales of
securities.
The Fund may engage in certain foreign currency, options and futures transactions to attempt to hedge
against the overall level of investment or currency risk associated with its present or planned
investments. Such transactions involve certain risks and transaction costs.
See "Investment Objective and Policies" and "Risk Factors."
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 4
<PAGE>
AIM WORLDWIDE GROWTH FUND
TABLE OF FEES AND EXPENSES. The expenses and maximum transaction costs
associated with investing in the Advisor Class shares of the Fund are reflected
in the following table (1):
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION COSTS:
Maximum sales charge on
purchases (as a % of
offering price)............ None
Sales charges on reinvested
distributions to
shareholders............... None
Maximum deferred sales
charges (as a % of net
asset value at time of
purchase or sale, whichever
is less)................... None
Redemption charges.......... None
Exchange fees............... None
ANNUAL FUND OPERATING EXPENSES
(2):
(AS A % OF AVERAGE NET
ASSETS)
Investment management and
administration fees........ .98%
12b-1 distribution and
service fees............... None
Other expenses (after
reimbursements)............ .49%
---------
Total Fund Operating
Expenses................... 1.47%
---------
---------
</TABLE>
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (3):
An investor would have directly or indirectly paid the following expenses at the
end of the periods shown on a $1,000 investment in the Fund, assuming a 5%
annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Advisor Class shares....................................................... $15 $47 $81 $177
</TABLE>
- --------------
(1) THIS TABLE IS INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE VARIOUS
COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
(2) Expenses are based on the Fund's fiscal year ended December 31, 1997. "Other
expenses" include custody, transfer agent, legal, audit and other operating
expenses. See "Management" herein and the Statement of Additional
Information for more information. Investors purchasing Advisor Class shares
through financial planners, trust companies, bank trust departments or
registered investment advisers, or under a "wrap fee" program, will be
subject to additional fees charged by such entities or by the sponsors of
such programs. Where any account advised by one of the companies composing
or affiliated with AMVESCAP PLC invests in Advisor Class shares of the Fund,
such account shall not be subject to duplicative advisory fees.
(3) THE "HYPOTHETICAL EXAMPLE" SET FORTH ABOVE IS NOT A REPRESENTATION OF PAST
OR FUTURE EXPENSES. THE FUND'S ACTUAL EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The table and the
assumption in the Hypothetical Example of a 5% annual return are required by
regulations of the SEC applicable to all mutual funds. The 5% annual return
is not a prediction of and does not represent the Fund's projected or actual
performance.
Prospectus Page 5
<PAGE>
AIM WORLDWIDE GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below provides condensed financial information concerning income and
capital changes for one Advisor Class share of the Fund. This information is
supplemented by the financial statements and accompanying notes appearing in the
Statement of Additional Information.
AIM WORLDWIDE GROWTH FUND
(FORMERLY GT GLOBAL WORLDWIDE GROWTH FUND)
[TO BE ADDED]
------------------------
PERFORMANCE. All advertisements of the Fund will disclose the maximum sales
charge (including deferred sales charges) imposed on purchases of the Fund's
shares. If any advertised performance data does not reflect the maximum sales
charge (if any), such advertisement will disclose that the sales charge has not
been deducted in computing the performance data, and that, if reflected, the
maximum sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Fund. Further information regarding the Fund's
performance is contained in the Fund's annual report to shareholders, which is
available upon request and without charge.
The Fund's total return is calculated in accordance with a standardized formula
for computation of annualized total return.
The Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL
YEAR-BY-YEAR RESULTS. To illustrate the components of overall performance, the
Fund may separate its cumulative and average annual returns into income results
and capital gains or losses.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of the Fund. Such practices will
have the effect of increasing the Fund's total return. The performance of the
Fund will vary from time to time and past results are not necessarily
representative of future results. The Fund's performance is a function of its
portfolio management in selecting the type and quality of portfolio securities
and is affected by operating expenses of the Fund as well as by general market
conditions.
Prospectus Page 6
<PAGE>
AIM WORLDWIDE GROWTH FUND
INVESTMENT OBJECTIVE
AND POLICIES
- --------------------------------------------------------------------------------
The Fund seeks long-term growth of capital. It seeks its objective by investing,
under normal circumstances, at least 65% of its total assets in equity
securities of issuers domiciled in its Primary Investment Area, as defined
below. Equity securities in which the Fund may invest include common stocks,
preferred stocks, convertible debt securities and warrants to acquire such
securities. The Fund's Primary Investment Area includes the following countries:
Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Columbia,
Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Indonesia,
Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands,
New Zealand, Norway, Pakistan, Peru, the Philippines, Portugal, Singapore,
Spain, South Africa, South Korea, Sweden, Switzerland, Taiwan, Thailand, Turkey,
United Kingdom, United States and Venezuela. There can be no assurance that the
Fund will achieve its investment objective.
Because the development of the world's economies and stock markets is rapidly
evolving, from time to time the Board of Trustees may add or delete countries
from the Fund's Primary Investment Area.
The Fund is designed for those investors desiring to delegate equity investment
decisions, including allocation of assets among the world's different markets,
currency strategies and individual stock selection, to the Sub-adviser's
professional team of investment specialists.
The Fund is intended for investors seeking to complement their U.S. equity
investments with a professionally managed non-U.S. portfolio. The Fund may
invest up to 35% of its total assets in the equity securities of issuers
domiciled outside of its Primary Investment Area. Such investments may include:
(a) securities of issuers in countries that are not located in the Primary
Investment Area but are linked by tradition, economic markets, cultural
similarities or geography to the countries in such Primary Investment Area; and
(b) securities of issuers located elsewhere in the world that have operations in
the Primary Investment Area or that stand to benefit from political and economic
events in the Primary Investment Area.
Under normal circumstances, the assets of the Fund are invested in the equity
securities of issuers domiciled in at least three different countries, and 20%
to 60% of the Fund's assets normally are invested in the equity securities of
U.S. issuers.
The Fund may invest up to 35% of its total assets in debt securities, including
U.S. and foreign government securities and corporate debt securities, Samurai
and Yankee bonds, Eurobonds and Depository Receipts. The Fund will limit its
purchases of debt securities to investment grade obligations. "Investment grade"
debt refers to those securities rated within one of the four highest ratings
categories by Moody's Investors Service, Inc. ("Moody's") or by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), or, if not
similarly rated by any other nationally recognized statistical rating
organization ("NRSRO"), deemed by the Sub-adviser to be of equivalent quality.
Debt rated Baa by Moody's, which is the lowest category of investment grade
debt, is considered by Moody's to have speculative characteristics. See the
Statement of Additional Information for a description of Moody's and S&P
ratings.
SELECTION OF INVESTMENTS AND ASSET ALLOCATION
In managing the Fund, the Sub-adviser seeks to identify those countries and
industries where economic and political factors, including currency movements,
are likely to produce above-average growth rates. The Sub-adviser further
attempts to identify those companies in such countries and industries that are
best positioned and managed to take advantage of these economic and political
factors. The Sub-adviser intends to invest in such markets only after balancing
the potential for growth of selected companies in each market relative to the
risks of investing in each such country. Among the factors to be considered are
that several of the markets are so-called developing countries, and their
economies and markets are less developed and more prone to uncertainty,
instability and risk than those of the other markets in which the Fund invests.
For purposes of this Prospectus, an issuer typically is considered as domiciled
in a particular country if it
Prospectus Page 7
<PAGE>
AIM WORLDWIDE GROWTH FUND
is (a) organized under the laws of, or has its principal office in, a particular
country or (b) normally derives 50% or more of its total revenues from business
in that country, provided that, in the Sub-adviser's view, the value of such
issuer's securities tends to reflect such country's development to a greater
extent than developments elsewhere. However, these are not absolute
requirements, and certain companies incorporated in a particular country and
considered by the Sub-adviser to be located in that country may have substantial
foreign operations or subsidiaries and/or export sales exceeding in size the
assets or sales in that country.
The Sub-adviser allocates investments among fixed income securities of
particular issuers on the basis of its views as to the best values then
currently available in the marketplace. Such values are a function of yield,
maturity, issue classification and quality characteristics, coupled with
expectations regarding the economy, movements in the general level and term of
interest rates, currency values, political developments, and variations in the
supply of funds available for investment in the world bond market relative to
the demands placed upon it. If market interest rates decline, fixed income
securities generally appreciate in value and vice versa. Fixed income securities
denominated in currencies other than the U.S. dollar or in multinational
currency units are evaluated on the strength of the particular currency against
the U.S. dollar as well as on the current and expected levels of interest rates
in the country or countries. In addition to the foregoing, the Fund may seek to
take advantage of differences in relative values of fixed income securities
among various countries.
OTHER INVESTMENT POLICIES
TEMPORARY DEFENSIVE STRATEGIES. In the interest of preserving shareholders'
capital, the Sub-adviser may employ a temporary defensive investment strategy if
it determines such a strategy to be warranted due to market, economic or
political conditions. During such time the Fund may invest less than 65% of its
total assets in the types of securities covered by its primary investment
policy. Under a defensive strategy, the Fund may invest up to 100% of its total
assets in cash (U.S. dollars, foreign currencies or multinational currency units
such as Euros) and/or high quality debt securities or money market instruments
issued by corporations or the U.S. or a foreign government. In addition, for
temporary defensive purposes, most or all investments of the Fund may be made in
the United States and denominated in U.S. dollars. To the extent the Fund adopts
a temporary defensive position, it will not be invested so as to achieve
directly its investment objective.
In addition, pending investment of proceeds from new sales of Fund shares or to
meet its ordinary daily cash needs, the Fund may hold cash (U.S. dollars,
foreign currencies or multinational currency units) and may invest in high
quality foreign or domestic money market instruments. For a description of money
market instruments, see "Temporary Defensive Strategies" in the "Investment
Objectives and Policies" section of the Statement of Additional Information.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. With respect to certain countries,
investments may only be made through investment in other investment companies,
some of which may be investment vehicles or companies that are advised by the
Sub-adviser or its affiliates ("Affiliated Funds"), that in turn are authorized
to invest in the securities of such countries. The Fund may invest up to 10% of
its total assets in other investment companies. As a shareholder in an
investment company, the Fund would bear its ratable share of that investment
company's expenses, including its advisory and administration fees. At the same
time, the Fund would continue to pay its own management fees and other expenses.
AIM and the Sub-adviser will waive their advisory fees to the extent that the
Fund invests in an Affiliated Fund.
PRIVATIZATIONS. The governments of some foreign countries have been engaged in
programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest in privatizations in appropriate circumstances. In certain
foreign countries, the ability of foreign entities to participate in
privatizations may be limited by local law, or the terms on which the Fund may
be permitted to participate may be less advantageous than those for local
investors. There can be no assurance that foreign governments will continue to
sell companies currently owned or controlled by them or that privatization
programs will be successful.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND ROLL TRANSACTIONS. The Fund may
borrow from banks or may borrow through reverse repurchase agreements and "roll"
transactions in connection with meeting requests for the redemption of the
Fund's shares. The Fund also may borrow up to 5% of its total assets for
temporary or emergency purposes other than to meet redemptions. The
Prospectus Page 8
<PAGE>
AIM WORLDWIDE GROWTH FUND
Fund may borrow up to 33 1/3% of its total assets. However, no additional
investments will be made if the Fund's borrowings exceed 5% of its total assets.
Any borrowing by the Fund may cause greater fluctuation in the value of its
shares than would be the case if the Fund did not borrow.
A reverse repurchase agreement is a borrowing transaction in which the Fund
transfers possession of a security to another party, such as a bank or
broker/dealer, in return for cash and agrees to repurchase the security in the
future at an agreed upon price which includes an interest component. A "roll"
borrowing transaction involves the Fund's sale of securities together with its
commitment (for which that Fund may receive a fee) to purchase similar, but not
identical, securities at a future date.
SECURITIES LENDING. The Fund may lend its portfolio securities to broker/dealers
or to other institutional investors. Securities lending allows the Fund to
retain ownership of the securities loaned and, at the same time, enhance the
Fund's total return. The Fund limits its loans of portfolio securities to an
aggregate of 30% of the value of its total assets, measured at the time any such
loan is made. While a loan is outstanding, the borrower must maintain with the
Fund's custodian collateral consisting of cash, U.S. government securities or
certain irrevocable letters of credit equal to at least the value of the
borrowed securities, plus any accrued interest or such other collateral as
permitted by the Fund's investment program and regulatory agencies, and as
approved by the Board. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
WHEN ISSUED OR FORWARD COMMITMENT SECURITIES. The Fund may purchase debt
securities on a "when-issued" basis and may purchase or sell such securities on
a "forward commitment" basis in order to hedge against anticipated changes in
interest rates and prices. The price, which generally is expressed in yield
terms, is fixed at the time the commitment is made, but delivery and payment for
the securities take place at a later date. When-issued securities and forward
commitments may be sold prior to the settlement date, but the Fund will purchase
or sell when-issued securities or enter into forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be. No income accrues on securities that have been purchased pursuant to a
forward commitment or on a when-issued basis prior to delivery to the Fund. If
the Fund disposes of the right to acquire a when-issued security prior to its
acquisition or disposes of its right to deliver or receive against a forward
commitment, it may incur a gain or loss. At the time the Fund enters into a
transaction on a when-issued or forward commitment basis, it will segregate cash
or liquid securities equal to the value of the when-issued or forward commitment
securities with its custodian and will mark to market daily such assets. There
is a risk that the securities may not be delivered and that the Fund may incur a
loss.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. The Fund may use forward
currency contracts, futures contracts, options on securities, options on
indices, options on currencies and options on futures contracts to attempt to
hedge against the overall level of investment risk normally associated with the
Fund's portfolio. These instruments are often referred to as "derivatives,"
which may be defined as financial instruments whose performance is derived, at
least in part, from the performance of another asset (such as a security,
currency or an index of securities). The Fund may enter into such instruments up
to the full value of its portfolio assets. See "Risk Factors -- Options, Futures
and Currency Strategies" herein and the Statement of Additional Information.
To attempt to hedge against adverse movements in exchange rates between
currencies, the Fund may enter into forward currency contracts for the purchase
or sale of a specified currency at a specified future date. Such contracts may
involve the purchase or sale of a foreign currency against the U.S. dollar or
may involve two foreign currencies. The Fund may enter into forward currency
contracts either with respect to specific transactions or with respect to its
portfolio positions. The Fund also may purchase and sell put and call options on
currencies, futures contracts on currencies and options on futures contracts on
currencies to hedge against movements in exchange rates.
In addition, the Fund may purchase and sell put and call options on equity and
debt securities to hedge against the risk of fluctuations in the prices of
securities held by the Fund or that the Sub-adviser intends to include in the
Fund's portfolio. The Fund also may buy and sell put and call options on stock
indexes to hedge against overall fluctuations in the securities markets or
market sectors generally or in a specific market sector.
Prospectus Page 9
<PAGE>
AIM WORLDWIDE GROWTH FUND
Further, the Fund may sell stock index futures contracts and may purchase put
options or write call options on such futures contracts to protect against a
general stock market or market sector decline that could adversely affect the
Fund's portfolio. The Fund also may purchase stock index futures contracts and
purchase call options or write put options on such contracts to hedge against a
general stock market or market sector advance and thereby attempt to lessen the
cost of future securities acquisitions. The Fund may use interest rate futures
contracts and options thereon to hedge the debt portion of its portfolio against
changes in the general level of interest rates.
DEPOSITORY RECEIPTS. The Fund may invest in securities of foreign issuers in the
form of ADRs or other similar securities convertible into securities of foreign
issuers. These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted. ADRs are receipts
typically issued by a United States bank or trust company evidencing ownership
of the underlying securities. Generally, ADRs in registered form are designed
for use in U.S. securities markets. See "Investment Objectives and Policies --
Depository Receipts" in the Statement of Additional Information.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval of a majority of the Fund's outstanding voting securities.
A "majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
Fund's outstanding shares are represented, or (ii) more than 50% of the Fund's
outstanding shares. In addition, the Fund has adopted certain investment
limitations that also may not be changed without shareholder approval. A
complete description of these limitations is included in the Statement of
Additional Information. Unless specifically noted, the Fund's investment
policies described in this Prospectus and in the Statement of Additional
Information are not fundamental policies and may be changed by vote of the
Company's Board of Trustees, without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of the Fund's investment policies or restrictions.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
GENERAL. There is no assurance that the Fund will achieve its investment
objective. The Fund's net asset value will fluctuate, reflecting fluctuations in
the market value of its securities. Equity securities, particularly common
stocks, generally represent the most junior position in an issuer's capital
structure and entitle holders to an interest in the assets of an issuer, if any,
remaining after all more senior claims have been satisfied. In addition, the
value of debt securities held by the Fund will fluctuate with changes in the
perceived creditworthiness of the issuers of such securities and interest rates.
FOREIGN INVESTING. The Fund invests a significant portion of its assets in
foreign securities. Investing in foreign securities entails certain risks. The
securities of non-U.S. issuers generally will not be registered with, nor will
the issuers thereof be subject to, the reporting requirements of the SEC.
Accordingly, there may be less publicly available information about foreign
securities and issuers than is available about domestic securities and issuers.
Foreign companies generally are not subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic companies. Securities of some foreign companies are less
liquid and their prices may be more volatile than securities of comparable
domestic companies. In addition, certain costs attributable to foreign
investing, such as custody charges, are higher than those attributable to
domestic investing. The Fund's interest and dividends from foreign issuers may
be subject to non-U.S. withholding taxes, thereby reducing its net investment
income.
With respect to some foreign countries, there is the increased possibility of
expropriation or confiscatory taxation, limitations on the repatriation of
assets of the Fund, political or social instability, or diplomatic developments
that could affect their
Prospectus Page 10
<PAGE>
AIM WORLDWIDE GROWTH FUND
investments in those countries. Moreover, individual foreign economies may
differ favorably or unfavorably from the U.S. economy in such respects as growth
of gross national product, rate of inflation, rate of savings and capital
reinvestment, resource self-sufficiency and balance of payments positions.
Because the Fund may invest substantially in securities denominated in
currencies other than the U.S. dollar, and may hold foreign currencies, it will
be affected favorably or unfavorably by exchange control regulations or changes
in the exchange rates between such currencies and the U.S. dollar. Changes in
currency exchange rates will influence the value of the Fund's shares, and also
may affect the value of dividends and interest earned by the Fund and gains and
losses realized by the Fund. Currencies generally are evaluated on the basis of
fundamental economic criteria (e.g., relative inflation and interest rate levels
and trends, growth rate forecasts, balance of payments status and economic
policies) as well as technical and political data. The exchange rates between
the U.S. dollar and other currencies are determined by supply and demand in the
currency exchange markets, the international balance of payments, governmental
intervention, speculation and other economic and political conditions. If the
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the currency would adversely affect the value of the security
expressed in U.S. dollars.
INVESTING IN EMERGING MARKETS. Because of the special risks associated with
investing in emerging markets, an investment in the Fund should be considered
speculative. Investors are strongly advised to consider carefully the special
risks involved in emerging markets, which are in addition to the usual risks of
investing in developed foreign markets around the world.
Investing in emerging markets involves risks relating to potential political and
economic instability within such markets and the risks of expropriation,
nationalization, confiscation of assets and property or the imposition of
restrictions on foreign investment and on repatriation of capital invested. In
the event of such expropriation, nationalization or other confiscation in any
emerging market, the Fund could lose its entire investment in that market.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had and may continue to have negative
effects on the economies and securities markets of certain emerging market
countries.
Economies in emerging markets generally are dependent heavily upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values and other protectionist measures imposed or negotiated by the countries
with which they trade. These economies also have been and may continue to be
affected adversely by economic conditions in the countries in which they trade.
The securities markets of emerging countries are substantially smaller, less
developed, less liquid and more volatile than the securities markets of the
United States and other more developed countries. Disclosure and regulatory
standards in many respects are less stringent than in the United States and
other major markets. There also may be a lower level of monitoring and
regulation of emerging securities markets and the activities of investors in
such markets, and enforcement of existing regulations has been extremely
limited.
In addition, brokerage commissions, custodial services and other costs relating
to investment in foreign markets generally are more expensive than in the United
States, particularly with respect to emerging markets. Such markets have
different settlement and clearance procedures. In certain markets there have
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the Fund to make intended securities purchases due to settlement
problems could cause the Fund to forego attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems could
result either in losses to the Fund due to subsequent declines in value of the
portfolio security or, if the Fund has entered into a contract to sell the
security, in possible liability to the purchaser.
In addition, many of the currencies in emerging market countries have
experienced steady devaluations relative to the U.S. dollar and major
devaluations have historically occurred in certain countries.
The risk also exists that an emergency situation may arise in one or more
emerging markets as a result of which trading of securities may cease or may be
substantially curtailed and prices for the Fund's portfolio securities in such
markets may not be readily available. Section 22(e) of the 1940 Act
Prospectus Page 11
<PAGE>
AIM WORLDWIDE GROWTH FUND
permits a registered investment company to suspend redemption of its shares for
any period during which an emergency exists, as determined by the SEC.
Accordingly, when the Fund believes that appropriate circumstances warrant, it
will promptly apply to the SEC for a determination that an emergency exists
within the meaning of Section 22(e). During the period commencing from the
Fund's identification of such conditions until the date of SEC action, the
portfolio securities of the Fund in the affected markets will be valued at fair
value as determined in good faith by or under the direction of the Company's
Board of Trustees.
[PACIFIC REGION COUNTRIES. The Fund may invest significantly in this region.
Certain of the risks associated with international investments are heightened
for investments in Pacific region countries. For example, some of the currencies
of Pacific region countries have experienced steady devaluations relative to the
U.S. dollar, and major adjustments have been made periodically in certain such
currencies. Moreover, recent currency devaluations in some Pacific region
countries have resulted in high interest rate levels and sharp reductions in
economic activity and have diminished prospects for short-term growth in
corporate earnings. Certain countries, such as India, face serious exchange
constraints. Jurisdictional disputes also exist between South Korea and North
Korea.
In addition, Hong Kong reverted to Chinese administration on July 1, 1997. The
long-term effects of this reversion are not known at this time. However, the
Fund's investments in Hong Kong may now be subject to the same or similar risks
as any investment in China. Investments in Hong Kong may be subject to
expropriation, nationalization or confiscation, in which case the Pacific Fund
could lose its entire investment in Hong Kong. In addition, the reversion of
Hong Kong also presents a risk that the Hong Kong dollar will be devalued and a
risk of possible loss of investor confidence in Hong Kong's currency, stock
market and economy.]
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Although the Fund is
authorized to enter into options, futures and forward currency transactions it
might not enter into any such transactions. Options, futures and foreign
currency transactions involve certain risks, which include: (1) dependence on
the Sub-adviser's ability to predict movements in the prices of individual
securities, fluctuations in the general securities markets or in the appropriate
market sector and movements in interest rates and currency markets; (2)
imperfect correlation, or even no correlation, between movements in the price of
options, forward contracts, futures contracts or options thereon and movements
in the price of the currency or security hedged or used for cover; (3) the fact
that skills and techniques needed to trade options, futures contracts or options
thereon or to use forward currency contracts are different from those needed to
select the securities in which the Fund invests; (4) lack of assurance that a
liquid secondary market will exist for any particular option, futures contract
or option thereon at any particular time; (5) the possible loss of principal
under certain conditions; and (6) the possible inability of the Fund to purchase
or sell a portfolio security at a time when it would otherwise be favorable for
it to do so, or the possible need for the Fund to sell a security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to set
aside securities in connection with hedging transactions.
ILLIQUID SECURITIES. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists, so-called "illiquid
securities." Illiquid securities may be more difficult to value than liquid
securities, and the sale of illiquid securities generally will require more time
and result in higher brokerage charges or dealer discounts and other selling
expenses than the sale of liquid securities. Moreover, illiquid securities often
sell at a price lower than similar securities that are liquid.
Prospectus Page 12
<PAGE>
AIM WORLDWIDE GROWTH FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Board of Trustees has approved all significant agreements between
the Trust and persons or companies furnishing services to the Fund, including
the investment management and administration agreement with AIM, the investment
sub-advisory and sub-administration agreement between AIM and the Sub-adviser,
the agreements with AIM Distributors regarding distribution of the Fund's
shares, the custody agreement and transfer agency agreement. The day-to-day
operations of the Fund are delegated to the officers of the Trust, subject
always to the investment objective and policies of the Fund and to the general
supervision of the Trust's Board. See "Trustees and Executive Officers" in the
Statement of Additional Information for information on the Trustees of the
Trust.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Services provided by AIM and the
Sub-adviser as the investment managers of the Fund include, but are not limited
to, determining the composition of the portfolio of the Fund and placing orders
to buy, sell or hold particular securities. In addition, AIM and the Sub-adviser
provide the following administrative services to the Fund: furnishing corporate
officers and clerical staff; providing office space, services and equipment; and
supervising all matters relating to the Fund's operations.
The Fund pays AIM investment management and administration fees, computed daily
and paid monthly, based on its average daily net assets, at the annualized rate
of .975% on the first $500 million, .95% on the next $500 million, .925% on the
next $500 million and .90% on amounts thereafter. Outof the aggregate fees
payable by the Fund, AIM pays the Sub-adviser sub-advisory and
sub-administration fees equal to 40% of the aggregate fees AIM receives from the
Fund. The investment management and administrative fees paid by the Fund are
higher than those paid by most mutual funds. The Fund pays all expenses not
assumed by AIM, the Sub-adviser, AIM Distributors or other agents. AIM has
undertaken to limit the Fund's expenses (exclusive of brokerage commissions,
taxes, interest and extraordinary expenses) to the maximum annual rate of 1.65%
of the average daily net assets of the Fund's Advisor Class shares.
The Sub-adviser also serves as the Fund's pricing and accounting agent. For
these services the Sub-adviser receives a fee consisting of 0.03% of the first
$5 billion of assets, and 0.02% of the assets in excess of $5 billion, of the
AIM Funds that are sub-advised by the Sub-adviser (other than AIM Eastern Europe
Fund). Each of these funds, including the Fund, pays an amount based upon its
relative net assets.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment manager to the Fund pursuant to a master investment management and
administration agreement, dated as of May 29, 1998 (the "Advisory Agreement").
AIM was organized in 1976 and, together with its subsidiaries, manages or
advises approximately 90 investment company portfolios encompassing a broad
range of investment objectives. The Sub-adviser 50 California Street, 27th
Floor, San Francisco, California 94111, and 1166 Avenue of the Americas, New
York, New York 10036, serves as the sub-adviser to the Fund pursuant to an
investment sub-advisory and sub-administration agreement dated as of May 29,
1998. Prior to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset
Management, Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of the Sub-adviser, consummated a purchase
agreement with AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset
Management Division, which included the Sub-adviser and certain other
affiliates. As a result of this transaction, the Sub-adviser is now an indirect
wholly owned subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and
its worldwide asset management affiliates provided investment management and/or
administrative services to institutional, corporate and individual clients
around the world since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and
Prospectus Page 13
<PAGE>
AIM WORLDWIDE GROWTH FUND
retail segment of the investment management industry in North America and
Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices in Atlanta, Boston, Dallas, Denver, Louisville,
Miami, Portland (Oregon), Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Fund, the Sub-adviser employs a team approach,
taking advantage of its investment resources around the world.
The investment professionals primarily responsible for the portfolio management
of the Fund are as follows:
<TABLE>
<CAPTION>
RESPONSIBILITIES FOR BUSINESS EXPERIENCE
NAME/OFFICE THE FUND PAST FIVE YEARS
- ----------------------- ------------------------ ---------------------------------------------------------------------
<S> <C> <C>
Roger Yates Portfolio Manager since Global Chief Investment Officer for the Sub-adviser and INVESCO GT
London 1996 Asset Management PLC (London) ("GT Asset Management"), an affiliate
of the Sub-adviser, since October 1997. International Chief
Investment Officer for the Sub-adviser and GT Asset Management from
September 1996 to October 1997. Chief Investment Officer and
Portfolio Manager for Europe and the United Kingdom for the
Sub-adviser and GT Asset Management from 1994 to September 1996.
Investment Manager for Morgan Grenfell Asset Management from 1988 to
1994.
Michael Lindsell Portfolio Manager since Head of Investment Strategy for Global Equities for the Sub-adviser
London 1997 and GT Asset Management since 1996. Chief Investment Officer for
Japan for INVESCO GT Asset Management Asia Ltd. (Hong Kong) and
Portfolio Manager for the Sub-adviser from 1992 to 1996. Director of
Warburg Asset Management (Tokyo) prior thereto.
Richard K. Collins Portfolio Manager since Senior Equity Portfolio Manager and Managing Director for the
New York 1997 Sub-adviser since April 1993. Senior Analyst and Portfolio Manager
from 1982 to April 1993. Employed by Chancellor Capital Management,
Inc., a predecessor of the Sub-adviser from 1982 to October 1996.
Senior Equity Analyst for Scudder, Stevens & Clark from 1973 to
1982, and Vice President of Research from 1976 to 1982. Research
Analyst for Salomon Brothers from 1970 to 1973. Chartered Financial
Analyst and member of the Association of Investment Management
Research (AIMR) and the New York Society of Securities Analysts.
</TABLE>
------------------------
In placing orders for the Fund's portfolio transactions, the Sub-adviser seeks
to obtain the best net results. Consistent with its obligation to obtain the
best net results, the Sub-adviser may consider a broker/dealer's sale of shares
of the AIM Funds as a factor in considering through whom portfolio transactions
will be effected. Brokerage transactions for the Fund may be executed through
affiliates of AIM or the Sub-adviser. High portfolio turnover (over 100%)
involves correspondingly greater brokerage commissions and other transaction
costs that the Fund will bear directly and could result in the realization of
net capital gains that would be taxable when distributed to shareholders. See
"Dividends, Distributions and Tax Matters."
DISTRIBUTOR. The Trust has entered into a Master Distribution Agreement, dated
May 29, 1998 (the "Distribution Agreement"), with AIM Distributors, a registered
broker-dealer and a wholly owned subsidiary of AIM, to act as the distributor of
the Advisor Class shares of the Fund. Certain Trustees and officers of the Trust
are affiliated with AIM Distributors.
The Distribution Agreement provides AIM Distributors with the exclusive right to
distribute Advisor Class shares of the Fund directly and through institutions
with whom AIM Distributors has entered into selected dealer agreements.
Prospectus Page 14
<PAGE>
AIM WORLDWIDE GROWTH FUND
OTHER INFORMATION
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. On May 29, 1998, the Trust acquired the assets of and assumed
the liabilities of G.T. Global Growth Series, a Massachusetts business trust.
The Fund constitutes one of the eight separate and distinct series portfolios of
the Company.
From time to time the Trust may establish additional funds, each corresponding
to a distinct investment portfolio and a distinct series of the Trust's shares
of beneficial interest. Shares of each fund are entitled to one vote per share
(with proportional voting for fractional shares) and are freely transferable.
Shareholders have no preemptive rights. Other than the automatic conversion of
Class B shares to Class A shares, there are no conversion rights.
On any matter submitted to a vote of shareholders, shares of the Fund will be
voted by the Fund's shareholders individually when the matter affects the
specific interest of the Fund only, such as approval of the Fund's investment
management arrangements. In addition, shares of a particular class of the Fund
may vote on matters affecting only that class. The shares of the Fund and of the
Trust's other series will be voted in the aggregate on other matters, such as
the election of Trustees and ratification of the selection of the Trust's
independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. Shares of the Fund and the Trust's other series do
not have cumulative voting rights, which means that the holders of a majority of
the shares voting for the election of Trustees can elect all the Trustees. A
Trustee may be removed at any meeting of the shareholders of the Trust by a vote
of the shareholders owning at least two-thirds of the outstanding shares. Any
Trustee may call a special meeting of shareholders for any purpose. Furthermore,
Trustees shall promptly call a meeting of shareholders solely for the purpose of
removing one or more Trustees when requested in writing to do so by shareholders
holding 10% of the Trust's outstanding shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares for the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other shares of the Fund and is
entitled to such dividends and distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared by the Board of
Trustees. Each share of the Fund is equal as to earnings, assets and voting
privileges to each other share in the Fund, except that each normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Shares of the Fund,
when issued, are fully paid and nonassessable.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Prospectus Page 15
<PAGE>
AIM INVESTOR'S GUIDE
The toll-free number for access to routine account information and to
shareholder assistance is
(800) 959-4246 (7:30 a.m. to 6:00 p.m. Central Time).
INVESTOR'S GUIDE TO
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK-
FOR ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of approximately 50 mutual funds, several
of which offer Advisor Class shares. Only Advisor Class shares are offered
through this Prospectus. Advisor Class shares are available from the following
funds (collectively, the "Advisor Class Funds"):
<TABLE>
<S> <C>
AIM AMERICA VALUE FUND AIM GLOBAL RESOURCES FUND
AIM DEVELOPING MARKETS FUND AIM GLOBAL TELECOMMUNICATIONS FUND
AIM DOLLAR FUND AIM GLOBAL TRENDS FUND
AIM EMERGING MARKETS FUND AIM INTERNATIONAL GROWTH FUND
AIM EUROPE GROWTH FUND AIM JAPAN GROWTH FUND
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND AIM LATIN AMERICAN GROWTH FUND
AIM GLOBAL FINANCIAL SERVICES FUND AIM MID CAP GROWTH FUND
AIM GLOBAL GOVERNMENT INCOME FUND AIM NEW PACIFIC GROWTH FUND
AIM GLOBAL GROWTH & INCOME FUND AIM SMALL CAP EQUITY FUND
AIM GLOBAL HEALTH CARE FUND AIM STRATEGIC INCOME FUND
AIM GLOBAL HIGH INCOME FUND AIM WORLDWIDE GROWTH FUND
AIM GLOBAL INFRASTRUCTURE FUND
</TABLE>
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. ADVISOR
CLASS SHARES OF A FUND MAY BE EXCHANGED ONLY FOR ADVISOR CLASS SHARES OF ANOTHER
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND
OTHER THAN THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a
front-end or contingent deferred sales charge or Rule 12b-1 fees.
HOW TO OPEN AN ACCOUNT. Advisor Class shares are available through
Financial Advisers (as defined herein) who have entered into agreements with
A I M Distributors, Inc. ("AIM Distributors"). In order to purchase Advisor
Class shares of any Advisor Class Fund, the Financial Adviser, on behalf of the
investor, must submit a fully completed new Account Application form directly to
A I M Fund Services, Inc. ("AFS" or the "Transfer Agent"). The Transfer Agent
will not accept new Account Application forms submitted directly by investors.
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will be subject to backup withholding. See the
Account Application for applicable IRS penalties. The minimum initial investment
for Advisor Class shares is $500.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Advisor Class shares of any Advisor Class Funds not named on the cover of
this Prospectus, as well as Class A, Class B and Class C shares of other funds
distributed by AIM Distributors ("AIM Funds"), are offered
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AIM INVESTOR'S GUIDE
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (800) 347-4246.
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his Financial Adviser should call AFS' Client Services
Department at (800) 959-4246 prior to sending a wire to receive a reference
number for the wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
Shareholder Name, Shareholder Account Number
OBI: (70 character limit)
</TABLE>
It is recommended that investors in wrap fee accounts and advisory accounts
place orders through their Financial Advisers.
HOW TO PURCHASE ADDITIONAL SHARES. Additional Advisor Class shares may be
purchased directly through AIM Distributors or through any Financial Adviser who
has entered into an agreement with AIM Distributors. The minimum investment for
additional purchases of Advisor Class shares is $50.
BY MAIL: Investors must indicate their account number and the name of the
Fund being purchased. The remittance slip from a confirmation statement should
be used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional Advisor Class shares by
electronic funds transfer, please contact the Client Services Department of AFS
for details.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
In addition to the Advisor Class Funds, the AIM Funds consist of the
following funds: AIM ADVISOR FLEX FUND, AIM ADVISOR INTERNATIONAL VALUE FUND,
AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR MULTIFLEX FUND, AIM ADVISOR REAL
ESTATE FUND, AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BALANCED
FUND, AIM BLUE CHIP FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM
CONSTELLATION FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND, AIM GLOBAL UTILITIES FUND,
AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM LIMITED
MATURITY TREASURY FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM
SELECT GROWTH FUND, AIM SMALL CAP OPPORTUNITIES FUND, AIM TAX-EXEMPT BOND FUND
OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
VALUE FUND and AIM WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE
GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE INTERMEDIATE FUND), with
the Advisor Class Funds, the "Multiple Class Funds." For information on
purchasing any of the AIM Funds and to receive a prospectus, please call (800)
347-4246. Net asset value is determined in the manner described under the
caption "Determination of Net Asset Value."
Advisor Class shares are offered through this Prospectus to (a) trustees or
other fiduciaries purchasing shares for employee benefit plans that are
sponsored by organizations that have at least 1,000 employees; (b) any account
with assets of at least $10,000 if (i) a financial planner, trust company, bank
trust department or registered investment adviser has investment discretion over
the account and (ii) the account holder pays such person as compensation for its
advice and other services an annual fee of at least .50% of the assets in the
account; (c) any account with assets of at least $10,000 if (i) the account is
established under a "wrap fee" program and (ii) the account holder pays the
sponsor of such program an annual fee of at least .50% of the assets in the
account; (d) accounts advised by INVESCO (NY), Inc. or one of the companies
formerly affiliated with Liechtenstein Global Trust AG, provided such accounts
were invested in Advisor Class shares on May 29, 1998; (e) any of the companies
affiliated with AMVESCAP PLC; and (f) AIM GLOBAL TRENDS FUND (certain Advisor
Class Funds only).
Financial planners, trust companies, bank trust departments and registered
investment advisers referenced in clause (b) above, and sponsors of "wrap fee"
programs referenced in clause (c) above are collectively referred to as
"Financial Advisers." Financial Advisers and other fiduciaries may be required
to provide information satisfactory to AIM Distributors concerning their
eligibility to purchase Advisor Class shares.
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AIM INVESTOR'S GUIDE
Investors in wrap fee programs and advisory accounts may only purchase Advisor
Class shares through Financial Advisers who have entered into agreements with
AIM Distributors. Investors may be charged a fee by their agents or brokers for
effecting transactions in Advisor Class shares.
AIM Distributors may, from time to time, pay a bonus or other consideration
or incentive to dealers who sell a minimum dollar amount of the shares of the
AIM Funds during a specified period of time. In some instances, these incentives
may be offered only to certain dealers who have sold or may sell significant
amounts of shares. At the option of the dealer, such incentives may take the
form of payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and their families to
places within or outside the United States. The total amount of such additional
bonus payments or other consideration shall not exceed 0.25% of the public
offering price of the shares sold. Any such bonus or incentive programs will not
change the price paid by investors for the purchase of the applicable AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the laws
of any state.
TIMING OF PURCHASE ORDERS. Orders for the purchase of Advisor Class shares
received prior to the close of regular trading on the New York Stock Exchange
("NYSE"), which is generally 4:00 p.m. Eastern Time (and which is hereinafter
referred to as "NYSE Close"), on any business day of an AIM Fund will be
confirmed at the price next determined. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of the AIM Fund.
Certain financial institutions (or their designees) may be authorized to accept
purchase orders on behalf of the AIM Funds. Orders received by authorized
institutions (or their designees) before NYSE Close will be deemed to have been
received by an AIM Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for
receipt of such orders. It is the responsibility of the dealer/financial
institution to ensure that all orders are transmitted on a timely basis to the
Transfer Agent. Any loss resulting from the dealer/financial institution's
failure to submit an order within the prescribed time frame will be borne by
that dealer/financial institution. Please see "How to Purchase Shares -- Initial
and Subsequent Purchases by Wire" for information on obtaining a reference
number for wire orders, which will facilitate the handling of such orders and
ensure prompt credit to an investor's account. A "business day" of an AIM Fund
is any day on which the NYSE is open for business. It is expected that the NYSE
will be closed during the next twelve months on Saturdays and Sundays and on the
days on which New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the
full number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO AIM DOLLAR FUND. Because AIM DOLLAR FUND
uses the amortized cost method of valuing the securities it holds and rounds its
per share net asset value to the nearest whole cent, it is anticipated that the
net asset value of the shares of that fund will remain constant at $1.00 per
share. However, there is no assurance that AIM DOLLAR FUND can maintain a $1.00
net asset value per share. AIM DOLLAR FUND generally will not issue share
certificates but will record investor holdings in noncertificate form and
regularly advise the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued
upon written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem Shares --
Redemptions by Telephone" for restrictions applicable to shares issued in
certificate form.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in
effect for at least one year and the shareholder has not made an additional
purchase in that account within the preceding six calendar months and (2) the
value of such account drops below $500 for three consecutive months as a result
of
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AIM INVESTOR'S GUIDE
redemptions or exchanges, the fund has the right to redeem the account, after
giving the shareholder 60 days' prior written notice, unless the shareholder
makes additional investments within the notice period to bring the account value
up to $500. If a fund determines that a shareholder has provided incorrect
information in opening an account with a fund or in the course of conducting
subsequent transactions with the fund related to such account, the fund may, in
its discretion, redeem the account and distribute the proceeds of such
redemption to the shareholder.
FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, AIM DISTRIBUTORS
AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL OR ANY PART OF
THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE OR EXCHANGE
ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE PRICE; (3) TO
INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR (4) TO MODIFY
ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF SUCH FUND. For any fund
named on the cover page, AIM Distributors and its agents will use their best
efforts to provide notice of any such actions through correspondence with
broker-dealers and existing shareholders, supplements to the AIM Funds'
prospectuses, or other appropriate means, and will provide sixty (60) days'
notice in the case of termination or material modification to the exchange
privilege discussed under the caption "Exchange Privilege."
- --------------------------------------------------------------------------------
[SPECIAL PLANS
Except as noted below, each Advisor Class Fund provides the special plans
described below for the convenience of its Advisor Class shareholders. Once
established, there is no obligation to continue to invest through a plan, and a
shareholder may terminate a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Advisor Class shareholders may elect to
have all dividends and distributions declared by an Advisor Class Fund paid in
cash or invested at net asset value either in Advisor Class shares of the same
Advisor Class Fund or invested in shares of another Advisor Class Fund. See
"Dividends, Distributions and Tax Matters -- Dividends and Distributions" for a
description of payment dates for these options. In order to qualify to have
dividends and distributions of one Advisor Class Fund invested in shares of
another Advisor Class Fund, the following conditions must be satisfied: (a) the
shareholder must have an account balance in the dividend paying fund of at least
$5,000; (b) the account must be held in the name of the shareholder (i.e., the
account may not be held in nominee name); and (c) the shareholder must have
requested and completed an authorization relating to the reinvestment of
dividends into another Advisor Class Fund. An authorization may be given on the
account application or on an authorization form available from AIM Distributors.
An Advisor Class Fund will waive the $5,000 minimum account value requirement if
the shareholder has an account in the fund selected to receive the dividends and
distributions with a value of at least $500.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program
("Program") permits eligible shareholders to establish and maintain an
allocation across a range of Advisor Class Funds. The Program automatically
rebalances holdings of Advisor Class Funds to the established allocation on a
periodic basis. Under the Program, a shareholder may predesignate, on a
percentage basis, how the total value of his or her holdings in a minimum of
two, and a maximum of ten, Advisor Class Funds ("Personal Portfolio") is to be
rebalanced on a quarterly, semiannual, or annual basis.
Rebalancing under the Program will be effected through the exchange of
shares of one or more Advisor Class Funds in the shareholder's Personal
Portfolio for shares of the same class(es) of one or more other Advisor Class
Funds in the shareholder's Personal Portfolio. See "Exchange Privilege." If
shares of the Advisor Class Fund(s) in a shareholder's Personal Portfolio have
appreciated during a rebalancing period, the Program will result in shares of
Advisor Class Fund(s) that have appreciated most during the period being
exchanged for shares of Advisor Class Fund(s) that have appreciated least. SUCH
EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER'S REALIZING A GAIN OR
LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions." Participation in
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AIM INVESTOR'S GUIDE
the Program does not assure that a shareholder will profit from purchases under
the Program nor does it prevent or lessen losses in a declining market.
The Program will automatically rebalance the shareholder's Personal
Portfolio on the 28th day of the last month of the period chosen (or the
immediately preceding business day if the 28th is not a business day), subject
to any limitations below. The Program will not execute an exchange if the
variance in a shareholder's Personal Portfolio for a particular Advisor Class
Fund would be 2% or less. In predesignating percentages, shareholders must use
whole percentages and totals must equal 100%. Shareholders participating in the
Program may not request issuance of physical certificates representing an
Advisor Class Fund's shares. The AIM Funds and AIM Distributors reserve the
right to modify, suspend, or terminate the Program at any time on 60 days' prior
written notice to shareholders. A request to participate in the Program must be
received in good order at least five business days prior to the next rebalancing
date. Once a shareholder establishes the Program for his or her Personal
Portfolio, a shareholder cannot cancel or change which rebalancing frequency,
which Advisor Class Funds or what allocation percentages are assigned to the
Program, unless canceled or changed in writing and received by the Transfer
Agent in good order at least five business days prior to the rebalancing date.
Certain dealers/financial institutions may charge a fee for establishing
accounts relating to the Program. Investors should contact their
dealers/financial institutions or AIM Distributors for more information.]
- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Advisor Class shareholders of the
Advisor Class Funds may participate in an exchange privilege as described below.
AIM Distributors acts as distributor for the Advisor Class Funds which represent
a range of different investment objectives and policies.
Advisor Class shares of any Advisor Class Fund may be exchanged only for
Advisor Class shares of any other Advisor Class Fund.
Investors in wrap fee programs and advisory accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of an
Advisor Class Fund being considered. Other investors should contact AIM
Distributors for the appropriate prospectus.
An exchange is permitted only in the following circumstances: (a) the dollar
amount of the exchange must be at least equal to the minimum investment
applicable to the shares of the Advisor Class Fund acquired through such
exchange; (b) the shares of the Advisor Class Fund acquired through exchange
must be qualified for sale in the state in which the shareholder resides; (c)
the exchange must be made between accounts having identical registrations and
addresses; (d) the full amount of the purchase price for the shares being
exchanged must have already been received by the fund; (e) the account from
which shares have been exchanged must be coded as having a certified taxpayer
identification number on file or, in the alternative, an appropriate IRS Form
W-8 (certificate of foreign status) or Form W-9 (certifying exempt status) must
have been received by the fund; (f) newly acquired shares (through either an
initial or subsequent investment) are held in an account for at least ten
business days, and all other shares are held in an account for at least one day,
prior to the exchange; and (g) certificates representing shares must be returned
before shares can be exchanged. There is no fee for exchanges among the Advisor
Class Funds.
THE CURRENT PROSPECTUS OF EACH OF THE ADVISOR CLASS FUNDS AND CURRENT
INFORMATION CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE
THROUGH AIM DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE
AGREEMENT WITH AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD
REVIEW THE PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH
EXCHANGE. EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE
INCOME TAX PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any Advisor Class Fund to be exchanged are redeemed at their net
asset value as determined at NYSE Close on the day that an exchange request in
proper form (described below) is received. Exchange requests received after NYSE
Close will result in the redemption of shares at their net asset value at NYSE
Close on the next business day. Normally, Advisor Class shares of an Advisor
Class Fund to be acquired by exchange are purchased at their net asset value
determined on the date that such request is received, but
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AIM INVESTOR'S GUIDE
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that an Advisor Class Fund would be materially
disadvantaged by an immediate transfer of the proceeds of the exchange. If a
shareholder is exchanging into an Advisor Class Fund that declares daily
dividends ("Dividends, Distributions and Tax Matters -- Dividends and
Distributions," below), and the release of the exchange proceeds is delayed for
the foregoing five-day period, such shareholder will not begin to accrue
dividends until the sixth business day after the exchange. Advisor Class shares
purchased by check may not be exchanged until it is determined that the check
has cleared, which may take up to ten business days from the date that the check
is received. See "Terms and Conditions of Purchase of the AIM Funds -- Timing of
Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the
right to reject any exchange request, if, in the judgment of AIM Distributors,
the number of requests or the total value of the shares that are the subject of
the exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their Advisor Class shares by mail
should send a written request to AFS. The request should contain the account
registration and account number, the dollar amount or number of Advisor Class
shares to be exchanged, and the names of the Advisor Class Funds from which and
into which the exchange is to be made. The request should comply with all of the
requirements for redemption by mail. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an
exchange by telephone. A shareholder may give exchange information to his
Financial Adviser. If a shareholder does not wish to allow telephone exchanges
by any person in his account, he should decline that option on the account
application. AIM Distributors has made arrangements with certain dealers and
investment advisory firms to accept telephone instructions to exchange shares
between any of the Advisor Class Funds. AIM Distributors reserves the right to
impose conditions on dealers or investment advisors who make telephone exchanges
of shares of the Advisor Class Funds, including the condition that any such
dealer or investment advisor enter into an agreement (which contains additional
conditions with respect to exchanges of shares) with AIM Distributors. To
exchange shares by telephone, a Financial Adviser, shareholder or dealer who has
satisfied the foregoing conditions must call AFS at (800) 959-4246. If a
Financial Adviser, shareholder or dealer is unable to reach AFS by telephone, he
may also request exchanges by telegraph or use overnight courier services to
expedite exchanges by mail, which will be effective on the business day received
by the Transfer Agent as long as such request is received prior to NYSE Close.
The Transfer Agent and AIM Distributors will not be liable for any loss, expense
or cost arising out of any telephone exchange request that they reasonably
believe to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's Social Security Number
and current address, and mailings of confirmations promptly after the
transaction.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer/ financial institution who has entered into an agreement with
AIM Distributors. In addition to the obligation of the fund(s) named on the
cover page to redeem shares, AIM Distributors also repurchases shares. No
redemption fee is imposed when Advisor Class shares are redeemed or repurchased;
however, dealers/ financial institutions may charge service fees for handling
repurchase transactions.
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
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AIM INVESTOR'S GUIDE
corporations, partnership, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by
telephone. If a shareholder does not wish to allow telephone redemptions by any
person in his account, he should decline that option on the account application.
The telephone redemption feature can be used only if: (a) the redemption
proceeds are to be mailed to the address of record or transferred electronically
or wired to the pre-authorized bank account; (b) there has been no change of
address of record on the account within the preceding 30 days; (c) the shares to
be redeemed are not in certificate form; (d) the person requesting the
redemption can provide proper identification information, and (e) the proceeds
of the redemption do not exceed $50,000. AIM Distributors has made arrangements
with certain dealers and investment advisors to accept telephone instructions
for the redemption of shares. AIM Distributors reserves the right to impose
conditions on these dealers and investment advisors, including the condition
that they enter into agreements (which contain additional conditions with
respect to the redemption of shares) with AIM Distributors. The Transfer Agent
and AIM Distributors will not be liable for any loss, expense or cost arising
out of any telephone redemption request effected in accordance with the
authorization set forth in the appropriate form if they reasonably believe such
request to be genuine, but may in certain cases be liable for losses due to
unauthorized or fraudulent transactions if they do not follow reasonable
procedures for verification of telephone transactions. Such reasonable
procedures may include recordings of telephone transactions (maintained for six
months), requests for confirmation of the shareholder's taxpayer identification
number and current address, and mailings of confirmations promptly after the
transaction.
TIMING AND PRICING OF REDEMPTION ORDERS. Advisor Class shares of the
Advisor Class Funds are redeemed at their net asset value next computed after a
request for redemption in proper form (including signature guarantees and other
required documentation for written redemptions) is received by the Transfer
Agent or certain financial institutions (or their designees) who are authorized
to accept redemption orders on behalf of the AIM Funds, provided that such
orders are transmitted to the Transfer Agent prior to the time set for receipt
of such orders. Orders for the redemption of Advisor Class shares received on
any business day of an AIM Fund will be confirmed at the price determined as of
the close of that day. Orders received after NYSE Close will be confirmed at the
price determined on the next business day of an AIM Fund. It is the
responsibility of the dealer/financial institution to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer/financial
institution's failure to submit a request for redemption within the prescribed
time frame will be borne by that dealer/financial institution. Telephone
redemption requests must be made by NYSE Close on any business day of an AIM
Fund and will be confirmed at the price determined as of the close of that day.
No AIM Fund will accept requests which specify a particular date for redemption
or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally made within seven
days following the redemption date. However, in the event of a redemption of
shares purchased by check, the investor may be required to wait up to ten
business days before the redemption proceeds are sent. See "Terms and Conditions
of Purchase of the AIM Funds -- Timing of Purchase Orders." A charge for special
handling (such as wiring of funds or expedited delivery services) may be made by
the Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner, (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions, and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the
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AIM INVESTOR'S GUIDE
proceeds are to be sent to the address of record. These requirements may be
waived or modified upon notice to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term in defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed the surety coverage amount indicated on the medallion. For information
regarding whether a particular institution or organization qualifies as an
"eligible guarantor institution," an investor should contact the Client Services
Department of AFS.
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each Advisor Class Fund is
determined as of 4:00 p.m. Eastern Time on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an Advisor Class
Fund's share will be determined as of the close of the NYSE on such day. For
purposes of defining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE. The
net asset value per share is calculated by subtracting a class' liabilities from
its assets and dividing the result by the total number of class shares
outstanding. The determination of net asset value per share is made in
accordance with generally accepted accounting principles. Among other items,
liabilities include accrued expenses and dividends payable, and total assets
include portfolio securities valued at their market value, as well as income
accrued but not yet received. Securities for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the supervision of the fund's officers and in accordance with methods
which are specifically authorized by its governing Board of Directors or
Trustees. Short-term obligations with maturities of 60 days or less, and the
securities held by the AIM DOLLAR FUND, are valued at amortized cost as
reflecting fair value.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 an AIM 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 the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM 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 Directors or Trustees of the
applicable AIM Fund. Securities listed primarily on foreign exchanges may trade
on days when the NYSE is closed (such as a Saturday). As a result, the net asset
value of a fund may be significantly affected by such trading on days when
shareholders cannot purchase or redeem shares of that fund.
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AIM INVESTOR'S GUIDE
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each Advisor Class Fund's policy regarding the payment of dividends and
distributions is set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
- -------------------------------------------------- ---------------------------- ----------------- -------------
<S> <C> <C> <C>
AIM AMERICA VALUE FUND............................ declared and paid annually annually annually
AIM DEVELOPING MARKETS FUND....................... declared and paid annually annually annually
AIM DOLLAR FUND................................... declared daily; paid monthly annually annually
AIM EMERGING MARKETS FUND......................... declared and paid annually annually annually
AIM EUROPE GROWTH FUND............................ declared and paid annually annually annually
AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND.... declared and paid annually annually annually
AIM GLOBAL FINANCIAL SERVICES FUND................ declared and paid annually annually annually
AIM GLOBAL GOVERNMENT INCOME FUND................. declared and paid monthly annually annually
AIM GLOBAL GROWTH & INCOME FUND................... declared and paid quarterly annually annually
AIM GLOBAL HEALTH CARE FUND....................... declared and paid annually annually annually
AIM GLOBAL HIGH INCOME FUND....................... declared and paid monthly annually annually
AIM GLOBAL INFRASTRUCTURE FUND.................... declared and paid annually annually annually
AIM GLOBAL RESOURCES FUND......................... declared and paid annually annually annually
AIM GLOBAL TELECOMMUNICATIONS FUND................ declared and paid annually annually annually
AIM GLOBAL TRENDS FUND............................ declared and paid annually annually annually
AIM INTERNATIONAL GROWTH FUND..................... declared and paid annually annually annually
AIM JAPAN GROWTH FUND............................. declared and paid annually annually annually
AIM LATIN AMERICAN GROWTH FUND.................... declared and paid annually annually annually
AIM MID CAP GROWTH FUND........................... declared and paid annually annually annually
AIM NEW PACIFIC GROWTH FUND....................... declared and paid annually annually annually
AIM SMALL CAP EQUITY FUND......................... declared and paid annually annually annually
AIM STRATEGIC INCOME FUND......................... declared and paid monthly annually annually
AIM WORLDWIDE GROWTH FUND......................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods. Each Advisor Class Fund
may make additional distributions, if necessary, to avoid a non-deductible 4%
federal excise tax on certain undistributed income and capital gain (the "Excise
Tax").
All dividends and distributions of an AIM Fund are automatically reinvested
on the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to Advisor Class shares of an Advisor
Class Fund are reinvested in additional Advisor Class shares of that fund,
absent an election by a shareholder to receive cash or to have such dividends
and distributions reinvested in Advisor Class shares of another Advisor Class
Fund, to the extent permitted. For funds that do not declare a dividend daily,
such dividends and distributions will be reinvested at the net asset value per
share determined on the ex-dividend date. For funds that declare a dividend
daily, such dividends and distributions will be reinvested at the net asset
value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or only the
dividend portion thereof, in cash, or to invest such dividends and distributions
in Advisor Class shares of another Advisor Class Fund. Investors who have not
previously selected such a reinvestment option on the account application form
may contact the Transfer Agent at any time to obtain a form to authorize such
reinvestments in another Advisor Class Fund.
Dividends on Advisor Class shares of an Advisor Class Fund are expected to
be higher than dividends on shares of other classes of that fund because of the
service and distribution fees paid by those other classes of shares. Dividends
on all shares may also be affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such payment. Any dividend and distribution election remains
in effect until the Transfer Agent receives a revised written election by the
shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
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AIM INVESTOR'S GUIDE
TAX MATTERS
Each AIM Fund has qualified and intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the Code. As long as a
fund qualifies for this tax treatment, it is not subject to federal income tax
on net investment income, net capital gains and net gains from foreign currency
transactions, if any, that are distributed to its shareholders. Each fund, for
all federal tax purposes (including determining taxable income, distribution
requirements and other requirements of Subchapter M), is treated as a separate
corporation. Therefore, no fund may offset its gains against another fund's
losses, and each fund must individually comply with all of the provisions of the
Code that are applicable to its operations.
TAX TREATMENT OF DIVIDENDS AND DISTRIBUTIONS -- GENERAL. Because each AIM
Fund intends to distribute to its shareholders substantially all of its net
investment income, net realized capital gains and net gains from foreign
currency transactions, if any, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid imposition of the Excise Tax.
Nevertheless, shareholders normally are subject to federal income tax, and any
applicable state and local income taxes, on the dividends and distributions
received by them from a fund whether in the form of cash or additional fund
shares. With respect to tax-exempt shareholders, dividends and distributions
from the AIM Funds are not subject to federal income taxation to the extent
permitted under the applicable tax exemption.
Dividends from an AIM Fund's net investment income, net short-term capital
gain and net gains from certain foreign currency transactions are taxable to its
shareholders as ordinary income to the extent of its earnings and profits.
Distributions of net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) are taxable as long-term capital gains,
regardless of the length of time the shareholder held his shares. Under the
Taxpayer Relief Act of 1997, different maximum tax rates apply to a non-
corporate taxpayer's net capital gain depending on the taxpayer's holding period
and marginal rate of federal income tax -- generally, 28% for gain recognized on
capital assets held for more than one year but not more than 18 months and 20%
(10% for taxpayers in the 15% marginal tax bracket) for gain recognized on
capital assets held for more than 18 months. An AIM Fund may divide each net
capital gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with its holding periods for the securities it sold
that generated the distributed gain), in which event its shareholders must treat
those portions accordingly; thus, the relevant holding period is determined by
how long the fund has held the securities on which the gain was realized, not by
how long a shareholder has held fund shares.
Dividends paid by a fund (but not other distributions) may qualify for the
federal 70% dividends received deduction for corporate shareholders to the
extent of the qualifying dividends received by the fund on domestic common or
preferred stock. It is not likely that dividends received from AIM Developing
Markets Fund, AIM Dollar Fund, AIM Emerging Markets Fund, AIM Europe Growth
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Trends Fund, AIM International Growth Fund, AIM Japan Growth Fund, AIM Latin
American Growth Fund, AIM New Pacific Growth Fund and AIM Strategic Income Fund
will qualify for this dividends received deduction.
Shortly after the end of each year, shareholders will receive information
regarding the amount and federal income tax treatment of all dividends and
distributions paid during the year. The information regarding capital gain
distributions will designate the portions thereof subject to the different
maximum rates of tax applicable to non-corporate taxpayers' net capital gain
indicated above. Certain dividends and distributions declared in October,
November or December of a calendar year are taxable to shareholders as though
received on December 31 of that year if paid to them during January of the
following calendar year.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31%
ON TAXABLE DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A
FUND MUST FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY
UNDER PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE
NOT SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under the Code, nonresident alien individuals, foreign partnerships and
foreign corporations may be subject to federal income tax withholding at a 30%
rate on ordinary income dividends. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
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AIM INVESTOR'S GUIDE
DIVIDENDS AND DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE
OR LOCAL TAX LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES
DISCUSSED HEREIN. ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE
STATEMENTS OF ADDITIONAL INFORMATION. INVESTORS SHOULD CONSULT THEIR TAX
ADVISORS BEFORE INVESTING.
AIM AMERICA VALUE FUND, AIM DOLLAR FUND, AIM GLOBAL GOVERNMENT INCOME FUND,
AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HIGH INCOME FUND, AIM MID CAP GROWTH
FUND, AIM SMALL CAP EQUITY FUND AND AIM STRATEGIC INCOME FUND -- SPECIAL TAX
INFORMATION. Certain states exempt from income taxes dividends paid by mutual
funds attributable to interest on U.S. Treasury and certain other U.S.
government obligations. Investors should consult with their own tax advisors
concerning the availability of such exemption.
AIM DEVELOPING MARKETS FUND, AIM EMERGING MARKETS FUND, AIM EUROPE GROWTH
FUND, AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND, AIM GLOBAL FINANCIAL
SERVICES FUND, AIM GLOBAL GROWTH & INCOME FUND, AIM GLOBAL HEALTH CARE FUND, AIM
GLOBAL INFRASTRUCTURE FUND, AIM GLOBAL RESOURCES FUND, AIM GLOBAL
TELECOMMUNICATIONS FUND, AIM INTERNATIONAL GROWTH FUND, AIM JAPAN GROWTH FUND,
AIM LATIN AMERICAN GROWTH FUND, AIM NEW PACIFIC GROWTH FUND AND AIM WORLDWIDE
GROWTH FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is
eligible to do so, each of these funds may elect to pass through to its
shareholders credits for foreign taxes paid. If a fund makes such an election, a
shareholder who receives a distribution (1) will be required to include in gross
income his proportionate share of foreign taxes allocable to the distribution
and (2) may claim a credit or deduction for such share for his taxable year in
which the distribution is received, subject to the general limitations imposed
on the allowance of foreign tax credits and deductions. Shareholders should also
note that certain gains or losses attributable to fluctuations in exchange rates
or foreign currency forward contracts may increase or decrease the amount of
income of the fund available for distribution to shareholders and should note
that if, for any fund, such losses exceed other income during a taxable year,
the fund would not be able to pay ordinary income dividends for that year.
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the Advisor Class Funds. Chase Bank of Texas,
N.A., P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for
retail purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a
wholly-owned subsidiary of AIM, serves as each Advisor Class Fund's transfer
agent and dividend payment agent.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts
should be directed to an A I M Fund Services, Inc. Client Services
Representative by calling (800) 959-4246. The Transfer Agent may impose certain
copying charges for requests for copies of shareholder account statements and
other historical account information older than the current year and the
immediately preceding year.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the AIM Funds, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the AIM Funds provide the AIM Funds and their shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
OTHER INFORMATION. This Prospectus sets forth basic information that
investors should know about the fund(s) named on the cover page prior to
investing. Recipients of this Prospectus will be provided with a copy of the
annual report of the fund(s) to which this Prospectus relates, upon request and
without charge. If
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AIM INVESTOR'S GUIDE
several members of a household own shares of the same fund, only one annual or
semi-annual report will be mailed to that address. To receive additional copies,
please call (800) 347-4246, or write to A I M Distributors, Inc., P.O. Box 4739,
Houston, Texas 77210-4739. A Statement of Additional Information has been filed
with the SEC and is available upon request and without charge, by writing or
calling AIM Distributors. The SEC maintains a Web site at http://www.sec.gov
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding the Fund. This Prospectus omits
certain information contained in the registration statement filed with the SEC.
Copies of the registration statement, including items omitted from this
Prospectus, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
A-12
<PAGE>
AIM WORLDWIDE GROWTH FUND
[LOGO]
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
SUB-ADVISER
INVESCO (NY), Inc.
50 California Street, 27th Floor
San Francisco, CA 94111
PRINCIPAL UNDERWRITER
A I M Distributors, Inc.
P.O. Box 4739
Houston, TX 77210-4739
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
INDEPENDENT ACCOUNTANTS
[ ]
[ ]
[ ]
For more complete information about any other fund in The AIM Family of
Funds-Registered Trademark-, including charges and expenses, please call
(800) 347-4246 or write to A I M Distributors, Inc. and request a free
prospectus. Please read the prospectus carefully before you invest or send
money.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
CLASS A AND CLASS B SHARES OF
AIM WORLDWIDE GROWTH FUND
AIM INTERNATIONAL GROWTH FUND
AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND
AIM MID CAP GROWTH FUND
AIM JAPAN GROWTH FUND
(Series Portfolios of AIM Growth Series)
11 Greenway Plaza
Suite 100
Houston, TX 77047-1173
(713) 626-1919
------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
ABOVE-NAMED FUNDS, A COPY OF WHICH MAY BE OBTAINED FREE
OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
A I M DISTRIBUTORS, INC.,
P.O. BOX 4739, HOUSTON TX 77210-4739
OR BY CALLING (800) 347-4246.
------------------------
Statement of Additional Information dated September 8, 1998
relating to the AIM Worldwide Growth Fund Prospectus,
the AIM International Growth Fund Prospectus, the AIM New Pacific Growth Fund
Prospectus, the AIM Europe Growth Fund Prospectus, the AIM Mid Cap Growth Fund
Prospectus and the AIM Japan Growth Fund Prospectus
each dated September 8, 1998
[LOGO]
Statement of Additional Information Page 1
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Introduction............................................................................................................. 3
Investment Objectives and Policies....................................................................................... 4
Options, Futures and Currency Strategies................................................................................. 7
Risk Factors............................................................................................................. 15
Investment Limitations................................................................................................... 20
Execution of Portfolio Transactions...................................................................................... 21
Trustees and Executive Officers.......................................................................................... 24
Control Persons and Principal Holders of Securities...................................................................... 26
Management............................................................................................................... 27
Valuation of Fund Shares................................................................................................. 33
How to Purchase and Redeem Shares........................................................................................ 33
Taxes.................................................................................................................... 35
Additional Information................................................................................................... 38
Investment Results....................................................................................................... 39
Description of Debt Ratings.............................................................................................. 44
Financial Statements..................................................................................................... 46
</TABLE>
Statement of Additional Information Page 2
<PAGE>
AIM EQUITY FUNDS
INTRODUCTION
- --------------------------------------------------------------------------------
This Statement of Additional Information relates to the Class A and Class B
shares of AIM Worldwide Growth Fund ("Worldwide Fund"), AIM International Growth
Fund ("International Fund"), AIM New Pacific Growth Fund ("Pacific Fund"), AIM
Europe Growth Fund ("Europe Fund"), AIM Mid Cap Growth Fund ("Mid Cap Fund") and
AIM Japan Growth Fund ("Japan Fund") (individually, a "Fund," and collectively,
the "Funds"). Each Fund is a diversified series of AIM Growth Series (the
"Trust"), a registered open-end management investment company.
A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-adviser") serves as the
investment sub-adviser of and sub-administrator for, the Funds.
The Trust is a series mutual fund. The rules and regulations of the United
States Securities and Exchange Commission (the "SEC") require all mutual funds
to furnish prospective investors certain information concerning the activities
of the fund being considered for investment. This information for Worldwide Fund
is included in a Prospectus dated September 8, 1998, for International Fund is
included in a separate Prospectus dated September 8, 1998, for Pacific Fund is
included in a separate Prospectus dated September 8, 1998, for Europe Fund is
included in a separate Prospectus dated September 8, 1998, for Mid Cap Fund is
included in a separate Prospectus dated September 8, 1998, and for Japan Fund is
included in a separate Prospectus dated September 8, 1998. Additional copies of
the Prospectuses and this Statement of Additional Information may be obtained
without charge by writing the principal distributor of the Funds' shares, A I M
Distributors, Inc. ("AIM Distributors"), P.O. Box 4739, Houston, TX 77210-4739
or by calling (800) 347-4246. Investors must receive a Prospectus before they
invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Funds. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus; and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
GENERAL INFORMATION ABOUT THE FUNDS
THE TRUST AND ITS SHARES
The Trust previously operated under the name G.T. Global Growth Series, which
was organized as a Massachusetts business trust on February 19, 1985. The Trust
was reorganized on May 29, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of eight separate portfolios; each of the six Funds,
AIM Small Cap Equity Fund, and AIM America Value Fund. Each of these funds has
three separate classes: Class A, Class B and Advisor Class shares. All
historical financial and other information contained in this Statement of
Additional Information for periods prior to May 29, 1998, is that of the series
of G.T. Global Growth Series.
This Statement of Additional Information relates solely to the Class A and B
shares of the Funds.
The term "majority of the outstanding shares" of the Trust, of a particular Fund
or of a particular class of a Fund means, respectively, the vote of the lesser
of (a) 67% or more of the shares of the Trust, such Fund or such class present
at a meeting of the Trust's shareholders, if the holders of more than 50% of the
outstanding shares of the Trust, such Fund or such class are present or
represented by proxy, or (b) more than 50% of the outstanding shares of the
Trust, such Fund or such class.
Class A, Class B and Advisor Class shares of each Fund have equal rights and
privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of such Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable so
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such
STATEMENT OF ADDITIONAL INFORMATION PAGE 3
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AIM EQUITY FUNDS
conversion and exchange rights as set forth in the Prospectus and this Statement
of Additional Information. Fractional shares have proportionately the same
rights, including voting rights, as are provided for a full share.
Shareholders of the Funds do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Funds voting
together for election of directors may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
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INVESTMENT OBJECTIVES
AND POLICIES
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SELECTION OF INVESTMENTS
In determining the appropriate distribution of investments among various
countries and geographic regions for the Funds, the Sub-adviser ordinarily
considers the following factors: prospects for relative economic growth between
the different countries in which each Fund may invest; expected levels of
inflation; government policies influencing business conditions; the outlook for
currency relationships; and the range of the individual investment opportunities
available to international investors.
In analyzing companies for investment by each Fund, the Sub-adviser ordinarily
looks for one or more of the following characteristics: an above-average
earnings growth per share; high return on invested capital; a healthy balance
sheet; sound financial and accounting policies and overall financial strength;
strong competitive advantages; effective research and product development and
marketing; efficient service; pricing flexibility; strength of management; and
general operating characteristics which will enable the companies to compete
successfully in their respective marketplaces. In certain countries,
governmental restrictions and other limitations on investment may affect the
maximum percentage of equity ownership in any one company by a Fund or the Funds
in the aggregate. In addition, in some instances only special classes of
securities may be purchased by foreigners and the market prices, liquidity and
rights with respect to those securities may vary from shares owned by nationals.
At this time, the Sub-adviser is not aware of the existence of any investment or
exchange control regulations that might substantially impair the operations of
the Funds as described in the Prospectus and this Statement of Additional
Information. Although restrictions may in the future make it undesirable to
invest in certain countries, the Sub-adviser does not believe that any current
repatriation restrictions would affect its decisions to invest in the countries
eligible for investment by any Fund. It should be noted, however, that this
situation could change at any time.
INVESTMENTS IN OTHER INVESTMENT COMPANIES
With respect to certain countries, investments by a Fund presently may be made
only by acquiring shares of other investment companies (including investment
vehicles or companies advised by the Sub-adviser or its affiliates ("Affiliated
Funds")) with local governmental approval to invest in those countries. At such
time as direct investment in these countries is allowed, the Funds anticipate
investing directly in these markets. The Funds may also invest in the securities
of closed-end investment companies within the limits of the Investment Company
Act of 1940, as amended (the "1940 Act"). These limitations currently provide
that, in part, each Fund may purchase shares of a closed-end investment company
unless: (a) such a purchase would cause a Fund to own more than 3% of the total
outstanding voting stock of the investment company or (b) such a purchase would
cause a Fund to have more than 5% of its assets invested in the investment
company or more than 10% of its assets invested in an aggregate of all such
investment companies. Investment in investment companies may involve the payment
of substantial premiums above the value of such companies' portfolio securities.
The Funds do not intend to invest in such vehicles or funds unless the
Sub-adviser determines that the potential benefits of such investments justify
the payment of any applicable premiums. The return on such securities will be
reduced by operating expenses of such companies including payments to the
investment managers of those investment companies. With respect to investments
in Affiliated Funds, the Sub-adviser waives its advisory fee to the extent that
such fees are based on assets of a Fund invested in Affiliated Funds.
SAMURAI AND YANKEE BONDS
The International Fund, the Japan Fund, the Pacific Fund and the Worldwide Fund
may invest in yen-denominated bonds sold in Japan by non-Japanese issuers
("Samurai bonds"), and the Worldwide Fund and the Mid Cap Fund may invest in
dollar-denominated bonds sold in the United States by non-U.S. issuers ("Yankee
bonds"). As compared with bonds issued in their countries of domicile, such bond
issues normally carry a higher interest rate but are less actively traded. It is
the
STATEMENT OF ADDITIONAL INFORMATION PAGE 4
<PAGE>
AIM EQUITY FUNDS
policy of each Fund to invest in Samurai or Yankee bond issues only after taking
into account considerations of quality and liquidity, as well as yield. These
bonds are issued by governments that are members of the Organization for
Economic Cooperation and Development or have AAA ratings. None of the Funds has
invested in Samurai or Yankee bonds since 1982.
DEPOSITARY RECEIPTS
Each Fund may hold securities of foreign issuers in the form of American
Depositary Receipts ("ADRs"), American Depository Shares ("ADSs"), Global
Depositary Receipts ("GDRs") and European Depositary Receipts ("EDRs") or other
securities convertible into securities of eligible European or Far Eastern
issuers. These securities may not necessarily be denominated in the same
currency as the securities for which they may be exchanged. ADRs and ADSs
typically are issued by an American bank or trust company and evidence ownership
of underlying securities issued by a foreign corporation. EDRs, which are
sometimes referred to as Continental Depositary Receipts ("CDRs"), are issued in
Europe typically by foreign banks and trust companies and evidence ownership of
either foreign or domestic securities. GDRs are similar to EDRs and are designed
for use in several international financial markets. Generally, ADRs and ADSs in
registered form are designed for use in United States securities markets and
EDRs in bearer form are designed for use in European securities markets. For
purposes of a Fund's investment policies, its investments in ADRs, ADSs, GDRs
and EDRs will be deemed to be investments in the equity securities representing
securities of foreign issuers into which they may be converted.
ADR facilities may be established as either "unsponsored" or "sponsored." While
ADRs issued under these two types of facilities are in some respects similar,
there are distinctions between them relating to the rights and obligations of
ADR holders and the practices of market participants. A depository may establish
an unsponsored facility without participation by (or even necessarily the
acquiescence of) the issuer of the deposited securities, although typically the
depository requests a letter of non-objection from such issuer prior to the
establishment of the facility. Holders of unsponsored ADRs generally bear all
the costs of such facilities. The depository usually charges fees upon the
deposit and withdrawal of the deposited securities, the conversion of dividends
into U.S. dollars, the disposition of non-cash distributions and the performance
of other services. The depository of an unsponsored facility frequently is under
no obligation to distribute shareholder communications received from the issuer
of the deposited securities or to pass through voting rights to ADR holders with
respect to the deposited securities. Sponsored ADR facilities are created in
generally the same manner as unsponsored facilities, except that the issuer of
the deposited securities enters into a deposit agreement with the depository.
The deposit agreement sets out the rights and responsibilities of the issuer,
the depository and the ADR holders. With sponsored facilities, the issuer of the
deposited securities generally will bear some of the costs relating to the
facility (such as dividend payment fees of the depository), although ADR holders
continue to bear certain other costs (such as deposit and withdrawal fees).
Under the terms of most sponsored arrangements, depositories agree to distribute
notices of shareholder meetings and voting instructions, and to provide
shareholder communications and other information to the ADR holders at the
request of the issuer of the deposited securities. The Funds may invest in both
sponsored and unsponsored ADRs.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by a Fund in connection with other securities
or separately and provide the Fund with the right to purchase at a later date
other securities of the issuer.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Fund may make secured loans
of its portfolio securities amounting to not more than 30% of its total assets.
Securities loans are made to broker/dealers or institutional investors pursuant
to agreements requiring that the loans continuously be secured by collateral at
least equal at all times to the value of the securities lent, plus any accrued
interest, "marked to market" on a daily basis. The Funds may pay reasonable
administrative and custodial fees in connection with the loans of their
securities. While the securities loans are outstanding, the Funds will continue
to receive the equivalent of the interest or dividends paid by the issuer on the
securities, as well as interest on the investment of the collateral or a fee
from the borrower. Each Fund will have a right to call each loan at any time and
obtain the securities within the stated settlement period. The Funds will not
have the right to vote equity securities while they are being lent, but may call
in a loan in anticipation of any important vote. Loans only will be made to
firms deemed by the Sub-adviser to be of good standing and will not be made
unless, in the judgment of the Sub-adviser, the consideration to be earned from
such loans would justify the risk.
COMMERCIAL BANK OBLIGATIONS
For the purposes of each Fund's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks and of foreign banks
are obligations of the issuing bank and may be general obligations of the parent
bank. Such obligations, however, may be limited by the terms of a specific
obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of
STATEMENT OF ADDITIONAL INFORMATION PAGE 5
<PAGE>
AIM EQUITY FUNDS
foreign banks may subject the Funds to investment risks that are different in
some respects from those of investments in obligations of domestic issuers.
Although a Fund typically will acquire obligations issued and supported by the
credit of U.S. or foreign banks having total assets at the time of purchase of
$1 billion or more, this $1 billion figure is not an investment policy or
restriction of any Fund. For the purposes of calculation with respect to the $1
billion figure, the assets of a bank will be deemed to include the assets of its
U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
A repurchase agreement is a transaction in which a Fund purchases a security
from a bank or recognized securities dealer and simultaneously commits to resell
that security to the bank or dealer at an agreed-upon price, date and market
rate of interest unrelated to the coupon rate or maturity of the purchased
security. Although repurchase agreements carry certain risks not associated with
direct investments in securities, including possible decline in the market value
of the underlying securities and delays and costs to the Fund if the other party
to the repurchase agreement becomes bankrupt, the Funds intend to enter into
repurchase agreements only with banks and dealers believed by the Sub-adviser to
present minimal credit risks in accordance with guidelines approved by the
Trust's Board of Trustees (the "Board"). The Sub-adviser reviews and monitors
the creditworthiness of such institutions under the Board's general supervision.
A Fund will invest only in repurchase agreements collateralized at all times in
an amount at least equal to the repurchase price plus accrued interest. To the
extent that the proceeds from any sale of such collateral upon a default in the
obligation to repurchase were less than the repurchase price, the Fund would
suffer a loss. If the financial institution which is party to the repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other liquidation proceedings, there may be restrictions on the Fund's ability
to sell the collateral and the Fund could suffer a loss. However, with respect
to financial institutions whose bankruptcy or liquidation proceedings are
subject to the U.S. Bankruptcy Code, each Fund intends to comply with provisions
under the U.S. Bankruptcy Code that would allow it immediately to resell the
collateral. A Fund will not enter into a repurchase agreement with a maturity of
more than seven days if, as a result, more than 15% of the value of its net
assets would be invested in such repurchase agreements and other illiquid
investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
Each Fund's borrowings will not exceed 33 1/3% of its total assets, i.e., each
Fund's total assets at all times will equal at least [300%] of the amount of
outstanding borrowings. If market fluctuations in the value of a Fund's
portfolio holdings or other factors cause the ratio of the Fund's total assets
to outstanding borrowings to fall below [300%,] within three days (excluding
Sundays and holidays) of such event the Fund may be required to sell portfolio
securities to restore the [300%] asset coverage, even though from an investment
standpoint such sales might be disadvantageous. Each Fund also may borrow up to
5% of its total assets for temporary or emergency purposes other than to meet
redemptions. Any borrowing by a Fund may cause greater fluctuation in the value
of its shares than would be the case if the Fund did not borrow.
Each Fund's fundamental investment limitations permit the Fund to borrow money
for leveraging purposes. Each Fund, however, currently is prohibited, pursuant
to a non-fundamental investment policy, from borrowing money in order to
purchase securities. Nevertheless, this policy may be changed in the future by
the Trust's Board of Trustees. If a Fund employs leverage in the future, it
would be subject to certain additional risks. Use of leverage creates an
opportunity for greater growth of capital but would exaggerate any increases or
decreases in a Fund's net asset value. When the income and gains on securities
purchased with the proceeds of borrowings exceed the costs of such borrowings, a
Fund's earnings or net asset value will increase faster than otherwise would be
the case; conversely, if such income and gains fail to exceed such costs, a
Fund's earnings or net asset value would decline faster than would otherwise be
the case.
Each Fund may enter into reverse repurchase agreements. A reverse repurchase
agreement is a borrowing transaction in which the Fund transfers possession of a
security to another party, such as a bank or broker/dealer in return for cash,
and agrees to repurchase the security in the future at an agreed upon price,
which includes an interest component. Each Fund also may engage in "roll"
borrowing transactions which involve its sale of Government National Mortgage
Association certificates or other securities together with a commitment (for
which the Fund may receive a fee) to purchase similar, but not identical,
securities at a future date. A Fund will segregate with a custodian, cash or
liquid securities in an amount sufficient to cover its obligations under "roll"
transactions and reverse repurchase agreements with broker/dealers. No
segregation is required for reverse repurchase agreements with banks.
TEMPORARY DEFENSIVE STRATEGIES
Money market instruments in which the Funds may invest include the following:
government securities; high grade commercial paper; bank certificates of
deposit; bankers' acceptances; and repurchase agreements related to any of the
foregoing. High grade commercial paper refers to commercial paper rated P-1 by
Moody's Investors Service, Inc. ("Moody's") or A-1 by Standard & Poor's, a
division of The McGraw-Hill Companies, Inc. ("S&P"), at the time of investment
or, if unrated, deemed by the Sub-adviser to be of comparable quality.
STATEMENT OF ADDITIONAL INFORMATION PAGE 6
<PAGE>
AIM EQUITY FUNDS
OPTIONS, FUTURES AND CURRENCY
STRATEGIES
- --------------------------------------------------------------------------------
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
(1) Successful use of most of these instruments depends upon the
Sub-adviser's ability to predict movements of the overall securities and
currency markets, which requires different skills than predicting changes in
the prices of individual securities. While the Sub-adviser is experienced in
the use of these instruments, there can be no assurance that any particular
strategy adopted will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if a Fund entered into a
short hedge because the Sub-adviser projected a decline in the price of a
security in the Fund's portfolio, and the price of that security increased
instead, the gain from that increase might be wholly or partially offset by
a decline in the price of the hedging instrument. Moreover, if the price of
the hedging instrument declined by more than the increase in the price of
the security, the Fund could suffer a loss. In either such case, the Fund
would have been in a better position had it not hedged at all.
(4) As described below, a Fund might be required to maintain assets as
"cover," maintain segregated accounts or make margin payments when it takes
positions in instruments involving obligations to third parties (I.E.,
instruments other than purchased options). If the Fund were unable to close
out its positions in such instruments, it might be required to continue to
maintain such assets or accounts or make such payments until the position
expired or matured. The requirements might impair the Fund's ability to sell
a portfolio security or make an investment at a time when it would otherwise
be favorable to do so, or require that the Fund sell a portfolio security at
a disadvantageous time. The Fund's ability to close out a position in an
instrument prior to expiration or maturity depends on the existence of a
liquid secondary market or, in the absence of such a market, the ability and
willingness of the other party to the transaction ("contra party") to enter
into a transaction closing out the position. Therefore, there is no
assurance that any position can be closed out at a time and price that is
favorable to the Fund.
WRITING CALL OPTIONS
A Fund may write (sell) call options on securities, indices and currencies. Call
options generally will be written on securities and currencies that, in the
opinion of the Sub-adviser, are not expected to make any major price moves in
the near future but that, over the long term, are deemed to be attractive
investments for the Fund.
A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
style) or on (European style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he may be assigned an
exercise notice, requiring him to deliver the underlying security or currency
against payment of the exercise price. This obligation terminates upon the
expiration of the call option, or such earlier time at which the writer effects
a closing purchase transaction by purchasing an option identical to that
previously sold.
Portfolio securities or currencies on which call options may be written will be
purchased solely on the basis of investment considerations consistent with each
Fund's investment objectives. When writing a call option, a Fund, in return for
the premium, gives up the opportunity for profit from a price increase in the
underlying security or currency above the exercise price, and retains the risk
of loss should the price of the security or currency decline. Unlike one who
owns
STATEMENT OF ADDITIONAL INFORMATION PAGE 7
<PAGE>
AIM EQUITY FUNDS
securities or currencies not subject to an option, a Fund has no control over
when it may be required to sell the underlying securities or currencies, since
most options may be exercised at any time prior to the option's expiration. If a
call option that a Fund has written expires, the Fund will realize a gain in the
amount of the premium; however, such gain may be offset by a decline in the
market value of the underlying security or currency during the option period. If
the call option is exercised, the Fund will realize a gain or loss from the sale
of the underlying security or currency, which will be increased or offset by the
premium received. The Fund does not consider a security or currency covered by a
call option to be "pledged" as that term is used in the Fund's policy that
limits the pledging or mortgaging of its assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Fund will be obligated to
sell the security or currency at less than its market value.
The premium that a Fund receives for writing a call option is deemed to
constitute the market value of an option. The premium a Fund will receive from
writing a call option will reflect, among other things, the current market price
of the underlying investment, the relationship of the exercise price to such
market price, the historical price volatility of the underlying investment and
the length of the option period. In determining whether a particular call option
should be written, the Sub-adviser will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit the Fund to write
another call option on the underlying security or currency with either a
different exercise price or expiration date or both.
The Funds will pay transaction costs in connection with the writing of options
and in entering into closing purchase contracts. Transaction costs relating to
options activity normally are higher than those applicable to purchases and
sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities, indices or currencies at the time
the options are written. From time to time, a Fund may purchase an underlying
security or currency for delivery in accordance with the exercise of an option,
rather than delivering such security or currency from its portfolio. In such
cases, additional costs will be incurred.
A Fund will realize a profit or loss from a closing purchase transaction if the
cost of the transaction is less or more, respectively, than the premium received
from writing the option. Because increases in the market price of a call option
generally will reflect increases in the market price of the underlying security
or currency, any loss resulting from the repurchase of a call option is likely
to be offset in whole or in part by appreciation of the underlying security or
currency owned by the Fund.
WRITING PUT OPTIONS
The Funds may write put options on securities, indices and currencies. A put
option gives the purchaser of the option the right to sell, and the writer
(seller) the obligation to buy, the underlying security or currency at the
exercise price at any time until (American style) or on (European style) the
expiration date. The operation of put options in other respects, including their
related risks and rewards, is substantially identical to that of call options.
A Fund generally would write put options in circumstances where the Sub-adviser
wishes to purchase the underlying security or currency for the Fund's portfolio
at a price lower than the current market price of the security or currency. In
such event, the Fund would write a put option at an exercise price that, reduced
by the premium received on the option, reflects the lower price it is willing to
pay. Since the Fund also would receive interest on debt securities or currencies
maintained to cover the exercise price of the option, this technique could be
used to enhance current return during periods of market uncertainty. The risk in
such a transaction would be that the market price of the underlying security or
currency would decline below the exercise price, less the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and a Fund will be obligated
to purchase the security or currency at greater than its market value.
PURCHASING PUT OPTIONS
Each Fund may purchase put options on securities, indices and currencies. As the
holder of a put option, a Fund would have the right to sell the underlying
security or currency at the exercise price at any time until (American style) or
on
STATEMENT OF ADDITIONAL INFORMATION PAGE 8
<PAGE>
AIM EQUITY FUNDS
(European style) the expiration date. A Fund may enter into closing sale
transactions with respect to such option, exercise such option or permit such
option to expire.
A Fund may purchase a put option on an underlying security or currency
("protective put") owned by the Fund in order to protect against an anticipated
decline in the value of the security or currency. Such hedge protection is
provided only during the life of the put option when the Fund, as the holder of
the put option, is able to sell the underlying security or currency at the put
exercise price regardless of any decline in the underlying security's market
price or currency's exchange value. The premium paid for the put option and any
transaction costs would reduce any profit otherwise available for distribution
when the security or currency eventually is sold.
A Fund also may purchase put options at a time when the Fund does not own the
underlying security or currency. By purchasing put options on a security or
currency it does not own, a Fund seeks to benefit from a decline in the market
price of the underlying security or currency. If the put option is not sold when
it has remaining value, and if the market price of the underlying security or
currency remains equal to or greater than the exercise price during the life of
the put option, the Fund will lose its entire investment in the put option. In
order for the purchase of a put option to be profitable, the market price of the
underlying security or currency must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.
PURCHASING CALL OPTIONS
Each Fund may purchase call options on securities, indices and currencies. As
the holder of a call option, a Fund would have the right to purchase the
underlying security or currency at the exercise price at any time until
(American style) or on (European style) the expiration date. A Fund may enter
into closing sale transactions with respect to such option, exercise such option
or permit such option to expire.
Call options may be purchased by a Fund for the purpose of acquiring the
underlying security or currency for its portfolio. Utilized in this fashion, the
purchase of call options would enable a Fund to acquire the security or currency
at the exercise price of the call option plus the premium paid. At times, the
net cost of acquiring the security or currency in this manner may be less than
the cost of acquiring the security or currency directly. This technique also may
be useful to the Funds in purchasing a large block of securities that would be
more difficult to acquire by direct market purchases. As long as it holds such a
call option, rather than the underlying security or currency itself, a Fund is
partially protected from any unexpected decline in the market price of the
underlying security or currency and, in such event, could allow the call option
to expire, incurring a loss only to the extent of the premium paid for the
option.
Each Fund also may purchase call options on underlying securities or currencies
it owns to avoid realizing losses that would result in a reduction of its
current return. For example, where a Fund has written a call option on an
underlying security or currency having a current market value below the price at
which it purchased the security or currency, an increase in the market price
could result in the exercise of the call option written by the Fund and the
realization of a loss on the underlying security or currency. Accordingly, the
Fund could purchase a call option on the same underlying security or currency,
which could be exercised to fulfill the Fund's delivery obligations under its
written call (if it is exercised). This strategy could allow the Fund to avoid
selling the portfolio security or currency at a time when it has an unrealized
loss; however, the Fund would have to pay a premium to purchase the call option
plus transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of such
Fund's total assets at the time of purchase.
Each Fund may attempt to accomplish objectives similar to those involved in
using Forward Contracts by purchasing put or call options on currencies. A put
option gives a Fund as purchaser the right (but not the obligation) to sell a
specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration date of the option. A call option
gives a Fund as purchaser the right (but not the obligation) to purchase a
specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration date of the option. A Fund might
purchase a currency put option, for example, to protect itself against a decline
in the dollar value of a currency in which it holds or anticipates holding
securities. If the currency's value should decline against the dollar, the loss
in currency value should be offset, in whole or in part, by an increase in the
value of the put. If the value of the currency instead should rise against the
dollar, any gain to the Fund would be reduced by the premium it had paid for the
put option. A currency call option might be purchased, for example, in
anticipation of, or to protect against, a rise in the value against the dollar
of a currency in which the Fund anticipates purchasing securities.
Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (I.E., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation), and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. A Fund will not purchase an OTC option unless the Sub-adviser believes
that daily valuations for such options are readily obtainable. OTC options
differ from exchange-traded options in that OTC
STATEMENT OF ADDITIONAL INFORMATION PAGE 9
<PAGE>
AIM EQUITY FUNDS
options are transacted with dealers directly and not through a clearing
corporation (which guarantees performance). Consequently, there is a risk of
non-performance by the dealer. Since no exchange is involved, OTC options are
valued on the basis of an average of the last bid prices obtained from dealers,
unless a quotation from only one dealer is available, in which case only that
dealer's price will be used. In the case of OTC options, there can be no
assurance that a liquid secondary market will exist for any particular option at
any specific time.
The staff of the SEC considers purchased OTC options to be illiquid securities.
A Fund may also sell OTC options and, in connection therewith, segregate assets
or cover its obligations with respect to OTC options written by the Fund. The
assets used as cover for OTC options written by a Fund will be considered
illiquid unless the OTC options are sold to qualified dealers who agree that the
Fund may repurchase any OTC option it writes at a maximum price to be calculated
by a formula set forth in the option agreement. The cover for an OTC option
written subject to this procedure would be considered illiquid only to the
extent that the maximum repurchase price under the formula exceeds the intrinsic
value of the option.
A Fund's ability to establish and close out positions in exchange-listed options
depends on the existence of a liquid market. A Fund intends to purchase or write
only those exchange-listed options for which there appears to be a liquid
secondary market. However, there can be no assurance that such a market will
exist at any particular time. Closing transactions can be made for OTC options
only by negotiating directly with the contra party or by a transaction in the
secondary market if any such market exists. Although a Fund will enter into OTC
options only with contra parties that are expected to be capable of entering
into closing transactions with the Fund, there is no assurance that the Fund
will in fact be able to close out an OTC option position at a favorable price
prior to expiration. In the event of insolvency of the contra party, the Fund
might be unable to close out an OTC option position at any time prior to its
expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When a Fund writes a call on an
index, it receives a premium and agrees that, prior to the expiration date, the
purchaser of the call, upon exercise of the call, will receive from the Fund an
amount of cash if the closing level of the index upon which the call is based is
greater than the exercise price of the call. The amount of cash is equal to the
difference between the closing price of the index and the exercise price of the
call times a specified multiple (the "multiplier"), which determines the total
dollar value for each point of such difference. When a Fund buys a call on an
index, it pays a premium and has the same rights as to such calls as are
indicated above. When a Fund buys a put on an index, it pays a premium and has
the right, prior to the expiration date, to require the seller of the put, upon
the Fund's exercise of the put, to deliver to the Fund an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the put, which amount of cash is determined by the multiplier, as
described above for calls. When a Fund writes a put on an index, it receives a
premium and the purchaser has the right, prior to the expiration date, to
require the Fund to deliver to it an amount of cash equal to the difference
between the closing level of the index and the exercise price times the
multiplier, if the closing level is less than the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Fund writes a call
on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Fund can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Fund cannot, as a practical matter, acquire and hold
a portfolio containing exactly the same securities as underlie the index and, as
a result, bears a risk that the value of the securities held will vary from the
value of the index.
Even if a Fund could assemble a securities portfolio that exactly reproduced the
composition of the underlying index, it still would not be fully covered from a
risk standpoint because of the "timing risk" inherent in writing index options.
When an index option is exercised, the amount of cash that the holder is
entitled to receive is determined by the difference between the exercise price
and the closing index level on the date when the option is exercised. As with
other kinds of options, the Fund, as the call writer, will not know that it has
been assigned until the next business day at the earliest. The time lag between
exercise and notice of assignment poses no risk for the writer of a covered call
on a specific underlying security, such as common stock, because there the
writer's obligation is to deliver the underlying security, not to pay its value
as of a fixed time in the past. So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder. In contrast, even if the writer of an
index call holds securities that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those securities against payment of the exercise price. Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date; and by the time it learns that it has been assigned, the index
may have declined, with a corresponding decline in the
STATEMENT OF ADDITIONAL INFORMATION PAGE 10
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AIM EQUITY FUNDS
value of its securities portfolio. This "timing risk" is an inherent limitation
on the ability of index call writers to cover their risk exposure by holding
securities positions.
If a Fund purchases an index option and exercises it before the closing index
value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Fund will be required to pay the difference
between the closing index value and the exercise price of the option (times the
applicable multiplier) to the assigned writer.
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
A Fund may enter into interest rate, currency or stock index futures contracts
("Futures" or "Futures Contracts") as a hedge against changes in prevailing
levels of interest rates, currency exchange rates or stock price levels in order
to establish more definitely the effective return on securities or currencies
held or intended to be acquired by the Fund. The Funds' hedging may include
sales of Futures as an offset against the effect of expected increases in
interest rates, or decreases in currency exchange rates and stock prices, and
purchases of Futures as an offset against the effect of expected declines in
interest rates, or increases in currency exchange rates or stock prices.
The Funds only will enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce the Funds' exposure to interest rate and currency exchange rate
fluctuations, the Funds may be able to hedge its exposure more effectively and
at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A stock
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of trading on the contract
and the price at which the Futures Contract is originally struck; no physical
delivery of stocks comprising the index is made. Brokerage fees are incurred
when a Futures Contract is bought or sold, and margin deposits must be
maintained at all times the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments or currencies, Futures Contracts usually are closed out
before the delivery date. Closing out an open Futures Contract sale or purchase
is effected by entering into an offsetting Futures Contract purchase or sale,
respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Fund realizes a gain; if it is
more, the Fund realizes a loss. Conversely, if the offsetting sale price is more
than the original purchase price, the Fund realizes a gain; if it is less, the
Fund realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that the Funds will be able to
enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Fund is not able to enter into an offsetting
transaction, the Fund will continue to be required to maintain the margin
deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one Futures Contract of September Deutschemarks on an exchange
may be fulfilled at any time before delivery under the Futures Contract is
required (I.E., on a specified date in September, the "delivery month") by the
purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance, the difference between the price at which the
Futures Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Fund.
The Funds' Futures transactions will be entered into for hedging purposes only;
that is, Futures Contracts will be sold to protect against a decline in the
price of securities or currencies that a Fund owns, or Futures Contracts will be
purchased to protect a Fund against an increase in the price of securities or
currencies it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Fund in order to initiate Futures trading and to maintain the
Fund's open positions in Futures Contracts. A margin deposit made when the
Futures Contract is entered into ("initial margin") is intended to ensure the
Fund's performance under the Futures Contract. The margin required for a
particular Futures Contract is set by the exchange on which the Futures Contract
is traded and may be significantly modified from time to time by the exchange
during the term of the Futures Contract.
STATEMENT OF ADDITIONAL INFORMATION PAGE 11
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AIM EQUITY FUNDS
Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Fund entered into the Futures Contract
will be made on a daily basis as the price of the underlying security, currency
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced by, among other things, actual and anticipated
changes in interest and currency rates, which in turn are affected by fiscal and
monetary policies and national and international political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in the Fund's portfolio
being hedged. The degree of imperfection of correlation depends upon
circumstances such as: variations in speculative market demand for Futures and
for securities or currencies, including technical influences in Futures trading;
and differences between the financial instruments being hedged and the
instruments underlying the standard Futures Contracts available for trading. A
decision of whether, when and how to hedge involves skill and judgment, and even
a well-conceived hedge may be unsuccessful to some degree because of unexpected
market behavior or interest or currency rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and option on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If a Fund were unable to liquidate a Futures or option on Futures position due
to the absence of a liquid secondary market or the imposition of price limits,
it could incur substantial losses. The Fund would continue to be subject to
market risk with respect to the position. In addition, except in the case of
purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to maintain the position being
hedged by the Future or option or to maintain cash or securities in a segregated
account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities or currencies,
except that options on Futures Contracts give the purchaser the right, in return
for the premium paid, to assume a position in a Futures Contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the delivery of the Futures position by the writer of
the option to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's Futures margin account, which represents the
amount by which the market price of the Futures Contract, at exercise, exceeds
(in the case of a call) or is less than (in the case of a put) the exercise
price of the option on the Futures Contract. If an option is exercised on the
last trading day prior to the expiration date of the option, the settlement will
be made entirely in cash equal to the difference between the exercise price of
the option and the closing level of the securities, currencies or index upon
which the Futures
STATEMENT OF ADDITIONAL INFORMATION PAGE 12
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AIM EQUITY FUNDS
Contract is based on the expiration date. Purchasers of options who fail to
exercise their options prior to the exercise date suffer a loss of the premium
paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
If a Fund writes an option on a Futures Contract, it will be required to deposit
initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
A Fund may seek to close out an option position by selling an option covering
the same Futures Contract and having the same exercise price and expiration
date. The ability to establish and close out positions on such options is
subject to the maintenance of a liquid secondary market.
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
To the extent that a Fund enters into Futures Contracts, options on Futures
Contracts, and options on foreign currencies traded on a CFTC-regulated
exchange, in each case other than for BONA FIDE hedging purposes (as defined by
the CFTC), the aggregate initial margin and premiums required to establish those
positions (excluding the amount by which options are "in-the-money") will not
exceed 5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund has
entered into. In general, a call option on a Futures Contract is "in-the-money"
if the value of the underlying Futures Contract exceeds the strike, I.E.,
exercise, price of the call; a put option on a Futures Contract is
"in-the-money" if the value of the underlying Futures Contract is exceeded by
the strike price of the put. This guideline may be modified by the Trust's Board
of Trustees without a shareholder vote. This limitation does not limit the
percentage of a Fund's assets at risk to 5%.
FORWARD CONTRACTS
A Forward Contract is an obligation, generally arranged with a commercial bank
or other currency dealer, to purchase or sell a currency against another
currency at a future date and price as agreed upon by the parties. A Fund may
either accept or make delivery of the currency at the maturity of the Forward
Contract. A Fund may also, if its contra party agrees, prior to maturity, enter
into a closing transaction involving the purchase or sale of an offsetting
contract.
A Fund engages in forward currency transactions in anticipation of or to protect
itself against fluctuations in exchange rates. A Fund might sell a particular
foreign currency forward, for example, when it holds bonds denominated in a
foreign currency but anticipates, and seeks to be protected against, a decline
in the currency against the U.S. dollar. Similarly, a Fund might sell the U.S.
dollar forward when it holds bonds denominated in U.S. dollars but anticipates,
and seeks to be protected against, a decline in the U.S. dollar relative to
other currencies. Further, a Fund might purchase a currency forward to "lock in"
the price of securities denominated in that currency that it anticipates
purchasing.
Forward Contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A Forward
Contract generally has no deposit requirement, and no commissions are charged at
any stage for trades. Each Fund will enter into such Forward Contracts with
major U.S. or foreign banks and securities or currency dealers in accordance
with guidelines approved by the Trust's Board of Trustees.
Each Fund may enter into Forward Contracts either with respect to specific
transactions or with respect to the overall investments of the Fund. The precise
matching of the Forward Contract amounts and the value of specific securities
generally will not be possible because the future value of such securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the Forward Contract is entered into and
the date it matures. Accordingly, it may be necessary for a Fund to purchase
additional foreign currency on the spot (I.E., cash) market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a decision is
made to sell the security and make delivery of the foreign currency. Conversely,
it may be necessary to sell on the spot market some of the foreign currency the
Fund is obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. Forward Contracts involve the risk that
anticipated currency movements will not be predicted accurately, causing a Fund
to sustain losses on these contracts and transaction costs.
At or before the maturity of a Forward Contract requiring a Fund to sell a
currency, the Fund either may sell a portfolio security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the maturity date, the same amount of
the currency that it is obligated to deliver. Similarly, a Fund may close out a
Forward Contract requiring it to purchase a specified currency by entering into
a second contract, if its contra party agrees, entitling it to sell
STATEMENT OF ADDITIONAL INFORMATION PAGE 13
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AIM EQUITY FUNDS
the same amount of the same currency on the maturity date of the first contract.
The Fund would realize a gain or loss as a result of entering into such an
offsetting Forward Contract under either circumstance to the extent the exchange
rate or rates between the currencies involved moved between the execution dates
of the first contract and the offsetting contract.
The cost to a Fund of engaging in Forward Contracts varies with factors such as
the currencies involved, the length of the contract period and the market
conditions then prevailing. Because Forward Contracts usually are entered into
on a principal basis, no fees or commissions are involved. The use of Forward
Contracts does not eliminate fluctuations in the prices of the underlying
securities a Fund owns or intends to acquire, but it does establish a rate of
exchange in advance. In addition, while Forward Contracts limit the risk of loss
due to a decline in the value of the hedged currencies, they also limit any
potential gain that might result should the value of the currencies increase.
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
A Fund may use options on foreign currencies, Futures on foreign currencies,
options on Futures on foreign currencies and Forward Contracts to hedge against
movements in the values of the foreign currencies in which the Fund's securities
are denominated. Such currency hedges can protect against price movements in a
security that a Fund owns or intends to acquire that are attributable to changes
in the value of the currency in which it is denominated. Such hedges do not,
however, protect against price movements in the securities that are attributable
to other causes.
A Fund might seek to hedge against changes in the value of a particular currency
when no Futures Contract, Forward Contract or option involving that currency is
available or one of such contracts is more expensive than certain other
contracts. In such cases, the Fund may hedge against price movements in that
currency by entering into a contract on another currency or basket or
currencies, the values of which the Sub-adviser believes will have a positive
correlation to the value of the currency being hedged. The risk that movements
in the price of the contract will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.
The value of Futures Contracts, options on Futures Contracts, Forward Contracts
and options on foreign currencies depends on the value of the underlying
currency relative to the U.S. dollar. Because foreign currency transactions
occurring in the interbank market might involve substantially larger amounts
than those involved in the use of Futures Contracts, Forward Contracts or
options, a Fund could be disadvantaged by dealing in the odd lot market
(generally consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable than for round
lots.
There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirements that quotations available through dealers or
other market sources be firm or revised on a timely basis. Quotation information
generally is representative of very large transactions in the interbank market
and thus might not reflect odd-lot transactions where rates might be less
favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
Settlement of Futures Contracts, Forward Contracts and options involving foreign
currencies might be required to take place within the country issuing the
underlying currency. Thus, a Fund might be required to accept or make delivery
of the underlying foreign currency in accordance with any U.S. or foreign
regulations regarding the maintenance of foreign banking arrangements by U.S.
residents and might be required to pay any fees, taxes and charges associated
with such delivery assessed in the issuing country.
COVER
Transactions using Forward Contracts, Futures Contracts and options (other than
options purchased by a Fund) expose the Fund to an obligation to another party.
A Fund will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities, currencies, or other options,
Forward Contracts or Futures Contracts, or (2) cash, receivables and short-term
debt securities with a value sufficient at all times to cover its potential
obligations not covered as provided in (1) above. Each Fund will comply with SEC
guidelines regarding cover for these instruments and, if the guidelines so
require, set aside cash or liquid securities.
Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a Fund's assets is used for cover or otherwise set aside, it could affect
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.
STATEMENT OF ADDITIONAL INFORMATION PAGE 14
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AIM EQUITY FUNDS
RISK FACTORS
- --------------------------------------------------------------------------------
ILLIQUID SECURITIES
A Fund may invest up to 15% of its net assets in illiquid securities. Securities
may be considered illiquid if a Fund cannot reasonably expect within seven days
to sell the securities for approximately the amount at which the Fund values
such securities. See "Investment Limitations." The sale of illiquid securities,
if they can be sold at all, generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities such as securities eligible for trading on U.S.
securities exchanges or in the OTC markets. Moreover, restricted securities,
which may be illiquid for purposes of this limitation, often sell, if at all, at
a price lower than similar securities that are not subject to restrictions on
resale.
Illiquid securities include those that are subject to restrictions contained in
the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, a Fund may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Fund might obtain a less favorable price
than prevailed when it decided to sell.
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended (the "1933 Act"),
including private placements, repurchase agreements, commercial paper, foreign
securities and corporate bonds and notes. These instruments are often restricted
securities because the securities are sold in transactions not requiring
registration. Institutional investors generally will not seek to sell these
instruments to the general public, but instead will often depend either on an
efficient institutional market in which such unregistered securities can be
readily resold or on an issuer's ability to honor a demand for repayment.
Therefore, the fact that there are contractual or legal restrictions on resale
to the general public or certain institutions is not dispositive of the
liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Fund, however, could affect adversely the marketability of such portfolio
securities and the Fund might be unable to dispose of such securities promptly
or at favorable prices.
With respect to liquidity determinations generally, the Trust's Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including restricted securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the 1933 Act, are liquid or
illiquid. The Trust's Board has delegated the function of making day-to-day
determinations of liquidity to the Sub-adviser in accordance with procedures
approved by the Board. The Sub-adviser takes into account a number of factors in
reaching liquidity decisions, including: (i) the frequency of trading in the
security; (ii) the number of dealers who make quotes for the security; (iii) the
number of dealers who have undertaken to make a market in the security; (iv) the
number of other potential purchasers; and (v) the nature of the security and how
trading is effected (e.g., the time needed to sell the security, how offers are
solicited, and the mechanics of transfer.) The Sub-adviser monitors the
liquidity of securities in each Fund's portfolio and periodically reports such
determinations to the Trust's Board of Trustees. If the liquidity percentage
restriction of a Fund is satisfied at the time of investment, a later increase
in the percentage of illiquid securities held by the Fund resulting from a
change in market value or assets will not constitute a violation of that
restriction. If as a result of a change in market value or assets, the
percentage of illiquid securities held by the Fund increases above the
applicable limit, the Sub-adviser will take appropriate steps to bring the
aggregate amount of illiquid assets back within the prescribed limitations as
soon as reasonably practicable, taking into account the effect of any
disposition on the Fund.
STATEMENT OF ADDITIONAL INFORMATION PAGE 15
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AIM EQUITY FUNDS
FOREIGN SECURITIES
POLITICAL, SOCIAL AND ECONOMIC RISKS. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, a Fund could lose its entire investment in
any such country.
RELIGIOUS, POLITICAL AND ETHNIC INSTABILITY. Certain countries in which a
Fund may invest may have groups that advocate radical religious or revolutionary
philosophies or support ethnic independence. Any disturbance on the part of such
individuals could carry the potential for widespread destruction or confiscation
of property owned by individuals and entities foreign to such country and could
cause the loss of the Fund's investment in those countries. Instability may also
result from, among other things: (i) authoritarian governments or military
involvement in political and economic decision-making, including changes in
government through extra-constitutional means; (ii) popular unrest associated
with demands for improved political, economic and social conditions; and (iii)
hostile relations with neighboring or other countries. Such political, social
and economic instability could disrupt the principal financial markets in which
a Fund invests and adversely affect the value of its assets.
FOREIGN INVESTMENT RESTRICTIONS. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as a Fund. These restrictions or
controls may at times limit or preclude investment in certain securities and may
increase the cost and expenses of the Fund. For example, certain countries
require prior governmental approval before investments by foreign persons may be
made, or may limit the amount of investment by foreign persons in a particular
company, or limit the investment by foreign persons to only a specific class of
securities of a company that may have less advantageous terms than securities of
the company available for purchase by nationals. Moreover, the national policies
of certain countries may restrict investment opportunities in issuers or
industries deemed sensitive to national interests. In addition, some countries
require governmental approval for the repatriation of investment income, capital
or the proceeds of securities sales by foreign investors. In addition, if there
is a deterioration in a country's balance of payments or for other reasons, a
country may impose restrictions on foreign capital remittances abroad. A Fund
could be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
NON-UNIFORM CORPORATE DISCLOSURE STANDARDS AND GOVERNMENTAL
REGULATION. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such financial statements been prepared in accordance with U.S. generally
accepted accounting principles. Most of the foreign securities held by a Fund
(other than the Mid Cap Fund) will not be registered with the SEC or regulators
of any foreign country, nor will the issuers thereof be subject to the SEC's
reporting requirements. Thus, there will be less available information
concerning most foreign issuers of securities held by a Fund than is available
concerning U.S. issuers. In instances where the financial statements of an
issuer are not deemed to reflect accurately the financial situation of the
issuer, the Sub-adviser will take appropriate steps to evaluate the proposed
investment, which may include on-site inspection of the issuer, interviews with
its management and consultations with accountants, bankers and other
specialists. There is substantially less publicly available information about
foreign companies than there are reports and ratings published about U.S.
companies and the U.S. government. In addition, where public information is
available, it may be less reliable than such information regarding U.S. issuers.
Issuers of securities in foreign jurisdictions are generally not subject to the
same degree of regulation as are U.S. issuers with respect to such matters as
restrictions on market manipulation, insider trading rules, shareholder proxy
requirements and timely disclosure of information.
CURRENCY FLUCTUATIONS. Because each Fund, other than the Mid Cap Fund, under
normal circumstances will invest a substantial portion of its total assets in
the securities of foreign issuers that are denominated in foreign currencies,
the strength or weakness of the U.S. dollar against such foreign currencies will
account for a significant part of the Fund's investment performance. A decline
in the value of any particular currency against the U.S. dollar will cause a
decline in the U.S. dollar value of a Fund's holdings of securities and cash
denominated in such currency and, therefore, will cause an overall decline in
the Fund's net asset value and any net investment income and capital gains
derived from such securities to be distributed in U.S. dollars to shareholders
of the Fund. Moreover, if the value of the foreign currencies in which a Fund
receives its income declines relative to the U.S. dollar between the receipt of
the income and the making of Fund distributions, it may be required to liquidate
securities in order to make distributions if it has insufficient cash in U.S.
dollars to meet distribution requirements.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors, including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the relative movement of
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AIM EQUITY FUNDS
interest rates and the pace of business activity in the other countries and the
United States, and other economic and financial conditions affecting the world
economy.
Although each Fund values its assets daily in terms of U.S. dollars, they do not
intend to convert their holdings of foreign currencies into U.S. dollars on a
daily basis. Each Fund will do so, from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at one
rate, while offering a lesser rate of exchange should a Fund desire to sell that
currency to the dealer.
ADVERSE MARKET CHARACTERISTICS. Securities of many foreign issuers may be
less liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the United
States, and foreign securities exchange transactions usually are subject to
fixed commissions, which generally are higher than negotiated commissions on
U.S. transactions. In addition, foreign securities exchange transactions may be
subject to difficulties associated with the settlement of such transactions.
Delays in settlement could result in temporary periods when assets of a Fund are
uninvested and no return is earned thereon. The inability of a Fund to make
intended security purchases due to settlement problems could cause the Fund to
miss attractive investment opportunities. Inability to dispose of a portfolio
security due to settlement problems either could result in losses to a Fund due
to subsequent declines in value of the portfolio security or, if a Fund has
entered into a contract to sell the security, could result in possible liability
to the purchaser. The Sub-adviser will consider such difficulties when
determining the allocation of each Fund's assets, although the Sub-adviser does
not believe that such difficulties will have a material adverse effect on the
Funds' portfolio trading activities.
The Funds may use foreign custodians, which may involve risks in addition to
those related to the use of U.S. custodians. Such risks include uncertainties
relating to: (i) determining and monitoring the financial strength, reputation
and standing of the foreign custodian; (ii) maintaining appropriate safeguards
to protect the Funds' investments and (iii) obtaining and enforcing judgments
against such custodians.
WITHHOLDING TAXES. A Fund's net investment income from foreign issuers may
be subject to non-U.S. withholding taxes by the foreign issuer's country,
thereby reducing the Fund's net investment income or delaying the receipt of
income where those taxes may be recaptured. See "Taxes."
CONCENTRATION. To the extent a Fund invests a significant portion of its
assets in securities of issuers located in a particular country or region of the
world, it may be subject to greater risks and may experience greater volatility
than a fund that is more broadly diversified geographically.
SPECIAL CONSIDERATIONS AFFECTING WESTERN EUROPEAN COUNTRIES. The countries
that are members of the European Economic Community ("Common Market") (Belgium,
Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,
Portugal, Spain and the United Kingdom) eliminated certain import tariffs and
quotas and other trade barriers with respect to one another over the past
several years. The Sub-adviser believes that this deregulation should improve
the prospects for economic growth in many Western European countries. Among
other things, the deregulation could enable companies domiciled in one country
to avail themselves of lower labor costs existing in other countries. In
addition, this deregulation could benefit companies domiciled in one country by
opening additional markets for their goods and services in other countries.
Since, however, it is not clear what the exact form or effect of these Common
Market reforms will be on business in Western Europe, it is impossible to
predict the long-term impact of the implementation of these programs on the
securities owned by a Fund.
SPECIAL CONSIDERATIONS AFFECTING RUSSIA AND EASTERN EUROPEAN COUNTRIES.
Investing in Russia and Eastern European countries involves a high degree of
risk and special considerations not typically associated with investing in the
U.S. securities markets and should be considered highly speculative. Such risks
include: (1) delays in settling portfolio transactions and risk of loss arising
out of the system of share registration and custody; (2) the risk that it may be
impossible or more difficult than in other countries to obtain and/or enforce a
judgment; (3) pervasiveness of corruption and crime in the economic system; (4)
currency exchange rate volatility and the lack of available currency hedging
instruments; (5) higher rates of inflation (including the risk of social unrest
associated with periods of hyper-inflation) and high unemployment; (6) controls
on foreign investment and local practices disfavoring foreign investors and
limitations on repatriation of invested capital, profits and dividends and on a
Fund's ability to exchange local currencies for U.S. dollars; (7) political
instability and social unrest and violence; (8) the risk that the governments of
Russia and Eastern European countries may decide not to continue to support the
economic reform programs implemented recently and may follow radically different
political and/or economic policies to the detriment of investors, including
non-market-oriented policies such as the support of certain industries at the
expense of other sectors or investors, or a return to the centrally planned
economy that existed when such countries had a communist form of government; (9)
the financial condition of
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AIM EQUITY FUNDS
companies in these countries, including large amounts of inter-company debt that
may create a payments crisis on a national scale; (10) dependency on exports and
the corresponding importance of international trade; (11) the risk that the tax
system in these countries will not be reformed to prevent inconsistent,
retroactive and/or exorbitant taxation; and (12) the underdeveloped nature of
the securities markets.
SPECIAL CONSIDERATIONS AFFECTING PACIFIC REGION COUNTRIES. Many Pacific
region countries may be subject to a greater degree of social, political and
economic instability than is the case in the United States. Such instability may
result from, among other things, the following: (i) authoritarian governments or
military involvement in political and economic decision making, and changes in
government through extra-constitutional means; (ii) popular unrest associated
with demands for improved political, economic and social conditions; (iii)
internal insurgencies; (iv) hostile relations with neighboring countries; and
(v) ethnic, religious and racial disaffection. Such social, political and
economic instability could significantly disrupt the principal financial markets
in which a Fund invests and adversely affect the value of a Fund's assets. In
addition, there may be the possibility of asset expropriations or future
confiscatory levels of taxation affecting the Funds.
In China, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea
and Thailand, government regulation or a company's charter may limit the maximum
foreign aggregate ownership of equity in the company. South Korea generally
prohibits foreign investment in won-denominated debt securities, and Sri Lanka
prohibits foreign investment in government debt securities. South Korea
prohibits foreign investment in specified telecommunications companies, and the
Philippines prohibits foreign investment in mass media companies and companies
providing certain professional services. In the Philippines, a Fund may
generally invest in "B" shares of Philippine issuers engaged in partly
nationalized business activities, the market prices, liquidity and rights of
which may vary from shares owned by nationals. Similarly, in China, a Fund may
only invest in "B" shares of securities traded on The Shanghai Securities
Exchange and The Shenzhen Stock Exchange, currently the two officially
recognized securities exchanges in China. "B" shares traded on The Shanghai
Securities Exchange are settled in U.S. dollars, and those traded on The
Shenzhen Stock Exchange are generally settled in Hong Kong dollars.
If, because of restrictions on repatriation or conversion of funds, a Fund were
unable to timely distribute substantially all of its net investment income and
net capital gains, the Fund could be subject to federal income and excise taxes
that would not otherwise be incurred and could cease to qualify for the
favorable tax treatment afforded to regulated investment companies ("RICs")
under the Internal Revenue Code of 1986, as amended (the "Code"). In such case,
it would become subject to federal income tax on all of its income and net
gains.
Several Pacific region countries have or in the past have had hostile
relationships with neighboring nations or have experienced internal insurgency.
Thailand has experienced border conflicts with Laos and Cambodia, and India is
engaged in border disputes with several of its neighbors, including China and
Pakistan. An uneasy truce exists between North Korea and South Korea, and the
recurrence of hostilities remains possible. Reunification of North Korea and
South Korea could have a detrimental effect on the economy of South Korea. Also,
China continues to claim sovereignty over Taiwan and recently has conducted
military maneuvers near Taiwan.
The economies of most Pacific region countries are heavily dependent upon
international trade and are accordingly affected by protective trade barriers
and the economic conditions of their trading partners, principally the United
States, Japan, China and the European Community. The enactment by the United
States or other principal trading partners of protectionist trade legislation,
reduction of foreign investment in the local economies and general declines in
the international securities markets could have a significant adverse effect
upon the securities markets of Pacific region countries. In addition, the
economies of some of the Asia Pacific region countries, Australia and Indonesia,
for example, are vulnerable to weakness in world prices for their commodity
exports, including crude oil.
Few of the Pacific region countries have Western-style or fully democratic
governments. Some governments in the region are authoritarian in nature and
influenced by security forces. For example, during the course of the last 25
years, governments in the region have been installed or removed as a result of
military coups, while others have periodically demonstrated repressive police
state characteristics. In several Pacific region countries, the leadership
ability of the government has suffered as a result of recent corruption
scandals. Disparities of wealth, among other factors, have also led to social
unrest in some of the Asia Pacific region countries, accompanied, in certain
cases, by violence and labor unrest. Ethnic, religious and racial disaffection,
as evidenced in India, Pakistan, and Sri Lanka, for example, have created
social, economic and political problems. Such problems also have occurred in
other regions.
Starting in mid-1997, some Pacific region countries began to experience currency
devaluations that resulted in high interest rate levels and sharp reductions in
economic activity. While the currency crisis diminished prospects for short-term
corporate earnings growth, the Sub-adviser believes that high interest rate
levels may force governments and
STATEMENT OF ADDITIONAL INFORMATION PAGE 18
<PAGE>
AIM EQUITY FUNDS
corporations to restructure the financial sector in a manner that may facilitate
a return to high levels of long-term economic activity.
China assumed sovereignty over Hong Kong in July 1997. Although China has
committed by treaty to preserve the economic and social freedoms enjoyed in Hong
Kong for fifty years, the continuation of the current form of the economic
system in Hong Kong will depend on the actions of the government of China. In
addition, such assumption of sovereignty has increased sensitivity in Hong Kong
to political developments and statements by public figures in China. Business
confidence in Hong Kong, therefore, can be significantly affected by such
developments and statements, which in turn can affect markets and business
performance.
In addition, there is continuing risk that the Hong Kong dollar will be devalued
and a risk of possible loss of investor confidence in the Hong Kong markets and
dollar. However, factors exist that are likely to mitigate this risk. First,
China has stated its intention to implement a "one country, two systems" policy,
which would preserve monetary sovereignty and leave control in the hands of the
Hong Kong Monetary Authority ("HKMA").
Second, fixed rate parity with the U.S. dollar is seen as critical to
maintaining investors' confidence in the transition to Chinese rule and,
therefore, it is anticipated that, if international investors lose confidence in
Hong Kong dollar assets, the HKMA would take steps to support the currency,
though the taking of such steps cannot be assured. Third, Hong Kong's and
China's sizable combined foreign exchange reserve may be used to support the
value of the Hong Kong dollar, provided that China does not appropriate such
reserves for other uses, which is not anticipated but cannot be assured.
Finally, China would be likely to experience significant adverse political and
economic consequences if confidence in the Hong Kong dollar and the territory
assets were to be endangered.
SPECIAL CONSIDERATIONS AFFECTING LATIN AMERICAN COUNTRIES. Most Latin
American countries have experienced substantial, and in some periods extremely
high, rates of inflation for many years. Inflation and rapid fluctuations in
inflation rates have had and may continue to have very negative effects on the
economies and securities markets of certain Latin American countries. Certain
Latin American countries are also among the largest debtors to commercial banks
and foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by foreign entities, investments may only be made in certain Latin
American countries solely or primarily through governmentally approved
investment vehicles or companies.
Certain Latin American countries may have managed currencies that are maintained
at artificial levels to the U.S. dollar rather than at levels determined by the
market. This type of system can lead to sudden and large adjustments in the
currency which, in turn, can have a disruptive and negative effect on foreign
investors. For example, in late 1994, the value of the Mexican peso lost more
than one-third of its value relative to the U.S. dollar.
SPECIAL CONSIDERATIONS AFFECTING EMERGING MARKETS. Investing in the
securities of companies in emerging markets may entail special risks relating to
potential political and economic instability and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility into U.S. dollars and on repatriation of capital
invested. In the event of such expropriation, nationalization or other
confiscation by any country, a Fund could lose its entire investment in any such
country.
Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading value in issuers compared to the
volume of trading in U.S. securities could cause prices to be erratic for
reasons apart from factors that affect the quality of the securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value and
liquidity of portfolio securities, especially in these markets. In addition,
securities traded in certain emerging markets may be subject to risks due to the
inexperience of financial intermediaries, a lack of modern technology, the lack
of a sufficient capital base to expand business operations, and the possibility
of permanent or temporary termination of trading.
Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging markets there may be
share registration and delivery delays or failures.
STATEMENT OF ADDITIONAL INFORMATION PAGE 19
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AIM EQUITY FUNDS
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain emerging market countries.
DEBT SECURITIES
Each Fund is permitted to purchase investment grade debt securities. In
selecting debt securities for investment, the Sub-adviser reviews and monitors
the creditworthiness of each issuer and issue and analyzes interest rate trends
and specific developments that may affect individual issuers, in addition to
relying on ratings assigned by S&P, Moody's or another nationally recognized
statistical rating organization ("NRSRO") as indicators of quality. Debt
securities rated Baa by Moody's or BBB by S&P are investment grade, although
Moody's considers securities rated Baa to have speculative characteristics.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity for such securities to make principal and interest payments
than is the case for higher grade debt securities. Each Fund is also permitted
to purchase debt securities that are not rated by S&P, Moody's or another NRSRO,
but that the Sub-adviser determines to be of comparable quality to that of rated
securities in which the Fund may invest. Such securities are included in the
computation of any percentage limitations applicable to the comparable rated
securities.
Ratings of debt securities represent the rating agencies' opinions regarding
their quality, are not a guarantee of quality and may be reduced after a Fund
has acquired the security. The Sub-adviser will consider such an event in
determining whether a Fund should continue to hold the security but is not
required to dispose of it. Credit ratings attempt to evaluate the safety of
principal and interest payments and do not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security. Also, NRSROs may fail to make timely changes in credit ratings in
response to subsequent events, so that an issuer's current financial condition
may be better or worse than the rating indicates. For a description of Moody's
and S&P ratings, see "Description of Debt Ratings" herein.
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INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
Each Fund has adopted the following investment limitations as fundamental
policies that may not be changed without approval by the affirmative vote of a
majority of the outstanding shares of the Fund. No Fund may:
(1) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
the Fund may exercise rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner;
(2) Purchase or sell physical commodities, but the Fund may purchase,
sell or enter into financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or derivative
instruments;
(3) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
(including the amount borrowed but reduced by any liabilities not
constituting borrowings) at the time of the borrowing, except that the Fund
may borrow up to an additional 5% of its total assets (not including the
amount borrowed) for temporary or emergency purposes;
(4) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this limitation, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
(5) Purchase securities of any one issuer if, as a result, more than 5%
of the Fund's total assets would be invested in securities of that issuer or
the Fund would own or hold more than 10% of the outstanding voting
securities of that issuer, except that up to 25% of the Fund's total assets
may be invested without regard to this limitation, and except that this
limitation does not apply to securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities or to securities issued by
other investment companies;
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AIM EQUITY FUNDS
(6) Engage in the business of underwriting securities of other issuers,
except to the extent that the Fund might be considered an underwriter under
the federal securities laws in connection with its disposition of portfolio
securities; or
(7) Purchase any security if, as a result of that purchase, 25% or more
of the Fund's total assets would be invested in securities of issuers having
their principal business activities in the same industry, except that this
limitation does not apply to securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
For purposes of the concentration policy contained in limitation (7) above, each
Fund intends to comply with the SEC staff position that securities issued or
guaranteed as to principal and interest by any single foreign government or any
supranational organization are considered to be securities of issuers in the
same industry.
The following investment limitations of each Fund are not fundamental policies
and may be changed by vote of the Trust's Board of Trustees without shareholder
approval. Each Fund may not:
(1) Invest more than 15% of its net assets in illiquid securities, a
term which means securities that cannot be disposed of within seven days in
the normal course of business at approximately the amount at which the Fund
has valued the securities and includes, among other things, repurchase
agreements maturing in more than seven days;
(2) Borrow money except for temporary or emergency purposes (not for
leveraging) in excess of 33 1/3% of the value of the Fund's total assets;
(3) Enter into a futures contract, an option on a futures contract or an
option on foreign currency traded on a CFTC-regulated exchange, in each case
other than for BONA FIDE hedging purposes (as defined by the CFTC), if the
aggregate initial margin and premiums required to establish all of these
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund
has entered into;
(4) Purchase securities on margin, provided that the Fund may obtain
short-term credits as may be necessary for the clearance of purchases and
sales of securities, and further provided that the Fund may make margin
deposits in connection with its use of financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments; or
(5) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
----------------------------
If a percentage restriction on investment or utilization of assets in an
investment policy or limitation is adhered to at the time an investment is made,
a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of a Fund's investment policies or restrictions. A Fund
may exchange securities, exercise conversion or subscription rights, warrants,
or other rights to purchase common stock or other equity securities and may
hold, except to the extent limited by the 1940 Act, any such securities so
acquired without regard to the Fund's investment policies and restrictions. The
original cost of the securities so acquired will be included in any subsequent
determination of a Fund's compliance with the investment percentage limitations
referred to above and in the Prospectus.
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EXECUTION OF PORTFOLIO
TRANSACTIONS
- --------------------------------------------------------------------------------
Subject to policies established by the Trust's Board of Trustees, the
Sub-adviser is responsible for the execution of the Funds' portfolio
transactions and the selection of brokers/dealers who execute such transactions
on behalf of the Funds. In executing transactions, the Sub-adviser seeks the
best net results for each Fund, taking into account such factors as the
STATEMENT OF ADDITIONAL INFORMATION PAGE 21
<PAGE>
AIM EQUITY FUNDS
price (including the applicable brokerage commission or dealer spread), size of
the order, difficulty of execution and operational facilities of the firm
involved. Although the Sub-adviser generally seeks reasonably competitive
commission rates and spreads, payment of the lowest commission or spread is not
necessarily consistent with the best net results. While the Funds may engage in
soft dollar arrangements for research services, as described below, the Funds
have no obligation to deal with any broker/dealer or group of broker/dealers in
the execution of portfolio transactions.
Consistent with the interests of the Funds, the Sub-adviser may select brokers
to execute the Funds' portfolio transactions on the basis of the research
services they provide to the Sub-adviser for its use in managing the Funds and
its other advisory accounts. Such services may include furnishing analysis,
reports and information concerning issuers, industries, securities, geographic
regions, economic factors and trends, portfolio strategy, and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Research and brokerage
services received from such broker are in addition to, and not in lieu of, the
services required to be performed by the Sub-adviser under the applicable
investment management and administration contract. A commission paid to such
broker may be higher than that which another qualified broker would have charged
for effecting the same transaction, provided that the Sub-adviser determines in
good faith that such commission is reasonable in terms either of that particular
transaction or the overall responsibility of the Sub-adviser to the Funds and
its other clients and that the total commissions paid by each Fund will be
reasonable in relation to the benefits received by the Funds over the long term.
Research services may also be received from dealers who execute Fund
transactions in OTC markets.
The Sub-adviser may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Fund toward payment of its expenses, such as
transfer agent and custodian fees.
Investment decisions for each Fund and for other investment accounts managed by
the Sub-adviser are made independently of each other in light of differing
conditions. However, the same investment decision occasionally may be made for
two or more of such accounts, including one or more Funds. In such cases,
simultaneous transactions may occur. Purchases or sales are then allocated as to
price or amount in a manner deemed fair and equitable to all accounts involved.
While in some cases this practice could have a detrimental effect upon the price
or value of the security as far as a Fund is concerned, in other cases the
Sub-adviser believes that coordination and the ability to participate in volume
transactions will be beneficial to the Funds.
Under a policy adopted by the Trust's Board of Trustees, and subject to the
policy of obtaining the best net results, the Sub-adviser may consider a
broker/dealer's sale of the shares of the Funds and the other funds for which
AIM or the Sub-adviser serves as investment manager and/or administrator in
selecting broker/dealers for the execution of portfolio transactions. This
policy does not imply a commitment to execute portfolio transactions through all
broker/dealers that sell shares of the Funds and such other funds.
Each Fund contemplates purchasing most foreign equity securities in OTC markets
or stock exchanges located in the countries in which the respective principal
offices of the issuers of the various securities are located, if that is the
best available market. The fixed commissions paid in connection with most such
foreign stock transactions generally are higher than negotiated commissions on
U.S. transactions. There generally is less government supervision and regulation
of foreign stock exchanges and brokers than in the United States. Foreign
security settlements may in some instances be subject to delays and related
administrative uncertainties.
Foreign equity securities may be held by a Fund in the form of ADRs, ADSs, EDRs,
GDRs, CDRs or securities convertible into foreign equity securities. ADRs, ADSs,
EDRs, GDRs and CDRs may be listed on stock exchanges, or traded in the OTC
markets in the United States or Europe, as the case may be. ADRs, like other
securities traded in the United States, will be subject to negotiated commission
rates. The foreign and domestic debt securities and money market instruments in
which the Funds may invest are generally traded in the OTC markets.
Each Fund contemplates that, consistent with the policy of obtaining the best
net results, brokerage transactions may be conducted through certain companies
that are affiliated with AIM or the Sub-adviser. The Trust's Board of Trustees
has adopted procedures in conformity with Rule 17e-1 under the 1940 Act to
ensure that all brokerage commissions paid to such affiliates are reasonable and
fair in the context of the market in which they are operating. Any such
transactions will be effected and related compensation paid only in accordance
with applicable SEC regulations.
For the fiscal year ended December 31, 1995, the Europe Fund paid to GT Bank in
Liechtenstein AG and GT Bank in Liechtenstein (Zurich), each of which was an
"affiliated" broker as defined in the 1940 Act, aggregate brokerage commissions
of $9,529 and $16,250, respectively, for transactions involving purchases and
sales of portfolio securities.
For the fiscal year ended December 31, 1995, the International Fund paid to GT
Bank in Liechtenstein AG aggregate brokerage commissions of $1,475 for
transactions involving purchases and sales of portfolio securities which
represented
STATEMENT OF ADDITIONAL INFORMATION PAGE 22
<PAGE>
AIM EQUITY FUNDS
0.08% of the total brokerage commissions paid by the International Fund and less
than 0.01% of the aggregate dollar amount of transactions involving payment of
commissions by the International Fund. For the fiscal year ended December 31,
1996, the International Fund paid to GT Bank in Liechtenstein (Deutschland) Gmbh
and GT Bank in Liechtenstein AG aggregate brokerage commissions of $6,284 and
$8,378, respectively, for transactions involving purchases and sales of
portfolio securities which represented 0.09% and 0.50%, respectively, of the
total brokerage commissions paid by the International Fund, and 0.08% and 0.94%,
respectively, of the aggregate dollar amount of transactions involving payment
of commissions by the International Fund. For the fiscal year ended December 31,
1996, the Worldwide Fund paid to GT Bank in Liechtenstein (Deutschland) Gmbh
aggregate brokerage commissions of $361.87 for transactions involving purchases
and sales of portfolio securities which represented less than 0.01% of the total
brokerage commissions paid by the Worldwide Fund, and less than 0.01% of the
aggregate dollar amount of transactions involving payment of commissions by the
Worldwide Fund.
For the fiscal year ended December 31, 1997, no payments were made to affiliated
brokers.
Aggregate brokerage commissions paid by the Funds for their three most recent
fiscal years were:
<TABLE>
<CAPTION>
FUND 1997 1996 1995
- -------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Mid Cap Fund.............................................................. $ 2,193,539 $ 2,760,768 $ 878,569
Europe Fund............................................................... $ 2,217,385 $ 2,711,139 $ 3,877,784
International Fund........................................................ $ 874,443 $ 1,496,178 $ 1,889,228
Japan Fund................................................................ $ 218,841 $ 253,623 $ 440,117
Pacific Fund.............................................................. $ 2,767,789 $ 5,151,533 $ 3,310,887
Worldwide Fund............................................................ $ 578,365 $ 792,165 $ 1,007,167
</TABLE>
PORTFOLIO TRADING AND TURNOVER
Although the Funds generally do not intend to trade for short-term profits, the
securities held by a Fund will be sold whenever the Sub-adviser believes it is
appropriate to do so, without regard to the length of time a particular security
may have been held. Portfolio turnover rate is calculated by dividing the lesser
of sales or purchases of portfolio securities by each Fund's average month-end
portfolio sales, excluding short-term investments. The portfolio turnover rate
will not be a limiting factor when the Sub-adviser deems portfolio changes
appropriate. Higher portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs that a Fund will bear directly
and may result in the realization of net capital gains that are taxable when
distributed to the Fund's shareholders. The portfolio turnover rates for the
fiscal years ended December 31, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
FUND 1997 1996
- ------------------------------------------------------------------------------------------------------ ---------- ----------
<S> <C> <C>
Mid Cap Fund.......................................................................................... 190% 253%
Europe Fund........................................................................................... 107% 123%
International Fund.................................................................................... 72% 74%
Japan Fund............................................................................................ 58% 31%
Pacific Fund.......................................................................................... 80% 93%
Worldwide Fund........................................................................................ 92% 80%
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION PAGE 23
<PAGE>
AIM EQUITY FUNDS
TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The Trust's Trustees and Executive Officers are listed below. Unless otherwise
indicated, the address of each Executive Officer is 11 Greenway Plaza, Suite
100, Houston, Texas 77046.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
TRUST AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
William J. Guilfoyle*, 40 President, GT Global, Inc. ("GT Global") since 1995; Director, GT Global since 1991; Senior
Trustee, Chairman of the Board and Vice President and Director of Sales and Marketing, GT Global from May 1992 to April 1995;
President Vice President and Director of Marketing, GT Global from 1987 to 1992; Director,
50 California Street Liechtenstein Global Trust AG (holding company of the various international GT companies)
San Francisco, CA 94111 Advisory Board from January 1996 to May 1998; Director, G.T. Global Insurance Agency ("G.T.
Insurance") since 1996; President and Chief Executive Officer, G.T. Insurance since 1995;
Senior Vice President and Director, Sales and Marketing, G.T. Insurance from April 1995 to
November 1995; Senior Vice President, Retail Marketing, G.T. Insurance from 1992 to 1993;
and Trustee, each of the other investment companies registered under the 1940 Act that is
sub-advised or sub-administered by the Sub-adviser.
C. Derek Anderson, 57 President, Plantagenet Capital Management, LLC (an investment partnership); Chief Executive
Trustee Officer, Plantagenet Holdings, Ltd. (an investment banking firm); Director, Anderson
220 Sansome Street Capital Management, Inc. since 1988; Director, PremiumWear, Inc. (formerly Munsingwear,
Suite 400 Inc.)(a casual apparel company); Director, "R" Homes, Inc. and various other companies; and
San Francisco, CA 94104 Trustee, each of the other investment companies registered under the 1940 Act that is sub-
advised or sub-administered by the Sub-adviser.
Frank S. Bayley, 58 Partner law firm of Baker & McKenzie; Director and Chairman, C.D. Stimson Company (a
Trustee private investment company); and Trustee, each of the other investment companies registered
Two Embarcadero Center under the 1940 Act that is sub-advised or sub- administered by the Sub-adviser.
Suite 2400
San Francisco, CA 94111
Arthur C. Patterson, 54 Managing Partner, Accel Partners (a venture capital firm); Director, Viasoft and PageMart,
Trustee Inc. (both public software companies), and several other privately held software and
428 University Avenue communications companies; and Trustee, each of the other investment companies registered
Palo Alto, CA 94301 under the 1940 Act that is sub-advised or sub-administered by the Sub-adviser.
Ruth H. Quigley, 63 Private investor; President, Quigley Friedlander & Co., Inc. (a financial advisory services
Trustee firm) from 1984 to 1986; and Trustee, each of the other investment companies registered
1055 California Street under the 1940 Act that is sub-advised or sub- administered by the Sub-adviser.
San Francisco, CA 94108
</TABLE>
- ------------------------
* Mr. Guilfoyle is an "interested person" of the Trust as defined by the 1940
Act due to his affiliation with the Sub-adviser.
STATEMENT OF ADDITIONAL INFORMATION PAGE 24
<PAGE>
AIM EQUITY FUNDS
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
TRUST AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
John J. Arthur+, 53 Director, Senior Vice President and Treasurer, A I M Advisors, Inc.; Vice President and
Vice President Treasurer, A I M Management Group Inc., A I M Capital Management, Inc., A I M Distributors,
Inc., A I M Fund Services, Inc. and Fund Management Company.
Kenneth W. Chancey, 53 Senior Vice President -- Mutual Fund Accounting, the Sub-adviser since 1997; Vice President
Vice President and Principal Accounting -- Mutual Fund Accounting, the Sub-adviser from 1992 to 1997.
Officer
50 California Street
San Francisco, CA 94111
Melville B. Cox, 54 Vice President and Chief Compliance Officer, A I M Advisors, Inc., A I M Capital
Vice President Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and Fund Management
Company.
Gary T. Crum, 50 Director and President, A I M Capital Management, Inc.; Director and Senior Vice President,
Vice President A I M Management Group Inc. and A I M Advisors, Inc.; and Director, A I M Distributors,
Inc. and AMVESCAP PLC.
Robert H. Graham, 51 Director, President and Chief Executive Officer, A I M Management Group Inc.; Director and
Vice President President, A I M Advisors, Inc.; Director and Senior Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and Fund Management
Company; and Director, AMVESCAP PLC.
Helge K. Lee, 52 Chief Legal and Compliance Officer -- North America, the Sub-adviser since October 1997;
Vice President and Secretary Secretary and Chief Legal and Compliance Officer, INVESCO (NY) Asset Management, Inc.,
50 California Street INVESCO (NY), Inc., GT Global Investor Services, Inc. and G.T. Insurance since August 1997;
San Francisco, CA 94111 Secretary and Chief Legal and Compliance Officer, GT Global from August 1997 to April 1998;
Executive Vice President of the Asset Management Division of Liechtenstein Global Trust AG,
from October 1996 to May 1998; Senior Vice President, General Counsel and Secretary of
INVESCO (NY) Asset Management, Inc., INVESCO (NY), Inc., GT Global, GT Global Investor
Services, Inc. and G.T. Insurance from May 1994 to October 1996; and Senior Vice President,
General Counsel and Secretary of Strong/Corneliuson Management, Inc. and Secretary of each
of the Strong Funds from October 1991 to May 1994.
Carol F. Relihan+, 43 Director, Senior Vice President, General Counsel and Secretary, A I M Advisors, Inc.; Vice
Vice President President, General Counsel and Secretary, A I M Management Group Inc.; Director, Vice
President and General Counsel, Fund Management Company; Vice President and General Counsel,
A I M Fund Services, Inc.; and Vice President, A I M Capital Management, Inc. and A I M
Distributors, Inc.
Dana R. Sutton, 39 Vice President and Fund Controller, A I M Advisors, Inc.; and Assistant Vice President and
Vice President and Assistant Treasurer Assistant Treasurer, Fund Management Company.
</TABLE>
- ------------------------------
+ Mr. Arthur and Ms. Relihan are married to each other.
STATEMENT OF ADDITIONAL INFORMATION PAGE 25
<PAGE>
AIM EQUITY FUNDS
The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and the
Funds and recommending firms to serve as independent auditors of the Trust. Each
of the Trustees and Officers of the Trust is also a Trustee and Officer of AIM
Investment Portfolios, AIM Investment Funds, AIM Series Trust, AIM Floating Rate
Fund, AIM Eastern Europe Fund, GT Global Variable Investment Trust, GT Global
Variable Investment Series, Growth Portfolio, Global High Income Portfolio,
Global Investment Portfolio and Floating Rate Portfolio, which also are
registered investment companies advised by AIM and sub-advised by the
Sub-adviser or an affiliate thereof. All of the Trust's Trustees also serve as
directors or trustees of some or all of the other investment companies managed,
administered or advised by AIM. All of the Trust's executive officers hold
similar offices with some or all of the other investment companies managed,
administered or advised by AIM. Each Trustee who is not a director, officer or
employee of the Sub-adviser or any affiliated company is paid aggregate fees of
$5,000 a year plus $300 per Fund for each meeting of the Board attended by the
Trustee, and reimbursed travel and other expenses incurred in connection with
attendance at such meetings. Other Trustees and Officers receive no compensation
or expense reimbursements from the Trust. For the fiscal year ended December 31,
1997, the Trust paid Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley,
who are not directors, officers or employees of the Sub-adviser or any
affiliated company, total compensation of $19,276, $20,044, $16,350 and $18,203,
respectively, for their services as Trustees. For the year ended December 31,
1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who are not
directors, officers or employees of the Sub-adviser or any other affiliated
company, received total compensation of $103,654, $106,556, $89,700 and $98,038,
respectively, from the investment companies managed or administered by AIM and
sub-advised or sub-administered by the Sub-adviser for which he or she serves as
a Trustee. Fees and expenses disbursed to the Trustees contained no accrued or
payable pension or retirement benefits. As of May 7, 1998, the Officers and
Trustees and their families as a group owned in the aggregate beneficially or of
record less than 1% of the outstanding shares of any Fund.
- --------------------------------------------------------------------------------
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------
To the best knowledge of the Trust, the names and addresses of the holders of 5%
or more of the outstanding shares of any class of each Fund's equity securities
as of June 26, 1998, and the percentage of the outstanding shares held by such
holders are set forth below.
<TABLE>
<CAPTION>
PERCENT
PERCENT OWNED OF
OWNED OF RECORD AND
FUND NAME AND ADDRESS OF OWNER RECORD* BENEFICIALLY
- ------------------------------ ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
International Fund G.T. Capital Holdings, Inc. 401(k) FBO 7.93% -0-
-- Advisor Class Account: 565-59-1255
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
G.T. Capital Holdings, Inc. 401(k) FBO 7.14% -0-
Account: 217646674
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
G.T. Capital Holdings, Inc. 401(k) FBO 5.98% -0-
Account: 545914793
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION PAGE 26
<PAGE>
AIM EQUITY FUNDS
<TABLE>
<CAPTION>
PERCENT
PERCENT OWNED OF
OWNED OF RECORD AND
FUND NAME AND ADDRESS OF OWNER RECORD* BENEFICIALLY
- ------------------------------ ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
G.T. Capital Holdings, Inc. 401(k) P/S 5.82% -0-
A/C 105 34 1352 P
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
G.T. Capital Holdings, Inc. 401(k) FBO 5.58% -0-
Account: 562-04-5693
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
G.T. Capital Holdings, Inc. 401(k) FBO 5.47% -0-
Account: 546-33-3477
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
Pacific Fund G.T. Capital Holdings, Inc. 27.08% -0-
-- Advisor Class SERP Deferred Compensation
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Ellen Hoke
G.T. Capital Holdings, Inc. 401(k) FBO 9.95% -0-
Account: 045462854
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
Japan Fund Donaldson Lufkin Jennette Securities Corp. Inc. 56.63% -0-
-- Advisor Class P.O. Box 2052
Jersey City, New Jersey 87303-2052
G.T. Capital Holdings, Inc. 5.35% -0-
SERP Deferred Compensation
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Ellen Hoke
</TABLE>
- ------------------------
*The Trust has no knowledge as to whether all or any portion of the shares owned
of record are also owned beneficially.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
AIM serves as the investment manager and administrator to each Fund under an
investment management and administration contract ("Management Contract")
between the Trust and AIM. The Sub-adviser serves as the sub-adviser and sub-
administrator to each Fund under a sub-advisory and sub-administration Contract
between AIM and the Sub-adviser ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). As investment managers and
administrators, AIM and the Sub-adviser make all investment decisions for each
Fund and administer each Fund's affairs. Among other things, AIM and the
Sub-adviser furnish the services and pay the compensation and travel expenses of
persons who perform the executive, administrative, clerical and bookkeeping
functions of the Trust and the Funds and provide suitable office space and
necessary small office equipment and utilities.
STATEMENT OF ADDITIONAL INFORMATION PAGE 27
<PAGE>
AIM EQUITY FUNDS
The Management Contracts may be renewed for additional one-year terms with
respect to each Fund, provided that any such renewal has been specifically
approved at least annually by: (i) the Board of Trustees or the vote of a
majority of the Fund's outstanding voting securities (as defined in the 1940
Act), and (ii) a majority of Trustees who are not parties to the Management
Contracts or "interested persons" of any such party (as defined in the 1940
Act), cast in person at a meeting called for the specific purpose of voting on
such approval. With respect to any Fund, either the Trust or each of AIM or the
Sub-adviser may terminate the Management Contracts without penalty upon sixty
days' written notice to the other party. The Management Contracts terminate
automatically in the event of their assignment (as defined in the 1940 Act).
The amounts of investment management and administration fees paid by each Fund
to the Sub-adviser during the Funds' three most recent fiscal years were as
follows:
<TABLE>
<CAPTION>
FUND 1997 1996 1995
- ---------------------------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
Mid Cap Fund........................................ $3,999,732 $4,982,969 $4,425,913
Europe Fund......................................... $5,228,246 $5,416,280 $6,161,265
International Fund.................................. $2,309,873 $3,034,522 $4,027,923
Japan Fund.......................................... $1,017,788 $1,367,702 $1,167,576
Pacific Fund........................................ $3,736,264 $5,260,774 $5,176,333
Worldwide Fund...................................... $1,619,691 $1,885,798 $2,050,983
</TABLE>
THE DISTRIBUTION PLANS
THE CLASS A PLAN. The Trust has adopted a Master Distribution Plan pursuant to
Rule 12b-1 under the 1940 Act relating to the Class A shares of the Funds (the
"Class A Plan"). The Class A Plan provides that the Class A shares pay 0.35% per
annum of their average daily net assets as compensation to AIM Distributors for
the purpose of financing any activity which is primarily intended to result in
the sale of Class A shares. Of such amounts, each Fund pays a service fee of
0.25% of the average daily net assets attributable to Class A shares to selected
dealers and other institutions which furnish continuing personal shareholder
services to their customers who purchase and own Class A shares. Activities
appropriate for financing under the Class A Plan include, but are not limited
to, the following: printing of prospectuses and statements of additional
information and reports for other than existing shareholders; overhead;
preparation and distribution of advertising material and sales literature;
expenses of organizing and conducting sales seminars; supplemental payments to
dealers and other institutions such as asset-based sales charges or as payments
of service fees under shareholder service arrangements; and costs of
administering the Class A Plan.
THE CLASS B PLAN. The Trust has also adopted a Master Distribution Plan pursuant
to Rule 12b-1 under the 1940 Act relating to Class B shares of the Funds (the
"Class B Plan", and collectively with the Class A Plan, the "Plans"). Under the
Class B Plan, each Fund pays compensation to AIM Distributors at an annual rate
of 1.00% of the average daily net assets attributable to Class B shares. Of such
amount, each Fund pays a service fee of 0.25% of the average daily net assets
attributable to Class B shares to selected dealers and other institutions which
furnish continuing personal shareholder services to their customers who purchase
and own Class B shares. Amounts paid in accordance with the Class B Plan may be
used to finance any activity primarily intended to result in the sale of Class B
shares, including but not limited to printing of prospectuses and statements of
additional information and reports for other than existing shareholders;
overhead; preparation and distribution of advertising material and sales
literature; expenses of organizing and conducting sales seminars; supplemental
payments to dealers and other institutions such as asset-based sales charges or
as payments of service fees under shareholder service arrangements; and costs of
administering the Class B Plan. AIM Distributors may transfer and sell its
rights to payments under the Class B Plan in order to finance distribution
expenditures in respect of Class B shares.
BOTH PLANS. Pursuant to an incentive program, AIM Distributors may enter into
agreements ("Shareholder Service Agreements") with investment dealers selected
from time to time by AIM Distributors for the provision of distribution
assistance in connection with the sale of the Funds' shares to such dealers'
customers, and for the provision of continuing personal shareholder services to
customers who may from time to time directly or beneficially own shares of the
Funds. The distribution assistance and continuing personal shareholder services
to be rendered by dealers under the Shareholder Service Agreements may include,
but shall not be limited to, the following: distributing sales literature;
answering routine customer inquiries concerning the Funds; assisting customers
in changing dividend options, account designations and addresses, and in
enrolling in any of the several special investment plans offered in connection
with the purchase of the Funds' shares; assisting in the establishment and
maintenance of customer accounts and records and in the processing
STATEMENT OF ADDITIONAL INFORMATION PAGE 28
<PAGE>
AIM EQUITY FUNDS
of purchase and redemption transactions; investing dividends and any capital
gains distributions automatically in the Funds' shares; and providing such other
information and services as the Funds or the customer may reasonably request.
Under the Plans, in addition to the Shareholder Service Agreements authorizing
payments to selected dealers, banks may enter into Shareholder Service
Agreements authorizing payments under the Plans to be made to banks which
provide services to their customers who have purchased shares. Services provided
pursuant to Shareholder Service Agreements with banks may include some or all of
the following: answering shareholder inquiries regarding the Funds; performing
sub-accounting; establishing and maintaining shareholder accounts and records;
processing customer purchase and redemption transactions; providing periodic
statements showing a shareholder's account balance and the integration of such
statements with those of other transactions and balances in the shareholder's
other accounts serviced by the bank; forwarding applicable prospectuses, proxy
statements, reports and notices to bank clients who hold Fund shares; and such
other administrative services as the Funds reasonably may request, to the extent
permitted by applicable statute, rule or regulation. Similar agreements may be
permitted under the Plans for institutions which provide recordkeeping for and
administrative services to 401(k) plans.
Financial intermediaries and any other person entitled to receive compensation
for selling Fund shares may receive different compensation for selling shares of
one particular class over another.
Under a Shareholder Service Agreement, each Fund agrees to pay periodically fees
to selected dealers and other institutions who render the foregoing services to
their customers. The fees payable under a Shareholder Service Agreement
generally will be calculated at the end of each payment period for each business
day of the Funds during such period at the annual rate of 0.25% of the average
daily net asset value of the Funds' shares purchased or acquired through
exchange. Fees calculated in this manner shall be paid only to those selected
dealers or other institutions who are dealers or institutions of record at the
close of business on the last business day of the applicable payment period for
the account in which such Fund's shares are held.
Payments pursuant to the Plans are subject to any applicable limitations imposed
by rules of the National Association of Securities Dealers, Inc. ("NASD"). The
Plans conform to rules of the NASD by limiting payments made to dealers and
other financial institutions who provide continuing personal shareholder
services to their customers who purchase and own shares of the Funds to no more
than 0.25% per annum of the average daily net assets of the Funds attributable
to the customers of such dealers or financial institutions, and by imposing a
cap on the total sales charges, including asset based sales charges, that may be
paid by the Funds and their respective classes.
AIM Distributors does not act as principal, but rather as agent for the Funds,
in making dealer incentive and shareholder servicing payments under the Plans.
These payments are an obligation of the Funds and not of AIM Distributors.
Prior to June 1, 1998, the Trust had adopted a different Rule 12b-1, that
operated as a "reimbursement-type" plan (the "Prior Plan"). The information
provided below relates to payments made under the Prior Plan, which provided for
payments to GT Global Inc., the distributor of the Funds at the time the Prior
Plan was in effect.
For the fiscal year ended December 31, 1997, each Fund paid the following
amounts under the Prior Plan:
<TABLE>
<CAPTION>
% OF CLASS
AVERAGE DAILY
NET ASSETS
--------------------
CLASS A CLASS B CLASS A CLASS B
------------- ------------- --------- ---------
<S> <C> <C> <C> <C>
Worldwide Fund..................................................... $ -- $ -- --% --%
International Fund................................................. $ -- $ -- --% --%
Pacific Fund....................................................... $ -- $ -- --% --%
Europe Fund........................................................ $ -- $ -- --% --%
Mid Cap Fund....................................................... $ -- $ -- --% --%
Japan Fund......................................................... $ -- $ -- --% --%
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION PAGE 29
<PAGE>
AIM EQUITY FUNDS
Actual fees by category paid by each Fund with regard to the Class A shares
during the year ended December 31, 1997 follows:
<TABLE>
<CAPTION>
WORLDWIDE INTERNATIONAL PACIFIC EUROPE MID CAP JAPAN
FUND FUND FUND FUND FUND FUND
----------- ------------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Advertising..................................... $ -- $ -- $ -- $ -- $ -- $ --
Printing and mailing prospectuses, semi-annual
reports and annual reports (other than to
current shareholders).......................... $ -- $ -- $ -- $ -- $ -- $ --
Seminars........................................ $ -- $ -- $ -- $ -- $ -- $ --
Compensation to Underwriters to partially offset
other marketing expenses....................... $ -- $ -- $ -- $ -- $ -- $ --
Compensation to Dealers including finder's
fees........................................... $ -- $ -- $ -- $ -- $ -- $ --
Compensation to Sales Personnel................. $ -- $ -- $ -- $ -- $ -- $ --
Annual Report Total............................. $ -- $ -- $ -- $ -- $ -- $ --
</TABLE>
Actual fees by category paid by each Fund with regard to the Class B Shares
during the year ended December 31, 1997 as follows:
<TABLE>
<CAPTION>
WORLDWIDE INTERNATIONAL PACIFIC EUROPE MID CAP JAPAN
FUND FUND FUND FUND FUND FUND
----------- ------------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Advertising..................................... $ -- $ -- $ -- $ -- $ -- $ --
Printing and mailing prospectuses, semi-annual
reports and annual reports (other than to
current shareholders).......................... $ -- $ -- $ -- $ -- $ -- $ --
Seminars........................................ $ -- $ -- $ -- $ -- $ -- $ --
Compensation to Underwriters to partially offset
upfront dealer commissions and other marketing
costs.......................................... $ -- $ -- $ -- $ -- $ -- $ --
Compensation to Dealers......................... $ -- $ -- $ -- $ -- $ -- $ --
Compensation to Sales Personnel................. $ -- $ -- $ -- $ -- $ -- $ --
Annual Report Total............................. $ -- $ -- $ -- $ -- $ -- $ --
</TABLE>
The Plans require AIM Distributors to provide the Board of Trustees at least
quarterly with a written report of the amounts expended pursuant to the Plans
and the purposes for which such expenditures were made. The Board of Trustees
reviews these reports in connection with their decisions with respect to the
Plans.
As required by Rule 12b-1, the Plans and related forms of Shareholder Service
Agreements were approved by the Board of Trustees, including a majority of the
directors who are not "interested persons" (as defined in the 1940 Act) of the
Trust and who have no direct or indirect financial interest in the operation of
the Plans or in any agreements related to the Plans ("Qualified Trustees"). In
approving the Plans in accordance with the requirements of Rule 12b-1, the
Trustees considered various factors and determined that there is a reasonable
likelihood that the Plans would benefit each class of each Fund and their
respective shareholders.
The Plans do not obligate the Funds to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Plans. Thus, even if AIM Distributors' actual expenses exceed the fee payable to
AIM Distributors thereunder at any given time, the Funds will not be obligated
to pay more than that fee. If AIM Distributors' expenses are less than the fee
it receives, AIM Distributors will retain the full amount of the fee.
STATEMENT OF ADDITIONAL INFORMATION PAGE 30
<PAGE>
AIM EQUITY FUNDS
Unless terminated earlier in accordance with their terms, the Plans continue in
effect until [June 30, 1999] and each year thereafter, as long as such
continuance is specifically approved at least annually by the Board of Trustees,
including a majority of the Qualified Trustees.
The Plans may be terminated by the vote of a majority of the Independent
Trustees, or, with respect to a particular class, by the vote of a majority of
the outstanding voting securities of that class.
Any change in the Plans that would increase materially the distribution expenses
paid by the applicable class requires shareholder approval; otherwise, it may be
amended by the Trustees, including a majority of the Qualified Trustees, by
votes cast in person at a meeting called for the purpose of voting upon such
amendment. As long as the Plans are in effect, the selection or nomination of
the Qualified Trustees is committed to the discretion of the Qualified Trustees.
In the event the Class A Plan is amended in a manner which the Board of Trustees
determines would materially increase the charges paid under the Class A Plan,
the Class B shares of the Funds will no longer convert into Class A shares of
the same Fund unless the Class B shares, voting separately, approve such
amendment. If the Class B shareholders do not approve such amendment, the Board
of Trustees will (i) create a new class of shares of the Funds which is
identical in all material respects to the Class A shares as they existed prior
to the implementation of the amendment and (ii) ensure that the existing Class B
shares of the Funds will be exchanged or converted into such new class of shares
no later than the date the Class B shares were scheduled to convert into Class A
shares.
The principal differences between the Class A Plan, on the one hand, and the
Class B Plan, on the other hand, are: (i) the Class A Plan allows payment to AIM
Distributors or to dealers or financial institutions of up to 0.35% of average
daily net assets of the Class A shares of each Fund, as compared to 1.00% of
such assets of each Fund's Class B shares; (ii) the Class B Plan obligates the
Class B shares to continue to make payments to AIM Distributors following
termination of the Class B shares Distribution Agreement with respect to Class B
shares sold by or attributable to the distribution efforts of AIM Distributors
unless there has been a complete termination of the Class B Plan (as defined in
such Plan) and (iii) the Class B Plan expressly authorizes AIM Distributors to
assign, transfer or pledge its rights to payments pursuant to the Class B Plan.
THE DISTRIBUTOR
Information concerning AIM Distributors and the continuous offering of the
Fund's shares is set forth in the Prospectus under the headings "How to Purchase
Shares" and "Terms and Conditions of Purchase of the AIM Funds." A Master
Distribution Agreement with AIM Distributors relating to the Class A and Class B
shares of the Funds was approved by the Board of Trustees on , 1998.
Both such Master Distribution Agreements are hereinafter collectively referred
to as the "Distribution Agreements."
The Distribution Agreements provide that AIM Distributors will bear the expenses
of printing from the final proof and distributing the Funds' prospectuses and
statements of additional information relating to public offerings made by AIM
Distributors pursuant to the Distribution Agreements (other than those
prospectuses and statements of additional information distributed to existing
shareholders of the Fund), and any promotional or sales literature used by AIM
Distributors or furnished by AIM Distributors to dealers in connection with the
public offering of the Fund's shares, including expenses of advertising in
connection with such public offerings. AIM Distributors has not undertaken to
sell any specified number of shares of any classes of the Funds.
AIM Distributors expects to pay sales commissions from its own resources to
dealers and institutions who sell Class B shares of the Funds at the time of
such sales. Payments with respect to Class B shares will equal 4.0% of the
purchase price of the Class B shares sold by the dealer or institution, and will
consist of a sales commission equal to 3.75% of the purchase price of the Class
B shares sold plus an advance of the first year service fee of 0.25% with
respect to such shares. The portion of the payments to AIM Distributors under
the Class B Plan which constitutes an asset-based sales charge (0.75%) is
intended in part to permit AIM Distributors to recoup a portion of such sales
commissions plus financing costs. AIM Distributors anticipates that it will
require a number of years to recoup from Class B Plan payments the sales
commissions paid to dealers and institutions in connection with sales of Class B
shares. In the future, if multiple distributors serve a Fund, each such
distributor (or its assignee or transferee) would receive a share of the
payments under the Class B Plan based on the portion of the Fund's Class B
shares sold by or attributable to the distribution efforts of that distributor.
The Trust (on behalf of any class of any Fund) or AIM Distributors may terminate
the Distribution Agreements on sixty (60) days' written notice without penalty.
The Distribution Agreements will terminate automatically in the event of their
assignment. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset based
distribution fees in respect of the outstanding Class B shares attributable to
the distribution efforts of AIM Distributors; provided, however, that a complete
termination of the Class B Plan (as defined in such
STATEMENT OF ADDITIONAL INFORMATION PAGE 31
<PAGE>
AIM EQUITY FUNDS
Plan) would terminate all payments to AIM Distributors. Termination of the Class
B Plan or Distribution Agreement does not affect the obligation of the Funds and
their Class B shareholders to pay contingent deferred sales charges.
The following chart reflects the total sales charges paid in connection with the
sale of Class A shares of each Fund and the amount retained by GT Global, Inc.,
the Trust's distributor prior to June 1, 1998, for the fiscal year ended
December 31, 1997.
<TABLE>
<CAPTION>
1997
-----------------------------
SALES AMOUNT
CHARGES RETAINED
-------------- -------------
<S> <C> <C>
Worldwide Fund.......................................................................... $ -- $ --
International Fund...................................................................... $ -- $ --
Pacific Fund............................................................................ $ -- $ --
Europe Fund............................................................................. $ -- $ --
Mid Cap Fund............................................................................ $ -- $ --
Japan Fund.............................................................................. $ -- $ --
</TABLE>
The following chart reflects the contingent deferred sales charges paid by Class
A and Class B shareholders for the fiscal year ended December 31, 1997, for
Class A and Class B shares:
<TABLE>
<CAPTION>
1997
-----------
<S> <C>
Class A $ --
Class B $ --
</TABLE>
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
The Transfer Agency and Service Agreement between the Trust and A I M Fund
Services, Inc. ("AFS"), a registered transfer agent and wholly-owned subsidiary
of AIM, provides that AFS will perform certain shareholder services for the
Funds for a fee per account serviced. The Transfer Agency and Service Agreement
provides that AFS will receive a per account fee plus out-of-pocket expenses to
process orders for purchases, redemptions and exchanges of shares; prepare and
transmit payments for dividends and distributions declared by the Funds;
maintain shareholder accounts and provide shareholders with information
regarding the Funds and their accounts. The Transfer Agency and Service
Agreement became effective at September 8, 1998. The Sub-adviser also serves as
each Fund's pricing and accounting agent. For the fiscal years ended December
31, 1995, December 31, 1996 and December 31, 1997, the accounting services fees
paid by the Mid Cap Fund, Europe Fund, International Fund, Japan Fund, Pacific
Fund, and Worldwide Fund were $79,918, $173,767 and $142,274; $62,660, $139,442
and $138,072; $40,655, $77,934 and $59,416; $14,483, $35,119 and $26,210;
$53,724, $135,182 and $99,321; and $22,092, $48,430 and $41,680, respectively.
EXPENSES OF THE FUNDS
Each Fund pays all expenses not assumed by AIM, the Sub-adviser, AIM
Distributors and other agents. These expenses include, in addition to the
advisory, distribution, transfer agency, pricing and accounting agency and
brokerage fees discussed above, legal and audit expenses, custodian fees,
trustees' fees, organizational fees, fidelity bond and other insurance premiums,
taxes, extraordinary expenses and expenses of reports and prospectuses sent to
existing investors. Certain of these expenses, such as custodial fees and
brokerage fees, generally are higher for non-U.S. securities. The allocation of
general Trust expenses, and expenses shared by the Funds with one another, are
made on a basis deemed fair and equitable, which may be based on the relative
net assets of the Funds or the nature of the services performed and relative
applicability to each Fund. Expenditures, including costs incurred in connection
with the purchase or sale of portfolio securities, that are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies, are accounted for as capital items and not as expenses.
The ratio of each Fund's expenses to its relative net assets can be expected to
be higher than the expense ratios of funds investing solely in domestic
securities, since the cost of maintaining the custody of foreign securities and
the rate of investment management fees paid by each Fund generally are higher
than the comparable expenses of such other funds.
STATEMENT OF ADDITIONAL INFORMATION PAGE 32
<PAGE>
AIM EQUITY FUNDS
- --------------------------------------------------------------------------------
VALUATION OF FUND SHARES
- --------------------------------------------------------------------------------
The net asset value per share of each Fund is normally determined daily as of
the close of trading of the New York Stock Exchange ("NYSE") (generally 4:00
p.m. Eastern time) on each business day of the Fund. In the event the NYSE
closes early (i.e., before 4:00 p.m. Eastern time) on a particular day, the net
asset value of a Fund is determined as of the close of the NYSE on such day. Net
asset value per share is determined by dividing the value of each Fund's
securities, cash and other assets (including interest accrued but not collected)
attributable to a particular class, less all its liabilities (including accrued
expenses and dividends payable) attributable to that class, by the total number
of shares outstanding of that class. Determination of each Fund's net asset
value per share is made in accordance with generally accepted accounting
principles.
Each equity security held by a Fund 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 mean between the closing bid and
asked prices on that day. Each security traded in the over-the-counter market
(but not including securities reported on the NASDAQ National Market System) is
valued at the mean between the last bid and asked prices based upon quotes
furnished by market makers for such securities. 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 mean between the closing bid and asked
prices on that day. Debt securities 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 institution-size trading in similar groups of
securities, developments related to special securities, yield, quality, coupon
rate, maturity, type of issue, individual trading characteristics and other
market data. 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 on the basis or amortized cost. For purposes of
determining net asset value per share, futures and options contracts generally
will be valued 15 minutes after the close of trading of the NYSE.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 each Fund's shares are determined at such
times. Foreign currency exchange rates are also generally determined prior the
close of the NYSE. Occasionally, events affecting the values of such securities
and such exchange rates may occur between the times at which such values are
determined and the close of the NYSE which will not be reflected in the
computation of a 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 of the Fund.
- --------------------------------------------------------------------------------
HOW TO PURCHASE AND
REDEEM SHARES
- --------------------------------------------------------------------------------
A complete description of the manner in which shares of the Funds may be
purchased appears in the Funds' Prospectuses under the headings "How to Purchase
Shares," "Terms and Conditions of Purchase of the AIM Funds" and "Special
Plans."
The sales charge normally deducted on purchases of Class A shares is used to
compensate AIM Distributors and participating dealers for their expenses
incurred in connections with the distribution of the Funds' Class A shares.
Since there is little expense associated with unsolicited orders placed directly
with AIM Distributors by persons who, because of their relationship with the
Funds or with AIM and its affiliates, are familiar with the Funds, or whose
programs for purchase involve little expense (e.g., because of the size of the
transaction and shareholder records required), AIM Distributors believes that it
is appropriate and in the Funds' best interests that such persons, and certain
other persons whose purchases result in relatively low expenses of distribution,
be permitted to purchase Class A shares of the Funds through AIM Distributors
without payment of a sales charge. The persons who may purchase Class A shares
of the Funds
STATEMENT OF ADDITIONAL INFORMATION PAGE 33
<PAGE>
AIM EQUITY FUNDS
without a sales charge are set forth in the Funds' Prospectuses. In addition,
the Funds offer programs such as Right of Accumulation and Letter of Intent,
which are described in the Prospectuses, that are designed to permit investors
to aggregate purchases of different funds, or separate purchases over time, in
order to qualify for a lower sales charge rate. See "Terms and Conditions of
Purchase of the AIM Funds -- Reductions in Initial Sales Charges" in the
Prospectuses.
Class B shares will automatically convert into Class A shares of the same Fund
eight years following the end of the calendar month in which a purchase was
made. For the purpose of calculating the holding period required for conversion
of Class B shares, the initial issuance of Class B shares shall mean (i) the
date on which such Class B shares were issued, or (ii) for Class B shares
obtained through an exchange, or a series of exchanges, the date on which the
original Class B shares were issued. For purposes of conversion to Class A,
Class B shares purchased through the reinvestment of dividends and other
distributions paid in respect of Class B shares will be held in a separate
sub-account. Each time any Class B shares in the shareholder's regular account
(other than those in the sub-account) convert to Class A, a pro rata portion of
the Class B shares in the sub-account will also convert to Class A. The portion
will be determined by the ratio that the shareholder's Class B shares converting
to Class A bears to the shareholder's total Class B shares not acquired through
dividends and other distributions.
The availability of the conversion feature is subject to the continuing
availability of an opinion of counsel to the effect that the dividends and other
distributions paid on Class A and Class B shares will not result in
"preferential dividends" under the Code and the conversion of shares does not
constitute a taxable event. If the conversion feature ceased to be available,
the Class B shares beyond the eighth year. AIM and the Sub-adviser has no reason
to believe that this condition for the availability of the conversion feature
will not be met.
Class A shares that are subject to a contingent deferred sales charge and that
were purchased before June 1, 1998 are entitled to the following waivers from
the contingent deferred sales charge otherwise due upon redemption: (1) minimum
required distributions made in connection with an IRA, Keogh Plan or custodial
account under Section 403(b) of the Code or other retirement plan following
attainment of age 70 1/2; (2) total or partial redemptions resulting from a
distribution following retirement in the case of a tax-qualified
employer-sponsored retirement plan; (3) when a redemption results from a
tax-free return of an excess contribution pursuant to Section 408(d)(4) or (5)
of the Code or from the death or disability of the employee; (4) redemptions
pursuant to a Fund's right to liquidate a shareholder's account involuntarily;
(5) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (6) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (7) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (8) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code, and the regulations
promulgated thereunder; (9) redemptions made in connection with a distribution
from any retirement plan or account that involves the return of an excess
deferral amount pursuant to Section 401(k)(8) or Section 402(g)(2) of the Code;
(10) redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (11) redemptions made by or for the benefit of
certain states, counties or cities, or any instrumentalities, departments or
authorities thereof where such entities are prohibited or limited by applicable
law from paying a sales charge or commission.
Class B shares purchased before June 1, 1998 are subject to the following
waivers from the contingent deferred sales charge otherwise due upon redemption
in addition to the waivers provided for redemptions of currently issued Class B
shares as described in the Prospectus: (1) total or partial redemptions
resulting from a distribution following retirement in the case of a
tax-qualified employer-sponsored retirement; (2) minimum required distributions
made in connection with an IRA, Keogh Plan or custodial account under Section
403(b) of the Code or other retirement plan following attainment of age 70 1/2;
(3) a one-time reinvestment in Class B shares of a Fund within 180 days of a
prior redemption; (4) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (5) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (6) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (7) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code, and the regulations
promulgated thereunder; (8) redemptions made in connection with a distribution
from a qualified profit-sharing or stock bonus plan described in Section 401(k)
of the Code to a participant or beneficiary under
STATEMENT OF ADDITIONAL INFORMATION PAGE 34
<PAGE>
AIM EQUITY FUNDS
Section 401(k)(2)(B)(IV) of the Code upon hardship of the covered employee
(determined pursuant to Treasury Regulation Section 1.401(k)-1(d)(2)); and (9)
redemptions made by or for the benefit of certain states, counties or cities, or
any instrumentalities, departments or authorities thereof where such entities
are prohibited or limited by applicable law from paying a sales charge or
commission.
For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment adviser, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
Complete information concerning the method of exchanging shares of the Funds for
shares of the other AIM Funds is set forth in the Prospectuses under the heading
"Exchange Privilege."
Information concerning redemption of the Funds' shares is set forth in the
Prospectuses under the heading "How to Redeem Shares." In addition to the Funds'
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Funds at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the applicable Fund next determined after the repurchase
order is received. Such an arrangement is subject to timely receipt by AFS of
all required documents in good order. If such documents are not received within
a reasonable time after the order is placed, the order is subject to
cancellation. While there is no charge imposed by a Fund or by AIM Distributors
(other than any applicable contingent deferred sales charge) when shares are
redeemed or repurchased, dealers may charge a fair service fee for handling the
transaction.
The right of redemption may be suspended or the date of payment postponed when
(a) trading on the NYSE is restricted, as determined by applicable rules and
regulations of the SEC, (b) the NYSE is closed for other than customary weekend
and holiday closings, (c) the SEC has by order permitted such suspension, or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of a Fund not reasonably
practicable.
QUALIFYING FOR A REDUCED FRONT-END SALES CHARGE. As described in the Prospectus,
the front-end sales charge for Class A shares is calculated by multiplying an
investor's total investment by the applicable sales charge rate. The applicable
rate varies with the amount invested. The Funds offer programs such as Right of
Accumulation and Letter of Intent, which are described in the Prospectus, and
are designed to permit investors to aggregate purchases of different funds, or
separate purchases over time, in order to qualify for a lower sales charge rate.
See "Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
Sales Charges" in the Prospectus.
PROGRAMS AND SERVICES FOR SHAREHOLDERS. The Funds provide certain services for
shareholders and certain investment or redemption programs. See "Exchange
Privilege" and "How to Redeem Shares" in the Prospectus. All inquiries
concerning these programs should be made directly to A I M Fund Services, Inc.,
P.O. Box 4739, Houston, Texas 77210-4739, toll free at (800) 959-4246.
DIVIDEND ORDER. Dividends may be paid to someone other than the registered
owner, or sent to an address other than the address of record. (Please note that
signature guarantees are required to effect this option.) An investor also may
direct that his or her dividends be invested in one of the other AIM Funds and
there is no sales charge for these investments; initial investment minimums
apply. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions" in the Prospectus. To affect this option, please contact your
authorized dealer. For more information concerning AIM Funds other than the
Funds, please obtain a current prospectus by contacting your authorized dealer,
by writing to A I M Fund Services, Inc. P.O. Box 4739, Houston, Texas
77210-4739, or by calling toll free (800) 959-4246.
TAXES
- --------------------------------------------------------------------------------
GENERAL
Each Fund is treated as a separate corporation for federal income tax purposes.
To continue to qualify for treatment as a RIC under the Code, each Fund must
distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of net investment
income, net short-term capital gain and net gains from certain foreign currency
transactions) ("Distribution Requirement") and must meet several additional
requirements. With
STATEMENT OF ADDITIONAL INFORMATION PAGE 35
<PAGE>
AIM EQUITY FUNDS
respect to each Fund, these requirements include the following: (1) the Fund
must derive at least 90% of its gross income each taxable year from dividends,
interest, payments with respect to securities loans and gains from the sale or
other disposition of securities or foreign currencies, or other income
(including gains from options, Futures or Forward Contracts) derived with
respect to its business of investing in securities or those currencies ("Income
Requirement"); and (2) the Diversification Requirements.
Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
FOREIGN TAXES
Dividends and interest received by a Fund, and gains realized thereby, may be
subject to income, withholding or other taxes imposed by foreign countries and
U.S. possessions ("foreign taxes") that would reduce the yield and/or total
return on its securities. Tax conventions between certain countries and the
United States may reduce or eliminate foreign taxes, however, and many foreign
countries do not impose taxes on capital gains in respect of investments by
foreign investors. If more than 50% of the value of a Fund's total assets at the
close of its taxable year consists of securities of foreign corporations, the
Fund will be eligible to, and may, file an election with the Internal Revenue
Service that will enable its shareholders, in effect, to receive the benefit of
the foreign tax credit with respect to any foreign taxes paid by it. Pursuant to
the election, a Fund would treat those taxes as dividends paid to its
shareholders and each shareholder would be required to (1) include in gross
income, and treat as paid by him, his share of those taxes, (2) treat his share
of those taxes and of any dividend paid by the Fund that represents its income
from foreign and U.S. possessions sources as his own income from those sources,
and (3) either deduct the taxes deemed paid by him in computing his taxable
income or, alternatively, use the foregoing information in calculating the
foreign tax credit against his federal income tax. Each Fund will report to its
shareholders shortly after each taxable year their respective shares of the
Fund's foreign taxes and income from sources within foreign countries and U.S.
possessions if it makes this election. Pursuant to the Taxpayer Relief Act of
1997 ("Tax Act"), individuals who have no more than $300 ($600 for married
persons filing jointly) of creditable foreign taxes included on Forms 1099 and
all of whose foreign source income is "qualified passive income" may elect each
year to be exempt from the extremely complicated foreign tax credit limitation
and will be able to claim a foreign tax credit without having to file the
detailed Form 1116 that otherwise is required.
PASSIVE FOREIGN INVESTMENT COMPANIES
Each Fund may invest in the stock of "passive foreign investment companies"
("PFICs"). A PFIC is a foreign corporation -- other than a "controlled foreign
corporation" (I.E., a foreign corporation in which, on any day during its
taxable year, more than 50% of the total voting power of all voting stock
therein or the total value of all stock therein is owned, directly, indirectly
or constructively, by "U.S. shareholders," defined as U.S. persons that
individually own, directly, indirectly or constructively, at least 10% of that
voting power) as to which a Fund is a U.S. shareholder -- that, in general,
meets either of the following tests: (1) at least 75% of its gross income is
passive or (2) an average of at least 50% of its assets produce, or are held for
the production of, passive income. Under certain circumstances, a Fund will be
subject to federal income tax on a portion of any "excess distribution" received
on, or of any gain from disposition of, stock of a PFIC (collectively "PFIC
income"), plus interest thereon, even if the Fund distributes the PFIC income as
a taxable dividend to its shareholders. The balance of the PFIC income will be
included in the Fund's investment company taxable income and, accordingly, will
not be taxable to the Fund to the extent it distributes that income to its
shareholders.
If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund" ("QEF"), then in lieu of the foregoing tax and interest
obligation, the Fund would be required to include in income each year its pro
rata share of the QEF's annual ordinary earnings and net capital gain (I.E.,the
excess of net long-term capital gain over net short-term capital loss) -- which
most likely would have to be distributed by the Fund to satisfy the Distribution
Requirement and avoid imposition of the Excise Tax -- even if those earnings and
gain were not received by the Fund from the QEF. In most instances, it will be
very difficult, if not impossible, to make this election because of certain
requirements thereof.
STATEMENT OF ADDITIONAL INFORMATION PAGE 36
<PAGE>
AIM EQUITY FUNDS
A Fund may elect to "mark to market" its stock in any PFIC. "Marking-to-market,"
in this context, means including in ordinary income each taxable year the
excess, if any, of the fair market value of the stock over the Fund's adjusted
basis therein as of the end of that year. Pursuant to the election, a Fund also
will be allowed to deduct (as ordinary, not capital, loss) the excess, if any,
of its adjusted basis in PFIC stock over the fair market value thereof as of the
taxable year-end, but only to the extent of any net mark-to-market gains with
respect to that stock included in income by the Fund for prior taxable years. A
Fund's adjusted basis in each PFIC's stock subject to the election will be
adjusted to reflect the amounts of income included and deductions taken
thereunder. Regulations proposed in 1992 provided a similar election with
respect to the stock of certain PFICs.
NON-U.S. SHAREHOLDERS
Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by a Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by a
Fund to a foreign shareholder generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS
Each Fund's use of hedging transactions, such as selling (writing) and
purchasing options and Futures Contracts and entering into Forward Contracts,
involves complex rules that will determine, for federal income tax purposes, the
amount, character and timing of recognition of the gains and losses a Fund
realizes in connection therewith. Gains from the disposition of foreign
currencies (except certain gains that may be excluded by future regulations),
and gains from options, Futures and Forward Contracts derived by a Fund with
respect to its business of investing in securities or foreign currencies, will
qualify as permissible income under the Income Requirement.
Futures and Forward Contracts that are subject to section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by a Fund at the end of its taxable year generally
will be deemed to have been sold at that time at market value for federal income
tax purposes. Sixty percent of any net gain or loss recognized on these deemed
sales, and 60% of any net realized gain or loss from any actual sales of Section
1256 Contracts, will be treated as long-term capital gain or loss, and the
balance will be treated as short-term capital gain or loss. That 60% portion
will qualify for the reduced maximum tax rates on noncorporate taxpayers' net
capital gain enacted by the Tax Act -- 20% (10% for taxpayers in the 15%
marginal tax bracket) for gain recognized on capital assets held for more than
18 months -- instead of the 28% rate in effect before that legislation, which
now applies to gain on capital assets held for more than one year but no more
than 18 months.
Section 988 of the Code also may apply to gains and losses from transactions in
foreign currencies, foreign-currency-denominated debt securities and options,
Futures and Forward Contracts on foreign currencies ("Section 988" gains and
losses). Each Section 988 gain or loss generally is computed separately and
treated as ordinary income or loss. In the case of overlap between sections 1256
and 988, special provisions determine the character and timing of any income,
gain or loss. Each Fund attempts to monitor Section 988 transactions to minimize
any adverse tax impact.
If a Fund has an "appreciated financial position" -- generally, an interest
(including an interest through an option, Futures or Forward Contract or short
sale) with respect to any stock, debt instrument (other than "straight debt") or
partnership interest the fair market value of which exceeds its adjusted basis
- -- and enters into a "constructive sale" of the same or substantially similar
property, the Fund will be treated as having made an actual sale thereof, with
the result that gain will be recognized at that time. A constructive sale
generally consists of a short sale, an offsetting notional principal contract or
Futures or Forward Contract entered into by a Fund or a related person with
respect to the same or substantially similar property. In addition, if the
appreciated financial position is itself a short sale or such a contract,
acquisition of the underlying property or substantially similar property will be
deemed a constructive sale.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Funds and their shareholders. Investors are urged
to consult their own tax advisers for more detailed information and for
information regarding any foreign, state and local taxes applicable to
distributions received from a Fund.
STATEMENT OF ADDITIONAL INFORMATION PAGE 37
<PAGE>
AIM EQUITY FUNDS
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
AIM was organized in 1976, and along with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. AIM is a direct, wholly owned subsidiary of A I M
Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are an
independent investment management group that has a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
CUSTODIAN
State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02110, acts as custodian of the Funds' assets. State Street is
authorized to establish and has established separate accounts in foreign
currencies and to cause securities of the Trust to be held in separate accounts
outside the United States in the custody of non-U.S. banks.
INDEPENDENT ACCOUNTANTS
The Trust's and the Funds' independent accountants are .
conducts annual audits of the Funds, assists in the preparation of the
Funds' federal and state income tax returns and consults with the Trust and the
Funds as to matters of accounting, regulatory filings and federal and state
income taxation.
The audited financial statements of the Trust included in this Statement of
Additional Information have been examined by as stated in their
opinion appearing herein and are included in reliance upon such opinion given
upon the authority of that firm as experts in accounting and auditing.
SHAREHOLDER LIABILITY
Under Delaware law, the shareholders of the Trust enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances shareholders of
the Trust may be held personally liable for the Trust's obligations. However,
the Trust's Agreement and Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or a trustee. The Trust's Agreement and Declaration of Trust provides
for indemnification from the Trust property for all losses and expenses of any
shareholder held personally liable for the Trust's obligations. Thus, the risk
of a shareholder incurring financial loss on account of such liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations and where the other party was held not to be bound by the
disclaimer.
NAMES
Prior to May 29, 1998, AIM New Pacific Growth Fund operated under the name of GT
Global New Pacific Growth Fund; AIM Europe Growth Fund operated under the name
GT Global Europe Growth Fund; AIM Japan Growth Fund operated under the name of
GT Global Japan Growth Fund; AIM International Growth Fund operated under the
name of GT Global International Growth Fund; AIM Worldwide Growth Fund operated
under the name of GT Global Worldwide Growth Fund and AIM Mid Cap Growth Fund
operated under the name of GT Global America Mid Cap Growth Fund.
STATEMENT OF ADDITIONAL INFORMATION PAGE 38
<PAGE>
AIM EQUITY FUNDS
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
TOTAL RETURN QUOTATIONS
The standard formula for calculating total return, as described in the
Prospectus, is as follows:
P(1+T)to the power of n=ERV
<TABLE>
<S> <C> <C> <C>
Where P = a hypothetical initial payment of $1,000.
T = average annual total return (assuming the applicable maximum sales load is
deducted at the beginning of the 1, 5, or 10 year periods).
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of the 1, 5,
or 10 year periods (or fractional portion of such period).
</TABLE>
The standardized returns for the Class A and Class B shares of the Mid Cap Fund,
stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
MID CAP FUND MID CAP FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997.......................................................... 7.78% 8.35%
For the five years ended Dec. 31, 1997................................................... 14.00% N/A
For the ten years ended Dec. 31, 1997.................................................... 17.03% N/A
April 1, 1993 (commencement of operations) through Dec. 31, 1997......................... N/A 17.00%
June 9, 1987 (commencement of operations) through Dec. 31, 1997.......................... 14.36% N/A
</TABLE>
The standardized returns for the Class A and Class B shares of the Europe Fund,
stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997............................................................. 5.08% 5.55%
For the five years ended Dec. 31, 1997...................................................... 10.79% N/A
For the ten years ended Dec. 31, 1997....................................................... 7.49% N/A
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................ N/A 10.37%
</TABLE>
The standardized returns for the Class A and Class B shares of the International
Fund, stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (CLASS B)
- ---------------------------------------------------------------------------------- --------------------- ---------------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997................................................... 2.54% 3.47%
For the five years ended Dec. 31, 1997............................................ 7.58% N/A
For the ten years ended Dec. 31, 1997............................................. 8.09% N/A
April 1, 1993 (commencement of operations) through Dec. 31, 1997.................. N/A 6.90%
</TABLE>
The standardized returns for the Class A and Class B shares of the Japan Fund,
stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997................................................................ (13.05)% (12.99)%
For the five years ended Dec. 31, 1997......................................................... 3.13% N/A
For the ten years ended Dec. 31, 1997.......................................................... 2.20% N/A
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................... N/A 0.86%
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION PAGE 39
<PAGE>
AIM EQUITY FUNDS
The standardized returns for the Class A and Class B shares of the Pacific Fund,
stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (CLASS B)
- --------------------------------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997.............................................................. (47.31)% (47.11)%
For the five years ended Dec. 31, 1997....................................................... (2.61)% N/A
For the ten years ended Dec. 31, 1997........................................................ 4.01% N/A
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................. N/A (4.37)%
</TABLE>
The standardized returns for the Class A and Class B shares of the Worldwide
Fund, stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997....................................................... 3.95% 5.02%
For the five years ended Dec. 31, 1997................................................ 8.84% N/A
For the ten years ended Dec. 31, 1997................................................. 10.26% N/A
April 1, 1993 (commencement of operations) through Dec. 31, 1997...................... N/A 7.79%
June 9, 1987 (commencement of operations) through Dec. 31, 1997....................... 8.41% N/A
</TABLE>
Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:
P(1+U)to the power of n=ERV
<TABLE>
<S> <C> <C> <C>
Where P = a hypothetical initial payment of $1,000.
U = average annual total return assuming payment of only a stated portion of, or none
of, the applicable maximum sales load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of the stated
period.
</TABLE>
The average annual non-standardized returns for the Class A and Class B shares
of the Mid Cap Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
MID CAP FUND MID CAP FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997.......................................................... 14.05% 13.35%
April 1, 1993 (commencement of operations) through Dec. 31, 1997......................... N/A 17.23%
June 9, 1987 (commencement of operations) through Dec. 31, 1997.......................... 14.97% N/A
</TABLE>
The average annual non-standardized returns for the Class A and Class B shares
of the Europe Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997............................................................. 11.20% 10.55%
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................ N/A 10.66%
July 19, 1985 (commencement of operations) through Dec. 31, 1997............................ 12.77% N/A
</TABLE>
The average annual non-standardized returns for the Class A and Class B shares
of the International Fund, stated as average annualized total returns for the
periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (CLASS B)
- ---------------------------------------------------------------------------------- --------------------- ---------------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997................................................... 8.51% 7.71%
April 1, 1993 (commencement of operations) through Dec. 31, 1997.................. N/A 7.18%
July 19, 1985 (commencement of operations) through Dec. 31, 1997.................. 13.21% N/A
</TABLE>
The average annual non-standardized returns for the Class A and Class B shares
of the Japan Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997................................................................ (7.99)% (8.42)%
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................... N/A 1.22%
July 19, 1985 (commencement of operations) through Dec. 31, 1997............................... 11.78% N/A
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION PAGE 40
<PAGE>
AIM EQUITY FUNDS
The average annual non-standardized returns for the Class A and Class B shares
of the Pacific Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (CLASS B)
- --------------------------------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997.............................................................. (44.24)% (44.65)%
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................. N/A (4.09)%
January 19, 1977 (commencement of operations) through Dec. 31, 1997.......................... 9.96% N/A
</TABLE>
The average annual non-standardized returns for the Class A and Class B shares
of the Worldwide Fund, stated as average annualized total returns for the
periods shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997....................................................... 10.00% 9.22%
April 1, 1993 (commencement of operations) through Dec. 31, 1997...................... N/A 8.06%
June 9, 1987 (commencement of operations) through Dec. 31, 1997....................... 9.00% N/A
</TABLE>
Cumulative total return across a stated period may be calculated as follows:
P(1+V)to the power of n=ERV
<TABLE>
<S> <C> <C> <C>
Where P = a hypothetical initial payment of $1,000.
V = cumulative total return assuming payment of all of, a stated portion of, or none
of, the applicable maximum sales load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of the stated
period.
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the Mid Cap Fund, stated as aggregate
total returns for the periods shown, were:
<TABLE>
<CAPTION>
MID CAP FUND MID CAP FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997......................... N/A 112.80%
June 9, 1987 (commencement of operations) through Dec. 31, 1997.......................... 336.53% N/A
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the Europe Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................ N/A 61.77%
July 19, 1985 (commencement of operations) through Dec. 31, 1997............................ 346.82% N/A
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the International Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (CLASS B)
- ---------------------------------------------------------------------------------- ------------------- ---------------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997.................. N/A 39.01%
July 19, 1985 (commencement of operations) through Dec. 31, 1997.................. 368.84% N/A
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the Japan Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------------- ------------- --------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................... N/A 5.91%
July 19, 1985 (commencement of operations) through Dec. 31, 1997............................... 300.11% N/A
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the Pacific Fund, stated as aggregate
total returns for the periods shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (CLASS B)
- --------------------------------------------------------------------------------------------- ------------- --------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................. N/A (17.99)%
January 19, 1977 (commencement of operations) through Dec. 31, 1997.......................... 630.10% N/A
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION PAGE 41
<PAGE>
AIM EQUITY FUNDS
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the Worldwide Fund, stated as aggregate
total returns for the periods shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------- ----------------- -------------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997...................... N/A 44.54%
June 9, 1987 (commencement of operations) through Dec. 31, 1997....................... 148.37% N/A
</TABLE>
The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B of the Mid Cap Fund, stated as aggregate total returns
for the periods shown, were:
<TABLE>
<CAPTION>
MID CAP FUND MID CAP FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997......................... N/A 110.80%
June 9, 1987 (commencement of operations) through Dec. 31, 1997.......................... 312.52% N/A
</TABLE>
The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B shares of the Europe Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................ N/A 59.77%
July 19, 1985 (commencement of operations) through Dec. 31, 1997............................ 322.24% N/A
</TABLE>
The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B shares of the International Fund, stated as aggregate
total returns for the periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (CLASS B)
- ---------------------------------------------------------------------------------- ------------------- ---------------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through De. 31, 1997................... N/A 37.32%
July 19, 1985 (commencement of operations) through Dec. 31, 1997.................. 343.05% N/A
</TABLE>
The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B shares of the Japan Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (CLASS B)
- ----------------------------------------------------------------------------------------------- ------------- --------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................... N/A 4.15%
July 19, 1985 (commencement of operations) through Dec. 31, 1997............................... 278.10% N/A
</TABLE>
The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B shares of the Pacific Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (CLASS B)
- --------------------------------------------------------------------------------------------- ------------- --------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................. N/A (19.11)%
January 19, 1977 (commencement of operations) through Dec. 31, 1997.......................... 589.94% N/A
</TABLE>
The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B shares of the Worldwide Fund, stated as aggregate total
returns for the periods shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (CLASS B)
- -------------------------------------------------------------------------------------- ----------------- -------------------
<S> <C> <C>
April 1, 1993 (commencement of operations) through Dec. 31, 1997...................... N/A 42.80%
June 9, 1987 (commencement of operations) through Dec. 31, 1997....................... 134.71% N/A
</TABLE>
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of each Fund's portfolio and operating expenses of
each Fund, so that current or past yield or total return should not be
considered representative of what an investment in each Fund may earn in any
future period. These factors and possible differences in the methods used in
calculating investment results should be considered when comparing each Fund's
investment results with those published for other investment companies and other
investment vehicles. Each Fund's results also should be considered relative to
the risks associated with such Fund's investment objective and policies.
PERFORMANCE INFORMATION
Total return figures for the Funds are neither fixed nor guaranteed, and no
Fund's principal is insured. Performance quotations reflect historical
information and should not be considered representative of a Fund's performance
for any period in the future. Performance is a function of a number of factors
which can be expected to fluctuate. The Funds may provide performance
information in reports, sales literature and advertisements. The Funds may also,
from time to time, quote information about the Funds published or aired by
publications or other media entities which contain articles or
STATEMENT OF ADDITIONAL INFORMATION PAGE 42
<PAGE>
AIM EQUITY FUNDS
segments relating to investment results or other data about one or more of the
Funds. Such publications or media entities may include the following, among
others:
Advertising Age
Barron's
Best's Review
Broker World
Business Week
Changing Times
Christian Science Monitor
Consumer Reports
Economist
EuroMoney
FACS of the Week
Financial Planning
Financial Product News
Financial World
Forbes
Fortune
Global Finance
Hartford Courant Inc.
Institutional Investor
Insurance Forum
Insurance Week
Investor's Daily
Journal of the American
Society of CLU & ChFC
Kiplinger Letter
Money
Mutual Fund Forecaster
Mutual Fund Magazine
Nation's Business
New York Times
Pension World
Pensions & Investments
Personal Investor
Financial Services Week
Philadelphia Inquirer
Smart Money
USA Today
U.S. News & World Report
Wall Street Journal
Washington Post
CNN
CNBC
PBS
The Funds and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
each Fund with the following, or compare each Fund's performance to performance
data of similar mutual funds as published in the following, among others:
Bank Rate National Monitor Index
Bear Stearns Foreign Bond Index
Bond Buyer Index
CDA/Wiesenberger Investment Company Services
(data and mutual fund rankings and comparisons)
CNBC/Financial News Composite Index
COFI
Consumer Price Index
Datastream
Donoghue's
Dow Jones Industrial Average
EAFE Index
First Boston High Yield Index
Fitch (publications)
Ibbotson Associates International Bond Index
International Bank for Reconstruction and
Development (publications)
International Finance Corporation Emerging
Markets Database
International Financial Statistics
Lehman Bond Indices
Lipper Analytical Data Services, Inc. (data and
mutual fund rankings and comparisons)
Micropal, Inc. (data and mutual fund rankings
and comparisons)
Moody's Investors Service (publications)
Morgan Stanley Capital International All Country
(AC) World Index
Morgan Stanley Capital International World
Indices
Morningstar, Inc. (data and mutual fund rankings
and comparisons)
NASDAQ
Organization for Economic Cooperation and
Development (publications)
Salomon Brothers Global Telecommunications
Index
Salomon Brothers World Government Bond
Index-Non-U.S.
Salomon Brothers World Government Bond
Index
Standard & Poor's (publications)
Standard & Poor's 500 Composite Stock Price
Index
Stangar
Wilshire Associaties
World Bank (publications and reports)
The World Bank Publication of Trends in
Developing Countries
Worldscope
Each Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
STATEMENT OF ADDITIONAL INFORMATION PAGE 43
<PAGE>
AIM EQUITY FUNDS
10-year Treasuries
30-year Treasuries
30-day Treasury Bills
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Funds or AIM
Distributors. Advertising for the Funds may from time to time include
discussions of general economic conditions and interest rates. Advertising for
the Funds may also include reference to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
From time to time, the Funds' sales literature and/or advertisements may discuss
generic topics pertaining to the mutual fund industry. This includes, but is not
limited to, literature addressing general information about mutual funds,
variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
Although performance data may be useful to prospective investors when comparing
a Fund's performance with other funds and other potential investments, investors
should note that the methods of computing performance of other potential
investments are not necessarily comparable to the methods employed by a Fund.
- --------------------------------------------------------------------------------
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF BOND RATINGS
MOODY'S rates the debt securities issued by various entities from "Aaa" to
"C." Investment grade ratings are the first four categories:
Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred
to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk appear somewhat
larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered adequate,
but elements may be present which suggest a susceptibility to impairment
some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly secured).
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
STATEMENT OF ADDITIONAL INFORMATION PAGE 44
<PAGE>
AIM EQUITY FUNDS
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
S&P rates the securities debt of various entities in categories ranging from
"AAA" to "D" according to quality. Investment grade ratings are the first four
categories:
AAA -- An obligation rated "AAA" has the highest rating assigned by S&P.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong.
A -- An obligation rated "A" is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations
in higher rated categories.
BBB -- An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.
BB, B, CCC, CC, C -- Obligations rated "BB," "B," "CCC," "CC," and "C"
are regarded as having significant speculative characteristics. "BB"
indicates the least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective characteristics,
these may be outweighed by large uncertainties or major exposures to adverse
conditions.
BB -- An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to the obligor's inadequate capacity to meet its financial commitment
on the obligation.
B -- An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB," but the obligor currently has the capacity to meet
its financial commitment on the obligation. Adverse business, financial, or
economic conditions will likely impair the obligor's capacity or willingness
to meet its financial commitment on the obligation.
CCC -- An obligation rated "CCC" is currently vulnerable to nonpayment,
and is dependent upon favorable business, financial, and economic conditions
for the obligor to meet its financial commitment on the obligation. In the
event of adverse business, financial, or economic conditions, the obligor is
not likely to have the capacity to meet its financial commitment on the
obligation.
CC -- An obligation rated "CC" is currently highly vulnerable to
nonpayment.
C -- The "C" rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but payments on
this obligation are being continued.
D -- An obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The "D" rating
also will be used upon the filing of a bankruptcy petition or the taking of
a similar action if payments on an obligation are jeopardized.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
STATEMENT OF ADDITIONAL INFORMATION PAGE 45
<PAGE>
AIM EQUITY FUNDS
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
MOODY'S employs the designation "Prime-1" to indicate commercial paper
having a superior ability for repayment of senior short-term debt obligations.
Prime-1 repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
S&P ratings of commercial paper are graded into several categories ranging
from "A-1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. "A-1" -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. "A-2" -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of the Funds as of December 31, 1997 and for
the fiscal year then ended, and the unaudited financial statements as of June
30, 1998 and for the six months then ended, appear on the following pages.
STATEMENT OF ADDITIONAL INFORMATION PAGE 46
<PAGE>
STATEMENT OF
ADDITIONAL INFORMATION
CLASS A AND CLASS B SHARES OF
AIM AMERICA VALUE FUND
AIM SMALL CAP EQUITY FUND
(SERIES PORTFOLIOS OF AIM GROWTH SERIES)
11 Greenway Plaza
Suite 100
Houston, TX 77046-1173
(713) 626-1919
- --------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IT SHOULD BE
READ IN CONJUNCTION WITH A PROSPECTUS OF THE ABOVE-NAMED FUNDS, A COPY OF WHICH
MAY BE OBTAINED FREE OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
A I M DISTRIBUTORS, INC.,
P.O. BOX 4739, HOUSTON TX 77210-4739
OR BY CALLING (800) 347-4246.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998 RELATING TO THE AIM
AMERICA VALUE FUND PROSPECTUS AND THE AIM SMALL CAP EQUITY FUND PROSPECTUS, EACH
DATED SEPTEMBER 8, 1998
[LOGO]
Statement of Additional Information Page 1
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE NO.
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<S> <C>
Introduction........................................................................................................... 3
Investment Objectives and Policies..................................................................................... 4
Options and Futures.................................................................................................... 6
Risk Factors........................................................................................................... 13
Investment Limitations................................................................................................. 14
Execution of Portfolio Transactions.................................................................................... 16
Trustees and Executive Officers........................................................................................ 18
Control Persons and Principal Holders of Securities.................................................................... 20
Management............................................................................................................. 21
Valuation of Fund Shares............................................................................................... 26
How to Purchase and Redeem Shares...................................................................................... 27
Taxes.................................................................................................................. 29
Additional Information................................................................................................. 31
Investment Results..................................................................................................... 32
Description of Debt Ratings............................................................................................ 35
Financial Statements................................................................................................... 37
</TABLE>
Statement of Additional Information Page 2
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
INTRODUCTION
- --------------------------------------------------------------------------------
This Statement of Additional Information relates to the Class A and Class B
shares of AIM Small Cap Equity Fund ("Small Cap Fund") and AIM America Value
Fund ("America Value Fund") (individually, a "Fund," and collectively, the
"Funds"). Each Fund is a diversified series of AIM Growth Series (the "Trust"),
a registered open-end management investment company. The Small Cap Fund and
America Value Fund invest all of their investable assets in the Small Cap
Portfolio and Value Portfolio (individually, a "Portfolio," and collectively,
the "Portfolios"), respectively.
A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-adviser") serves as the
investment sub-adviser of and sub-administrator for the Portfolios. AIM and the
Sub-adviser also serve as the administrator and sub-administrator, respectively,
for the Funds.
The Trust is a series mutual fund. The rules and regulations of the United
States Securities and Exchange Commission (the "SEC") require all mutual funds
to furnish prospective investors certain information concerning the activities
of the fund being considered for investment. This information for Small Cap Fund
is included in a Prospectus dated September 8, 1998, and for America Value Fund
is included in a separated Prospectus dated September 8, 1998. Additional copies
of the Prospectuses and this Statement of Additional Information may be obtained
without charge by writing the principal distributor of the Funds' shares, A I M
Distributors, Inc. ("AIM Distributors"), P.O. Box 4739, Houston, TX 77210-4739
or by calling (800) 347-4246. Investors must receive a Prospectus before they
invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Funds. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus; and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
GENERAL INFORMATION ABOUT THE FUNDS
THE TRUST AND ITS SHARES
The Trust previously operated under the name G.T. Global Growth Series, which
was organized as a Massachusetts business trust on February 19, 1985. The Trust
was reorganized on May 7, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of eight separate portfolios: each of the Funds, AIM
New Pacific Growth Fund, AIM Europe Growth Fund, AIM Japan Growth Fund, AIM
International Growth Fund, AIM Worldwide Growth Fund and AIM Mid Cap Growth
Fund. Each of these funds has three separate classes: Class A, Class B and
Advisor Class shares. All historical financial and other information contained
in this Statement of Additional Information for periods prior to May 7, 1998, is
that of the series of G.T. Global Growth Series (renamed AIM Growth Series).
This Statement of Additional Information relates solely to the Class A and B
shares of the Funds.
The term "majority of the outstanding shares" of the Trust, of a particular Fund
or of a particular class of a Fund or of a particular Portfolio means,
respectively, the vote of the lesser of (a) 67% or more of the shares of the
Trust, such Fund or such class present at a meeting of the Trust's shareholders,
if the holders of more than 50% of the outstanding shares of the Trust, such
Fund or such class are present or represented by proxy, or (b) more than 50% of
the outstanding shares of the Trust, such Fund or such class.
Class A, Class B and Advisor Class shares of each Fund have equal rights and
privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of such Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable to
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such
Statement of Additional Information Page 3
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
conversion and exchange rights as set forth in the Prospectus and this Statement
of Additional Information. Fractional shares have proportionately the same
rights, including voting rights, as are provided for a full share.
Shareholders of the Funds do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Funds voting
together for election of directors may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
The investment objective of each Fund is long-term capital appreciation. The
Small Cap Fund and America Value Fund each seeks to achieve its investment
objective by investing all of its investable assets in the Small Cap Portfolio
and Value Portfolio, respectively, each of which is a subtrust (a "series") of
Growth Portfolio, a New York Common Law Trust registered as an open-end
management investment company with an investment objective that is identical to
that of its corresponding Fund. Whenever the phrase "all of the Fund's
investable assets" is used herein and in the Prospectus, it means that the only
investment securities that will be held by a Fund will be its interest in its
corresponding Portfolio. A Fund may withdraw its investment in its corresponding
Portfolio at any time, if the Board of Trustees of the Trust determines that it
is in the best interests of the Fund and its shareholders to do so. Upon any
such withdrawal, a Fund's assets would be invested in accordance with the
investment policies described below and in the Prospectus with respect to its
corresponding Portfolio.
INVESTMENTS IN OTHER INVESTMENT COMPANIES
The Portfolios may invest in the securities of closed-end investment companies
(including investment vehicles or companies advised by the Sub-adviser or its
affiliates ("Affiliated Funds")) within the limits of the Investment Company Act
of 1940, as amended (the "1940 Act"). These limitations currently provide that,
in general, each Portfolio may purchase shares of a closed-end investment
company unless (a) such a purchase would cause a Portfolio to own more than 3%
of the total outstanding voting stock of the investment company or (b) such a
purchase would cause a Portfolio to have more than 5% of its assets invested in
the investment company or more than 10% of its assets invested in an aggregate
of all such investment companies. Investment in investment companies may involve
the payment of substantial premiums above the value of such companies' portfolio
securities. The Portfolios do not intend to invest in such vehicles or funds
unless the Sub-adviser determines that the potential benefits of such
investments justify the payment of any applicable premiums. The return on such
securities will be reduced by operating expenses of such companies including
payments to the investment managers of those investment companies. With respect
to investments in Affiliated Funds, the Sub-adviser waives its advisory fee to
the extent that such fees are based on assets of a Fund invested in Affiliated
Funds.
DEPOSITORY RECEIPTS
Each Portfolio may invest up to 10% of its total assets in securities of foreign
issuers in the form of American Depository Receipts ("ADRs") American Depository
Shares ("ADSs"), Global Depository Receipts ("GDRs") and European Depository
Receipts ("EDRs") or other securities convertible into securities of eligible
European or Far Eastern issuers. These securities may not necessarily be
denominated in the same currency as the securities for which they may be
exchanged. ADRs and ADSs typically are issued by an American bank or trust
company and evidence ownership of underlying securities issued by a foreign
corporation. EDRs, which are sometimes referred to as Continental Depository
Receipts ("CDRs"), are issued in Europe typically by foreign banks and trust
companies and evidence ownership of either foreign or domestic securities. GDRs
are similar to EDRs and are designed for use in several international financial
markets. Generally, ADRs and ADSs in registered form are designed for use in
United States securities markets and EDRs in bearer form are designed for use in
European securities markets. For purposes of a Portfolio's investment policies,
its investments in ADRs, ADSs, GDRs and EDRs will be deemed to be investments in
the equity securities representing securities of foreign issuers into which they
may be converted.
ADR facilities may be established as either "unsponsored" or "sponsored." While
ADRs issued under these two types of facilities are in some respects similar,
there are distinctions between them relating to the rights and obligations of
ADR
Statement of Additional Information Page 4
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
holders and the practices of market participants. A depository may establish an
unsponsored facility without participation by (or even necessarily the
acquiescence of) the issuer of the deposited securities, although typically the
depository requests a letter of non-objection from such issuer prior to the
establishment of the facility. Holders of unsponsored ADRs generally bear all
the costs of such facilities. The depository usually charges fees upon the
deposit and withdrawal of the deposited securities, the conversion of dividends
into U.S. dollars, the disposition of non-cash distributions, and the
performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass through voting
rights to ADR holders with respect to the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Portfolios may invest in both sponsored and unsponsored ADRs.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by a Portfolio in connection with other
securities or separately and provide the Portfolio with the right to purchase at
a later date other securities of the issuer.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Portfolio may make secured
loans of its portfolio securities amounting to not more than 30% of its total
assets. Securities loans are made to broker/dealers or institutional investors
pursuant to agreements requiring that the loans continuously be secured by
collateral at least equal at all times to the value of the securities lent, plus
any accrued interest, "marked to market" on a daily basis. The Portfolios may
pay reasonable administrative and custodial fees in connection with the loans of
their securities. While the securities loans are outstanding, the Portfolios
will continue to receive the equivalent of the interest or dividends paid by the
issuer on the securities, as well as interest on the investment of the
collateral or a fee from the borrower. Each Portfolio will have a right to call
each loan at any time and obtain the securities within the stated settlement
period. The Portfolios will not have the right to vote equity securities while
they are being lent, but may call in a loan in anticipation of any important
vote. Loans will only be made to firms deemed by the Sub-adviser to be of good
standing and will not be made unless, in the judgment of the Sub-adviser, the
consideration to be earned from such loans would justify the risk.
COMMERCIAL BANK OBLIGATIONS
For the purposes of each Portfolio's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks are obligations of
the issuing bank and may be general obligations of the parent bank. Such
obligations, however, may be limited by the terms of a specific obligation and
by government regulation. Although a Portfolio typically will acquire
obligations issued and supported by the credit of U.S. banks having total assets
at the time of purchase of $1 billion or more, this $1 billion figure is not an
investment policy or restriction of any Portfolio. For the purposes of
calculation with respect to the $1 billion figure, the assets of a bank will be
deemed to include the assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
A repurchase agreement is a transaction in which a Portfolio purchases a
security from a bank or recognized securities dealer and simultaneously commits
to resell that security to the bank or dealer at an agreed-upon price, date and
market rate of interest unrelated to the coupon rate or maturity of the
purchased security. Although repurchase agreements carry certain risks not
associated with direct investment in securities, including possible decline in
the market value of the underlying securities and delays and costs to the
Portfolio if the other party to the repurchase agreement becomes bankrupt, the
Portfolios intend to enter into repurchase agreements only with banks and
dealers believed by the Sub-adviser to present minimal credit risks in
accordance with guidelines approved by Growth Portfolio's Board of Trustees. The
Sub-adviser will review and monitor the creditworthiness of such institutions
under the general supervision of Growth Portfolio's Board.
Each Portfolio will invest only in repurchase agreements collateralized at all
times in an amount at least equal to the repurchase price plus accrued interest.
To the extent that the proceeds from any sale of such collateral upon a default
in the obligation to repurchase were less than the repurchase price, the Fund
would suffer a loss. If the financial institution
Statement of Additional Information Page 5
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
which is party to the repurchase agreement petitions for bankruptcy or otherwise
becomes subject to bankruptcy or other liquidation proceedings, there may be
restrictions on the Portfolio's ability to sell the collateral and the Portfolio
could suffer a loss. However, with respect to financial institutions whose
bankruptcy or liquidation proceedings are subject to the U.S. Bankruptcy Code,
the Portfolios intend to comply with provisions under the U.S. Bankruptcy Code
that would allow them to immediately to resell the collateral. A Portfolio will
not enter into a repurchase agreement with a maturity of more than seven days
if, as a result, more than 15% of the value of its net assets would be invested
in such repurchase agreements and other illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
Each Portfolio's borrowings will not exceed 33 1/3% of its total assets, i.e.,
each Portfolio's total assets at all times will equal at least 300% of the
amount of outstanding borrowings. If market fluctuations in the value of a
Portfolio's portfolio holdings or other factors cause the ratio of the
Portfolio's total assets to outstanding borrowings to fall below 300%, within
three days (excluding Sundays and holidays) of such event the Portfolio may be
required to sell portfolio securities to restore the 300% asset coverage, even
though from an investment standpoint such sales might be disadvantageous. Each
Portfolio also may borrow up to 5% of its total assets for temporary or
emergency purposes other than to meet redemptions. Any borrowing by a Portfolio
may cause greater fluctuation in the value of its corresponding Fund's shares
than would be the case if the Portfolio did not borrow.
Each Portfolio's fundamental investment limitations permit the Portfolio to
borrow money for leveraging purposes. Each Portfolio, however, currently is
prohibited, pursuant to a non-fundamental investment policy, from borrowing
money in order to purchase securities. Nevertheless, this policy may be changed
in the future by Growth Portfolio's Board of Trustees. If a Portfolio employs
leverage in the future, it would be subject to certain additional risks. Use of
leverage creates an opportunity for greater growth of capital but would
exaggerate any increases or decreases in a Portfolio's net asset value. When the
income and gains on securities purchased with the proceeds of borrowings exceed
the costs of such borrowings, a Portfolio's earnings or net asset value will
increase faster than otherwise would be the case; conversely, if such income and
gains fail to exceed such costs, a Portfolio's earnings or net asset value would
decline faster than would otherwise be the case.
Each Portfolio may enter into reverse repurchase agreements. A reverse
repurchase agreement is a borrowing transaction in which the Portfolio transfers
possession of a security to another party, such as a bank or broker/dealer in
return for cash, and agrees to repurchase the security in the future at an
agreed upon price, which includes an interest component. Each Portfolio also may
engage in "roll" borrowing transactions which involve its sale of Government
National Mortgage Association certificates or other securities together with a
commitment (for which the Portfolio may receive a fee) to purchase similar, but
not identical, securities at a future date. Each Portfolio will segregate with a
custodian, cash or liquid securities in an amount sufficient to cover its
obligations under "roll" transactions and reverse repurchase agreements with
broker/dealers. No segregation is required for reverse repurchase agreements
with banks.
TEMPORARY DEFENSIVE STRATEGIES
Money market instruments in which the Portfolios may invest include the
following: government securities; high grade commercial paper; bank certificates
of deposit; bankers' acceptances; and repurchase agreements related to any of
the foregoing. High grade commercial paper refers to commercial paper rated P-1
by Moody's Investors Service, Inc. ("Moody's") or A-1 by Standard & Poor's, a
division of The McGraw-Hill Companies, Inc. ("S&P"), at the time of investment
or, if unrated, deemed by the Sub-adviser to be of comparable quality.
OPTIONS AND FUTURES
- --------------------------------------------------------------------------------
SPECIAL RISKS OF OPTIONS AND FUTURES
The use of options and futures contracts involves special considerations and
risks, as described below. Risks pertaining to particular instruments are
described in the sections that follow.
(1) Successful use of most of these instruments depends upon the
Sub-adviser's ability to predict movements of the overall securities
markets, which requires different skills than predicting changes in the
prices of individual securities. While the Sub-adviser is experienced in the
use of these instruments, there can be no assurance that any particular
strategy adopted will succeed.
Statement of Additional Information Page 6
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if a Portfolio entered
into a short hedge because the Sub-adviser projected a decline in the price
of a security in the Portfolio's securities portfolio, and the price of that
security increased instead, the gain from that increase might be wholly or
partially offset by a decline in the price of the hedging instrument.
Moreover, if the price of the hedging instrument declined by more than the
increase in the price of the security, the Portfolio could suffer a loss. In
either such case, the Portfolio would have been in a better position had it
not hedged at all.
(4) As described below, a Portfolio might be required to maintain assets
as "cover," maintain segregated accounts or make margin payments when it
takes positions in instruments involving obligations to third parties (I.E.,
instruments other than purchased options). If the Portfolio were unable to
close out its positions in such instruments, it might be required to
continue to maintain such assets or accounts or make such payments until the
position expired or matured. The requirements might impair the Portfolio's
ability to sell a portfolio security or make an investment at a time when it
would otherwise be favorable to do so, or require that the Portfolio sell a
portfolio security at a disadvantageous time. The Portfolio's ability to
close out a position in an instrument prior to expiration or maturity
depends on the existence of a liquid secondary market or, in the absence of
such a market, the ability and willingness of the other party to the
transaction ("contra party") to enter into a transaction closing out the
position. Therefore, there is no assurance that any position can be closed
out at a time and price that is favorable to a Portfolio.
WRITING CALL OPTIONS
A Portfolio may write (sell) call options on securities and indices. Call
options generally will be written on securities that, in the opinion of the
Sub-adviser, are not expected to make any major price moves in the near future
but that, over the long term, are deemed to be attractive investments for the
Portfolio.
A call option gives the holder (buyer) the right to purchase a security at a
specified price (the exercise price) at any time until (American style) or on
(European style) a certain date (the expiration date). So long as the obligation
of the writer of a call option continues, he or she may be assigned an exercise
notice, requiring him or her to deliver the underlying security against payment
of the exercise price. This obligation terminates upon the expiration of the
call option, or such earlier time at which the writer effects a closing purchase
transaction by purchasing an option identical to that previously sold.
Portfolio securities on which call options may be written will be purchased
solely on the basis of investment considerations consistent with each
Portfolio's investment objective. When writing a call option, a Portfolio, in
return for the premium, gives up the opportunity for profit from a price
increase in the underlying security above the exercise price, and retains the
risk of loss should the price of the security decline. Unlike one who owns
securities not subject to an option, a Portfolio has no control over when it may
be required to sell the underlying securities, since most options may be
exercised at any time prior to the option's expiration. If a call option that a
Portfolio has written expires, the Portfolio will realize a gain in the amount
of the premium; however, such gain may be offset by a decline in the market
value of the underlying security during the option period. If the call option is
exercised, the Portfolio will realize a gain or loss from the sale of the
underlying security, which will be increased or offset by the premium received.
Neither Portfolio considers a security covered by a call option to be "pledged"
as that term is used in the Portfolio's policy that limits the pledging or
mortgaging of its assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security appreciates to a price
higher than the exercise price of the call option, it can be expected that the
option will be exercised and a Portfolio will be obligated to sell the security
at less than its market value.
The premium that a Portfolio receives for writing a call option is deemed to
constitute the market value of an option. The premium a Portfolio will receive
from writing a call option will reflect, among other things, the current market
price of the
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underlying investment, the relationship of the exercise price to such market
price, the historical price volatility of the underlying investment and the
length of the option period. In determining whether a particular call option
should be written, the Sub-adviser will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security from being called, or
to permit the sale of the underlying security. Furthermore, effecting a closing
transaction will permit a Portfolio to write another call option on the
underlying security with either a different exercise price or expiration date or
both.
Each Portfolio will pay transaction costs in connection with the writing of
options and in entering into closing purchase contracts. Transaction costs
relating to options activity normally are higher than those applicable to
purchases and sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities or indices at the time the options
are written. From time to time, a Portfolio may purchase an underlying security
for delivery in accordance with the exercise of an option, rather than
delivering such security from its portfolio. In such cases, additional costs
will be incurred.
A Portfolio will realize a profit or loss from a closing purchase transaction if
the cost of the transaction is less or more, respectively, than the premium
received from writing the option. Because increases in the market price of a
call option generally will reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset in whole or in part by appreciation of the underlying
security owned by the Portfolio.
WRITING PUT OPTIONS
The Portfolios may write put options on securities and indices. A put option
gives the purchaser of the option the right to sell, and the writer (seller) the
obligation to buy, the underlying security at the exercise price at any time
until (American style) or on (European style) the expiration date. The operation
of put options in other respects, including their related risks and rewards, is
substantially identical to that of call options.
A Portfolio generally would write put options in circumstances where the
Sub-adviser wishes to purchase the underlying security for the Portfolio's
portfolio at a price lower than the current market price of the security. In
such event, the Portfolio would write a put option at an exercise price that,
reduced by the premium received on the option, reflects the lower price it is
willing to pay. Since the Portfolio also would receive interest on debt
securities maintained to cover the exercise price of the option, this technique
could be used to enhance current return during periods of market uncertainty.
The risk in such a transaction would be that the market price of the underlying
security would decline below the exercise price, less the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security depreciates to a price
lower than the exercise price of the put option, it can be expected that the put
option will be exercised and a Portfolio will be obligated to purchase the
security at greater than its market value.
PURCHASING PUT OPTIONS
Each Portfolio may purchase put options on securities and indices. As the holder
of a put option, a Portfolio would have the right to sell the underlying
security at the exercise price at any time until (American style) or on
(European style) the expiration date. A Portfolio may enter into closing sale
transactions with respect to such options, exercise such options or permit such
options to expire.
A Portfolio may purchase a put option on an underlying security ("protective
put") owned by the Portfolio in order to protect against an anticipated decline
in the value of the security. Such hedge protection is provided only during the
life of the put option when the Portfolio, as the holder of the put option, is
able to sell the underlying security at the put exercise price regardless of any
decline in the underlying security's market price. The premium paid for the put
option and any transaction costs would reduce any profit otherwise available for
distribution when the security eventually is sold.
A Portfolio also may purchase put options at a time when the Portfolio does not
own the underlying security. By purchasing put options on a security it does not
own, a Portfolio seeks to benefit from a decline in the market price of the
underlying security. If the put option is not sold when it has remaining value,
and if the market price of the underlying security remains equal to or greater
than the exercise price during the life of the put option, the Portfolio will
lose its entire investment in the put option. In order for the purchase of a put
option to be profitable, the market price of the underlying
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security must decline sufficiently below the exercise price to cover the premium
and transaction costs, unless the put option is sold in a closing sale
transaction.
PURCHASING CALL OPTIONS
Each Portfolio may purchase call options on securities and indices. As the
holder of a call option, a Portfolio would have the right to purchase the
underlying security at the exercise price at any time until (American style) or
on (European style) the expiration date. A Portfolio may enter into closing sale
transactions with respect to such option, exercise such options or permit such
options to expire.
Call options may be purchased by a Portfolio for the purpose of acquiring the
underlying security for its portfolio. Utilized in this fashion, the purchase of
call options would enable a Portfolio to acquire the security at the exercise
price of the call option plus the premium paid. At times, the net cost of
acquiring the security in this manner may be less than the cost of acquiring the
security directly. This technique also may be useful to the Portfolios in
purchasing a large block of securities that would be more difficult to acquire
by direct market purchases. As long as it holds such a call option, rather than
the underlying security itself, a Portfolio is partially protected from any
unexpected decline in the market price of the underlying security and, in such
event, could allow the call option to expire, incurring a loss only to the
extent of the premium paid for the option.
Each Portfolio also may purchase call options on underlying securities it owns
to avoid realizing losses that would result in a reduction of its current
return. For example, where a Portfolio has written a call option on an
underlying security having a current market value below the price at which it
purchased the security, an increase in the market price could result in the
exercise of the call option written by the Portfolio and the realization of a
loss on the underlying security. Accordingly, the Portfolio could purchase a
call option on the same underlying security, which could be exercised to fulfill
the Portfolio's delivery obligations under its written call (if it is
exercised). This strategy could allow the Portfolio to avoid selling the
portfolio security at a time when it has an unrealized loss; however, the
Portfolio would have to pay a premium to purchase the call option plus
transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of such
Portfolio's total assets at the time of purchase.
Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (I.E., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation), and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. A Portfolio will not purchase an OTC option unless the Sub-adviser
believes that daily valuations for such options are readily obtainable. OTC
options differ from exchange-traded options in that OTC options are transacted
with dealers directly and not through a clearing corporation (which guarantees
performance). Consequently, there is a risk of non-performance by the dealer.
Since no exchange is involved, OTC options are valued on the basis of an average
of the last bid prices obtained from dealers, unless a quotation from only one
dealer is available in which case only that dealer's price will be used. In the
case of OTC options, there can be no assurance that a liquid secondary market
will exist for any particular option at any specific time.
The staff of the SEC considers purchased OTC options to be illiquid securities.
A Portfolio may also sell OTC options and, in connection therewith, set aside
assets or cover its obligations with respect to OTC options written by the
Portfolio. The assets used as cover for OTC options written by a Portfolio will
be considered illiquid unless the OTC options are sold to qualified dealers who
agree that the Portfolio may repurchase any OTC option it writes at a maximum
price to be calculated by a formula set forth in the option agreement. The cover
for an OTC option written subject to this procedure would be considered illiquid
only to the extent that the maximum repurchase price under the formula exceeds
the intrinsic value of the option.
A Portfolio's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. A Portfolio intends to
purchase or write only those exchange-listed options for which there appears to
be a liquid secondary market. However, there can be no assurance that such a
market will exist at any particular time. Closing transactions can be made for
OTC options only by negotiating directly with the contra party or by a
transaction in the secondary market if any such market exists. Although a
Portfolio will enter into OTC options only with contra parties that are expected
to be capable of entering into closing transactions with the Portfolio, there is
no assurance that the Portfolio will in fact be able to close out an OTC option
position at a favorable price prior to expiration. In the event of insolvency of
the contra party, the Portfolio might be unable to close out an OTC option
position at any time prior to its expiration.
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INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When a Portfolio writes a call on
an index, it receives a premium and agrees that, prior to the expiration date,
the purchaser of the call, upon exercise of the call, will receive from the
Portfolio an amount of cash if the closing level of the index upon which the
call is based is greater than the exercise price of the call. The amount of cash
is equal to the difference between the closing price of the index and the
exercise price of the call times a specified multiple (the "multiplier"), which
determines the total dollar value for each point of such difference. When a
Portfolio buys a call on an index, it pays a premium and has the same rights as
to such call as are indicated above. When a Portfolio buys a put on an index, it
pays a premium and has the right, prior to the expiration date, to require the
seller of the put, upon the Portfolio's exercise of the put, to deliver to the
Portfolio an amount of cash if the closing level of the index upon which the put
is based is less than the exercise price of the put, which amount of cash is
determined by the multiplier, as described above for calls. When a Portfolio
writes a put on an index, it receives a premium and the purchaser has the right,
prior to the expiration date, to require the Portfolio to deliver to it an
amount of cash equal to the difference between the closing level of the index
and the exercise price times the multiplier, if the closing level is less than
the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Portfolio writes a
call on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Portfolio can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Portfolio cannot, as a practical matter, acquire and
hold a portfolio containing exactly the same securities as underlie the index
and, as a result, bears a risk that the value of the securities held will vary
from the value of the index.
Even if a Portfolio could assemble a securities portfolio that exactly
reproduced the composition of the underlying index, it still would not be fully
covered from a risk standpoint because of the "timing risk" inherent in writing
index options. When an index option is exercised, the amount of cash that the
holder is entitled to receive is determined by the difference between the
exercise price and the closing index level on the date when the option is
exercised. As with other kinds of options, the Portfolio as the call writer,
will not know that it has been assigned until the next business day at the
earliest. The time lag between exercise and notice of assignment poses no risk
for the writer of a covered call on a specific underlying security, such as
common stock, because there the writer's obligation is to deliver the underlying
security, not to pay its value as of a fixed time in the past. So long as the
writer already owns the underlying security, it can satisfy its settlement
obligations by simply delivering it, and the risk that its value may have
declined since the exercise date is borne by the exercising holder. In contrast,
even if the writer of an index call holds securities that exactly match the
composition of the underlying index, it will not be able to satisfy its
assignment obligations by delivering those securities against payment of the
exercise price. Instead, it will be required to pay cash in an amount based on
the closing index value on the exercise date; and by the time it learns that it
has been assigned, the index may have declined, with a corresponding decline in
the value of its securities portfolio. This "timing risk" is an inherent
limitation on the ability of index call writers to cover their risk exposure by
holding securities positions.
If a Portfolio purchases an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Portfolio will be required to pay the
difference between the closing index value and the exercise price of the option
(times the applicable multiplier) to the assigned writer.
INTEREST RATE AND STOCK INDEX FUTURES CONTRACTS
A Portfolio may enter into interest rate or stock index futures contracts
("Futures" or "Futures Contracts") as a hedge against changes in prevailing
levels of interest rates or stock price levels in order to establish more
definitely the effective return on securities held or intended to be acquired by
the Portfolio. A Portfolio's hedging may include sales of Futures as an offset
against the effect of expected increases in interest rates, or decreases in
stock prices, and purchases of Futures as an offset against the effect of
expected declines in interest rates, or increases in stock prices.
The Portfolios only will enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC").
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Although techniques other than sales and purchases of Futures Contracts could be
used to reduce a Portfolio's exposure to interest rate and stock market
fluctuations, the Portfolio may be able to hedge its exposure more effectively
and at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument for a
specified price at a designated date, time and place. A stock index Futures
Contract provides for the delivery, at a designated date, time and place, of an
amount of cash equal to a specified dollar amount times the difference between
the stock index value at the close of trading on the contract and the price at
which the Futures Contract is originally struck; no physical delivery of stocks
comprising the index is made. Brokerage fees are incurred when a Futures
Contract is bought or sold, and margin deposits must be maintained at all times
the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments, Futures Contracts usually are closed out before the
delivery date. Closing out an open Futures Contract sale or purchase is effected
by entering into an offsetting Futures Contract purchase or sale, respectively,
for the same aggregate amount of the identical financial instrument and the same
delivery date. If the offsetting purchase price is less than the original sale
price, the Portfolio realizes a gain; if it is more, the Portfolio realizes a
loss. Conversely, if the offsetting sale price is more than the original
purchase price, the Portfolio realizes a gain; if it is less, the Portfolio
realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that a Portfolio will be able
to enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Portfolio is not able to enter into an
offsetting transaction, the Portfolio will continue to be required to maintain
the margin deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one September stock index Futures Contract on an exchange may
be fulfilled at any time before delivery under the Futures Contract is required
(I.E., on a specified date in September, the "delivery month") by the purchase
of the same September stock index Futures Contract on the same exchange. In such
instance, the difference between the price at which the Futures Contract was
sold and the price paid for the offsetting purchase, after allowance for
transaction costs, represents the profit or loss to the Portfolio.
Each Portfolio's Futures transactions will be entered into for hedging purposes
only; that is, Futures Contracts will be sold to protect against a decline in
the price of securities that a Portfolio owns, or Futures Contracts will be
purchased to protect a Portfolio against an increase in the price of securities
it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Portfolio in order to initiate Futures trading and to maintain
the Portfolio's open positions in Futures Contracts. A margin deposit made when
the Futures Contract is entered into ("initial margin") is intended to ensure
the Portfolio's performance under the Futures Contract. The margin required for
a particular Futures Contract is set by the exchange on which the Futures
Contract is traded and may be significantly modified from time to time by the
exchange during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Portfolio entered into the Futures
Contract will be made on a daily basis as the price of the underlying security
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced by, among other things, actual and anticipated
changes in interest rates and in stock market movements, which in turn are
affected by fiscal and monetary policies and national and international
political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities in the Portfolio's portfolio being
hedged. The degree of imperfection of correlation depends upon circumstances
such as variations in speculative market demand for Futures and for securities,
including technical influences in Futures trading; and differences between the
financial instruments being hedged and the instruments underlying the standard
Futures Contracts available for trading. A decision of whether, when and how to
hedge involves skill and judgment, and even a well-conceived hedge may be
unsuccessful to some degree because of unexpected market behavior or interest
rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any
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deduction for the transaction costs, if the account were then closed out. A 15%
decrease would result in a loss equal to 150% of the original margin deposit, if
the Futures Contract were closed out. Thus, a purchase or sale of a Futures
Contract may result in losses in excess of the amount invested in the Futures
Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and options on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If a Portfolio were unable to liquidate a Futures or option on Futures position
due to the absence of a liquid secondary market or the imposition of price
limits, it could incur substantial losses. The Portfolio would continue to be
subject to market risk with respect to the position. In addition, except in the
case of purchased options, the Portfolio would continue to be required to make
daily variation margin payments and might be required to maintain the position
being hedged by the Future or option or to maintain cash or securities in a
segregated account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities, except that
options on Futures Contracts give the purchaser the right, in return for the
premium paid, to assume a position in a Futures Contract (a long position if the
option is a call and a short position if the option is a put) at a specified
exercise price at any time during the period of the option. Upon exercise of the
option, the delivery of the Futures position by the writer of the option to the
holder of the option will be accompanied by delivery of the accumulated balance
in the writer's Futures margin account, which represents the amount by which the
market price of the Futures Contract, at exercise, exceeds (in the case of a
call) or is less than (in the case of a put) the exercise price of the option on
the Futures Contract. If an option is exercised on the last trading day prior to
the expiration date of the option, the settlement will be made entirely in cash
equal to the difference between the exercise price of the option and the closing
level of the securities or index upon which the Futures Contract is based on the
expiration date. Purchasers of options who fail to exercise their options prior
to the exercise date suffer a loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities or indices.
If a Portfolio writes an option on a Futures Contract, it will be required to
deposit initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
A Portfolio may seek to close out an option position by selling an option
covering the same Futures Contract and having the same exercise price and
expiration date. The ability to establish and close out positions on such
options is subject to the maintenance of a liquid secondary market.
LIMITATION ON USE OF FUTURES AND OPTIONS ON FUTURES
To the extent that a Portfolio enters into Futures Contracts and options on
Futures Contracts, in each case other than for BONA FIDE hedging purposes (as
defined by the CFTC), the aggregate initial margin and premiums required to
establish these positions (excluding the amount by which options are
"in-the-money") will not exceed 5% of the liquidation value of
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the Portfolio's portfolio, after taking into account unrealized profits and
unrealized losses on any contracts the Portfolio has entered into. In general, a
call option on a Futures Contract is "in-the-money" if the value of the
underlying Futures Contract exceeds the strike, I.E., exercise, price of the
call; a put option on a Futures Contract is "in-the-money" if the value of the
underlying Futures Contract is exceeded by the strike price of the put. This
guideline may be modified by Growth Portfolio's Board of Trustees without a
shareholder vote. This limitation does not limit the percentage of a Portfolio's
assets at risk to 5%.
COVER
Transactions using Futures Contracts and options (other than options purchased
by a Portfolio) expose the Portfolio to an obligation to another party. A
Portfolio will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities or other options or Futures
Contracts, or (2) cash, receivables and short-term debt securities with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. Each Portfolio will comply with SEC guidelines regarding
cover for these instruments and, if the guidelines so require, set aside cash or
liquid securities.
Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Futures Contract or option is open, unless they
are replaced with other appropriate assets. If a large portion of a Portfolio's
assets are used for cover or otherwise set aside, it could affect portfolio
management or the Portfolio's ability to meet redemption requests or other
current obligations.
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RISK FACTORS
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ILLIQUID SECURITIES
A Portfolio may invest up to 15% of its net assets in illiquid securities.
Securities may be considered illiquid if a Portfolio cannot reasonably expect
within seven days to sell the securities for approximately the amount at which
the Portfolio values such securities. See "Investment Limitations." The sale of
illiquid securities, if they can be sold at all, generally will require more
time and result in higher brokerage charges or dealer discounts and other
selling expenses than the sale of liquid securities such as securities eligible
for trading on U.S. securities exchanges or in the OTC markets. Moreover,
restricted securities, which may be illiquid for purposes of this limitation,
often sell, if at all, at a price lower than similar securities that are not
subject to restrictions on resale.
Illiquid securities include those that are subject to restrictions contained in
the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, a Portfolio may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Portfolio may be permitted to sell a
security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Portfolio might obtain a less
favorable price than prevailed when it decided to sell.
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended (the "1933 Act"),
including private placements, repurchase agreements, commercial paper, foreign
securities and corporate bonds and notes. These instruments are often restricted
securities because the securities are sold in transactions not requiring
registration. Institutional investors generally will not seek to sell these
instruments to the general public, but instead will often depend either on an
efficient institutional market in which such unregistered securities can be
readily resold or on an issuer's ability to honor a demand for repayment.
Therefore, the fact that there are contractual or legal restrictions on resale
to the general public or certain institutions is not dispositive of the
liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of
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unregistered securities of domestic and foreign issuers, such as the PORTAL
System sponsored by the National Association of Securities Dealers, Inc. An
insufficient number of qualified institutional buyers interested in purchasing
Rule 144A-eligible restricted securities held by a Portfolio, however, could
affect adversely the marketability of such portfolio securities and the
Portfolio might be unable to dispose of such securities promptly or at favorable
prices.
With respect to liquidity determinations generally, Growth Portfolio's Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including restricted securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the 1933 Act, are liquid or
illiquid. That Board of Trustees has delegated the function of making day-to-day
determinations of liquidity to the Sub-adviser in accordance with procedures
approved by that Board of Trustees. The Sub-adviser takes into account a number
of factors in reaching liquidity decisions, including: (i) the frequency of
trading in the security; (ii) the number of dealers who make quotes for the
security; (iii) the number of dealers who have undertaken to make a market in
the security; (iv) the number of other potential purchasers; and (v) the nature
of the security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited, and the mechanics of transfer). The
Sub-adviser monitors the liquidity of securities in each Portfolio's securities
portfolio and periodically reports such determinations to Growth Portfolio's
Board of Trustees. If the liquidity percentage restriction of a Portfolio is
satisfied at the time of investment, a later increase in the percentage of
illiquid securities held by the Portfolio resulting from a change in market
value or assets will not constitute a violation of that restriction. If as a
result of a change in market value or assets, the percentage of illiquid
securities held by a Portfolio increases above the applicable limit, the
Sub-adviser will take appropriate steps to bring the aggregate amount of
illiquid assets back within the prescribed limitations as soon as reasonably
practicable, taking into account the effect of any disposition on that
Portfolio.
DEBT SECURITIES
Each Portfolio is permitted to purchase investment grade debt securities. In
selecting debt securities for investment, the Sub-adviser reviews and monitors
the creditworthiness of each issuer and issue and analyzes interest rate trends
and specific developments that may affect individual issuers, in addition to
relying on ratings assigned by S&P, Moody's or another nationally recognized
statistical rating organization ("NRSRO") as indicators of quality. Debt
securities rated Baa by Moody's or BBB by S&P are investment grade, although
Moody's considers securities rated Baa to have speculative characteristics.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity for such securities to make principal and interest payments
than is the case for higher grade debt securities. Each Portfolio is also
permitted to purchase debt securities that are not rated by S&P, Moody's or
another NRSRO but that the Sub-adviser determines to be of comparable quality to
that of rated securities in which the Portfolio may invest. Such securities are
included in the computation of any percentage limitations applicable to the
comparable rated securities.
Ratings of debt securities represent the rating agencies' opinions regarding
their quality, are not a guarantee of quality and may be reduced after a
Portfolio has acquired the security. The Sub-adviser will consider such an event
in determining whether a Portfolio should continue to hold the security but is
not required to despose of it. Credit ratings attempt to evaluate the safety of
principal and interest payments and do not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security. Also, NRSROs may fail to make timely changes in credit ratings in
response to subsequent events, so that an issuer's current financial condition
may be better or worse than the rating indicates. For a description of Moody's
and S&P ratings, see "Description of Debt Ratings" herein.
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
THE FUNDS
The Small Cap Fund and America Value Fund each has the following fundamental
investment policy to enable it to invest in the Small Cap Portfolio and Value
Portfolio, respectively:
Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having
substantially the same investment objective, policies and limitations as the
Fund.
All other investment policies and limitations of each Fund and its corresponding
Portfolio are identical. Therefore, although the following discusses certain
investment policies and limitations of each Portfolio and Growth Portfolio's
Board of Trustees, it applies equally to each Fund and the Trust's Board of
Trustees.
Statement of Additional Information Page 14
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
Each Portfolio has adopted the following investment limitations as fundamental
policies that may not be changed without approval by the affirmative vote of a
majority of the outstanding shares of the Portfolio. Neither Portfolio may:
(1) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
a Portfolio may exercise rights under agreements relating to such
securities, including the right to enforce security interests and to hold
real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner;
(2) Purchase or sell physical commodities, but a Portfolio may purchase,
sell or enter into financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or derivative
instruments;
(3) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of a Portfolio's total assets
(including the amount borrowed but reduced by any liabilities not
constituting borrowings) at the time of the borrowing, except that a
Portfolio may borrow up to an additional 5% of its total assets (not
including the amount borrowed) for temporary or emergency purposes;
(4) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this limitation, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
(5) Purchase securities of any one issuer if, as a result, more than 5%
of a Portfolio's total assets would be invested in securities of that issuer
or a Portfolio would own or hold more than 10% of the outstanding voting
securities of that issuer, except that up to 25% of a Portfolio's total
assets may be invested without regard to this limitation, and except that
this limitation does not apply to securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities or to securities issued
by other investment companies;
(6) Engage in the business of underwriting securities of other issuers,
except to the extent that a Portfolio might be considered an underwriter
under the federal securities laws in connection with its disposition of
portfolio securities; or
(7) Purchase any security if, as a result of that purchase, 25% or more
of a Portfolio's total assets would be invested in securities of issuers
having their principal business activities in the same industry, except that
this limitation does not apply to securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities.
The following investment limitations of each Portfolio are not fundamental
policies and may be changed by vote of Growth Portfolio's Board of Trustees
without shareholder approval. Neither Portfolio may:
(1) Invest more than 15% of its net assets in illiquid securities, a
term which means securities that cannot be disposed of within seven days in
the normal course of business at approximately the amount at which the
Portfolio has valued the securities and includes, among other things,
repurchase agreements maturing in more than seven days;
(2) Borrow money except for temporary or emergency purposes (not for
leveraging) in excess of 33 1/3% of the value of the Portfolio's total
assets;
(3) Enter into a futures contract or an option on a futures contract, in
each case other than for BONA FIDE hedging purposes (as defined by the
CFTC), if the aggregate initial margin and premiums required to establish
all of these positions (excluding the amount by which options are
"in-the-money") exceeds 5% of the liquidation value of the Portfolio's
portfolio, after taking into account unrealized profits and unrealized
losses on any contracts the Portfolio has entered into;
(4) Purchase securities of other investment companies, except to the
extent permitted by the 1940 Act, in the open market at no more than
customary commission rates. This limitation does not apply to securities
received or acquired as dividends, through offers of exchange, or as a
result of reorganization, consolidation, or merger;
(5) Purchase securities on margin, provided that a Portfolio may obtain
short-term credits as may be necessary for the clearance of purchases and
sales of securities, and further provided that a Portfolio may make margin
deposits in connection with its use of financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments; or
Statement of Additional Information Page 15
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
(6) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
If a percentage restriction on investment or utilization of assets in an
investment policy or limitation is adhered to at the time an investment is made,
a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of a Portfolio's investment policies or restrictions. A
Portfolio may exchange securities, exercise conversion or subscription rights,
warrants, or other rights to purchase common stock or other equity securities
and may hold, except to the extent limited by the 1940 Act, any such securities
so acquired without regard to the Portfolio's investment policies and
limitations. The original cost of the securities so acquired will be included in
any subsequent determination of a Portfolio's compliance with the investment
percentage limitations referred to above and in the Prospectus.
- --------------------------------------------------------------------------------
EXECUTION OF PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------
Subject to policies established by Growth Portfolio's Board of Trustees, the
Sub-adviser is responsible for the execution of the Portfolios' securities
transactions and the selection of brokers/dealers who execute such transactions
on behalf of the Portfolios. In executing transactions, the Sub-adviser seeks
the best net results for each Portfolio, taking into account such factors as the
price (including the applicable brokerage commission or dealer spread), size of
the order, difficulty of execution and operational facilities of the firm
involved. Although the Sub-adviser generally seeks reasonably competitive
commission rates and spreads, payment of the lowest commission or spread is not
necessarily consistent with the best net results. While the Portfolios may
engage in soft dollar arrangements for research services, as described below,
the Portfolios have no obligation to deal with any broker/dealer or group of
broker/dealers in the execution of portfolio transactions.
Consistent with the interests of the Portfolios, the Sub-adviser may select
brokers to execute the Portfolios' securities transactions on the basis of the
research services they provide to the Sub-adviser for its use in managing the
Portfolios and its other advisory accounts. Such services may include furnishing
analyses, reports and information concerning issuers, industries, securities,
geographic regions, economic factors and trends, portfolio strategy, and
performance of accounts, and effecting securities transactions and performing
functions incidental thereto (such as clearance and settlement). Research and
brokerage services received from such broker are in addition to, and not in lieu
of, the services required to be performed by the Sub-adviser under the
applicable investment management and administration contract. A commission paid
to such broker may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the Sub-adviser
determines in good faith that such commission is reasonable in terms either of
that particular transaction or the overall responsibility of the Sub-adviser to
the Portfolios and its other clients and that the total commissions paid by each
Fund will be reasonable in relation to the benefits received by the Portfolios
over the long term. Research services may also be received from dealers who
execute Portfolio transactions in OTC markets.
The Sub-adviser may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Portfolio toward payment of its expenses, such as
custodian fees.
Investment decisions for each Portfolio and for other investment accounts
managed by the Sub-adviser are made independently of each other in light of
differing conditions. However, the same investment decision occasionally may be
made for two or more of such accounts, including one or more Portfolios. In such
cases, simultaneous transactions may occur. Purchases or sales are then
allocated as to price or amount in a manner deemed fair and equitable to all
accounts involved. While in some cases this practice could have a detrimental
effect upon the price or value of the security as far as a Portfolio is
concerned, in other cases the Sub-adviser believes that coordination and the
ability to participate in volume transactions will be beneficial to the
Portfolios.
Under a policy adopted by Growth Portfolio's Board of Trustees, and subject to
the policy of obtaining the best net results, the Sub-adviser may consider a
broker/dealer's sale of the shares of the Funds and the other funds for which
AIM or the
Statement of Additional Information Page 16
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
Sub-adviser serves as investment manager and/or administrator in selecting
broker/dealers for the execution of portfolio transactions. This policy does not
imply a commitment to execute portfolio transactions through all broker/dealers
that sell shares of the Funds and such other funds.
Each Portfolio contemplates that, consistent with the policy of obtaining the
best net results, brokerage transactions may be conducted through certain
companies that are affiliated with AIM or the Sub-adviser. Growth Portfolio's
Board of Trustees has adopted procedures in conformity with Rule 17e-1 under the
1940 Act to ensure that all brokerage commissions paid to such affiliates are
reasonable and fair in the context of the market in which they are operating.
Any such transactions will be effected and related compensation paid only in
accordance with applicable SEC regulations.
For the fiscal years ended December 31, 1997 and December 31, 1996, and for the
fiscal period October 18, 1995 (commencement of operations) to December 31,
1995, the Small Cap Portfolio paid aggregate brokerage commissions of $91,971,
$54,241 and $3,317, respectively. For the fiscal years ended December 31, 1997
and December 31, 1996, and for the fiscal period October 18, 1995 (commencement
of operations) to December 31, 1995, the Value Portfolio paid aggregate
brokerage commissions of $22,202, $37,380 and $1,032, respectively.
PORTFOLIO TRADING AND TURNOVER
Although the Portfolios generally do not intend to trade for short-term profits,
the securities held by a Portfolio will be sold whenever the Sub-adviser
believes it is appropriate to do so, without regard to the length of time a
particular security may have been held. Portfolio turnover rate is calculated by
dividing the lesser of sales or purchases of portfolio securities by each
Portfolio's average month-end portfolio value, excluding short-term investments.
The portfolio turnover rate will not be a limiting factor when the Sub-adviser
deems portfolio changes appropriate. Higher portfolio turnover involves
correspondingly greater brokerage commissions and other transaction costs that a
Portfolio will bear directly and may result in the realization of net capital
gains that are taxable when distributed to each corresponding Fund's
shareholders. For the fiscal years ended December 31, 1997 and December 31,
1996, the Small Cap Portfolio's and Value Portfolio's portfolio turnover rates
were 233% and 150%, and 93% and 256%, respectively.
Statement of Additional Information Page 17
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The Trust's Trustees and Executive Officers are listed below. Unless otherwise
indicated, the address of each Executive Officer is 11 Greenway Plaza, Suite
100, Houston, Texas 77046.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
TRUST AND ADDRESS EXPERIENCE FOR THE PAST 5 YEARS
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
William J. Guilfoyle*, 40 President, GT Global, Inc. ("GT Global") since 1995; Director, GT Global since 1991;
Trustee, Chairman of the Board and Senior Vice President and Director of Sales and Marketing, GT Global from May 1992 to
President April 1995; Vice President and Director of Marketing, GT Global from 1987 to 1992;
50 California Street Director, Liechtenstein Global Trust AG (holding company of the various international LGT
San Francisco, CA 94111 companies) Advisory Board from January 1996 to May 1998; Director, G.T. Global Insurance
Agency ("G.T. Insurance") since 1996; President and Chief Executive Officer, G.T.
Insurance since 1995; Senior Vice President and Director, Sales and Marketing, G.T.
Insurance from April 1995 to November 1995; Senior Vice President, Retail Marketing, G.T.
Insurance from 1992 to 1993; and Trustee, each of the other investment companies
registered under the 1940 Act that is sub-advised or sub-administered by the Sub-adviser.
C. Derek Anderson, 57 President, Plantagenet Capital Management, LLC (an investment partnership); Chief
Trustee Executive Officer, Plantagenet Holdings, Ltd. (an investment banking firm); Director,
220 Sansome Street Anderson Capital Management, Inc. since 1988; Director, PremiumWear, Inc. (formerly
Suite 400 Munsingwear, Inc.)(a casual apparel company); Director, "R" Homes, Inc. and various other
San Francisco, CA 94104 companies; and Trustee, each of the other investment companies registered under the 1940
Act that is sub-advised or sub-administered by the Sub-adviser.
Frank S. Bayley, 58 Partner, law firm of Baker & McKenzie; Director and Chairman, C.D. Stimson Company (a
Trustee private investment company); and Trustee, each of the other investment companies
Two Embarcadero Center registered under the 1940 Act that is sub-advised or sub- administered by the Sub-adviser.
Suite 2400
San Francisco, CA 94111
Arthur C. Patterson, 54 Managing Partner, Accel Partners (a venture capital firm); Director, Viasoft and PageMart,
Trustee Inc. (both public software companies) and several other privately held software and
428 University Avenue communications companies; and Trustee, each of the other investment companies registered
Palo Alto, CA 94301 under the 1940 Act that is sub-advised or sub-administered by the Sub-adviser.
Ruth H. Quigley, 63 Private investor; President, Quigley Friedlander & Co., Inc. (a financial advisory
Trustee services firm) from 1984 to 1986; and Director, each of the other investment companies
1055 California Street registered under the 1940 Act that is sub-advised or sub- administered by the Sub-adviser.
San Francisco, CA 94108
</TABLE>
<TABLE>
<S> <C>
John J. Arthur+, 53 Director, Senior Vice President and Treasurer, A I M Advisors, Inc.;
Vice President Vice President and Treasurer, A I M Management Group Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc.,
and Fund Management Company.
Kenneth W. Chancey, 53 Senior Vice President -- Mutual Fund Accounting, the Sub-adviser since
Vice President and Principal 1997; Vice President -- Mutual Fund Accounting, the Sub-adviser from
Accounting Officer 1992 to 1997.
50 California Street
San Francisco, CA 94111
Melville B. Cox, 54 Vice President and Chief Compliance Officer, A I M Advisors, Inc., A I M
Vice President Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services,
Inc. and Fund Management Company.
</TABLE>
- --------------
* Mr. Guilfolye is an "interested person" of the Trust as defined by the 1940
Act due to his affiliation with the Sub-adviser.
+ Mr. Arthur and Ms. Relihan are married to each other.
Statement of Additional Information Page 18
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
TRUST AND ADDRESS EXPERIENCE FOR THE PAST 5 YEARS
- -------------------------------- ------------------------------------------------------------------------
<S> <C> <C>
Gary T. Crum, 50 Director and President, A I M Capital Management, Inc.; Director and Senior Vice
Vice President President, A I M Management Group Inc. and A I M Advisors, Inc.; and Director, A I M
Distributors, Inc. and AMVESCAP PLC.
Robert H. Graham, 51 Director, President and Chief Executive Officer, A I M Management Group Inc.; Director and
Vice President President, A I M Advisors, Inc.; Director and Senior Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and Fund Management
Company; Director, AMVESCAP PLC.
Helge K. Lee, 52 Chief Legal and Compliance Officer -- North America, the Sub-adviser since October 1997;
Vice President and Secretary Secretary and Chief Legal and Compliance Officer, INVESCO (NY) Asset Management, Inc.,
50 California Street INVESCO (NY), Inc., GT Global Investor Services, Inc. and G.T. Insurance since August
San Francisco, CA 94111 1997; Secretary and Chief Legal and Compliance Officer, GT Global from August 1997 to
April 1998; Executive Vice President of the Asset Management Division of Liechtenstein
Global Trust AG, from October 1996 to May 1998; Senior Vice President, General Counsel and
Secretary of INVESCO (NY) Asset Management, Inc., INVESCO (NY), Inc., GT Global, GT Global
Investor Services, Inc. and G.T. Insurance from May 1994 to October 1996; and Senior Vice
President, General Counsel and Secretary of Strong/Corneliuson Management, Inc. and
Secretary of each of the Strong Funds from October 1991 to May 1994.
Carol F. Relihan+, 43 Director, Senior Vice President, General Counsel and Secretary, A I M Advisors, Inc.; Vice
Vice President President, General Counsel and Secretary, A I M Management Group, Inc.; Director, Vice
President and General Counsel, Fund Management Company; Vice President and General
Counsel, A I M Fund Services, Inc.; and Vice President, A I M Capital Management, Inc. and
A I M Distributors, Inc.
</TABLE>
<TABLE>
<S> <C>
Dana R. Sutton, 39 Vice President and Fund Controller, A I M Advisors, Inc.; and Assistant
Vice President and Assistant Vice President and Assistant Treasurer, Fund Management Company.
Treasurer
</TABLE>
------------------------
The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and the
Funds and recommending firms to serve as independent auditors of the Trust. Each
of the Trustees and Officers of the Trust is also a Trustee and Officer of AIM
Investment Portfolios, AIM Investment Funds, AIM Series Trust, AIM Floating Rate
Fund, AIM Eastern Europe Fund, GT Global Variable Investment Trust, GT Global
Variable Investment Series, Growth Portfolio (of which the Portfolios are
subtrusts), Global High Income Portfolio, Global Investment Portfolio and
Floating Rate Portfolio, which also are registered investment companies advised
by AIM and sub-advised by the Sub-adviser or an affiliate thereof. All of the
Trust's Trustees also serve as directors or trustees of some or all of the other
investment companies managed, administered or advised by AIM. All of the Trust's
executive officers hold similar offices with some or all of the other investment
companies managed, administered or advised by AIM. Each Trustee who is not a
director, officer or employee of the Sub-adviser or any affiliated company is
paid aggregate fees of $5,000 a year, plus $300 per Fund for each meeting of the
Board attended, and reimbursed travel and other expenses incurred in connection
with attendance at such meetings. Other Trustees and Officers receive no
compensation or expense reimbursements from the Trust. For the fiscal year ended
December 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who
are not directors, officers or employees of the Sub-adviser or any affiliated
company, received total compensation of $6,425, $6,681, $5,450 and $6,068,
respectively, from the Trust for their services as Trustees. For the year ended
December 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who
are not directors, officers or employees of the Sub-adviser or any other
affiliated company, received total compensation of $103,654, $106,556, $89,700
and $98,038, respectively, from the investment companies managed or administered
by AIM and sub-advised or sub-administered by the Sub-adviser for which he or
she served as a Trustee. Fees and expenses disbursed to the Trustees contained
no accrued or payable pension or retirement benefits. As of June 26, 1998, the
Officers and Trustees and their families as a group owned in the aggregate
beneficially or of record less than 1% of the shares of the America Value Fund
and less than 1% of the shares of the Small Cap Fund.
- --------------
+ Mr. Arthur and Ms. Relihan are married to each other.
Statement of Additional Information Page 19
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
- --------------------------------------------------------------------------------
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------
To the best knowledge of the Trust, the names and addresses of the holders of 5%
or more of the outstanding shares of any class of each Fund's equity securities
as of June 26, 1998, and the percentage of the outstanding shares held by such
holders are set forth below.
<TABLE>
<CAPTION>
PERCENT
OWNED OF
FUND NAME AND ADDRESS OF OWNER RECORD*
- ------------------------------------ ---------------------------------------------------------------- ------------
<S> <C> <C>
Small Cap Fund Donaldson Lufkin Jenrette Securities Corp. Inc. 6.83%
-- Advisor Class P.O. Box 2052
Jersey City, New Jersey 07303-2052
America Value Fund G.T. Capital Holdings, Inc. 9.78%
-- Advisor Class SERP Deferred Compensation
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Ellen Hoke
INVESCO (NY) Asset Management Inc. 7.84%
1166 Avenue of the Americas
New York, New York 10036-2708
Attn: Julio Garcia
<CAPTION>
PERCENT
OWNED OF
RECORD AND
FUND BENEFICIALLY
- ------------------------------------ ---------------
<S> <C>
Small Cap Fund -0-
-- Advisor Class
America Value Fund -0-
-- Advisor Class
-0-
</TABLE>
- --------------
*The Trust has no knowledge as to whether all or any portion of the shares owned
of record are also owned beneficially.
Statement of Additional Information Page 20
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES RELATING TO THE FUNDS AND THE
PORTFOLIOS
AIM serves as each Portfolio's investment manager and administrator under an
investment management and administration contract between Growth Portfolio and
AIM ("Portfolio Management Contract"). The Sub-adviser serves as each
Portfolio's sub-adviser and sub-administrator under a sub-advisory and
sub-administration agreement between AIM and the Sub-adviser ("Portfolio
Management Sub-Contract," and together with the Portfolio Management Contract,
the "Portfolio Management Contracts"). AIM serves as administrator to each Fund
under an administration contract between the Trust and AIM ("Administration
Contract"). The Sub-adviser serves as sub-administrator to each Fund under a
sub-administration contract between AIM and the Sub-adviser ("Administration
Sub-Contract," and together with the Administration Contract, the
"Administration Contracts").
The Administration Contracts will not be deemed advisory contracts, as defined
under the 1940 Act. As investment managers and administrators, AIM and the
Sub-adviser make all investment decisions for each Portfolio and, as
administrator, administer each Portfolio's and Fund's affairs. Among other
things, AIM and the Sub-adviser furnish the services and pay the compensation
and travel expenses of persons who perform the executive, administrative,
clerical and bookkeeping functions of the Portfolios and the Funds and provide
suitable office space and necessary small office equipment and utilities.
The Portfolio Management Contracts may be renewed with respect to a Portfolio
for one-year terms, provided that any such renewal has been specifically
approved at least annually by: (i) Growth Portfolio's Board of Trustees or the
vote of a majority of the Portfolio's outstanding voting securities (as defined
in the 1940 Act), and (ii) a majority of Growth Portfolio's Trustees who are not
parties to the Portfolio Management Contracts or "interested persons" of any
such party (as defined in the 1940 Act), cast in person at a meeting called for
the specific purpose of voting on such approval. The Portfolio Management
Contracts provide that with respect to each Portfolio, and the Administration
Contracts provide that with respect to each Fund, either the Trust, Growth
Portfolio or each of AIM or the Sub-adviser may terminate the contract without
penalty upon sixty days' written notice to the other party. The Portfolio
Management Contracts terminate automatically in the event of their assignment
(as defined in the 1940 Act).
For the fiscal period October 18, 1995 (commencement of operations) to December
31, 1995, the Small Cap Portfolio and the Value Portfolio paid fees of $1,293
and $622, respectively, to the Sub-adviser. For the same period, the Small Cap
Fund and America Value Fund paid administration fees of $755 and $349,
respectively, to the Sub-adviser. For the fiscal period October 18, 1995
(commencement of operations) to December 31, 1995, the Sub-adviser reimbursed
the Small Cap Portfolio and Value Portfolio for their respective investment
management and administration fees in the amounts of $1,293 and $622,
respectively; for the same period, the Small Cap Fund and America Value Fund
reimbursed administration fees in the amounts of $755 and $349, respectively.
Accordingly, the Sub-adviser reimbursed each Fund and its respective Portfolio
investment management and administration fees in the aggregate amounts of $2,048
and $971, respectively.
For the fiscal years ended December 31, 1997 and December 31, 1996, the Small
Cap Portfolio and the Value Portfolio paid fees of $120,544 and $73,312; and
$74,372 and $27,487, respectively, to the Sub-adviser. For the same periods, the
Small Cap Fund and America Value Fund paid administration fees of $63,460 and
$39,004; and $39,171 and $14,722, respectively, to the Sub-adviser. For the
fiscal years ended December 31, 1997 and December 31, 1996, the Sub-adviser
reimbursed the Small Cap Portfolio and Value Portfolio for their respective
investment management and administration fees in the amounts of $67,837 and
$73,312; and $74,372 and $27,487, respectively; for the same periods, the
Sub-adviser reimbursed the Small Cap Fund and America Value Fund for their
respective administration fees in the amounts of $63,460 and $39,004; and
$39,171 and $14,722, respectively. Accordingly, the Sub-adviser reimbursed each
Fund and its corresponding Portfolio investment management and administration
fees in the aggregate amounts of $131,297 and $112,316; and $113,543 and
$42,209, respectively.
For the fiscal period October 18, 1995 (commencement of operations) to December
31, 1995, the Sub-adviser, pursuant to a voluntary expense undertaking to limit
expenses to the maximum annual level of 2.00% and 2.65%, respectively, of
average daily net assets of the Class A shares and Class B shares of the Funds,
reimbursed the Small Cap Fund and America Value Fund for expenses in the
additional amounts of $65,079 and $66,907, respectively.
For the fiscal years ended December 31, 1997 and December 31, 1996, the
Sub-adviser, pursuant to its voluntary expense undertaking, reimbursed the Small
Cap Fund and America Value Fund for expenses in the additional amounts of $0 and
$58,269; and $38,419 and $164,683, respectively.
Statement of Additional Information Page 21
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
THE DISTRIBUTION PLANS
THE CLASS A PLAN. The Trust has adopted a Master Distribution Plan pursuant to
Rule 12b-1 under the 1940 Act relating to the Class A shares of the Funds (the
"Class A Plan"). The Class A Plan provides that the Class A shares pay 0.35% per
annum of their average daily net assets as compensation to AIM Distributors for
the purpose of financing any activity which is primarily intended to result in
the sale of Class A shares. Of such amounts, each Fund pays a service fee of
0.25% of the average daily net assets attributable to Class A shares to selected
dealers and other institutions which furnish continuing personal shareholder
services to their customer who purchase and own Class A shares. Activities
appropriate for financing under the Class A Plan include, but are not limited
to, the following: printing of prospectuses and statements of additional
information and reports for other than existing shareholders; overhead;
preparation and distribution of advertising material and sales literature;
expenses of organizing and conducting sales seminars; supplemental payments to
dealers and other institutions such as asset-based sales charges or as payments
of service fees under shareholder service arrangements; and costs of
administering the Class A Plan.
THE CLASS B PLAN. The Trust has also adopted a Master Distribution Plan pursuant
to Rule 12b-1 under the 1940 Act relating to Class B shares of the Funds (the
"Class B Plan", and collectively with the Class A Plan, the "Plans"). Under the
Class B Plan, each Fund pays compensation to AIM Distributors at an annual rate
of 1.00% of the average daily net assets attributable to Class B shares. Of such
amount, each Fund pays a service fee of 0.25% of the average daily net assets
attributable to Class B shares to selected dealers and other institutions which
furnish continuing personal shareholder services to their customers who purchase
and own Class B shares. Amounts paid in accordance with the Class B Plan may be
used to finance any activity primarily intended to result in the sale of Class B
shares, including but not limited to printing of prospectuses and statements of
additional information and reports for other than existing shareholders;
overhead; preparation and distribution of advertising material and sales
literature; expenses of organizing and conducting sales seminars; supplemental
payments to dealers and other institutions such as asset-based sales charges or
as payments of service fees under shareholder service arrangements; and costs of
administering the Class B Plan. AIM Distributors may transfer and sell its
rights to payments under the Class B Plan in order to finance distribution
expenditures in respect of Class B shares.
BOTH PLANS. Pursuant to an incentive program, AIM Distributors may enter into
agreements ("Shareholder Service Agreements") with investment dealers selected
from time to time by AIM Distributors for the provision of distribution
assistance in connection with the sale of the Funds' shares to such dealers'
customers, and for the provision of continuing personal shareholder services to
customers who may from time to time directly or beneficially own shares of the
Funds. The distribution assistance and continuing personal shareholder services
to be rendered by dealers under the Shareholder Service Agreements may include,
but shall not be limited to, the following: distributing sales literature;
answering routine customer inquiries concerning the Funds; assisting customers
in changing dividend options, account designations and addresses, and in
enrolling in any of the several special investment plans offered in connection
with the purchase of the Funds' shares; assisting in the establishment and
maintenance of customer accounts and records and in the processing of purchase
and redemption transactions; investing dividends and any capital gains
distributions automatically in the Funds' shares; and providing such other
information and services as the Funds or the customer may reasonably request.
Under the Plans, in addition to the Shareholder Service Agreements authorizing
payments to selected dealers, banks may enter into Shareholder Service
Agreements authorizing payments under the Plans to be made to banks which
provide services to their customers who have purchased shares. Services provided
pursuant to Shareholder Service Agreements with banks may include some or all of
the following: answering shareholder inquiries regarding the Funds; performing
sub-accounting; establishing and maintaining shareholder accounts and records;
processing customer purchase and redemption transactions; providing periodic
statements showing a shareholder's account balance and the integration of such
statements with those of other transactions and balances in the shareholder's
other accounts serviced by the bank; forwarding applicable prospectuses, proxy
statements, reports and notices to bank clients who hold Fund shares; and such
other administrative services as the Funds reasonably may request, to the extent
permitted by applicable statute, rule or regulation. Similar agreements may be
permitted under the Plans for institutions which provide recordkeeping for and
administrative services to 401(k) plans.
Financial intermediaries and any other person entitled to receive compensation
for selling Fund shares may receive different compensation for selling shares of
one particular class over another.
Under a Shareholder Service Agreement, each Fund agrees to pay periodically fees
to selected dealers and other institutions who render the foregoing services to
their customers. The fees payable under a Shareholder Service Agreement
generally will be calculated at the end of each payment period for each business
day of the Funds during such period at the annual rate of 0.25% of the average
daily net asset value of the Funds' shares purchased or acquired through
exchange. Fees calculated in this manner shall be paid only to those selected
dealers or other institutions who are dealers or institutions of record at the
close of business on the last business day of the applicable payment period for
the account in which each Fund's shares are held.
Payments pursuant to the Plans are subject to any applicable limitations imposed
by rules of the National Association of Securities Dealers, Inc. ("NASD"). The
Plans conform to rules of the NASD by limiting payments made to dealers and
Statement of Additional Information Page 22
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
other financial institutions who provide continuing personal shareholder
services to their customers who purchase and own shares of the Funds to no more
than 0.25% per annum of the average daily net assets of the funds attributable
to the customers of such dealers or financial institutions, and by imposing a
cap on the total sales charges, including asset based sales charges, that may be
paid by the Funds and their respective classes.
AIM Distributors does not act as principal, but rather as agent for the Funds,
in making dealer incentive and shareholder servicing payments under the Plans.
These payments are an obligation of the Funds and not of AIM Distributors.
Prior to June 1, 1998, the Trust had adopted a different Rule 12b-1, that
operated as a "reimbursement-type" plan (the "Prior Plan"). The information
provided below relates to payments made under the Prior Plan, which provided for
payments to GT Global Inc., the distributor of the Funds at the time the Prior
Plan was in effect.
For the fiscal year ended December 31, 1997, each Fund paid the following
amounts under the Prior Plan:
<TABLE>
<CAPTION>
% OF CLASS
AVERAGE DAILY
NET ASSETS
--------------------
CLASS A CLASS B CLASS A CLASS B
-------------- -------------- --------- ---------
<S> <C> <C> <C> <C>
Small Cap Fund................................................. $ -- $ -- --% --%
America Value Fund.............................................
</TABLE>
Actual fees by category paid by the Fund with regard to the Class A shares
during the year ended December 31, 1997 follows:
<TABLE>
<CAPTION>
SMALL CAP AMERICA VALUE
FUND FUND
----------- --------------
<S> <C> <C>
CLASS A
Advertising............................................................................... $ -- $ --
Printing and mailing prospectuses, semi-annual reports and annual reports (other than to
current shareholders).................................................................... $ -- $ --
Seminars.................................................................................. $ -- $ --
Compensation to Underwriters to partially offset other marketing expenses................. $ -- $ --
Compensation to Dealers including finder's fees........................................... $ -- $ --
Compensation to Sales Personnel........................................................... $ -- $ --
Annual Report Total....................................................................... $ -- $ --
</TABLE>
Actual fees by category paid by the Fund with regard to the Class B Shares
during the year ended December 31, 1997 as follows:
<TABLE>
<CAPTION>
SMALL CAP AMERICA VALUE
FUND FUND
----------- --------------
<S> <C> <C>
CLASS B
Advertising............................................................................... $ -- $ --
Printing and mailing prospectuses, semi-annual reports and annual reports (other than to
current shareholders).................................................................... $ -- $ --
Seminars.................................................................................. $ -- $ --
Compensation to Underwriters to partially offset upfront dealer commissions and other
marketing costs.......................................................................... $ -- $ --
Compensation to Dealers................................................................... $ -- $ --
Compensation to Sales Personnel........................................................... $ -- $ --
Annual Report Total....................................................................... $ -- $ --
</TABLE>
The Plans require AIM Distributors to provide the Board of Trustees at least
quarterly with a written report of the amounts expended pursuant to the Plans
and the purposes for which such expenditures were made. The Board of Directors
reviews these reports in connection with their decisions with respect to the
Plans.
As required by Rule 12b-1, the Plans and related forms of Shareholder Service
Agreements were approved by the Board of Trustees, including a majority of the
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Trust and who have no direct or indirect financial interest in the operation of
the Plans or in any agreements related to the Plans ("Qualified Trustees"). In
approving the Plans in accordance with the requirements of Rule 12b-1, the
Trustees considered various factors and determined that there is a reasonable
likelihood that the Plans would benefit each class of each Fund and their
respective shareholders.
The Plans do not obligate the Funds to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Plans. Thus, even if AIM Distributors' actual expenses exceed the fee payable to
AIM
Statement of Additional Information Page 23
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
Distributors thereunder at any given time, the Funds will not be obligated to
pay more than that fee. If AIM Distributors' expenses are less than the fee it
receives, AIM Distributors will retain the full amount of the fee.
Unless terminated earlier in accordance with their terms, the Plans continue in
effect until [June 30, 1999] and each year thereafter, as long as such
continuance is specifically approved at least annually by the Board of Trustees,
including a majority of the Qualified Trustees.
The Plans may be terminated by the vote of a majority of the Independent
Trustees, or, with respect to a particular class, by the vote of a majority of
the outstanding voting securities of that class.
Any change in the Plans that would increase materially the distribution expenses
paid by the applicable class requires shareholder approval; otherwise, it may be
amended by the Trustees, including a majority of the Qualified Trustees, by
votes cast in person at a meeting called for the purpose of voting upon such
amendment. As long as the Plans are in effect, the selection or nomination of
the Qualified Trustees is committed to the discretion of the Qualified Trustees.
In the event the Class A Plan is amended in a manner which the Board of Trustees
determines would materially increase the charges paid under the Class A Plan,
the Class B shares of the Funds will no longer convert into Class A shares of
the same Funds unless the Class B shares, voting separately, approve such
amendment. If the Class B shareholders do not approve such amendment, the Board
of Trustees will (i) create a new class of shares of the Funds which is
identical in all material respects to the Class A shares as they existed prior
to the implementation of the amendment and (ii) ensure that the existing Class B
shares of the Funds will be exchanged or converted into such new class of shares
no later than the date the Class B shares were scheduled to convert into Class A
shares.
The principal differences between the Class A Plan, on the one hand, and the
Class B Plan, on the other hand, are: (i) the Class A Plan allows payment to AIM
Distributors or to dealers or financial institutions of up to 0.35% of average
daily net assets of the Class A shares of each Fund, as compared to 1.00% of
such assets of each Fund's Class B shares; (ii) the Class B Plan obligates the
Class B shares to continue to make payments to AIM Distributors following
termination of the Class B shares Distribution Agreement with respect to Class B
shares sold by or attributable to the distribution efforts of AIM Distributors
unless there has been a complete termination of the Class B Plan (as defined in
such Plan) and (iii) the Class B Plan expressly authorizes AIM Distributors to
assign, transfer or pledge its rights to payments pursuant to the Class B Plan.
THE DISTRIBUTOR
Information concerning AIM Distributors and the continuous offering of the
Funds' shares is set forth in the Prospectus under the headings "How to Purchase
Shares" and "Terms and Conditions of Purchase of the AIM Funds." A Master
Distribution Agreement with AIM Distributors relating to the Class A and Class B
shares of the Funds was approved by the Board of Trustees on , 1998.
Both such Master Distribution Agreements are hereinafter collectively referred
to as the "Distribution Agreements."
The Distribution Agreements provide that AIM Distributors will bear the expenses
of printing from the final proof and distributing the Funds' prospectuses and
statements of additional information relating to public offerings made by AIM
Distributors pursuant to the Distribution Agreements (other than those
prospectuses and statements of additional information distributed to existing
shareholders of the Fund), and any promotional or sales literature used by AIM
Distributors or furnished by AIM Distributors to dealers in connection with the
public offering of the Fund's shares, including expenses of advertising in
connection with such public offerings. AIM Distributors has not undertaken to
sell any specified number of shares of any classes of the Funds.
AIM Distributors expects to pay sales commissions from its own resources to
dealers and institutions who sell Class B shares of the Funds at the time of
such sales. Payments with respect to Class B shares will equal 4.0% of the
purchase price of the Class B shares sold by the dealer or institution, and will
consist of a sales commission equal to 3.75% of the purchase price of the Class
B shares sold plus an advance of the first year service fee of 0.25% with
respect to such shares. The portion of the payments to AIM Distributors under
the Class B Plan which constitutes an asset-based sales charge (0.75%) is
intended in part to permit AIM Distributors to recoup a portion of such sales
commissions plus financing costs. AIM Distributors anticipates that it will
require a number of years to recoup from Class B Plan payments the sales
commissions paid to dealers and institutions in connection with sales of Class B
shares. In the future, if multiple distributors serve a Fund, each such
distributor (or its assignee or transferee) would receive a share of the
payments under the Class B Plan based on the portion of the Fund's Class B
shares sold by or attributable to the distribution efforts of that distributor.
The Trust (on behalf of any class of any Fund) or AIM Distributors may terminate
the Distribution Agreements on sixty (60) days' written notice without penalty.
The Distribution Agreements will terminate automatically in the event of their
assignment. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset based
distribution fees in respect of the outstanding Class B shares attributable to
the distribution efforts of AIM Distributors; provided, however, that a complete
termination of the Class B Plan (as defined in such Plan) would terminate all
payments to AIM Distributors. Termination of the Class B Plan or Distribution
Agreement does not affect the obligation of the Funds and their Class B
shareholders to pay contingent deferred sales charges.
Statement of Additional Information Page 24
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
The following chart reflects the total sales charges paid in connection with the
sale of Class A shares of each Fund and the amount retained by GT Global, Inc.,
the Trust's distributor prior to June 1, 1998, for the fiscal year ended
December 31, 1997.
<TABLE>
<CAPTION>
1997
--------------------------------
SALES AMOUNT
CHARGES RETAINED
---------------- --------------
<S> <C> <C>
Small Cap Fund........................................................................ $ -- $ --
America Value Fund.................................................................... $ -- $ --
</TABLE>
The following chart reflects the contingent deferred sales charges paid by Class
A and Class B shareholders for the fiscal year ended December 31, 1997, for
Class A and Class B shares:
<TABLE>
<CAPTION>
1997
------------
<S> <C>
Class A $ --
Class B $ --
</TABLE>
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
The Transfer Agency and Service Agreement between the Trust and A I M Fund
Services, Inc. ("AFS"), a registered transfer agent and wholly-owned subsidiary
of AIM, provides that AFS will perform certain shareholder services for the
Funds for a fee per account serviced. The Transfer Agency and Service Agreement
provides that AFS will receive a per account fee plus out-of-pocket expenses to
process orders for purchases, redemptions and exchanges of shares; prepare and
transmit payments for dividends and distributions declared by the Funds;
maintain shareholder accounts and provide shareholders with information
regarding the Funds and their accounts. The Transfer Agency and Service
Agreement became effective on September 8, 1998. The Sub-adviser also serves as
each Fund's pricing and accounting agent. For the fiscal years ended December
31, 1997 and December 31, 1996, and the period October 18, 1995 (commencement of
operations) to December 31, 1995, the Small Cap Fund and America Value Fund paid
accounting services fees of $6,379, $3,900 and $76; and $3,938, $1,472 and $36,
respectively.
EXPENSES OF THE FUNDS AND THE PORTFOLIOS
Each Fund and each Portfolio pays all expenses not assumed by AIM, the
Sub-adviser, AIM Distributors and other agents. These expenses include, in
addition to the advisory, distribution, transfer agency, pricing and accounting
agency and brokerage fees discussed above, legal and audit expenses, custodian
fees, trustees' fees, organizational fees, fidelity bond and other insurance
premiums, taxes, extraordinary expenses, and expenses of reports and
prospectuses sent to existing investors. The allocation of general Trust expense
and expenses shared by the Funds with one another, are made on a basis deemed
fair and equitable, which may be based on the relative net assets of the Funds
or the nature of the services performed and relative applicability to each Fund.
Similarly, the allocation of general Growth Portfolio expenses, and expenses
shared by the Portfolios with each other, are made on a basis deemed fair and
equitable and may be based on the relative net assets of the Portfolios or the
nature of the services performed and relative applicability to each Portfolio.
Expenditures, including costs incurred in connection with the purchase or sale
of portfolio securities, that are capitalized in accordance with generally
accepted accounting principles applicable to investment companies, are accounted
for as capital items and not as expenses.
Statement of Additional Information Page 25
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
VALUATION OF FUND SHARES
- --------------------------------------------------------------------------------
The net asset value per share of each Fund and Portfolio is normally determined
daily as of the close of trading of the New York Stock Exchange ("NYSE")
(generally 4:00 p.m. Eastern time) on each business day of the Fund and
Portfolio. In the event the NYSE closes early (i.e., before 4:00 p.m. Eastern
time) on a particular day, the net asset value of a Fund or Portfolio is
determined as of the close of the NYSE on such day. Net asset value per share is
determined by dividing the value of a Portfolio's securities, cash and other
assets (including interest accrued but not collected) attributable to a
particular class, less all its liabilities (including accrued expenses and
dividends payable) attributable to that class, by the total number of shares
outstanding of that class. Determination of a Fund's or a Portfolio's net asset
value per share is made in accordance with generally accepted accounting
principles.
Each equity security 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 mean between the closing bid and asked prices on that
day. Each security traded in the over-the-counter market (but not including
securities reported on the NASDAQ National Market System) is valued at the mean
between the last bid and asked prices based upon quotes furnished by market
makers for such securities. 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 mean between the closing bid and asked prices on that day.
Debt securities 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 institution-size trading in similar groups of securities, developments
related to special securities, yield, quality, coupon rate, maturity, type of
issue, individual trading characteristics and other market data. 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 Portfolio's or the
Fund's Board of Trustees. Short-term obligations having 60 days or less to
maturity are valued on the basis of amortized cost. For purposes of determining
net asset value per share, futures and options contracts generally will be
valued 15 minutes after the close of trading of the NYSE.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 each Fund's or Portfolio's shares are
determined at such times. Foreign currency exchange rates are also generally
determined prior the close of the NYSE. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the times at
which such values are determined and the close of the NYSE which will not be
reflected in the computation of a Fund's or Portfolio'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 Portfolio's or the Fund's Board
of Trustees.
Statement of Additional Information Page 26
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
HOW TO PURCHASE AND
REDEEM SHARES
- --------------------------------------------------------------------------------
A complete description of the manner in which shares of the Funds may be
purchased appears in the Funds' Prospectuses under the headings "How to Purchase
Shares," "Terms and Conditions of Purchases of the AIM Funds" and "Special
Plans."
The sales charge normally deducted on purchases of Class A shares is used to
compensate AIM Distributors and participating dealers for their expenses
incurred in connections with the distribution of the Funds' Class A shares.
Since there is little expenses associated with unsolicited orders placed
directly with AIM Distributors by persons who, because of their relationship
with the Funds or with AIM and its affiliates, are familiar with the Funds, or
whose programs for purchase involve little expense (e.g., because of the size of
the transaction and shareholder records required), AIM Distributors believes
that it is appropriate and in the Funds' best interests that such persons, and
certain other persons whose purchases result in relatively low expenses of
distribution, be permitted to purchase Class A shares of the Funds through AIM
Distributors without payment of a sales charge. The persons who may purchase
Class A shares of the Funds without a sales charge are set forth in the Funds'
Prospectuses. In addition, the Funds offer programs such as Right of
Accumulation and Letter of Intent, which are described in the Prospectuses, that
are designed to permit investors to aggregate purchases of different funds, or
separate purchases over time, in order to qualify for a lower sales charge rate.
See "Terms and Conditions of Purchase of the AIM Funds -- Reductions in Initial
Sales Charges" in the Prospectuses.
Class B shares will automatically convert into Class A shares of the same Fund
eight years following the end of the calendar month in which a purchase was
made. For the purpose of calculating the holding period required for conversion
of Class B shares, the initial issuance of Class B shares shall mean (i) the
date on which such Class B shares were issued, or (ii) for Class B shares
obtained through an exchange, or a series of exchanges, the date on which the
original Class B shares were issued. For purposes of conversion to Class A,
Class B shares purchased through the reinvestment of dividends and other
distributions paid in respect of Class B shares will be held in a separate
sub-account. Each time any Class B shares in the shareholder's regular account
(other than those in the sub-account) convert to Class A, a pro rata portion of
the Class B shares in the sub-account will also convert to Class A. The portion
will be determined by the ratio that the shareholder's Class B shares converting
to Class A bears to the shareholder's total Class B shares not acquired through
dividends and other distributions.
The availability of the conversion feature is subject to the continuing
availability of an opinion of counsel to the effect that the dividends and other
distributions paid on Class A and Class B shares will not result in
"preferential dividends" under the Internal Revenue Code and the conversion of
shares does not constitute a taxable event. If the conversion feature ceased to
be available, the Class B shares beyond the eighth year. AIM and the Sub-adviser
has no reason to believe that this condition for the availability of the
conversion feature will not be met.
Class A shares that are subject to a contingent deferred sales charge and that
were purchased before June 1, 1998 are entitled to the following waivers from
the contingent deferred sales charge otherwise due upon redemption: (1) minimum
required distributions made in connection with an IRA, Keogh Plan or custodial
account under Section 403(b) of the Code or other retirement plan following
attainment of age 70 1/2; (2) total or partial redemptions resulting from a
distribution following retirement in the case of a tax-qualified
employer-sponsored retirement plan; (3) when a redemption results from a
tax-free return of an excess contribution pursuant to Section 408(d)(4) or (5)
of the Code or from the death or disability of the employee; (4) redemptions
pursuant to a Fund's right to liquidate a shareholder's account involuntarily;
(5) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (6) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (7) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (8) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code, and the regulations
promulgated thereunder; (9) redemptions made in connection with a distribution
from any retirement plan or account that involves the return of an excess
deferral amount pursuant to Section 401(k)(8) or Section 402(g)(2) of the Code;
(10) redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under
Statement of Additional Information Page 27
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
Section 401(k)(2)(B)(IV) of the Code upon hardship of the covered employee
(determined pursuant to Treasury Regulation Section 1.401(k)-1(d)(2)); and (11)
redemptions made by or for the benefit of certain states, counties or cities, or
any instrumentalities, departments or authorities thereof where such entities
are prohibited or limited by applicable law from paying a sales charge or
commission.
Class B shares purchased before June 1, 1998 are subject to the following
waivers from the contingent deferred sales charge otherwise due upon redemption
in addition to the waivers provided for redemptions of currently issued Class B
shares as described in the Prospectus: (1) total or partial redemptions
resulting from a distribution following retirement in the case of a
tax-qualified employer-sponsored retirement; (2) minimum required distributions
made in connection with an IRA, Keogh Plan or custodial account under Section
403(b) of the Code or other retirement plan following attainment of age 70 1/2;
(3) a one-time reinvestment in Class B shares of a Fund within 180 days of a
prior redemption; (4) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM Funds; (5) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (6) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (7) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code, and the regulations
promulgated thereunder; (8) redemptions made in connection with a distribution
from a qualified profit-sharing or stock bonus plan described in Section 401(k)
of the Code to a participant or beneficiary under Section 401(k)(2)(B)(IV) of
the Code upon hardship of the covered employee (determined pursuant to Treasury
Regulation Section 1.401(k)-1(d)(2)); and (9) redemptions made by or for the
benefit of certain states, counties or cities, or any instrumentalities,
departments or authorities thereof where such entities are prohibited or limited
by applicable law from paying a sales charge or commission.
For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment adviser, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
Complete information concerning the method of exchanging shares of the Funds for
shares of the other AIM Funds is set forth in the Prospectuses under the heading
"Exchange Privilege."
Information concerning redemption of the Funds' shares is set forth in the
Prospectuses under the heading "How to Redeem Shares." In addition to the Funds'
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Funds at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the applicable Fund next determined after the repurchase
order is received. Such an arrangement is subject to timely receipt by A I M
Fund Services, Inc., the Funds' transfer agent, of all required documents in
good order. If such documents are not received within a reasonable time after
the order is placed, the order is subject to cancellation. While there is no
charge imposed by a Fund or by AIM Distributors (other than any applicable
contingent deferred sales charge) when shares are redeemed or repurchased,
dealers may charge a fair service fee for handling the transaction.
The right of redemption may be suspended or the date of payment postponed when
(a) trading on the NYSE is restricted, as determined by applicable rules and
regulations of the SEC, (b) the NYSE is closed for other than customary weekend
and holiday closings, (c) the SEC has by order permitted such suspension, or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of a Fund not reasonably
practicable.
PROGRAMS AND SERVICES FOR SHAREHOLDERS
The Funds provide certain services for shareholders and certain investment or
redemption programs. See "Exchange Privilege" and "How to Redeem Shares" in the
Prospectus. All inquiries concerning these programs should be made directly to A
I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, toll free at
(800) 959-4246.
DIVIDEND ORDER
Dividends may be paid to someone other than the registered owner, or sent to an
address other than the address of record. (Please note that signature guarantees
are required to effect this option.) An investor also may direct that his or her
dividends be invested in one of the other AIM Funds and there is no sales charge
for these investments; initial investment minimums apply. See "Dividends,
Distributions and Tax Matters -- Dividends and Distributions" in the Prospectus.
To effect this option, please contact your authorized dealer. For more
information concerning AIM Funds other than the
Statement of Additional Information Page 28
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
Funds, please obtain a current prospectus by contacting your authorized dealer,
by writing to A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas
77210-4739, or by calling toll free (800) 959-4246.
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TAXES
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TAXATION OF THE FUNDS
Each Fund is treated as a separate corporation for federal income tax purposes.
To continue to qualify for treatment as a regulated investment company ("RIC")
under the Code, each Fund must distribute to its shareholders for each taxable
year at least 90% of its investment company taxable income (consisting generally
of net investment income and net short-term capital gain) and must meet several
additional requirements. With respect to each Fund, these requirements include
the following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities loans
and gains from the sale or other disposition of securities, or other income
(including gains from options or Futures) derived with respect to its business
of investing in securities ("Income Requirement"); and (2) the Diversification
Requirements. Each Fund, as an investor in its corresponding Portfolio, is
deemed to own a proportionate share of the Portfolio's assets, and to earn a
proportionate share of the Portfolio's income, for purposes of determining
whether the Fund satisfies all of the requirements described above to qualify as
a RIC.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
See the next section for a discussion of the tax consequences to each Fund of
hedging transactions engaged in by its corresponding Portfolio.
TAXATION OF THE PORTFOLIOS
THE PORTFOLIOS AND THEIR RELATIONSHIP TO THE FUNDS. Each Portfolio is
treated as a separate partnership for federal income tax purposes and is not a
"publicly traded partnership." As a result, each Portfolio is not subject to
federal income tax; instead, each Fund, as an investor in its corresponding
Portfolio, is required to take into account in determining its federal income
tax liability its share of the Portfolio's income, gains, losses, deductions and
credits, without regard to whether it has received any cash distributions from
the Portfolio. Each Portfolio also is not subject to New York income or
franchise tax.
Because, as noted above, each Fund is deemed to own a proportionate share of its
corresponding Portfolio's assets, and to earn a proportionate share of its
corresponding Portfolio's income, for purposes of determining whether the Fund
satisfies the requirements to qualify as a RIC, each Portfolio intends to
conduct its operations so that its corresponding Fund will be able to continue
to satisfy all those requirements.
Distributions to each Fund from its corresponding Portfolio (whether pursuant to
a partial or complete withdrawal or otherwise) will not result in the Fund's
recognition of any gain or loss for federal income tax purposes, except that (1)
gain will be recognized to the extent any cash that is distributed exceeds the
Fund's basis for its interest in the Portfolio before the distribution, (2)
income or gain will be recognized if the distribution is in liquidation of the
Fund's entire interest in the Portfolio and includes a disproportionate share of
any unrealized receivables held by the Portfolio, and (3) loss will be
recognized if a liquidation distribution consists solely of cash and/or
unrealized receivables. Each Fund's basis for its interest in its corresponding
Portfolio generally will equal the amount of cash and the basis of any property
the Fund invests in the Portfolio, increased by the Fund's share of the
Portfolio's net income and gains and decreased by (a) the amount of cash and the
basis of any property the Portfolio distributes to the Fund and (b) the Fund's
share of the Portfolio's losses.
OPTIONS AND FUTURES TRANSACTIONS. The Portfolios' use of hedging
transactions, such as selling (writing) and purchasing options and Futures,
involves complex rules that will determine, for federal income tax purposes, the
amount, character and timing of recognition of the gains and losses a Portfolio
realizes in connection therewith. Gains from options and Futures derived by a
Portfolio with respect to its business of investing in securities will qualify
as permissible income under the Income Requirement for its corresponding Fund.
Statement of Additional Information Page 29
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
Futures that are subject to section 1256 of the Code (other than those that are
part of a "mixed straddle") ("Section 1256 Contracts") and that are held by a
Portfolio at the end of its taxable year generally will be deemed to have been
sold at that time at market value for federal income tax purposes. Sixty percent
of any net gain or loss recognized on these deemed sales, and 60% of any net
realized gain or loss from any actual sales of Section 1256 Contracts, will be
treated as long-term capital gain or loss, and the balance will be treated as
short-term capital gain or loss. That 60% portion will qualify for the reduced
maximum tax rates on noncorporate taxpayers' net capital gain (i.e., the excess
of net long-term capital gain over net short-term capital loss) enacted by the
Taxpayer Relief Act of 1997 -- 20% (10% for taxpayers in the 15% marginal tax
bracket) for gain recognized on capital assets held for more than 18 months --
instead of the 28% rate in effect before that legislation, which now applies to
gain on capital assets held for more than one year but not more than 18 months.
However, technical corrections legislation passed by the House of
Representatives late in 1997 would clarify that the lower rates apply.
If a Portfolio has an "appreciated financial position" -- generally, an interest
(including an interest through an option, Futures Contract or short sale) with
respect to any stock, debt instrument (other than "straight debt") or
partnership interest the fair market value of which exceeds its adjusted basis
- -- and enters into a "constructive sale" of the same or substantially similar
property, the Portfolio will be treated as having made an actual sale thereof,
with the result that gain will be recognized at that time. A constructive sale
generally consists of a short sale, an offsetting notional principal contract or
Futures Contract entered into by a Portfolio or a related person with respect to
the same or substantially similar property. In addition, if the appreciated
financial position is itself a short sale or such a contract, acquisition of the
underlying property or substantially similar property will be deemed a
constructive sale.
TAXATION OF THE FUNDS' SHAREHOLDERS
Dividends and distributions declared by a Fund in, and payable to shareholders
of record as of a date in, October, November or December of any year will be
deemed to have been paid by the Fund and received by the shareholders on
December 31 of that year if the distributions are paid by the Fund during the
following January. Accordingly, those distributions will be taxed to
shareholders for the year in which that December 31 falls.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by a Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by a
Fund to a foreign shareholder generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Funds, their shareholders and the Portfolios.
Investors are urged to consult their own tax advisers for more detailed
information and for information regarding any foreign, state and local taxes
applicable to distributions received from a Fund.
Statement of Additional Information Page 30
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
ADDITIONAL INFORMATION
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AIM was organized in 1976, and along with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. AIM is a direct, wholly owned subsidiary of A I M
Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are an
independent investment management group that has a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston, MA 02110, acts
as custodian of the Portfolios' assets.
INDEPENDENT ACCOUNTANTS
The Trust's, the Funds' and the Portfolios' independent accountants are
. conducts annual audits of the Funds and the
Portfolios, assists in the preparation of the Funds' and the Portfolios' federal
and state income tax returns and consults with the Trust and the Funds and
Growth Portfolio and the Portfolios as to matters of accounting, regulatory
filings and federal and state income taxation.
The audited financial statements of the Trust and Growth Portfolio included in
this Statement of Additional Information have been examined by
as stated in their opinion appearing herein and are
included in reliance upon such opinion given upon the authority of that firm as
experts in accounting and auditing.
SHAREHOLDER LIABILITY
Under Delaware law, the shareholders of the Trust enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances shareholders of
the Trust may be held personally liable for the Trust's obligations. However,
the Trust's Agreement and Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or a trustee. The Trust's Agreement and Declaration of Trust provides
for indemnification from the Trust property for all losses and expenses of any
shareholder held personally liable for the Trust's obligations. Thus, the risk
of a shareholder incurring financial loss on account of such liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations and where the other party was held not to be bound by the
disclaimer.
NAMES
Prior to May 29, 1998, AIM America Value Fund operated under the name of GT
Global America Value Fund, and AIM Small Cap Equity Fund operated under the name
of GT Global America Small Cap Growth Fund.
Statement of Additional Information Page 31
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
INVESTMENT RESULTS
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TOTAL RETURN QUOTATIONS
The standard formula for calculating total return, as described in the
Prospectus, is as follows:
P(1+T)to the power of n=ERV
<TABLE>
<S> <C> <C>
Where P = a hypothetical initial payment of $1,000.
T = average annual total return (assuming the applicable maximum sales load is
deducted at the beginning of the 1, 5, or 10 year periods).
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of the 1, 5,
or 10 year periods (or fractional portion of such period).
</TABLE>
The standardized returns for the Class A and Class B shares of the Small Cap
Fund and America Value Fund, stated as average annualized total returns for the
periods shown, were:
<TABLE>
<CAPTION>
AMERICA
SMALL CAP SMALL CAP VALUE
FUND FUND FUND
PERIOD (CLASS A) (CLASS B) (CLASS A)
- ------------------------------------------------------------------------------------- ------------- ------------- -----------
<S> <C> <C> <C>
Fiscal year ended Dec. 31, 1997...................................................... 9.83% 10.47% 20.24%
Oct. 18, 1995 (commencement of operations) through Dec. 31, 1997..................... 12.27% 13.29% 21.84%
<CAPTION>
AMERICA
VALUE
FUND
PERIOD (CLASS B)
- ------------------------------------------------------------------------------------- -----------
<S> <C>
Fiscal year ended Dec. 31, 1997...................................................... 21.44%
Oct. 18, 1995 (commencement of operations) through Dec. 31, 1997..................... 23.18%
</TABLE>
Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:
P(1+U)to the power of n=ERV
<TABLE>
<S> <C> <C>
Where P = a hypothetical initial payment of $1,000.
U = average annual total return assuming payment of only a stated portion of, or
none of, the applicable maximum sales load at the beginning of the stated
period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of the
stated period.
</TABLE>
The average annual non-standardized returns for the Class A and Class B shares
of the Small Cap Fund and America Value Fund, stated as average annualized total
returns for the periods shown, were:
<TABLE>
<CAPTION>
AMERICA
SMALL CAP SMALL CAP VALUE
FUND FUND FUND
PERIOD (CLASS A) (CLASS B) (CLASS A)
- ------------------------------------------------------------------------------------- ----------- ------------- -----------
<S> <C> <C> <C>
Fiscal year ended Dec. 31, 1997...................................................... [16.23% 15.47% 27.23%
Oct. 18, 1995 (commencement of operations) through Dec. 31, 1997..................... 15.19% 14.46% 25.01%
<CAPTION>
AMERICA
VALUE
FUND
PERIOD (CLASS B)
- ------------------------------------------------------------------------------------- -----------
<S> <C>
Fiscal year ended Dec. 31, 1997...................................................... 26.44%
Oct. 18, 1995 (commencement of operations) through Dec. 31, 1997..................... 24.23%]
</TABLE>
Cumulative total return across a stated period may be calculated as follows:
P(1+V)to the power of n=ERV
<TABLE>
<S> <C> <C>
Where P = a hypothetical initial payment of $1,000.
V = cumulative total return assuming payment of all of, a stated portion of, or none
of, the applicable maximum sales load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of the
stated period.
</TABLE>
Statement of Additional Information Page 32
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Class B shares of the Small Cap Fund and America Value Fund,
stated as aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
AMERICA
SMALL CAP SMALL CAP VALUE
FUND FUND FUND
PERIOD (CLASS A) (CLASS B) (CLASS A)
- ------------------------------------------------------------------------------------- ----------- ------------- -----------
<S> <C> <C> <C>
Oct. 18, 1995 (commencement of operations) through Dec. 31, 1997..................... [36.55% 34.65% 63.52%
<CAPTION>
AMERICA
VALUE
FUND
PERIOD (CLASS B)
- ------------------------------------------------------------------------------------- -----------
<S> <C>
Oct. 18, 1995 (commencement of operations) through Dec. 31, 1997..................... 61.28%]
</TABLE>
The aggregate non-standardized returns (taking sales charges into account) for
the Class A and Class B shares of the Small Cap Fund and America Value Fund,
stated as aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
AMERICA
SMALL CAP SMALL CAP VALUE
FUND FUND FUND
PERIOD (CLASS A) (CLASS B) (CLASS A)
- ------------------------------------------------------------------------------------- ----------- ------------- -----------
<S> <C> <C> <C>
Oct. 18, 1995 (commencement of operations) through Dec. 31, 1997..................... [29.04% 31.65% 54.53%
<CAPTION>
AMERICA
VALUE
FUND
PERIOD (CLASS B)
- ------------------------------------------------------------------------------------- -----------
<S> <C>
Oct. 18, 1995 (commencement of operations) through Dec. 31, 1997..................... 58.28%]
</TABLE>
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of each Fund's portfolio and operating expenses of
each Fund, so that current or past yield or total return should not be
considered representative of what an investment in each Fund may earn in any
future period. These factors and possible differences in the methods used in
calculating investment results should be considered when comparing each Fund's
investment results with those published for other investment companies and other
investment vehicles. Each Fund's results also should be considered relative to
the risks associated with such Fund's investment objective and policies.
PERFORMANCE INFORMATION
Total return and yield figures for the Funds are neither fixed nor guaranteed,
and no Fund's principal is insured. Performance quotations reflect historical
information and should not be considered representative of a Fund's performance
for any period in the future. Performance is a function of a number of factors
which can be expected to fluctuate. The Funds may provide performance
information in reports, sales literature and advertisements. The Funds may also,
from time to time, quote information about the Funds published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about one or more of the Funds. Such
publications or media entities may include the following, among others:
Advertising Age
Barron's
Best's Review
Broker World
Business Week
Changing Times
Christian Science Monitor
Consumer Reports
Economist
EuroMoney
FACS of the Week
Financial Planning
Financial Product News
Financial World
Forbes
Fortune
Global Finance
Hartford Courant Inc.
Institutional Investor
Insurance Forum
Insurance Week
Investor's Daily
Journal of the American
Society of CLU & ChFC
Kiplinger Letter
Money
Mutual Fund Forecaster
Mutual Fund Magazine
Nation's Business
New York Times
Pension World
Pensions & Investments
Personal Investor
Financial Services Week
Philadelphia Inquirer
Smart Money
USA Today
U.S. News & World Report
Wall Street Journal
Washington Post
CNN
CNBC
PBS
Statement of Additional Information Page 33
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
The Funds and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
each Fund with the following, or compare each Fund's performance to performance
data of similar mutual funds as published in the following, among others:
Bank Rate National Monitor Index
Bear Stearns Foreign Bond Index
Bond Buyer Index
CDA/Wiesenberger Investment Company Services
(data and mutual fund rankings and comparisons)
CNBC/Financial News Composite Index
COFI
Consumer Price Index
Datastream
Donoghue's
Dow Jones Industrial Average
EAFE Index
First Boston High Yield Index
Fitch (publications)
Ibbotson Associates International Bond Index
International Bank for Reconstruction and
Development (publications)
International Finance Corporation Emerging
Markets Database
International Financial Statistics
Lehman Bond Indices
Lipper Analytical Data Services, Inc. (data and
mutual fund rankings and comparisons)
Micropal, Inc. (data and mutual fund rankings
and comparisons)
Moody's Investors Service (publications)
Morgan Stanley Capital International All Country
(AC) World Index
Morgan Stanley Capital International World
Indices
Morningstar, Inc. (data and mutual fund rankings
and comparisons)
NASDAQ
Organization for Economic Cooperation and
Development (publications)
Salomon Brothers Global Telecommunications
Index
Salomon Brothers World Government Bond
Index-Non-U.S.
Salomon Brothers World Government Bond
Index
Standard & Poor's (publications)
Standard & Poor's 500 Composite Stock Price
Index
Stangar
Wilshire Associaties
World Bank (publications and reports)
The World Bank Publication of Trends in
Developing Countries
Worldscope
Each Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
10-year Treasuries
30-year Treasuries
30-day Treasury Bills
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Funds or AIM
Distributors. Advertising for the Funds may from time to time include
discussions of general economic conditions and interest rates. Advertising for
the Funds may also include reference to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
From time to time, the Funds' sales literature and/or advertisements may discuss
generic topics pertaining to the mutual fund industry. This includes, but is not
limited to, literature addressing general information about mutual funds,
variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
Although performance data may be useful to prospective investors when comparing
a Fund's performance with other funds and other potential investments, investors
should note that the methods of computing performance of other potential
investments are not necessarily comparable to the methods employed by a Fund.
Statement of Additional Information Page 34
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
DESCRIPTION OF DEBT RATINGS
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DESCRIPTION OF BOND RATINGS
MOODY'S rates the debt securities issued by various entities from "Aaa" to
"C." Investment grade ratings are the first four categories:
Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred
to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk appear somewhat
larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered adequate,
but elements may be present which suggest a susceptibility to impairment
some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly secured).
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Statement of Additional Information Page 35
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
S&P rates the securities debt of various entities in categories ranging from
"AAA" to "D" according to quality. Investment grade ratings are the first four
categories:
AAA -- An obligation rated "AAA" has the highest rating assigned by S&P.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meets its
financial commitment on the obligation is very strong.
A -- An obligation rated "A" is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations
in higher rated categories.
BBB -- An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.
BB, B, CCC, CC, C -- Obligations rated "BB," "B," "CCC," "CC," and "C"
are regarded as having significant speculative characteristics. "BB"
indicates the least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective characteristics,
these may be outweighed by large uncertainties or major exposures to adverse
conditions.
BB -- An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to the obligor's inadequate capacity to meet its financial commitment
on the obligation.
B -- An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB," but the obligor currently has the capacity to meet
its financial commitment on the obligation. Adverse business, financial, or
economic conditions will likely impair the obligor's capacity or willingness
to meet its financial commitment on the obligation.
CCC -- An obligation rated "CCC" is currently vulnerable to nonpayment,
and is dependent upon favorable business, financial, and economic conditions
for the obligor to meet its financial commitment on the obligation. In the
event of adverse business, financial, or economic conditions, the obligor is
not likely to have the capacity to meet its financial commitment on the
obligation.
CC -- An obligation rated "CC" is currently highly vulnerable to
nonpayment.
C -- The "C" rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but payments on
this obligation are being continued.
D -- An obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The "D" rating
also will be used upon the filing of a bankruptcy petition or the taking of
a similar action if payments on an obligation are jeopardized.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
MOODY'S employs the designation "Prime-1" to indicate commercial paper
having a superior ability for repayment of senior short-term debt obligations.
Prime-1 repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings
Statement of Additional Information Page 36
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.
S&P ratings of commercial paper are graded into several categories ranging
from "A-1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. "A-1" -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. "A-2" -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of the Funds as of December 31, 1997 and for
the fiscal year then ended, and the unaudited financial statements as of June
30, 1998 and for the six months then ended, appear on the following pages.
Statement of Additional Information Page 37
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ADVISOR CLASS SHARES OF
AIM WORLDWIDE GROWTH FUND
AIM INTERNATIONAL GROWTH FUND
AIM NEW PACIFIC GROWTH FUND
AIM EUROPE GROWTH FUND
AIM MID CAP GROWTH FUND
AIM JAPAN GROWTH FUND
(SERIES PORTFOLIOS OF AIM GROWTH SERIES)
11 Greenway Plaza
Suite 100
Houston, TX 77046-1173
(713) 626-1919
------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IT SHOULD BE
READ IN CONJUNCTION WITH A PROSPECTUS OF THE ABOVE-NAMED FUNDS, A COPY OF WHICH
MAY BE OBTAINED FREE OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
A I M DISTRIBUTORS, INC.,
P.O. BOX 4739, HOUSTON TX 77210-4739
OR BY CALLING (800) 347-4246.
------------------------
STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998 RELATING TO THE AIM
WORLDWIDE GROWTH FUND PROSPECTUS, THE AIM INTERNATIONAL GROWTH FUND PROSPECTUS,
THE AIM NEW PACIFIC GROWTH FUND PROSPECTUS, THE AIM EUROPE GROWTH FUND
PROSPECTUS, THE AIM MID CAP GROWTH FUND PROSPECTUS AND THE AIM JAPAN GROWTH FUND
PROSPECTUS EACH DATED SEPTEMBER 8, 1998
Statement of Additional Information Page 1
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TABLE OF CONTENTS
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<TABLE>
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Page No.
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<S> <C>
Introduction............................................................................................................. 3
Investment Objectives and Policies....................................................................................... 4
Options, Futures and Currency Strategies................................................................................. 7
Risk Factors............................................................................................................. 15
Investment Limitations................................................................................................... 20
Execution of Portfolio Transactions...................................................................................... 22
Trustees and Executive Officers.......................................................................................... 24
Control Persons and Principal Holders of Securities...................................................................... 27
Management............................................................................................................... 28
Valuation of Fund Shares................................................................................................. 29
How to Purchase and Redeem Shares........................................................................................ 30
Taxes.................................................................................................................... 31
Additional Information................................................................................................... 33
Investment Results....................................................................................................... 34
Description of Debt Ratings.............................................................................................. 38
Financial Statements..................................................................................................... 40
</TABLE>
[LOGO]
Statement of Additional Information Page 2
<PAGE>
AIM EQUITY FUNDS
INTRODUCTION
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This Statement of Additional Information relates to the Advisor Class shares of
AIM Worldwide Growth Fund ("Worldwide Fund"), AIM International Growth Fund
("International Fund"), AIM New Pacific Growth Fund ("Pacific Fund"), AIM Europe
Growth Fund ("Europe Fund"), AIM Mid Cap Growth Fund ("Mid Cap Fund") and AIM
Japan Growth Fund ("Japan Fund") (individually, a "Fund," and collectively, the
"Funds"). Each Fund is a diversified series of AIM Growth Series (the "Trust"),
a registered open-end management investment company.
A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-adviser") serves as the
investment sub-adviser of and sub-administrator for, the Funds.
The Trust is a series mutual fund. The rules and regulations of the United
States Securities and Exchange Commission (the "SEC") require all mutual funds
to furnish prospective investors certain information concerning the activities
of the fund being considered for investment. This information for Worldwide Fund
is included in a Prospectus dated September 8, 1998, for International Fund is
included in a separate Prospectus dated September 8, 1998, for Pacific Fund is
included in a separate Prospectus dated September 8, 1998, for Europe Fund is
included in a separate Prospectus dated September 8, 1998, for Mid Cap Fund is
included in a separate Prospectus dated September 8, 1998, and for Japan Fund is
included in a separate Prospectus dated September 8, 1998. Additional copies of
the Prospectuses and this Statement of Additional Information may be obtained
without charge by writing the principal distributor of the Funds' shares, A I M
Distributors, Inc. ("AIM Distributors"), P.O. Box 4739, Houston, TX 77210-4739
or by calling (800) 347-4246. Investors must receive a Prospectus before they
invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Funds. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus; and, in order to avoid repetition, reference will be
made to sections of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
GENERAL INFORMATION ABOUT THE FUNDS
THE TRUST AND ITS SHARES
The Trust previously operated under the name G.T. Global Growth Series, which
was organized as a Massachusetts business trust on February 19, 1985. The Trust
was reorganized on May 29, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of eight separate portfolios: each of the six Funds,
AIM Small Cap Equity Fund, and AIM America Value Fund. Each of these funds has
three separate classes: Class A, Class B and Advisor Class shares. All
historical financial and other information contained in this Statement of
Additional Information for periods prior to May 29, 1998, is that of the series
G.T. Global Growth Series.
This Statement of Additional Information relates solely to the Advisor Class
shares of the Funds.
The term "majority of the outstanding shares" of the Trust, a particular Fund,
or of a particular class of a Fund means, respectively, the vote of the lesser
of (a) 67% or more of the shares of the Trust, such Fund or such class present
at a meeting of the Trust's shareholders, if the holders of more than 50% of the
outstanding shares of the Trust, such Fund or such class are present or
represented by proxy, or (b) more than 50% of the outstanding shares of the
Trust, such Fund or such class.
Class A, and Class B and Advisor Class shares of each Fund have equal rights and
privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of such Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable to
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such
Statement of Additional Information Page 3
<PAGE>
AIM EQUITY FUNDS
conversion and exchange rights as set forth in the Prospectus and this Statement
of Additional Information. Fractional shares have proportionately the same
rights, including voting rights, as are provided for a full share.
Shareholders of the Funds do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Funds voting
together for election of directors may elect all of the members of the Board of
Trustees of the Trust. In such event, the remaining holders cannot elect any
trustees of the Trust.
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INVESTMENT OBJECTIVES
AND POLICIES
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SELECTION OF INVESTMENTS
In determining the appropriate distribution of investments among various
countries and geographic regions for the Funds, the Sub-adviser ordinarily
considers the following factors: prospects for relative economic growth between
the different countries in which each Fund may invest; expected levels of
inflation; government policies influencing business conditions; the outlook for
currency relationships; and the range of the individual investment opportunities
available to international investors.
In analyzing companies for investment by each Fund, the Sub-adviser ordinarily
looks for one or more of the following characteristics: an above-average
earnings growth per share; high return on invested capital; a healthy balance
sheet; sound financial and accounting policies and overall financial strength;
strong competitive advantages; effective research and product development and
marketing; efficient service; pricing flexibility; strength of management; and
general operating characteristics which will enable the companies to compete
successfully in their respective marketplaces. In certain countries,
governmental restrictions and other limitations on investment may affect the
maximum percentage of equity ownership in any one company by a Fund or the Funds
in the aggregate. In addition, in some instances only special classes of
securities may be purchased by foreigners and the market prices, liquidity and
rights with respect to those securities may vary from shares owned by nationals.
At this time, the Sub-adviser is not aware of the existence of any investment or
exchange control regulations that might substantially impair the operations of
the Funds as described in the Prospectus and this Statement of Additional
Information. Although restrictions may in the future make it undesirable to
invest in certain countries, the Sub-adviser does not believe that any current
repatriation restrictions would affect its decisions to invest in the countries
eligible for investment by any Fund. It should be noted, however, that this
situation could change at any time.
INVESTMENTS IN OTHER INVESTMENT COMPANIES
With respect to certain countries, investments by a Fund presently may be made
only by acquiring shares of other investment companies (including investment
vehicles or companies advised by the Sub-adviser or its affiliates ("Affiliated
Funds")) with local governmental approval to invest in those countries. At such
time as direct investment in these countries is allowed, the Funds anticipate
investing directly in these markets. The Funds may also invest in the securities
of closed-end investment companies within the limits of the Investment Company
Act of 1940, as amended (the "1940 Act"). These limitations currently provide
that, in part, each Fund may purchase shares of a closed-end investment company
unless: (a) such a purchase would cause a Fund to own more than 3% of the total
outstanding voting stock of the investment company or (b) such a purchase would
cause a Fund to have more than 5% of its assets invested in the investment
company or more than 10% of its assets invested in an aggregate of all such
investment companies. Investment in investment companies may involve the payment
of substantial premiums above the value of such companies' portfolio securities.
The Funds do not intend to invest in such vehicles or funds unless the
Sub-adviser determines that the potential benefits of such investments justify
the payment of any applicable premiums. The return on such securities will be
reduced by operating expenses of such companies including payments to the
investment managers of those investment companies. With respect to investments
in Affiliated Funds, the Sub-adviser waives its advisory fee to the extent that
such fees are based on assets of a Fund invested in Affiliated Funds.
SAMURAI AND YANKEE BONDS
The International Fund, the Japan Fund, the Pacific Fund and the Worldwide Fund
may invest in yen-denominated bonds sold in Japan by non-Japanese issuers
("Samurai bonds"), and the Worldwide Fund and the Mid Cap Fund may invest in
dollar-denominated bonds sold in the United States by non-U.S. issuers ("Yankee
bonds"). As compared with bonds issued
Statement of Additional Information Page 4
<PAGE>
AIM EQUITY FUNDS
in their countries of domicile, such bond issues normally carry a higher
interest rate but are less actively traded. It is the policy of each Fund to
invest in Samurai or Yankee bond issues only after taking into account
considerations of quality and liquidity, as well as yield. These bonds are
issued by governments that are members of the Organization for Economic
Cooperation and Development or have AAA ratings. None of the Funds has invested
in Samurai or Yankee bonds since 1982.
DEPOSITARY RECEIPTS
Each Fund may hold securities of foreign issuers in the form of American
Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"), Global
Depositary Receipts ("GDRs") and European Depositary Receipts ("EDRs") or other
securities convertible into securities of eligible European or Far Eastern
issuers. These securities may not necessarily be denominated in the same
currency as the securities for which they may be exchanged. ADRs and ADSs
typically are issued by an American bank or trust company and evidence ownership
of underlying securities issued by a foreign corporation. EDRs, which are
sometimes referred to as Continental Depositary Receipts ("CDRs"), are issued in
Europe typically by foreign banks and trust companies and evidence ownership of
either foreign or domestic securities. GDRs are similar to EDRs and are designed
for use in several international financial markets. Generally, ADRs and ADSs in
registered form are designed for use in United States securities markets and
EDRs in bearer form are designed for use in European securities markets. For
purposes of a Fund's investment policies, its investments in ADRs, ADSs, GDRs
and EDRs will be deemed to be investments in the equity securities representing
securities of foreign issuers into which they may be converted.
ADR facilities may be established as either "unsponsored" or "sponsored." While
ADRs issued under these two types of facilities are in some respects similar,
there are distinctions between them relating to the rights and obligations of
ADR holders and the practices of market participants. A depository may establish
an unsponsored facility without participation by (or even necessarily the
acquiescence of) the issuer of the deposited securities, although typically the
depository requests a letter of non-objection from such issuer prior to the
establishment of the facility. Holders of unsponsored ADRs generally bear all
the costs of such facilities. The depository usually charges fees upon the
deposit and withdrawal of the deposited securities, the conversion of dividends
into U.S. dollars, the disposition of non-cash distributions and the performance
of other services. The depository of an unsponsored facility frequently is under
no obligation to distribute shareholder communications received from the issuer
of the deposited securities or to pass through voting rights to ADR holders with
respect to the deposited securities. Sponsored ADR facilities are created in
generally the same manner as unsponsored facilities, except that the issuer of
the deposited securities enters into a deposit agreement with the depository.
The deposit agreement sets out the rights and responsibilities of the issuer,
the depository and the ADR holders. With sponsored facilities, the issuer of the
deposited securities generally will bear some of the costs relating to the
facility (such as dividend payment fees of the depository), although ADR holders
continue to bear certain other costs (such as deposit and withdrawal fees).
Under the terms of most sponsored arrangements, depositories agree to distribute
notices of shareholder meetings and voting instructions, and to provide
shareholder communications and other information to the ADR holders at the
request of the issuer of the deposited securities. The Funds may invest in both
sponsored and unsponsored ADRs.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by a Fund in connection with other securities
or separately and provide the Fund with the right to purchase at a later date
other securities of the issuer.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Fund may make secured loans
of its portfolio securities amounting to not more than 30% of its total assets.
Securities loans are made to broker/dealers or institutional investors pursuant
to agreements requiring that the loans continuously be secured by collateral at
least equal at all times to the value of the securities lent, plus any accrued
interest, "marked to market" on a daily basis. The Funds may pay reasonable
administrative and custodial fees in connection with the loans of their
securities. While the securities loans are outstanding, the Funds will continue
to receive the equivalent of the interest or dividends paid by the issuer on the
securities, as well as interest on the investment of the collateral or a fee
from the borrower. Each Fund will have a right to call each loan at any time and
obtain the securities within the stated settlement period. The Funds will not
have the right to vote equity securities while they are being lent, but may call
in a loan in anticipation of any important vote. Loans only will be made to
firms deemed by the Sub-adviser to be of good standing and will not be made
unless, in the judgment of the Sub-adviser, the consideration to be earned from
such loans would justify the risk.
Statement of Additional Information Page 5
<PAGE>
AIM EQUITY FUNDS
COMMERCIAL BANK OBLIGATIONS
For the purposes of each Fund's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks and of foreign banks
are obligations of the issuing bank and may be general obligations of the parent
bank. Such obligations, however, may be limited by the terms of a specific
obligation and by government regulation. As with investment in non-U.S.
securities in general, investments in the obligations of foreign branches of
U.S. banks and of foreign banks may subject the Funds to investment risks that
are different in some respects from those of investments in obligations of
domestic issuers. Although a Fund typically will acquire obligations issued and
supported by the credit of U.S. or foreign banks having total assets at the time
of purchase of $1 billion or more, this $1 billion figure is not an investment
policy or restriction of any Fund. For the purposes of calculation with respect
to the $1 billion figure, the assets of a bank will be deemed to include the
assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
A repurchase agreement is a transaction in which a Fund purchases a security
from a bank or recognized securities dealer and simultaneously commits to resell
that security to the bank or dealer at an agreed-upon price, date and market
rate of interest unrelated to the coupon rate or maturity of the purchased
security. Although repurchase agreements carry certain risks not associated with
direct investments in securities, including possible decline in the market value
of the underlying securities and delays and costs to the Fund if the other party
to the repurchase agreement becomes bankrupt, the Funds intend to enter into
repurchase agreements only with banks and dealers believed by the Sub-adviser to
present minimal credit risks in accordance with guidelines approved by the
Trust's Board of Trustees (the "Board"). The Sub-adviser reviews and monitors
the creditworthiness of such institutions under the Board's general supervision.
A Fund will invest only in repurchase agreements collateralized at all times in
an amount at least equal to the repurchase price plus accrued interest. To the
extent that the proceeds from any sale of such collateral upon a default in the
obligation to repurchase were less than the repurchase price, the Fund would
suffer a loss. If the financial institution which is party to the repurchase
agreement petitions for bankruptcy or otherwise becomes subject to bankruptcy or
other liquidation proceedings, there may be restrictions on the Fund's ability
to sell the collateral and the Fund could suffer a loss. However, with respect
to financial institutions whose bankruptcy or liquidation proceedings are
subject to the U.S. Bankruptcy Code, each Fund intends to comply with provisions
under the U.S. Bankruptcy Code that would allow it immediately to resell the
collateral. A Fund will not enter into a repurchase agreement with a maturity of
more than seven days if, as a result, more than 15% of the value of its net
assets would be invested in such repurchase agreements and other illiquid
investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
Each Fund's borrowings will not exceed 33 1/3% of its total assets, i.e., each
Fund's total assets at all times will equal at least [300%] of the amount of
outstanding borrowings. If market fluctuations in the value of a Fund's
portfolio holdings or other factors cause the ratio of the Fund's total assets
to outstanding borrowings to fall below [300%,] within three days (excluding
Sundays and holidays) of such event the Fund may be required to sell portfolio
securities to restore the [300%] asset coverage, even though from an investment
standpoint such sales might be disadvantageous. Each Fund also may borrow up to
5% of its total assets for temporary or emergency purposes other than to meet
redemptions. Any borrowing by a Fund may cause greater fluctuation in the value
of its shares than would be the case if the Fund did not borrow.
Each Fund's fundamental investment limitations permit the Fund to borrow money
for leveraging purposes. Each Fund, however, currently is prohibited, pursuant
to a non-fundamental investment policy, from borrowing money in order to
purchase securities. Nevertheless, this policy may be changed in the future by
the Trust's Board of Trustees. If a Fund employs leverage in the future, it
would be subject to certain additional risks. Use of leverage creates an
opportunity for greater growth of capital but would exaggerate any increases or
decreases in a Fund's net asset value. When the income and gains on securities
purchased with the proceeds of borrowings exceed the costs of such borrowings, a
Fund's earnings or net asset value will increase faster than otherwise would be
the case; conversely, if such income and gains fail to exceed such costs, a
Fund's earnings or net asset value would decline faster than would otherwise be
the case.
Each Fund may enter into reverse repurchase agreements. A reverse repurchase
agreement is a borrowing transaction in which the Fund transfers possession of a
security to another party, such as a bank or broker/dealer in return for cash,
and agrees to repurchase the security in the future at an agreed upon price,
which includes an interest component. Each Fund also may engage in "roll"
borrowing transactions which involve its sale of Government National Mortgage
Association certificates or other securities together with a commitment (for
which the Fund may receive a fee) to purchase similar, but not identical,
securities at a future date. A Fund will segregate with a custodian, cash or
liquid securities in an amount sufficient to cover its obligations under "roll"
transactions and reverse repurchase agreements with broker/dealers. No
segregation is required for reverse repurchase agreements with banks.
Statement of Additional Information Page 6
<PAGE>
AIM EQUITY FUNDS
TEMPORARY DEFENSIVE STRATEGIES
Money market instruments in which the Funds may invest include the following:
government securities; high grade commercial paper; bank certificates of
deposit; bankers' acceptances; and repurchase agreements related to any of the
foregoing. High grade commercial paper refers to commercial paper rated P-1 by
Moody's Investors Service, Inc. ("Moody's") or A-1 by Standard & Poor's, a
division of The McGraw-Hill Companies, Inc ("S&P"), at the time of investment
or, if unrated, deemed by the Sub-adviser to be of comparable quality.
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OPTIONS, FUTURES AND CURRENCY
STRATEGIES
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SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
The use of options, futures contracts and forward currency contracts ("Forward
Contracts") involves special considerations and risks, as described below. Risks
pertaining to particular instruments are described in the sections that follow.
(1) Successful use of most of these instruments depends upon the
Sub-adviser's ability to predict movements of the overall securities and
currency markets, which requires different skills than predicting changes in
the prices of individual securities. While the Sub-adviser is experienced in
the use of these instruments, there can be no assurance that any particular
strategy adopted will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if a Fund entered into a
short hedge because the Sub-adviser projected a decline in the price of a
security in the Fund's portfolio, and the price of that security increased
instead, the gain from threat increase might by wholly or partially offset
by a decline in the price of the hedging instrument. Moreover, if the price
of the hedging instrument declined by more than the increase in the price of
the security, the Fund could suffer a loss. In either such case, the Fund
would have been in a better position had it not hedged at all.
(4) As described below, a Fund might be required to maintain assets as
"cover," maintain segregated accounts or make margin payments when it takes
positions in instruments involving obligations to third parties (I.E.,
instruments other than purchased options). If the Fund were unable to close
out its positions in such instruments, it might be required to continue to
maintain such assets or accounts or make such payments until the position
expired or matured. The requirements might impair the Fund's ability to sell
a portfolio security or make an investment at a time when it would otherwise
be favorable to do so, or require that the Fund sell a portfolio security at
a disadvantageous time. The Fund's ability to close out a position in an
instrument prior to expiration or maturity depends on the existence of a
liquid secondary market or, in the absence of such a market, the ability and
willingness of the other party to the transaction ("contra party") to enter
into a transaction closing out the position. Therefore, there is no
assurance that any position can be closed out at a time and price that is
favorable to the Fund.
WRITING CALL OPTIONS
A Fund may write (sell) call options on securities, indices and currencies. Call
options generally will be written on securities and currencies that, in the
opinion of the Sub-adviser, are not expected to make any major price moves in
the near future but that, over the long term, are deemed to be attractive
investments for the Fund.
A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
style) or on (European style) a certain date (the expiration date). So long as
the obligation of the
Statement of Additional Information Page 7
<PAGE>
AIM EQUITY FUNDS
writer of a call option continues, he may be assigned an exercise notice,
requiring him to deliver the underlying security or currency against payment of
the exercise price. This obligation terminates upon the expiration of the call
option, or such earlier time at which the writer effects a closing purchase
transaction by purchasing an option identical to that previously sold.
Portfolio securities or currencies on which call options may be written will be
purchased solely on the basis of investment considerations consistent with each
Fund's investment objectives. When writing a call option, a Fund, in return for
the premium, gives up the opportunity for profit from a price increase in the
underlying security or currency above the exercise price, and retains the risk
of loss should the price of the security or currency decline. Unlike one who
owns securities or currencies not subject to an option, a Fund has no control
over when it may be required to sell the underlying securities or currencies,
since most options may be exercised at any time prior to the option's
expiration. If a call option that a Fund has written expires, the Fund will
realize a gain in the amount of the premium; however, such gain may be offset by
a decline in the market value of the underlying security or currency during the
option period. If the call option is exercised, the Fund will realize a gain or
loss from the sale of the underlying security or currency, which will be
increased or offset by the premium received. The Fund does not consider a
security or currency covered by a call option to be "pledged" as that term is
used in the Fund's policy that limits the pledging or mortgaging of its assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and a Fund will be obligated to
sell the security or currency at less than its market value.
The premium that a Fund receives for writing a call option is deemed to
constitute the market value of an option. The premium a Fund will receive from
writing a call option will reflect, among other things, the current market price
of the underlying investment, the relationship of the exercise price to such
market price, the historical price volatility of the underlying investment and
the length of the option period. In determining whether a particular call option
should be written, the Sub-adviser will consider the reasonableness of the
anticipated premium and the likelihood that a liquid secondary market will exist
for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called, or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit the Fund to write
another call option on the underlying security or currency with either a
different exercise price or expiration date or both.
The Funds will pay transaction costs in connection with the writing of options
and in entering into closing purchase contracts. Transaction costs relating to
options activity normally are higher than those applicable to purchases and
sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities, indices or currencies at the time
the options are written. From time to time, a Fund may purchase an underlying
security or currency for delivery in accordance with the exercise of an option,
rather than delivering such security or currency from its portfolio. In such
cases, additional costs will be incurred.
A Fund will realize a profit or loss from a closing purchase transaction if the
cost of the transaction is less or more, respectively, than the premium received
from writing the option. Because increases in the market price of a call option
generally will reflect increases in the market price of the underlying security
or currency, any loss resulting from the repurchase of a call option is likely
to be offset in whole or in part by appreciation of the underlying security or
currency owned by the Fund.
WRITING PUT OPTIONS
The Funds may write put options on securities, indices and currencies. A put
option gives the purchaser of the option the right to sell, and the writer
(seller) the obligation to buy, the underlying security or currency at the
exercise price at any time until (American style) or on (European style) the
expiration date. The operation of put options in other respects, including their
related risks and rewards, is substantially identical to that of call options.
A Fund generally would write put options in circumstances where the Sub-adviser
wishes to purchase the underlying security or currency for the Fund's portfolio
at a price lower than the current market price of the security or currency. In
such event, the Fund would write a put option at an exercise price that, reduced
by the premium received on the option, reflects the lower price it is willing to
pay. Since the Fund also would receive interest on debt securities or currencies
maintained to cover the exercise price of the option, this technique could be
used to enhance current return during
Statement of Additional Information Page 8
<PAGE>
AIM EQUITY FUNDS
periods of market uncertainty. The risk in such a transaction would be that the
market price of the underlying security or currency would decline below the
exercise price, less the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and a Fund will be obligated
to purchase the security or currency at more than its market value.
PURCHASING PUT OPTIONS
Each Fund may purchase put options on securities, indices and currencies. As the
holder of a put option, a Fund would have the right to sell the underlying
security or currency at the exercise price at any time until (American style) or
on (European style) the expiration date. A Fund may enter into closing sale
transactions with respect to such option, exercise such option or permit such
option to expire.
A Fund may purchase a put option on an underlying security or currency
("protective put") owned by the Fund in order to protect against an anticipated
decline in the value of the security or currency. Such hedge protection is
provided only during the life of the put option when the Fund, as the holder of
the put option, is able to sell the underlying security or currency at the put
exercise price regardless of any decline in the underlying security's market
price or currency's exchange value. The premium paid for the put option and any
transaction costs would reduce any profit otherwise available for distribution
when the security or currency eventually is sold.
A Fund also may purchase put options at a time when the Fund does not own the
underlying security or currency. By purchasing put options on a security or
currency it does not own, a Fund seeks to benefit from a decline in the market
price of the underlying security or currency. If the put option is not sold when
it has remaining value, and if the market price of the underlying security or
currency remains equal to or greater than the exercise price during the life of
the put option, the Fund will lose its entire investment in the put option. In
order for the purchase of a put option to be profitable, the market price of the
underlying security or currency must decline sufficiently below the exercise
price to cover the premium and transaction costs, unless the put option is sold
in a closing sale transaction.
PURCHASING CALL OPTIONS
Each Fund may purchase call options on securities, indices and currencies. As
the holder of a call option, a Fund would have the right to purchase the
underlying security or currency at the exercise price at any time until
(American style) or on (European style) the expiration date. A Fund may enter
into closing sale transactions with respect to such option, exercise such option
or permit such option to expire.
Call options may be purchased by a Fund for the purpose of acquiring the
underlying security or currency for its portfolio. Utilized in this fashion, the
purchase of call options would enable a Fund to acquire the security or currency
at the exercise price of the call option plus the premium paid. At times, the
net cost of acquiring the security or currency in this manner may be less than
the cost of acquiring the security or currency directly. This technique also may
be useful to the Funds in purchasing a large block of securities that would be
more difficult to acquire by direct market purchases. As long as it holds such a
call option, rather than the underlying security or currency itself, a Fund is
partially protected from any unexpected decline in the market price of the
underlying security or currency and, in such event, could allow the call option
to expire, incurring a loss only to the extent of the premium paid for the
option.
Each Fund also may purchase call options on underlying securities or currencies
it owns to avoid realizing losses that would result in a reduction of its
current return. For example, where a Fund has written a call option on an
underlying security or currency having a current market value below the price at
which it purchased the security or currency, an increase in the market price
could result in the exercise of the call option written by the Fund and the
realization of a loss on the underlying security or currency. Accordingly, the
Fund could purchase a call option on the same underlying security or currency,
which could be exercised to fulfill the Fund's delivery obligations under its
written call (if it is exercised). This strategy could allow the Fund to avoid
selling the portfolio security or currency at a time when it has an unrealized
loss; however, the Fund would have to pay a premium to purchase the call option
plus transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of such
Fund's total assets at the time of purchase.
Each Fund may attempt to accomplish objectives similar to those involved in
using Forward Contracts by purchasing put or call options on currencies. A put
option gives a Fund as purchaser the right (but not the obligation) to sell a
specified amount of currency at the exercise price at any time until (American
style) or on (European style) the expiration of the option. A call option gives
a Fund as purchaser the right (but not the obligation) to purchase a specified
amount of currency at the exercise price at any time until (American style) or
on (European style) the expiration date of the option. A
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AIM EQUITY FUNDS
Fund might purchase a currency put option, for example, to protect itself
against a decline in the dollar value of a currency in which it holds or
anticipates holding securities. If the currency's value should decline against
the dollar, the loss in currency value should be offset, in whole or in part, by
an increase in the value of the put. If the value of the currency instead should
rise against the dollar, any gain to the Fund would be reduced by the premium it
had paid for the put option. A currency call option might be purchased, for
example, in anticipation of, or to protect against, a rise in the value against
the dollar of a currency in which the Fund anticipates purchasing securities.
Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (I.E., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation), and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. A Fund will not purchase an OTC option unless the Sub-adviser believes
that daily valuations for such options are readily obtainable. OTC options
differ from exchange-traded options in that OTC options are transacted with
dealers directly and not through a clearing corporation (which guarantees
performance). Consequently, there is a risk of non-performance by the dealer.
Since no exchange is involved, OTC options are valued on the basis of an average
of the last bid prices obtained from dealers, unless a quotation from only one
dealer is available, in which case only that dealer's price will be used. In the
case of OTC options, there can be no assurance that a liquid secondary market
will exist for any particular option at any specific time.
The staff of the SEC considers purchased OTC options to be illiquid securities.
A Fund may also sell OTC options and, in connection therewith, segregate assets
or cover its obligations with respect to OTC options written by the Fund. The
assets used as cover for OTC options written by a Fund will be considered
illiquid unless the OTC options are sold to qualified dealers who agree that the
Fund may repurchase any OTC option it writes at a maximum price to be calculated
by a formula set forth in the option agreement. The cover for an OTC option
written subject to this procedure would be considered illiquid only to the
extent that the maximum repurchase price under the formula exceeds the intrinsic
value of the option.
A Fund's ability to establish and close out positions in exchange-listed options
depends on the existence of a liquid market. A Fund intends to purchase or write
only those exchange-listed options for which there appears to be a liquid
secondary market. However, there can be no assurance that such a market will
exist at any particular time. Closing transactions can be made for OTC options
only by negotiating directly with the contra party or by a transaction in the
secondary market if any such market exists. Although a Fund will enter into OTC
options only with contra parties that are expected to be capable of entering
into closing transactions with the Fund, there is no assurance that the Fund
will in fact be able to close out an OTC option position at a favorable price
prior to expiration. In the event of insolvency of the contra party, the Fund
might be unable to close out an OTC option position at any time prior to its
expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When a Fund writes a call on an
index, it receives a premium and agrees that, prior to the expiration date, the
purchaser of the call, upon exercise of the call, will receive from the Fund an
amount of cash if the closing level of the index upon which the call is based is
greater than the exercise price of the call. The amount of cash is equal to the
difference between the closing price of the index and the exercise price of the
call times a specified multiple (the "multiplier"), which determines the total
dollar value for each point of such difference. When a Fund buys a call on an
index, it pays a premium and has the same rights as to such calls as are
indicated above. When a Fund buys a put on an index, it pays a premium and has
the right, prior to the expiration date, to require the seller of the put, upon
the Fund's exercise of the put, to deliver to the Fund an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the put, which amount of cash is determined by the multiplier, as
described above for calls. When a Fund writes a put on an index, it receives a
premium and the purchaser has the right, prior to the expiration date, to
require the Fund to deliver to it an amount of cash equal to the difference
between the closing level of the index and the exercise price times the
multiplier, if the closing level is less than the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Fund writes a call
on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Fund can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Fund cannot, as a practical matter, acquire and hold
a portfolio containing exactly the same securities as underlie the index and, as
a result, bears a risk that the value of the securities held will vary from the
value of the index.
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AIM EQUITY FUNDS
Even if a Fund could assemble a securities portfolio that exactly reproduced the
composition of the underlying index, it still would not be fully covered from a
risk standpoint because of the "timing risk" inherent in writing index options.
When an index option is exercised, the amount of cash that the holder is
entitled to receive is determined by the difference between the exercise price
and the closing index level on the date when the option is exercised. As with
other kinds of options, the Fund, as the call writer, will not know that it has
been assigned until the next business day at the earliest. The time lag between
exercise and notice of assignment poses no risk for the writer of a covered call
on a specific underlying security, such as common stock, because there the
writer's obligation is to deliver the underlying security, not to pay its value
as of a fixed time in the past. So long as the writer already owns the
underlying security, it can satisfy its settlement obligations by simply
delivering it, and the risk that its value may have declined since the exercise
date is borne by the exercising holder. In contrast, even if the writer of an
index call holds securities that exactly match the composition of the underlying
index, it will not be able to satisfy its assignment obligations by delivering
those securities against payment of the exercise price. Instead, it will be
required to pay cash in an amount based on the closing index value on the
exercise date; and by the time it learns that it has been assigned, the index
may have declined, with a corresponding decline in the value of its securities
portfolio. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure by holding securities positions.
If a Fund purchases an index option and exercises it before the closing index
value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Fund will be required to pay the difference
between the closing index value and the exercise price of the option (times the
applicable multiplier) to the assigned writer.
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
A Fund may enter into interest rate, currency or stock index futures contracts
("Futures" or "Futures Contracts") as a hedge against changes in prevailing
levels of interest rates, currency exchange rates or stock price levels in order
to establish more definitely the effective return on securities or currencies
held or intended to be acquired by the Fund. The Funds' hedging may include
sales of Futures as an offset against the effect of expected increases in
interest rates, or decreases in currency exchange rates and stock prices, and
purchases of Futures as an offset against the effect of expected declines in
interest rates, or increases in currency exchange rates or stock prices.
The Funds only will enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC"). Futures are exchanged in London at the London International
Financial Futures Exchange.
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce the Funds' exposure to interest rate and currency exchange rate
fluctuations, the Funds may be able to hedge its exposure more effectively and
at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A stock
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of trading on the contract
and the price at which the Futures Contract is originally struck; no physical
delivery of stocks comprising the index is made. Brokerage fees are incurred
when a Futures Contract is bought or sold, and margin deposits must be
maintained at all times the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments or currencies, Futures Contracts usually are closed out
before the delivery date. Closing out an open Futures Contract sale or purchase
is effected by entering into an offsetting Futures Contract purchase or sale,
respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Fund realizes a gain; if it is
more, the Fund realizes a loss. Conversely, if the offsetting sale price is more
than the original purchase price, the Fund realizes a gain; if it is less, the
Fund realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that the Funds will be able to
enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Fund is not able to enter into an offsetting
transaction, the Fund will continue to be required to maintain the margin
deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one Futures Contract of September Deutschemarks on an exchange
may be fulfilled at any time before delivery under the Futures Contract is
required (I.E., on a specified date in September, the "delivery month") by the
purchase of another Futures Contract of
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AIM EQUITY FUNDS
September Deutschemarks on the same exchange. In such instance, the difference
between the price at which the Futures Contract was sold and the price paid for
the offsetting purchase, after allowance for transaction costs, represents the
profit or loss to the Fund.
The Funds' Futures transactions will be entered into for hedging purposes only;
that is, Futures Contracts will be sold to protect against a decline in the
price of securities or currencies that a Fund owns, or Futures Contracts will be
purchased to protect the Fund against an increase in the price of securities or
currencies it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Fund in order to initiate Futures trading and to maintain the
Fund's open positions in Futures Contracts. A margin deposit made when the
Futures Contract is entered into ("initial margin") is intended to ensure the
Fund's performance under the Futures Contract. The margin required for a
particular Futures Contract is set by the exchange on which the Futures Contract
is traded and may be significantly modified from time to time by the exchange
during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Fund entered into the Futures Contract
will be made on a daily basis as the price of the underlying security, currency
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced by, among other things, actual and anticipated
changes in interest and currency rates, which in turn are affected by fiscal and
monetary policies and national and international political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in the Fund's portfolio
being hedged. The degree of imperfection of correlation depends upon
circumstances such as: variations in speculative market demand for Futures and
for securities or currencies, including technical influences in Futures trading;
and differences between the financial instruments being hedged and the
instruments underlying the standard Futures Contracts available for trading. A
decision of whether, when and how to hedge involves skill and judgment, and even
a well-conceived hedge may be unsuccessful to some degree because of unexpected
market behavior or interest or currency rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and option on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If a Fund were unable to liquidate a Futures or option on Futures position due
to the absence of a liquid secondary market or the imposition of price limits,
it could incur substantial losses. The Fund would continue to be subject to
market risk with respect to the position. In addition, except in the case of
purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to maintain the position being
hedged by the Future or option or to maintain cash or securities in a segregated
account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit
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AIM EQUITY FUNDS
requirements in the Futures market are less onerous than margin requirements in
the securities markets, there might be increased participation by speculators in
the Futures markets. This participation also might cause temporary price
distortions. In addition, activities of large traders in both the Futures and
securities markets involving arbitrage, "program trading" and other investment
strategies might result in temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities or currencies,
except that options on Futures Contracts give the purchaser the right, in return
for the premium paid, to assume a position in a Futures Contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the delivery of the Futures position by the writer of
the option to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's Futures margin account, which represents the
amount by which the market price of the Futures Contract, at exercise, exceeds
(in the case of a call) or is less than (in the case of a put) the exercise
price of the option on the Futures Contract. If an option is exercised on the
last trading day prior to the expiration date of the option, the settlement will
be made entirely in cash equal to the difference between the exercise price of
the option and the closing level of the securities, currencies or index upon
which the Futures Contract is based on the expiration date. Purchasers of
options who fail to exercise their options prior to the exercise date suffer a
loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
If a Fund writes an option on a Futures Contract, it will be required to deposit
initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
A Fund may seek to close out an option position by selling an option covering
the same Futures Contract and having the same exercise price and expiration
date. The ability to establish and close out positions on such options is be
subject to the maintenance of a liquid secondary market.
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
To the extent that a Fund enters into Futures Contracts, options on Futures
Contracts, and options on foreign currencies traded on a CFTC-regulated
exchange, in each case other than for BONA FIDE hedging purposes (as defined by
the CFTC), the aggregate initial margin and premiums required to establish those
positions (excluding the amount by which options are "in-the-money") will not
exceed 5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund has
entered into. In general, a call option on a Futures Contract is "in-the-money"
if the value of the underlying Futures Contract exceeds the strike, I.E.,
exercise, price of the call; a put option on a Futures Contract is
"in-the-money" if the value of the underlying Futures Contract is exceeded by
the strike price of the put. This guideline may be modified by the Trust's Board
of Trustees without a shareholder vote. This limitation does not limit the
percentage of a Fund's assets at risk to 5%.
FORWARD CONTRACTS
A Forward Contract is an obligation, generally arranged with a commercial bank
or other currency dealer, to purchase or sell a currency against another
currency at a future date and price as agreed upon by the parties. A Fund may
either accept or make delivery of the currency at the maturity of the Forward
Contract. A Fund may also, if its contra party agrees, prior to maturity, enter
into a closing transaction involving the purchase or sale of an offsetting
contract.
A Fund engages in forward currency transactions in anticipation of or to protect
itself against fluctuations in exchange rates. A Fund might sell a particular
foreign currency forward, for example, when it holds bonds denominated in a
foreign currency but anticipates, and seeks to be protected against, a decline
in the currency against the U.S. dollar. Similarly, a Fund might sell the U.S.
dollar forward when it holds bonds denominated in U.S. dollars but anticipates,
and seeks to be protected against, a decline in the U.S. dollar relative to
other currencies. Further, a Fund might purchase a currency forward to "lock in"
the price of securities denominated in that currency that it anticipates
purchasing.
Forward Contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A Forward
Contract generally has no deposit requirement, and no commissions are charged at
any stage for trades. Each Fund will enter into such Forward Contracts with
major U.S. or foreign banks and securities or currency dealers in accordance
with guidelines approved by the Board.
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AIM EQUITY FUNDS
Each Fund may enter into Forward Contracts either with respect to specific
transactions or with respect to the overall investments of the Fund. The precise
matching of the Forward Contract amounts and the value of specific securities
generally will not be possible because the future value of such securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date the Forward Contract is entered into and
the date it matures. Accordingly, it may be necessary for a Fund to purchase
additional foreign currency on the spot (I.E., cash) market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver and if a decision is
made to sell the security and make delivery of the foreign currency. Conversely,
it may be necessary to sell on the spot market some of the foreign currency the
Fund is obligated to deliver. The projection of short-term currency market
movements is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. Forward Contracts involve the risk that
anticipated currency movements will not be predicted accurately, causing a Fund
to sustain losses on these contracts and transaction costs.
At or before the maturity of a Forward Contract requiring a Fund to sell a
currency, the Fund either may sell a portfolio security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which the Fund will obtain, on the maturity date, the same amount of
the currency that it is obligated to deliver. Similarly, a Fund may close out a
Forward Contract requiring it to purchase a specified currency by entering into
a second contract if its contra party agrees, entitling it to sell the same
amount of the same currency on the maturity date of the first contract. The Fund
would realize a gain or loss as a result of entering into such an offsetting
Forward Contract under either circumstance to the extent the exchange rate or
rates between the currencies involved moved between the execution dates of the
first contract and the offsetting contract.
The cost to a Fund of engaging in Forward Contracts varies with factors such as
the currencies involved, the length of the contract period and the market
conditions then prevailing. Because Forward Contracts usually are entered into
on a principal basis, no fees or commissions are involved. The use of Forward
Contracts does not eliminate fluctuations in the prices of the underlying
securities a Fund owns or intends to acquire, but it does establish a rate of
exchange in advance. In addition, while Forward Contracts limit the risk of loss
due to a decline in the value of the hedged currencies, they also limit any
potential gain that might result should the value of the currencies increase.
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
A Fund may use options on foreign currencies, Futures on foreign currencies,
options on Futures on foreign currencies and Forward Contracts to hedge against
movements in the values of the foreign currencies in which the Fund's securities
are denominated. Such currency hedges can protect against price movements in a
security that a Fund owns or intends to acquire that are attributable to changes
in the value of the currency in which it is denominated. Such hedges do not,
however, protect against price movements in the securities that are attributable
to other causes.
A Fund might seek to hedge against changes in the value of a particular currency
when no Futures Contract, Forward Contract or option involving that currency is
available or one of such contracts is more expensive than certain other
contracts. In such cases, the Fund may hedge against price movements in that
currency by entering into a contract on another currency or basket of
currencies, the values of which the Sub-adviser believes will have a positive
correlation to the value of the currency being hedged. The risk that movements
in the price of the contract will not correlate perfectly with movements in the
price of the currency being hedged is magnified when this strategy is used.
The value of Futures Contracts, options on Futures Contracts, Forward Contracts
and options on foreign currencies depends on the value of the underlying
currency relative to the U.S. dollar. Because foreign currency transactions
occurring in the interbank market might involve substantially larger amounts
than those involved in the use of Futures Contracts, Forward Contracts or
options, a Fund could be disadvantaged by dealing in the odd lot market
(generally consisting of transactions of less than $1 million) for the
underlying foreign currencies at prices that are less favorable than for round
lots.
There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirements that quotations available through dealers or
other market sources be firm or revised on a timely basis. Quotation information
generally is representative of very large transactions in the interbank market
and thus might not reflect odd-lot transactions where rates might be less
favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
Settlement of Futures Contracts, Forward Contracts and options involving foreign
currencies might be required to take place within the country issuing the
underlying currency. Thus, a Fund might be required to accept or make delivery
of the
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AIM EQUITY FUNDS
underlying foreign currency in accordance with any U.S. or foreign regulations
regarding the maintenance of foreign banking arrangements by U.S. residents and
might be required to pay any fees, taxes and charges associated with such
delivery assessed in the issuing country.
COVER
Transactions using Forward Contracts, Futures Contracts and options (other than
options purchased by a Fund) expose the Fund to an obligation to another party.
A Fund will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities, currencies or other options,
Forward Contracts or Futures Contracts, or (2) cash, receivables and short-term
debt securities with a value sufficient at all times to cover its potential
obligations not covered as provided in (1) above. Each Fund will comply with SEC
guidelines regarding cover for these instruments and, if the guidelines so
require, set aside cash or liquid securities.
Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of a Fund's assets is used for cover or otherwise set aside, it could affect
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.
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RISK FACTORS
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ILLIQUID SECURITIES
A Fund may invest up to 15% of its net assets in illiquid securities. Securities
may be considered illiquid if a Fund cannot reasonably expect within seven days
to sell the securities for approximately the amount at which the Fund values
such securities. See "Investment Limitations." The sale of illiquid securities,
if they can be sold at all, generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities such as securities eligible for trading on U.S.
securities exchanges or in the OTC markets. Moreover, restricted securities,
which may be illiquid for purposes of this limitation, often sell, if at all, at
a price lower than similar securities that are not subject to restrictions on
resale.
Illiquid securities include those that are subject to restrictions contained in
the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, a Fund may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Fund might obtain a less favorable price
than prevailed when it decided to sell.
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended (the "1933 Act"),
including private placements, repurchase agreements, commercial paper, foreign
securities and corporate bonds and notes. These instruments are often restricted
securities because the securities are sold in transactions not requiring
registration. Institutional investors generally will not seek to sell these
instruments to the general public, but instead will often depend either on an
efficient institutional market in which such unregistered securities can be
readily resold or on an issuer's ability to honor a demand for repayment.
Therefore, the fact that there are contractual or legal restrictions on resale
to the general public or certain institutions is not dispositive of the
liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
a Fund, however, could affect adversely the marketability of such portfolio
securities and the Fund might be unable to dispose of such securities promptly
or at favorable prices.
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With respect to liquidity determinations generally, the Trust's Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including restricted securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the 1933 Act, are liquid or
illiquid. The Trust's Board has delegated the function of making day-to-day
determinations of liquidity to the Sub-adviser in accordance with procedures
approved by the Board. The Sub-adviser takes into account a number of factors in
reaching liquidity decisions, including: (i) the frequency of trading in the
security; (ii) the number of dealers who make quotes for the security; (iii) the
number of dealers who have undertaken to make a market in the security; (iv) the
number of other potential purchasers; and (v) the nature of the security and how
trading is effected (e.g., the time needed to sell the security, how offers are
solicited, and the mechanics of transfer.) The Sub-adviser monitors the
liquidity of securities in each Fund's portfolio and periodically reports such
determinations to the Trust's Board of Trustees. If the liquidity percentage
restriction of a Fund is satisfied at the time of investment, a later increase
in the percentage of illiquid securities held by the Fund resulting from a
change in market value or assets will not constitute a violation of that
restriction. If as a result of a change in market value or assets, the
percentage of illiquid securities held by the Fund increases above the
applicable limit, the Sub-adviser will take appropriate steps to bring the
aggregate amount of illiquid assets back within the prescribed limitations as
soon as reasonably practicable, taking into account the effect of any
disposition on the Fund.
FOREIGN SECURITIES
POLITICAL, SOCIAL AND ECONOMIC RISKS. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, a Fund could lose its entire investment in
any such country.
RELIGIOUS, POLITICAL AND ETHNIC INSTABILITY. Certain countries in which a
Fund may invest may have groups that advocate radical religious or revolutionary
philosophies or support ethnic independence. Any disturbance on the part of such
individuals could carry the potential for widespread destruction or confiscation
of property owned by individuals and entities foreign to such country and could
cause the loss of the Fund's investment in those countries. Instability may also
result from, among other things: (i) authoritarian governments or military
involvement in political and economic decision-making, including changes in
government through extra-constitutional means; (ii) popular unrest associated
with demands for improved political, economic and social conditions; and (iii)
hostile relations with neighboring or other countries. Such political, social
and economic instability could disrupt the principal financial markets in which
a Fund invests and adversely affect the value of its assets.
FOREIGN INVESTMENT RESTRICTIONS. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as a Fund. These restrictions or
controls may at times limit or preclude investment in certain securities and may
increase the cost and expenses of the Fund. For example, certain countries
require prior governmental approval before investments by foreign persons may be
made, or may limit the amount of investment by foreign persons in a particular
company, or limit the investment by foreign persons to only a specific class of
securities of a company that may have less advantageous terms than securities of
the company available for purchase by nationals. Moreover, the national policies
of certain countries may restrict investment opportunities in issuers or
industries deemed sensitive to national interests. In addition, some countries
require governmental approval for the repatriation of investment income, capital
or the proceeds of securities sales by foreign investors. In addition, if there
is a deterioration in a country's balance of payments or for other reasons, a
country may impose restrictions on foreign capital remittances abroad. A Fund
could be adversely affected by delays in, or a refusal to grant, any required
governmental approval for repatriation, as well as by the application to it of
other restrictions on investments.
NON-UNIFORM CORPORATE DISCLOSURE STANDARDS AND GOVERNMENTAL
REGULATION. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such financial statements been prepared in accordance with U.S. generally
accepted accounting principles. Most of the foreign securities held by a Fund
(other than the Mid Cap Fund) will not be registered with the SEC or regulators
of any foreign country, nor will the issuers thereof be subject to the SEC's
reporting requirements. Thus, there will be less available information
concerning most foreign issuers of securities held by a Fund than is available
concerning U.S. issuers. In instances where the financial statements of an
issuer are not deemed to reflect accurately the financial situation of the
issuer, the Sub-adviser will take appropriate steps to evaluate the proposed
investment, which may include on-site inspection of the issuer, interviews with
its management and consultations with accountants, bankers and other
specialists. There is substantially less publicly available information about
foreign companies than there are reports and ratings published about U.S.
companies and
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AIM EQUITY FUNDS
the U.S. government. In addition, where public information is available, it may
be less reliable than such information regarding U.S. issuers. Issuers of
securities in foreign jurisdictions are generally not subject to the same degree
of regulation as are U.S. issuers with respect to such matters as restrictions
on market manipulation, insider trading rules, shareholder proxy requirements
and timely disclosure of information.
CURRENCY FLUCTUATIONS. Because each Fund, other than the Mid Cap Fund, under
normal circumstances will invest a substantial portion of its total assets in
the securities of foreign issuers that are denominated in foreign currencies,
the strength or weakness of the U.S. dollar against such foreign currencies will
account for a significant part of the Fund's investment performance. A decline
in the value of any particular currency against the U.S. dollar will cause a
decline in the U.S. dollar value of a Fund's holdings of securities and cash
denominated in such currency and, therefore, will cause an overall decline in
the Fund's net asset value and any net investment income and capital gains
derived from such securities to be distributed in U.S. dollars to shareholders
of the Fund. Moreover, if the value of the foreign currencies in which a Fund
receives its income declines relative to U.S. dollars between the receipt of
income and the making of Fund distributions, it may be required to liquidate
securities in order to make distributions if it has insufficient cash in U.S.
dollars to meet distribution requirements.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors, including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the relative movement of
interest rate and the pace of business activity in the other countries and the
United States, and other economic and financial conditions affecting the world
economy.
Although each Fund values its assets daily in terms of U.S. dollars, they do not
intend to convert their holdings of foreign currencies into U.S. dollars on a
daily basis. Each Fund will do so, from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at one
rate, while offering a lesser rate of exchange should a Fund desire to sell that
currency to the dealer.
ADVERSE MARKET CHARACTERISTICS. Securities of many foreign issuers may be
less liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the United
States, and foreign securities exchange transactions usually are subject to
fixed commissions, which generally are higher than negotiated commissions on
U.S. transactions. In addition, foreign securities exchange transactions may be
subject to difficulties associated with the settlement of such transactions.
Delays in settlement could result in temporary periods when assets of a Fund are
uninvested and no return is earned thereon. The inability of a Fund to make
intended security purchases due to settlement problems could cause the Fund to
miss attractive investment opportunities. Inability to dispose of a portfolio
security due to settlement problems either could result in losses to a Fund due
to subsequent declines in value of the portfolio security or, if a Fund has
entered into a contract to sell the security, could result in possible liability
to the purchaser. The Sub-adviser will consider such difficulties when
determining the allocation of each Fund's assets, although the Sub-adviser does
not believe that such difficulties will have a material adverse effect on the
Funds' portfolio trading activities.
The Funds may use foreign custodians, which may involve risks in addition to
those related to the use of U.S. custodians. Such risks include uncertainties
relating to: (i) determining and monitoring the financial strength, reputation
and standing of the foreign custodian; (ii) maintaining appropriate safeguards
to protect the Funds' investments and (iii) obtaining and enforcing judgments
against such custodians.
WITHHOLDING TAXES. A Fund's net investment income from foreign issuers may
be subject to non-U.S. withholding taxes by the foreign issuer's country,
thereby reducing the Fund's net investment income or delaying the receipt of
income whose those taxes may be recaptured. See "Taxes."
CONCENTRATION. To the extent a Fund invests a significant portion of its
assets in securities of issuers located in a particular country or region of the
world, it may be subject to greater risks and may experience greater volatility
than a fund that is more broadly diversified geographically.
SPECIAL CONSIDERATIONS AFFECTING WESTERN EUROPEAN COUNTRIES. The countries
that are members of the European Economic Community ("Common Market") (Belgium,
Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,
Portugal, Spain and the United Kingdom) eliminated certain import tariffs and
quotas and other trade barriers with respect to one another over the past
several years. The Sub-adviser believes that this deregulation should improve
the prospects for economic growth in many Western European countries. Among
other things, the deregulation could enable companies domiciled in one country
to avail themselves of lower labor costs existing in other countries. In
addition, this
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AIM EQUITY FUNDS
deregulation could benefit companies domiciled in one country by opening
additional markets for their goods and services in other countries. Since,
however, it is not clear what the exact form or effect of these Common Market
reforms will be on business in Western Europe, it is impossible to predict the
long-term impact of the implementation of these programs on the securities owned
by a Fund.
SPECIAL CONSIDERATIONS AFFECTING RUSSIA AND EASTERN EUROPEAN
COUNTRIES. Investing in Russia and Eastern European countries involves a high
degree of risk and special considerations not typically associated with
investing in the U.S. securities markets and should be considered highly
speculative. Such risks include: (1) delays in settling portfolio transactions
and risk of loss arising out of the system of share registration and custody;
(2) the risk that it may be impossible or more difficult than in other countries
to obtain and/or enforce a judgment; (3) pervasiveness of corruption and crime
in the economic system; (4) currency exchange rate volatility and the lack of
available currency hedging instruments; (5) higher rates of inflation (including
the risk of social unrest associated with periods of hyper-inflation) and high
unemployment; (6) controls on foreign investment and local practices disfavoring
foreign investors and limitations on repatriation of invested capital, profits
and dividends and on a Fund's ability to exchange local currencies for U.S.
dollars; (7) political instability and social unrest and violence; (8) the risk
that the governments of Russia and Eastern European countries may decide not to
continue to support the economic reform programs implemented recently and may
follow radically different political and/or economic policies to the detriment
of investors, including non-market-oriented policies such as the support of
certain industries at the expense of other sectors or investors, or a return to
the centrally planned economy that existed when such countries had a communist
form of government; (9) the financial condition of companies in these countries,
including large amounts of inter-company debt that may create a payments crisis
on a national scale; (10) dependency on exports and the corresponding importance
of international trade; (11) the risk that the tax system in these countries
will not be reformed to prevent inconsistent, retroactive and/or exorbitant
taxation; and (12) the underdeveloped nature of the securities markets.
SPECIAL CONSIDERATIONS AFFECTING PACIFIC REGION COUNTRIES. Many Pacific
region countries may be subject to a greater degree of social, political and
economic instability than is the case in the United States. Such instability may
result from, among other things, the following: (i) authoritarian governments or
military involvement in political and economic decision making, and changes in
government through extra-constitutional means; (ii) popular unrest associated
with demands for improved political, economic and social conditions; (iii)
internal insurgencies; (iv) hostile relations with neighboring countries; and
(v) ethnic, religious and racial disaffection. Such social, political and
economic instability could significantly disrupt the principal financial markets
in which a Fund invests and adversely affect the value of a Fund's assets. In
addition, there may be the possibility of asset expropriations or future
confiscatory levels of taxation affecting the Funds.
In China, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea
and Thailand, government regulation or a company's charter may limit the maximum
foreign aggregate ownership of equity in the company. South Korea generally
prohibits foreign investment in won-denominated debt securities, and Sri Lanka
prohibits foreign investment in government debt securities. South Korea
prohibits foreign investment in specified telecommunications companies, and the
Philippines prohibits foreign investment in mass media companies and companies
providing certain professional services. In the Philippines, a Fund may
generally invest in "B" shares of Philippine issuers engaged in partly
nationalized business activities, the market prices, liquidity and rights of
which may vary from shares owned by nationals. Similarly, in China, a Fund may
only invest in "B" shares of securities traded on The Shanghai Securities
Exchange and The Shenzhen Stock Exchange, currently the two officially
recognized securities exchanges in China. "B" shares traded on The Shanghai
Securities Exchange are settled in U.S. dollars, and those traded on The
Shenzhen Stock Exchange are generally settled in Hong Kong dollars.
If, because of restrictions on repatriation or conversion of funds, a Fund were
unable to timely distribute substantially all of its net investment income, and
net capital gains, the Fund could be subject to federal income and excise taxes
that would not otherwise be incurred and could cease to qualify for the
favorable tax treatment afforded to regulated investment companies ("RICs")
under the Internal Revenue Code of 1986, as amended (the "Code"). In such case,
it would become subject to federal income tax on all of its income and net
gains.
Several Pacific region countries have or in the past have had hostile
relationships with neighboring nations or have experienced internal insurgency.
Thailand has experienced border conflicts with Laos and Cambodia, and India is
engaged in border disputes with several of its neighbors, including China and
Pakistan. An uneasy truce exists between North Korea and South Korea, and the
recurrence of hostilities remains possible. Reunification of North Korea and
South Korea could have a detrimental effect on the economy of South Korea. Also,
China continues to claim sovereignty over Taiwan and recently has conducted
military maneuvers near Taiwan.
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AIM EQUITY FUNDS
The economies of most Pacific region countries are heavily dependent upon
international trade and are accordingly affected by protective trade barriers
and the economic conditions of their trading partners, principally the United
States, Japan, China and the European Community. The enactment by the United
States or other principal trading partners of protectionist trade legislation,
reduction of foreign investment in the local economies and general declines in
the international securities markets could have a significant adverse effect
upon the securities markets of Pacific region countries. In addition, the
economies of some of the Asia Pacific region countries, Australia and Indonesia,
for example, are vulnerable to weakness in world prices for their commodity
exports, including crude oil.
Few of the Pacific region countries have Western-style or fully democratic
governments. Some governments in the region are authoritarian in nature and
influenced by security forces. For example, during the course of the last 25
years, governments in the region have been installed or removed as a result of
military coups, while others have periodically demonstrated repressive police
state characteristics. In several Pacific region countries, the leadership
ability of the government has suffered as a result of recent corruption
scandals. Disparities of wealth, among other factors, have also led to social
unrest in some of the Asia Pacific region countries, accompanied, in certain
cases, by violence and labor unrest. Ethnic, religious and racial disaffection,
as evidenced in India, Pakistan, and Sri Lanka, for example, have created
social, economic and political problems. Such problems also have occurred in
other regions.
Starting in mid-1997, some Pacific region countries began to experience currency
devaluations that resulted in high interest rate levels and sharp reductions in
economic activity. While the currency crisis diminished prospects for short-term
corporate earnings growth, the Sub-adviser believes that high interest rate
levels may force governments and corporations to restructure the financial
sector in a manner that may facilitate a return to high levels of long-term
economic activity.
China assumed sovereignty over Hong Kong in July 1997. Although China has
committed by treaty to preserve the economic and social freedoms enjoyed in Hong
Kong for fifty years, the continuation of the current form of the economic
system in Hong Kong will depend on the actions of the government of China. In
addition, such assumption of sovereignty has increased sensitivity in Hong Kong
to political developments and statements by public figures in China. Business
confidence in Hong Kong, therefore, can be significantly affected by such
developments and statements, which in turn can affect markets and business
performance.
In addition, there is continuing risk that the Hong Kong dollar will be devalued
and a risk of possible loss of investor confidence in the Hong Kong markets and
dollar. However, factors exist that are likely to mitigate this risk. First,
China has stated its intention to implement a "one country, two systems" policy,
which would preserve monetary sovereignty and leave control in the hands of the
Hong Kong Monetary Authority ("HKMA").
Second, fixed rate parity with the U.S. dollar is seen as critical to
maintaining investors' confidence in the transition to Chinese rule and,
therefore, it is anticipated that, if international investors lose confidence in
Hong Kong dollar assets, the HKMA would take steps to support the currency,
though the taking of such steps cannot be assured. Third, Hong Kong's and
China's sizable combined foreign exchange reserve may be used to support the
value of the Hong Kong dollar, provided that China does not appropriate such
reserves for other uses, which is not anticipated but cannot be assured.
Finally, China would be likely to experience significant adverse political and
economic consequences if confidence in the Hong Kong dollar and the territory
assets were to be endangered.
SPECIAL CONSIDERATIONS AFFECTING LATIN AMERICAN COUNTRIES. Most Latin
American countries have experienced substantial, and in some periods extremely
high, rates of inflation for many years. Inflation and rapid fluctuations in
inflation rates have had and may continue to have very negative effects on the
economies and securities markets of certain Latin American countries. Certain
Latin American countries are also among the largest debtors to commercial banks
and foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by foreign entities, investments may only be made in certain Latin
American countries solely or primarily through governmentally approved
investment vehicles or companies.
Certain Latin American countries may have managed currencies that are maintained
at artificial levels to the U.S. dollar rather than at levels determined by the
market. This type of system can lead to sudden and large adjustments in the
currency which, in turn, can have a disruptive and negative effect on foreign
investors. For example, in late 1994, the value of the Mexican peso lost more
than one-third of its value relative to the U.S. dollar.
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AIM EQUITY FUNDS
SPECIAL CONSIDERATIONS AFFECTING EMERGING MARKETS. Investing in the
securities of companies in emerging markets may entail special risks relating to
potential political and economic instability and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility into U.S. dollars and on repatriation of capital
invested. In the event of such expropriation, nationalization or other
confiscation by any country, a Fund could lose its entire investment in any such
country.
Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading value in issuers compared to the
volume of trading in U.S. securities could cause prices to be erratic for
reasons apart from factors that affect the quality of the securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value and
liquidity of portfolio securities, especially in these markets. In addition,
securities traded in certain emerging markets may be subject to risks due to the
inexperience of financial intermediaries, a lack of modern technology, the lack
of a sufficient capital base to expand business operations, and the possibility
of permanent or temporary termination of trading.
Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging markets there may be
share registration and delivery delays or failures.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain emerging market countries.
DEBT SECURITIES
Each Fund is permitted to purchase investment grade debt securities. In
selecting debt securities for investment, the Sub-adviser reviews and monitors
the creditworthiness of each issuer and issue and analyzes interest rate trends
and specific developments that may affect individual issuers, in addition to
relying on ratings assigned by S&P, Moody's or another nationally recognized
statistical rating organization ("NRSRO") as indicators of quality. Debt
securities rated Baa by Moody's or BBB by S&P are investment grade, although
Moody's considers securities rated Baa to have speculative characteristics.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity for such securities to make principal and interest payments
than is the case for higher grade debt securities. Each Fund is also permitted
to purchase debt securities that are not rated by S&P, Moody's or another NRSRO,
but that the Sub-adviser determines to be of comparable quality to that of rated
securities in which the Fund may invest. Such securities are included in the
computation of any percentage limitations applicable to the comparable rated
securities.
Ratings of debt securities represent the rating agencies' opinions regarding
their quality, are not a guarantee of quality and may be reduced after a Fund
has acquired the security. The Sub-adviser will consider such an event in
determining whether a Fund should continue to hold the security but is not
required to dispose of it. Credit ratings attempt to evaluate the safety of
principal and interest payments and do not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security. Also, NRSROs may fail to make timely changes in credit ratings in
response to subsequent events, so that an issuer's current financial condition
may be better or worse than the rating indicates. For a description of Moody's
and S&P ratings, see "Description of Debt Ratings" herein.
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INVESTMENT LIMITATIONS
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Each Fund has adopted the following investment limitations as fundamental
policies that may not be changed without approval by the affirmative vote of a
majority of the outstanding shares of the Fund. No Fund may:
(1) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
the Fund may exercise rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner;
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AIM EQUITY FUNDS
(2) Purchase or sell physical commodities, but the Fund may purchase,
sell or enter into financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or derivative
instruments;
(3) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
(including the amount borrowed but reduced by any liabilities not
constituting borrowings) at the time of the borrowing, except that the Fund
may borrow up to an additional 5% of its total assets (not including the
amount borrowed) for temporary or emergency purposes;
(4) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this limitation, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
(5) Purchase securities of any one issuer if, as a result, more than 5%
of the Fund's total assets would be invested in securities of that issuer or
the Fund would own or hold more than 10% of the outstanding voting
securities of that issuer, except that up to 25% of the Fund's total assets
may be invested without regard to this limitation, and except that this
limitation does not apply to securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities or to securities issued by
other investment companies;
(6) Engage in the business of underwriting securities of other issuers,
except to the extent that the Fund might be considered an underwriter under
the federal securities laws in connection with its disposition of portfolio
securities; or
(7) Purchase any security if, as a result of that purchase, 25% or more
of the Fund's total assets would be invested in securities of issuers having
their principal business activities in the same industry, except that this
limitation does not apply to securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
For purposes of the concentration policy contained in limitation (7) above, each
Fund intends to comply with the SEC staff position that securities issued or
guaranteed as to principal and interest by any single foreign government or any
supranational organization are considered to be securities of issuers in the
same industry.
The following investment limitations of each Fund are not fundamental policies
and may be changed by vote of the Trust's Board of Trustees without shareholder
approval. Each Fund may not:
(1) Invest more than 15% of its net assets in illiquid securities, a
term which means securities that cannot be disposed of within seven days in
the normal course of business at approximately the amount at which the Fund
has valued the securities and includes, among other things, repurchase
agreements maturing in more than seven days;
(2) Borrow money except for temporary or emergency purposes (not for
leveraging) in excess of 33 1/3% of the value of the Fund's total assets;
(3) Enter into a futures contract, an option on a futures contract or an
option on foreign currency traded on a CFTC-regulated exchange, in each case
other than for BONA FIDE hedging purposes (as defined by the CFTC), if the
aggregate initial margin and premiums required to establish all of these
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund
has entered into;
(4) Purchase securities on margin, provided that the Fund may obtain
short-term credits as may be necessary for the clearance of purchases and
sales of securities, and further provided that the Fund may make margin
deposits in connection with its use of financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments; or
(5) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
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If a percentage restriction on investment or utilization of assets in an
investment policy or limitation is adhered to at the time an investment is made,
a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of a Fund's investment policies or restrictions. A Fund
may exchange securities, exercise conversion or subscription rights, warrants,
or other rights to purchase common stock or other equity securities and may
hold, except to the extent limited by the 1940 Act, any such securities so
acquired without regard to the Fund's investment policies and restrictions. The
original cost of the securities so acquired will be included in any subsequent
determination of a Fund's compliance with the investment percentage limitations
referred to above and in the Prospectus.
- --------------------------------------------------------------------------------
EXECUTION OF PORTFOLIO
TRANSACTIONS
- --------------------------------------------------------------------------------
Subject to policies established by the Trust's Board of Trustees, the
Sub-adviser is responsible for the execution of the Funds' portfolio
transactions and the selection of brokers/dealers who execute such transactions
on behalf of the Funds. In executing transactions, the Sub-adviser seeks the
best net results for each Fund, taking into account such factors as the price
(including the applicable brokerage commission or dealer spread), size of the
order, difficulty of execution and operational facilities of the firm involved.
Although the Sub-adviser generally seeks reasonably competitive commission rates
and spreads, payment of the lowest commission or spread is not necessarily
consistent with the best net results. While the Funds may engage in soft dollar
arrangements for research services, as described below, the Funds have no
obligation to deal with any broker/dealer or group of broker/dealers in the
execution of portfolio transactions.
Consistent with the interests of the Funds, the Sub-adviser may select brokers
to execute the Funds' portfolio transactions on the basis of the research
services they provide to the Sub-adviser for its use in managing the Funds and
its other advisory accounts. Such services may include furnishing analysis,
reports and information concerning issuers, industries, securities, geographic
regions, economic factors and trends, portfolio strategy, and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). Research and brokerage
services received from such broker are in addition to, and not in lieu of, the
services required to be performed by the Sub-adviser under the applicable
investment management and administration contract. A commission paid to such
broker may be higher than that which another qualified broker would have charged
for effecting the same transaction, provided that the Sub-adviser determines in
good faith that such commission is reasonable in terms either of that particular
transaction or the overall responsibility of the Sub-adviser to the Funds and
its other clients and that the total commissions paid by each Fund will be
reasonable in relation to the benefits received by the Funds over the long term.
Research services may also be received from dealers who execute Fund
transactions in OTC markets.
The Sub-adviser may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Fund toward payment of its expenses, such as
transfer agent and custodian fees.
Investment decisions for each Fund and for other investment accounts managed by
the Sub-adviser are made independently of each other in light of differing
conditions. However, the same investment decision occasionally may be made for
two or more of such accounts, including one or more Funds. In such cases,
simultaneous transactions may occur. Purchases or sales are then allocated as to
price or amount in a manner deemed fair and equitable to all accounts involved.
While in some cases this practice could have a detrimental effect upon the price
or value of the security as far as a Fund is concerned, in other cases the
Sub-adviser believes that coordination and the ability to participate in volume
transactions will be beneficial to the Funds.
Under a policy adopted by the Trust's Board of Trustees, and subject to the
policy of obtaining the best net results, the Sub-adviser may consider a
broker/dealer's sale of the shares of the Funds and the other funds for which
AIM or the Sub-adviser serves as investment manager and/or administrator in
selecting broker/dealers for the execution of portfolio transactions. This
policy does not imply a commitment to execute portfolio transactions through all
broker/dealers that sell shares of the Funds and such other funds.
Each Fund contemplates purchasing most foreign equity securities in OTC markets
or stock exchanges located in the countries in which the respective principal
offices of the issuers of the various securities are located, if that is the
best
Statement of Additional Information Page 22
<PAGE>
AIM EQUITY FUNDS
available market. The fixed commissions paid in connection with most such
foreign stock transactions generally are higher than negotiated commissions on
U.S. transactions. There generally is less government supervision and regulation
of foreign stock exchanges and brokers than in the United States. Foreign
security settlements may in some instances be subject to delays and related
administrative uncertainties.
Foreign equity securities may be held by a Fund in the form of ADRs, ADSs, EDRs,
GDRs, CDRs or securities convertible into foreign equity securities. ADRs, ADSs,
EDRs, GDRs and CDRs may be listed on stock exchanges, or traded in the OTC
markets in the United States or Europe, as the case may be. ADRs, like other
securities traded in the United States, will be subject to negotiated commission
rates. The foreign and domestic debt securities and money market instruments in
which the Funds may invest are generally traded in the OTC markets.
Each Fund contemplates that, consistent with the policy of obtaining the best
net results, brokerage transactions may be conducted through certain companies
that are affiliated with AIM or the Sub-adviser. The Trust's Board of Trustees
has adopted procedures in conformity with Rule 17e-1 under the 1940 Act to
ensure that all brokerage commissions paid to such affiliates are reasonable and
fair in the context of the market in which they are operating. Any such
transactions will be effected and related compensation paid only in accordance
with applicable SEC regulations.
For the fiscal year ended December 31, 1995, the Europe Fund paid to GT Bank in
Liechtenstein AG and GT Bank in Liechtenstein (Zurich), each of which was an
"affiliated" broker as defined in the 1940 Act, aggregate brokerage commissions
of $9,529 and $16,250, respectively, for transactions involving purchases and
sales of portfolio securities.
For the fiscal year ended December 31, 1995, the International Fund paid to GT
Bank in Liechtenstein AG aggregate brokerage commissions of $1,475 for
transactions involving purchases and sales of portfolio securities which
represented 0.08% of the total brokerage commissions paid by the International
Fund and less than 0.01% of the aggregate dollar amount of transactions
involving payment of commissions by the International Fund. For the fiscal year
ended December 31, 1996, the International Fund paid to GT Bank in Liechtenstein
(Deutschland) Gmbh and GT Bank in Liechtenstein AG aggregate brokerage
commissions of $6,284 and $8,378, respectively, for transactions involving
purchases and sales of portfolio securities which represented 0.09% and 0.50%,
respectively, of the total brokerage commissions paid by the International Fund,
and 0.08% and 0.94%, respectively, of the aggregate dollar amount of
transactions involving payment of commissions by the International Fund. For the
fiscal year ended December 31, 1996, the Worldwide Fund paid to GT Bank in
Liechtenstein (Deutschland) Gmbh aggregate brokerage commissions of $361.87 for
transactions involving purchases and sales of portfolio securities which
represented less than 0.01% of the total brokerage commissions paid by the
Worldwide Fund, and less than 0.01% of the aggregate dollar amount of the
transactions involving payment of commissions by the Worldwide Fund.
For the fiscal year ended December 31, 1997, no payments were made to affiliated
brokers.
Aggregate brokerage commissions paid by the Funds for their three most recent
fiscal years were:
<TABLE>
<CAPTION>
FUND 1997 1996 1995
- -------------------------------------------------------------------------- ------------- ------------- -------------
<S> <C> <C> <C>
Mid Cap Fund.............................................................. $ 2,193,539 $ 2,760,768 $ 878,569
Europe Fund............................................................... $ 2,217,385 $ 2,711,139 $ 3,877,784
International Fund........................................................ $ 874,443 $ 1,496,178 $ 1,889,228
Japan Fund................................................................ $ 218,841 $ 253,623 $ 440,117
Pacific Fund.............................................................. $ 2,767,789 $ 5,151,533 $ 3,310,887
Worldwide Fund............................................................ $ 578,365 $ 792,165 $ 1,007,167
</TABLE>
PORTFOLIO TRADING AND TURNOVER
Although the Funds generally do not intend to trade for short-term profits, the
securities held by a Fund will be sold whenever the Sub-adviser believes it is
appropriate to do so, without regard to the length of time a particular security
may have been held. Portfolio turnover rate is calculated by dividing the lesser
of sales or purchases of portfolio securities by each Fund's average month-end
portfolio sales, excluding short-term investments. The portfolio turnover rate
will not be a limiting factor when the Sub-adviser deems portfolio changes
appropriate. Higher portfolio turnover involves correspondingly greater
brokerage commissions and other transaction costs that a Fund will bear directly
and may result in the
Statement of Additional Information Page 23
<PAGE>
AIM EQUITY FUNDS
realization of net capital gains that are taxable when distributed to the Fund's
shareholders. The portfolio turnover rates for the fiscal years ended December
31, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
FUND 1997 1996
- ------------------------------------------------------------------------------------------------------ ---------- ----------
<S> <C> <C>
Mid Cap Fund.......................................................................................... 190% 253%
Europe Fund........................................................................................... 107% 123%
International Fund.................................................................................... 72% 74%
Japan Fund............................................................................................ 58% 31%
Pacific Fund.......................................................................................... 80% 93%
Worldwide Fund........................................................................................ 92% 80%
</TABLE>
- --------------------------------------------------------------------------------
TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The Trust's Trustees and Executive Officers are listed below. Unless otherwise
indicated, the address of each Executive Officer is 11 Greenway Plaza, Suite
100, Houston, Texas 77046.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
TRUST AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
William J. Guilfoyle*, 39 Mr. Guilfoyle is President, GT Global, Inc. ("GT Global") since 1995;
Trustee, Chairman of the Board and President Director, GT Global since 1991; Senior Vice President and Director of
50 California Street Sales and Marketing, GT Global from May 1992 to April 1995; Vice
San Francisco, CA 94111 President and Director of Marketing, GT Global from 1987 to 1992;
Director, Liechtenstein Global Trust AG (holding company of the
various international GT companies) Advisory Board since January 1996;
Director, G.T. Global Insurance Agency ("G.T. Insurance") since 1996;
President and Chief Executive Officer, G.T. Insurance since 1995;
Senior Vice President and Director, Sales and Marketing, G.T.
Insurance from April 1995 to November 1995; Senior Vice President,
Retail Marketing, G.T. Insurance from 1992 to 1993. Mr. Guilfoyle is
also a trustee of each of the other investment companies registered
under the 1940 Act that is sub-advised or sub-administered by the
Sub-adviser.
</TABLE>
<TABLE>
<S> <C>
C. Derek Anderson, 57 Mr. Anderson is President, Plantagenet Capital Management, LLC (an
Trustee investment partnership); Chief Executive Officer, Plantagenet
220 Sansome Street Holdings, Ltd. (an investment banking firm); Director, Anderson
Suite 400 Capital Management, Inc. since 1988; Director, PremiumWear, Inc.
San Francisco, CA 94104 (formerly Munsingwear, Inc.)(a casual apparel company) and Director,
"R" Homes, Inc. and various other companies. Mr. Anderson is also a
trustee of each of the other investment companies registered under the
1940 Act that is sub-advised or sub-administered by the Sub-adviser.
Frank S. Bayley, 58 Mr. Bayley is a partner of the law firm of Baker & McKenzie, and
Trustee serves as a Director and Chairman of C.D. Stimson Company (a private
Two Embarcadero Center investment company). Mr. Bayley is also a trustee of each of the other
Suite 2400 investment companies registered under the 1940 Act that is sub-advised
San Francisco, CA 94111 or sub- administered by the Sub-adviser.
</TABLE>
- ------------------------
* Mr. Guilfoyle is an "interested person" of the Trust as defined by the 1940
Act due to his affiliation with the Sub-adviser.
Statement of Additional Information Page 24
<PAGE>
AIM EQUITY FUNDS
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
TRUST AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Arthur C. Patterson, 54 Mr. Patterson is Managing Partner of Accel Partners (a venture capital
Trustee firm). He also serves as a director of Viasoft and PageMart, Inc.
428 University Avenue (both public software companies), as well as several other privately
Palo Alto, CA 94301 held software and communications companies. Mr. Patterson is also a
trustee of each of the other investment companies registered under the
1940 Act that is sub-advised or sub-administered by the Sub-adviser.
Ruth H. Quigley, 63 Miss Quigley is a private investor. From 1984 to 1986, she was
Trustee President of Quigley Friedlander & Co., Inc. (a financial advisory
1055 California Street services firm). Miss Quigley is also a trustee of each of the other
San Francisco, CA 94108 investment companies registered under the 1940 Act that is sub-advised
or sub-administered by the Sub-adviser.
John J. Arthur+, 53 Director, Senior Vice President and Treasurer, A I M Advisors, Inc.;
Vice President Vice President and Treasurer, A I M Management Group Inc., A I M
Capital Management, Inc., A I M Distributors, Inc., A I M Fund
Services, Inc. and Fund Management Company.
Kenneth W. Chancey, 52 Senior Vice President -- Mutual Fund Accounting, the Sub-adviser since
Vice President and Principal Accounting Officer 1997; Vice President -- Mutual Fund Accounting, the Sub-adviser from
50 California Street 1992 to 1997.
San Francisco, CA 94111
Melville B. Cox, 54 Vice President and Chief Compliance Officer, A I M Advisors, Inc.,
Vice President A I M Capital Management, Inc., A I M Distributors, Inc., A I M Fund
Services, Inc. and Fund Management Company.
Gary T. Crum, 50 Director and President, A I M Capital Management, Inc.; Director and
Vice President Senior Vice President, A I M Management Group Inc. and A I M Advisors,
Inc.; and Director, A I M Distributors, Inc. and AMVESCAP PLC.
Robert H. Graham, 51 Director, President and Chief Executive Officer, A I M Management
Vice President Group Inc.; Director and President, A I M Advisors, Inc.; Director and
Senior Vice President, A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc. and Fund Management
Company; and Director, AMVESCAP PLC.
Helge K. Lee, 52 Chief Legal and Compliance Officer -- North America, the Sub-adviser
Vice President and Secretary since October 1997; Executive Vice President of the Asset Management
50 California Street Division of Liechtenstein Global Trust since October 1996; Senior Vice
San Francisco, CA 94111 President, General Counsel and Secretary of LGT Asset Management Inc.,
Chancellor LGT Asset Management, Inc., GT Global, GT Global Investor
Services, Inc. and G.T. Insurance from May 1994 to October 1996;
Senior Vice President, General Counsel and Secretary of
Strong/Corneliuson Management, Inc. and Secretary of each of the
Strong Funds from October 1991 through May 1994.
Carol F. Relihan+, 43 Director, Senior Vice President, General Counsel and Secretary, A I M
Vice President Advisors, Inc.; Vice President, General Counsel and Secretary, A I M
Management Group Inc.; Director, Vice President and General Counsel,
Fund Management Company; Vice President and General Counsel, A I M
Fund Services, Inc.; and Vice President, A I M Capital Management,
Inc. and A I M Distributors, Inc.
Dana R. Sutton, 39 Vice President and Fund Controller, A I M Advisors, Inc.; and
Vice President and Assistant Treasurer Assistant Vice President and Assistant Treasurer, Fund Management
Company.
</TABLE>
Statement of Additional Information Page 25
<PAGE>
AIM EQUITY FUNDS
- ------------------------------
+ Mr. Arthur and Ms. Relihan are married to each other.
Statement of Additional Information Page 26
<PAGE>
AIM EQUITY FUNDS
The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and the
Funds and recommending firms to serve as independent auditors of the Trust. Each
of the Trustees and Officers of the Trust is also a Trustee and Officer of AIM
Investment Portfolios, AIM Investment Funds, AIM Series Trust, AIM Floating Rate
Fund, AIM Eastern Europe Fund, GT Global Variable Investment Trust, GT Global
Variable Investment Series, Growth Portfolio, Global High Income Portfolio,
Global Investment Portfolio and Floating Rate Portfolio, which also are
registered investment companies advised by AIM and sub-advised by the
Sub-adviser or an affiliate thereof. All of the Trust's Trustees also serve as
directors or trustees of some or all of the other investment companies managed,
administered or advised by AIM. All of the Trust's executive officers hold
similar offices with some or all of the other investment companies managed,
administered or advised by AIM. Each Trustee who is not a director, officer or
employee of the Sub-adviser or any affiliated company is paid aggregate fees of
$5,000 a year plus $300 per Fund for each meeting of the Board attended by the
Trustee, and reimbursed travel and other expenses incurred in connection with
attendance at such meetings. Other Trustees and Officers receive no compensation
or expense reimbursements from the Trust. For the fiscal year ended December 31,
1997, the Trust paid Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley,
who are not directors, officers or employees of the Sub-adviser or any
affiliated company, total compensation of $19,276, $20,044, $16,350 and $18,203,
respectively, for their services as Trustees. For the year ended December 31,
1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who are not
directors, officers or employees of the Sub-adviser or any other affiliated
company, received total compensation of $103,654, $106,556, $89,700 and $98,038,
respectively, from the investment companies managed or administered by AIM and
sub-advised or sub-administered by the Sub-adviser for which he or she serves as
a Trustee. Fees and expenses disbursed to the Trustees contained no accrued or
payable pension or retirement benefits. As of June 26, 1998, the Officers and
Trustees and their families as a group owned in the aggregate beneficially or of
record less than 1% of the outstanding shares of any Fund.
Statement of Additional Information Page 26
<PAGE>
AIM EQUITY FUNDS
- --------------------------------------------------------------------------------
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------
To the best knowledge of the Trust, the names and addresses of the holders of 5%
or more of the outstanding shares of any class of each Fund's equity securities
as of June 26, 1998, and the percentage of the outstanding shares held by such
holders are set forth below.
<TABLE>
<CAPTION>
PERCENT
PERCENT OWNED OF
OWNED OF RECORD AND
FUND NAME AND ADDRESS OF OWNER RECORD* BENEFICIALLY
- ------------------------------ ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
International Fund G.T. Capital Holdings, Inc. 401(k) FBO 7.93% -0-
-- Advisor Class Account: 565-59-1255
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
G.T. Capital Holdings, Inc. 401(k) FBO
Account: 217-64-6674
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
7.14% -0-
G.T. Capital Holdings, Inc. 401(k) FBO
Account: 545-91-4793
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
5.98% -0-
G.T. Capital Holdings, Inc. 401(k) P/S
A/C ###-##-#### P
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
5.82% -0-
G.T. Capital Holdings, Inc. 401(k) FBO
Account: 562-04-5693
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
5.58% -0-
G.T. Capital Holdings, Inc. 401(k) FBO
Account: 546-33-3477
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
5.47% -0-
Pacific Fund G.T. Capital Holdings, Inc. 27.08% -0-
-- Advisor Class SERP Deferred Compensation
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Ellen Hoke
</TABLE>
- ------------------------
*The Trust has no knowledge as to whether all or any portion of the shares owned
of record are also owned beneficially.
Statement of Additional Information Page 27
<PAGE>
AIM EQUITY FUNDS
<TABLE>
<CAPTION>
PERCENT
PERCENT OWNED OF
OWNED OF RECORD AND
FUND NAME AND ADDRESS OF OWNER RECORD* BENEFICIALLY
- ------------------------------ ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
G.T. Capital Holdings, Inc. 401(k) FBO
Account: 045-46-2854
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Human Resources
9.95% -0-
Japan Fund Donaldson Lufkin Jenrette Securities Corp. Inc. 56.63% -0-
-- Advisor Class P.O. Box 2052
Jersey City, New Jersey 07303-2052
G.T. Capital Holdings, Inc.
SERP Deferred Compensation
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Ellen Hoke
5.35% -0-
</TABLE>
- ------------------------
*The Trust has no knowledge as to whether all or any portion of the shares owned
of record are also owned beneficially.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES
AIM serves as the investment manager and administrator to each Fund under an
investment management and administration contract ("Management Contract")
between the Trust and AIM. The Sub-adviser serves as the sub-adviser and sub-
administrator to each Fund under a sub-advisory and sub-administration contract
between AIM and the Sub-adviser ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). As investment managers and
administrators, AIM and the Sub-adviser make all investment decisions for each
Fund and administer each Fund's affairs. Among other things, AIM and the
Sub-adviser furnish the services and pay the compensation and travel expenses of
persons who perform the executive, administrative, clerical and bookkeeping
functions of the Trust and the Funds and provide suitable office space and
necessary small office equipment and utilities.
The Management Contracts may be renewed for additional one-year terms with
respect to each Fund, provided that any such renewal has been specifically
approved at least annually by: (i) the Board of Trustees or the vote of a
majority of the Fund's outstanding voting securities (as defined in the 1940
Act), and (ii) a majority of Trustees who are not parties to the Management
Contracts or "interested persons" of any such party (as defined in the 1940
Act), cast in person at a meeting called for the specific purpose of voting on
such approval. With respect to any Fund, either the Trust or each of AIM or the
Sub-adviser may terminate the Management Contracts without penalty upon sixty
days' written notice to the other party. The Management Contracts terminate
automatically in the event of their assignment (as defined in the 1940 Act).
The amounts of investment management and administration fees paid by each Fund
to the Sub-adviser during the Funds' three most recent fiscal years were as
follows:
<TABLE>
<CAPTION>
FUND 1997 1996 1995
- ------------------------------------------------------------ --------------- --------------- ---------------
<S> <C> <C> <C>
Mid Cap Fund................................................ $ 3,999,732 $ 4,982,969 $ 4,425,913
Europe Fund................................................. $ 5,228,246 $ 5,416,280 $ 6,161,265
International Fund.......................................... $ 2,309,873 $ 3,034,522 $ 4,027,923
Japan Fund.................................................. $ 1,017,788 $ 1,367,702 $ 1,167,576
Pacific Fund................................................ $ 3,736,264 $ 5,260,774 $ 5,176,333
Worldwide Fund.............................................. $ 1,619,691 $ 1,885,798 $ 2,050,983
</TABLE>
Statement of Additional Information Page 28
<PAGE>
AIM EQUITY FUNDS
DISTRIBUTION SERVICES
Each Fund's Advisor Class shares are offered continuously through the Funds'
principal underwriter and distributor, AIM Distributors, on a "best efforts"
basis without a front-end sales charge or a contingent deferred sales charge.
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
The Transfer Agency and Service Agreement between the Trust and A I M Fund
Services, Inc. ("AFS"), a registered transfer agent and wholly-owned subsidiary
of AIM, provides that AFS will perform certain shareholder services for the
Funds for a fee per account serviced. The Transfer Agency and Service Agreement
provides that AFS will receive a per account fee plus out-of-pocket expenses to
process orders for purchases, redemptions and exchanges of shares; prepare and
transmit payments for dividends and distributions declared by the Funds;
maintain shareholder accounts and provide shareholders with information
regarding the Funds and their accounts. The Transfer Agency and Service
Agreement became effective on September 8, 1998. The Sub-adviser also serves as
each Fund's pricing and accounting agent. For the fiscal years ended December
31, 1995, December 31, 1996 and December 31, 1997, the accounting services fees
paid by the Mid Cap Fund, Europe Fund, International Fund, Japan Fund, Pacific
Fund and Worldwide Fund were $79,918, $173,767 and $142,274, $62,660, $139,442
and $138,072, $40,655, $77,934 and $59,416, $14,483, $35,119 and $26,210,
$53,724, $135,182 and $99,321, and $22,092, $48,430 and $41,680, respectively.
EXPENSES OF THE FUNDS
Each Fund pays all expenses not assumed by AIM, the Sub-adviser, AIM
Distributors and other agents. These expenses include, in addition to the
advisory, distribution, transfer agency, pricing and accounting agency and
brokerage fees discussed above, legal and audit expenses, custodian fees,
trustees' fees, organizational fees, fidelity bond and other insurance premiums,
taxes, extraordinary expenses and expenses of reports and prospectuses sent to
existing investors. Certain of these expenses, such as custodial fees and
brokerage fees generally are higher for non-U.S. securities. The allocation of
general Trust expenses, and expenses shared by the Funds with one another, are
made on a basis deemed fair and equitable, which may be based on the relative
net assets of the Funds or the nature of the services performed and relative
applicability to each Fund. Expenditures, including costs incurred in connection
with the purchase or sale of portfolio securities, that are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies, are accounted for as capital items and not as expenses.
The ratio of each Fund's, other than Mid Cap Fund's, expenses to its relative
net assets can be expected to be higher than the expense ratios of funds
investing solely in domestic securities, since the cost of maintaining the
custody of foreign securities and the rate of investment management fees paid by
each Fund generally are higher than the comparable expenses of such other funds.
- --------------------------------------------------------------------------------
VALUATION OF FUND SHARES
- --------------------------------------------------------------------------------
The net asset value per share of each Fund is normally determined daily as of
the close of trading on the New York Stock Exchange ("NYSE") (generally 4:00
p.m. Eastern time) on each business day of the Fund. In the event the NYSE
closes early (i.e., before 4:00 p.m. Eastern time) on a particular day, the net
asset value of a Fund is determined as of the close of the NYSE on such day. Net
asset value per share is determined by dividing the value of each Fund's
securities, cash and other assets (including interest accrued but not collected)
attributable to a particular class, less all its liabilities (including accrued
expenses and dividends payable) attributable to that class, by the total number
of shares outstanding of that class. Determination of each Fund's net asset
value per share is made in accordance with generally accepted accounting
principles.
Each equity security held by a Fund 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 mean between the closing bid and
asked prices on that day. Each security traded in the over-the-counter market
(but not including securities reported on the NASDAQ National Market System) is
valued at the mean between the last bid and asked prices based upon quotes
furnished by market makers for such securities. 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 mean between the closing bid and asked
prices on that day. Debt securities 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 institution-size trading in similar groups of
securities, developments related to special securities, yield, quality, coupon
rate, maturity, type
Statement of Additional Information Page 29
<PAGE>
AIM EQUITY FUNDS
of issue, individual trading characteristics and other market data. 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
on the basis of amortized cost. For purposes of determining net asset value per
share, futures and options contracts generally will be valued 15 minutes after
the close of trading of the NYSE.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 each Fund's shares are determined at such
times. Foreign currency exchange rates are also generally determined prior the
close of the NYSE. Occasionally, events affecting the values of such securities
and such exchange rates may occur between the times at which such values are
determined and the close of the NYSE which will not be reflected in the
computation of a 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 of the Fund.
- --------------------------------------------------------------------------------
HOW TO PURCHASE AND REDEEM SHARES
- --------------------------------------------------------------------------------
A complete description of the manner in which shares of the Funds may be
purchased appears in the Funds' Prospectuses under the headings "How to Purchase
Shares," "Terms and Conditions of Purchase of the AIM Funds" and "Special
Plans."
Complete information concerning the method of exchanging shares of the Funds for
shares of the other AIM Funds is set forth in the Prospectuses under the heading
"Exchange Privilege."
Information concerning redemption of the Funds' shares is set forth in the
Prospectuses under the heading "How to Redeem Shares." In addition to the Funds'
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Funds at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the applicable Fund next determined after the repurchase
order is received. Such an arrangement is subject to timely receipt by AFS, of
all required documents in good order. If such documents are not received within
a reasonable time after the order is placed, the order is subject to
cancellation. While there is no charge imposed by a Fund or by AIM Distributors
(other than any applicable contingent deferred sales charge) when shares are
redeemed or repurchased, dealers may charge a fair service fee for handling the
transaction.
The right of redemption may be suspended or the date of payment postponed when
(a) trading on the NYSE is restricted, as determined by applicable rules and
regulations of the SEC, (b) the NYSE is closed for other than customary weekend
and holiday closings, (c) the SEC has by order permitted such suspension, or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of a Fund not reasonably
practicable.
PROGRAMS AND SERVICES FOR SHAREHOLDERS. The Funds provide certain services for
shareholders and certain investment or redemption programs. See "Exchange
Privilege" and "How to Redeem Shares" in the Prospectus. All inquiries
concerning these programs should be made directly to A I M Fund Services, Inc.,
P.O. Box 4739, Houston, Texas 77210-4739, toll free at (800) 959-4246.
DIVIDEND ORDER. Dividends may be paid to someone other than the registered
owner, or sent to an address other than the address of record. (Please note that
signature guarantees are required to effect this option.) An investor also may
direct that his or her dividends be invested in one of the other AIM Funds and
there is no sales charge for these investments; initial investment minimums
apply. See "Dividends, Distributions and Tax Matters -- Dividends and
Distributions" in the Prospectus. To effect this option, please contact your
authorized dealer. For more information concerning AIM Funds other than the
Funds, please obtain a current prospectus by contacting your authorized dealer,
by writing to A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas
77210-4739, or by calling toll free (800) 959-4246.
Statement of Additional Information Page 30
<PAGE>
AIM EQUITY FUNDS
TAXES
- --------------------------------------------------------------------------------
GENERAL
Each Fund is treated as a separate corporation for federal income tax purposes.
To continue to qualify for treatment as a RIC under the Code, each Fund must
distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of net investment
income, net short-term capital gain and net gains from certain foreign currency
transactions) ("Distribution Requirement") and must meet several additional
requirements. With respect to each Fund, these requirements include the
following: (1) the Fund must derive at least 90% of its gross income each
taxable year from dividends, interest, payments with respect to securities loans
and gains from the sale or other disposition of securities or foreign
currencies, or other income (including gains from options, Futures or Forward
Contracts) derived with respect to its business of investing in securities or
those currencies ("Income Requirement"); and (2) the Diversification
Requirements.
Dividends and other distributions declared by a Fund in, and payable to
shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
FOREIGN TAXES
Dividends and interest received by a Fund, and gains realized thereby, may be
subject to income, withholding or other taxes imposed by foreign countries and
U.S. possessions ("foreign taxes") that would reduce the yield and/or total
return on its securities. Tax conventions between certain countries and the
United States may reduce or eliminate foreign taxes, however, and many foreign
countries do not impose taxes on capital gains in respect of investments by
foreign investors. If more than 50% of the value of a Fund's total assets at the
close of its taxable year consists of securities of foreign corporations, the
Fund will be eligible to, and may, file an election with the Internal Revenue
Service that will enable its shareholders, in effect, to receive the benefit of
the foreign tax credit with respect to any foreign taxes paid by it. Pursuant to
the election, a Fund would treat those taxes as dividends paid to its
shareholders and each shareholder would be required to (1) include in gross
income, and treat as paid by him, his share of those taxes, (2) treat his share
of those taxes and of any dividend paid by the Fund that represents its income
from foreign and U.S. possessions sources as his own income from those sources,
and (3) either deduct the taxes deemed paid by him in computing his taxable
income or, alternatively, use the foregoing information in calculating the
foreign tax credit against his federal income tax. Each Fund will report to its
shareholders shortly after each taxable year their respective shares of the
Fund's foreign taxes and income from sources within foreign countries and U.S.
possessions if it makes this election. Pursuant to the Taxpayer Relief Act of
1997 ("Tax Act"), individuals who have no more than $300 ($600 for married
persons filing jointly) of creditable foreign taxes included on Forms 1099 and
all of whose foreign source income is "qualified passive income" may elect each
year to be exempt from the extremely complicated foreign tax credit limitation
and will be able to claim a foreign tax credit without having to file the
detailed Form 1116 that otherwise is required.
PASSIVE FOREIGN INVESTMENT COMPANIES
Each Fund (other than the Mid Cap Fund) may invest in the stock of "passive
foreign investment companies" ("PFICs"). A PFIC is a foreign corporation --
other than a "controlled foreign corporation" (I.E., a foreign corporation in
which, on any day during its taxable year, more than 50% of the total voting
power of all voting stock therein or the total value of all stock therein is
owned, directly, indirectly or constructively, by "U.S. shareholders," defined
as U.S. persons that individually
Statement of Additional Information Page 31
<PAGE>
AIM EQUITY FUNDS
own, directly, indirectly or constructively, at least 10% of that voting power)
as to which a Fund is a U.S. shareholder -- that, in general, meets either of
the following tests: (1) at least 75% of its gross income is passive or (2) an
average of at least 50% of its assets produce, or are held for the production
of, passive income. Under certain circumstances, a Fund will be subject to
federal income tax on a portion of any "excess distribution" received on, or of
any gain from disposition of, stock of a PFIC (collectively "PFIC income"), plus
interest thereon, even if the Fund distributes the PFIC income as a taxable
dividend to its shareholders. The balance of the PFIC income will be included in
the Fund's investment company taxable income and, accordingly, will not be
taxable to the Fund to the extent it distributes that income to its
shareholders.
If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund" ("QEF"), then in lieu of the foregoing tax and interest
obligation, the Fund would be required to include in income each year its pro
rata share of the QEF's annual ordinary earnings and net capital gain (I.E., the
excess of net long-term capital gain over net short-term capital loss) -- which
most likely would have to be distributed by the Fund to satisfy the Distribution
Requirement and avoid imposition of the Excise Tax -- even if those earnings and
gain were not received by the Fund from the QEF. In most instances, it will be
very difficult, if not impossible, to make this election because of certain
requirements thereof.
A Fund may elect to "mark to market" its stock in any PFIC. "Marking-to-market,"
in this context, means including in ordinary income each taxable year the
excess, if any, of the fair market value of the stock over the Fund's adjusted
basis therein as of the end of that year. Pursuant to the election, a Fund also
will be allowed to deduct (as ordinary, not capital, loss) the excess, if any,
of its adjusted basis in PFIC stock over the fair market value thereof as of the
taxable year-end, but only to the extent of any net mark-to-market gains with
respect to that stock included in income by the Fund for prior taxable years. A
Fund's adjusted basis in each PFIC's stock subject to the election will be
adjusted to reflect the amounts of income included and deductions taken
thereunder. Regulations proposed in 1992 provided a similar election with
respect to the stock of certain PFICs.
NON-U.S. SHAREHOLDERS
Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by a Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by a
Fund to foreign shareholders generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
OPTIONS, FUTURES AND FOREIGN CURRENCY TRANSACTIONS
Each Fund's use of hedging transactions, such as selling (writing) and
purchasing options and Futures Contracts and entering into Forward Contracts,
involves complex rules that will determine, for federal income tax purposes, the
amount, character and timing of recognition of the gains and losses a Fund
realizes in connection therewith. Gains from the disposition of foreign
currencies (except certain gains that may be excluded by future regulations),
and gains from options, Futures and Forward Contracts derived by a Fund with
respect to its business of investing in securities or foreign currencies, will
qualify as permissible income under the Income Requirement.
Futures and Forward Contracts that are subject to section 1256 of the Code
(other than those that are part of a "mixed straddle") ("Section 1256
Contracts") and that are held by a Fund at the end of its taxable year generally
will be deemed to have been sold at that time at market value for federal income
tax purposes. Sixty percent of any net gain or loss recognized on these deemed
sales, and 60% of any net realized gain or loss from any actual sales of Section
1256 Contracts, will be treated as long-term capital gain or loss, and the
balance will be treated as short-term capital gain or loss. That 60% portion
will qualify for the reduced maximum tax rates on noncorporate taxpayers' net
capital gain enacted by the Tax Act -- 20% (10% for taxpayers in the 15%
marginal tax bracket) for gain recognized on capital assets held for more than
18 months -- instead of the 28% rate in effect before that legislation, which
now applies to gain on capital assets held for more than one year but no more
than 18 months.
Section 988 of the Code also may apply to gains and losses from transactions in
foreign currencies, foreign-currency-denominated debt securities and options,
Futures and Forward Contracts on foreign currencies ("Section 988" gains and
losses). Each Section 988 gain or loss generally is computed separately and
treated as ordinary income or loss. In the case of overlap between sections 1256
and 988, special provisions determine the character and timing of any income,
gain or loss. Each Fund attempts to monitor section 988 transactions to minimize
any adverse tax impact.
Statement of Additional Information Page 32
<PAGE>
AIM EQUITY FUNDS
If a Fund has an "appreciated financial position" -- generally, an interest
(including an interest through an option, Futures or Forward Contract or short
sale) with respect to any stock, debt instrument (other than "straight debt") or
partnership interest the fair market value of which exceeds its adjusted basis
- -- and enters into a "constructive sale" of the same or substantially similar
property, the Fund will be treated as having made an actual sale thereof, with
the result that gain will be recognized at that time. A constructive sale
generally consists of a short sale, an offsetting notional principal contract or
Futures or Forward Contract entered into by a Fund or a related person with
respect to the same or substantially similar property. In addition, if the
appreciated financial position is itself a short sale or such a contract,
acquisition of the underlying property or substantially similar property will be
deemed a constructive sale.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Funds and their shareholders. Investors are urged
to consult their own tax advisers for more detailed information and for
information regarding any foreign, state and local taxes applicable to
distributions received from a Fund.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
AIM was organized in 1976, and along with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. AIM is a direct, wholly owned subsidiary of A I M
Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are an
independent investment management group that has a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
CUSTODIAN
State Street Bank and Trust Company ("State Street"), 225 Franklin Street,
Boston, MA 02110, acts as custodian of the Funds' assets. State Street is
authorized to establish and has established separate accounts in foreign
currencies and to cause securities of the Company to be held in separate
accounts outside the United States in the custody of non-U.S. banks.
INDEPENDENT ACCOUNTANTS
The Trust's and the Funds' independent accountants are .
conducts annual audits of the Funds, assists in the
preparation of the Funds' federal and state income tax returns and consults with
the Trust and the Funds as to matters of accounting, regulatory filings and
federal and state income taxation.
The audited financial statements of the Trust included in this Statement of
Additional Information have been examined by as stated
in their opinion appearing herein and are included in reliance upon such opinion
given upon the authority of that firm as experts in accounting and auditing.
Statement of Additional Information Page 33
<PAGE>
AIM EQUITY FUNDS
SHAREHOLDER LIABILITY
Under Delaware law, the shareholders of the Trust enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances shareholders of
the Trust may be held personally liable for the Trust's obligations. However,
the Trust's Agreement and Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or a trustee. The Trust's Agreement and Declaration of Trust provides
for indemnification from the Trust property for all losses and expenses of any
shareholder held personally liable for the Trust's obligations. Thus, the risk
of a shareholder incurring financial loss on account of such liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations and where the other party was held not to be bound by the
disclaimer.
NAMES
Prior to May 29, 1998, AIM New Pacific Growth Fund operated under the name of GT
Global New Pacific Growth Fund; AIM Europe Growth Fund operated under the name
GT Global Europe Growth Fund; AIM Japan Growth Fund operated under the name of
GT Global Japan Growth Fund; AIM International Growth Fund operated under the
name of GT Global International Growth Fund; AIM Worldwide Growth Fund operated
under the name of GT Global Worldwide Growth Fund and AIM Mid Cap Growth Fund
operated under the name of GT Global America Mid Cap Growth Fund.
- --------------------------------------------------------------------------------
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
TOTAL RETURN QUOTATIONS
The standard formula for calculating total return, as described in the
Prospectus, is as follows:
P(1+T)(n)=ERV
<TABLE>
<S> <C> <C>
Where P = a hypothetical initial payment of $1,000.
T = average annual total return (assuming the applicable maximum sales load is deducted at
the beginning of the 1, 5, or 10 year periods).
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of the 1, 5, or 10
year periods (or fractional portions of such period).
</TABLE>
The standardized returns for the Class A and Advisor Class shares of the Mid Cap
Fund, stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
MID CAP FUND MID CAP FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- ----------------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997.......................................................... [7.78% 14.54%
For the five years ended Dec. 31, 1997................................................... 14.00% n/a
For the ten years ended Dec. 31, 1997.................................................... 17.03% n/a
June 1, 1995 (commencement of operations) through Dec. 31, 1997.......................... n/a 14.05%
April 1, 1993 (commencement of operations) through Dec. 31, 1997......................... n/a n/a
June 9, 1987 (commencement of operations) through Dec. 31, 1997.......................... 14.36% n/a]
</TABLE>
The standardized returns for the Class A and Advisor Class shares of the Europe
Fund, stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- ------------------------------------------------------------------------------------------ ------------- ---------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997........................................................... [5.08% 11.64%
For the five years ended Dec. 31, 1997.................................................... 10.79% n/a
For the ten years ended Dec. 31, 1997..................................................... 7.49% n/a
June 1, 1995 (commencement of operations) through Dec. 31, 1997........................... n/a 15.33%
April 1, 1993 (commencement of operations) through Dec. 31, 1997.......................... n/a n/a]
</TABLE>
Statement of Additional Information Page 34
<PAGE>
AIM EQUITY FUNDS
The standardized returns for the Class A and Advisor Class shares of the
International Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- ---------------------------------------------------------------------------------- ------------------- -------------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997................................................... [2.54% 8.53%
For the five years ended Dec. 31, 1997............................................ 7.58% n/a
For the ten years ended Dec. 31, 1997............................................. 8.09% n/a
June 1, 1995 (commencement of operations) through Dec. 31, 1997................... n/a 12.02%
April 1, 1993 (commencement of operations) through Dec. 31, 1997.................. n/a n/a]
</TABLE>
The standardized returns for the Class A and Advisor Class shares of the Japan
Fund, stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- -------------------------------------------------------------------------------------------- ----------- ---------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997............................................................. [(13.05)% (7.54)%
For the five years ended Dec. 31, 1997...................................................... 3.13% n/a
For the ten years ended Dec. 31, 1997....................................................... 2.20% n/a
June 1, 1995 (commencement of operations) through Dec. 31, 1997............................. n/a 0.55%
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................ n/a n/a]
</TABLE>
The standardized returns for the Class A and Advisor Class shares of the Pacific
Fund, stated as average annualized total returns for the periods shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- ------------------------------------------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997............................................................ [(47.31)% (44.26)%
For the five years ended Dec. 31, 1997..................................................... (2.61)% n/a
For the ten years ended Dec. 31, 1997...................................................... 4.01% n/a
June 1, 1995 (commencement of operations) through Dec. 31, 1997............................ n/a (13.89)%
April 1, 1993 (commencement of operations) through Dec. 31, 1997........................... n/a n/a]
</TABLE>
The standardized returns for the Class A and Advisor Class shares of the
Worldwide Fund, stated as average annualized total returns for the periods
shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- -------------------------------------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997....................................................... [3.95% 10.43%
For the five years ended Dec. 31, 1997................................................ 8.84% n/a
For the ten years ended Dec. 31, 1997................................................. 10.26% n/a
June 1, 1995 (commencement of operations) through Dec. 31, 1997....................... n/a 13.73%
April 1, 1993 (commencement of operations) through Dec. 31, 1997...................... n/a n/a
June 9, 1987 (commencement of operations) through Dec. 31, 1997....................... 8.41% n/a]
</TABLE>
Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, cumulative total return across a
stated period may be calculated as follows:
P(1+V)(n)=ERV
<TABLE>
<S> <C> <C>
Where P = a hypothetical initial payment of $1,000.
V = cumulative total return assuming payment of all of, a stated portion of, or none of, the
applicable maximum sales load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of the stated period.
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Mid Cap Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
MID CAP FUND MID CAP FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- ----------------------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through Dec. 31, 1997.......................... [n/a 40.51%
April 1, 1993 (commencement of operations) through Dec. 31, 1997......................... n/a n/a
June 9, 1987 (commencement of operations) through Dec. 31, 1997.......................... 336.53% n/a]
</TABLE>
Statement of Additional Information Page 35
<PAGE>
AIM EQUITY FUNDS
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Europe Fund, stated as aggregate
total returns for the periods shown, were:
<TABLE>
<CAPTION>
EUROPE FUND EUROPE FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- ------------------------------------------------------------------------------------------ ------------- ---------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through Dec. 31, 1997........................... [n/a 44.60%
April 1, 1993 (commencement of operations) through Dec. 31, 1997.......................... n/a n/a
July 19, 1985 (commencement of operations) through Dec. 31, 1997.......................... 346.82% n/a]
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the International Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
INTERNATIONAL FUND INTERNATIONAL FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- ---------------------------------------------------------------------------------- ------------------ -------------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through Dec. 31, 1997................... [n/a 34.12%
April 1, 1993 (commencement of operations) through Dec. 31, 1997.................. n/a n/a
July 19, 1985 (commencement of operations) through Dec. 31, 1997.................. 368.84% n/a]
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Japan Fund, stated as aggregate
total returns for the periods shown, were:
<TABLE>
<CAPTION>
JAPAN FUND JAPAN FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- -------------------------------------------------------------------------------------------- ----------- -----------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through Dec. 31, 1997............................. [n/a 1.44%
April 1, 1993 (commencement of operations) through Dec. 31, 1997............................ n/a n/a
July 19, 1985 (commencement of operations) through Dec. 31, 1997............................ 300.11% n/a]
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Pacific Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
PACIFIC FUND PACIFIC FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- ------------------------------------------------------------------------------------------- ------------ ---------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through Dec. 31, 1997............................ [n/a (32.08)%
April 1, 1993 (commencement of operations) through Dec. 31, 1997........................... n/a n/a
July 19, 1985 (commencement of operations) through Dec. 31, 1997........................... 630.10% n/a]
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Worldwide Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
WORLDWIDE FUND WORLDWIDE FUND
PERIOD (CLASS A) (ADVISOR CLASS)
- -------------------------------------------------------------------------------------- ---------------- -----------------
<S> <C> <C>
June 1, 1995 (commencement of operations) through Dec. 31, 1997....................... [n/a 39.47%
April 1, 1993 (commencement of operations) through Dec. 31, 1997...................... n/a n/a
June 9, 1987 (commencement of operations) through Dec. 31, 1997....................... 148.37% n/a]
</TABLE>
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of each Fund's portfolio and operating expenses of
each Fund, so that current or past yield or total return should not be
considered representative of what an investment in each Fund may earn in any
future period. These factors and possible differences in the methods used in
calculating investment results should be considered when comparing each Fund's
investment results with those published for other investment companies and other
investment vehicles. Each Fund's results also should be considered relative to
the risks associated with such Fund's investment objective and policies.
Statement of Additional Information Page 36
<PAGE>
AIM EQUITY FUNDS
PERFORMANCE INFORMATION
Total return figures for the Funds are neither fixed nor guaranteed, and no
Fund's principal is insured. Performance quotations reflect historical
information and should not be considered representative of a Fund's performance
for any period in the future. Performance is a function of a number of factors
which can be expected to fluctuate. The Funds may provide performance
information in reports, sales literature and advertisements. The Funds may also,
from time to time, quote information about the Funds published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about one or more of the Funds. Such
publications or media entities may include the following, among others:
Advertising Age
Barron's
Best's Review
Broker World
Business Week
Changing Times
Christian Science Monitor
Consumer Reports
Economist
EuroMoney
FACS of the Week
Financial Planning
Financial Product News
Financial World
Forbes
Fortune
Global Finance
Hartford Courant Inc.
Institutional Investor
Insurance Forum
Insurance Week
Investor's Daily
Journal of the American
Society of CLU & ChFC
Kiplinger Letter
Money
Mutual Fund Forecaster
Mutual Fund Magazine
Nation's Business
New York Times
Pension World
Pensions & Investments
Personal Investor
Financial Services Week
Philadelphia Inquirer
Smart Money
USA Today
U.S. News & World Report
Wall Street Journal
Washington Post
CNN
CNBC
PBS
The Funds and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
each Fund with the following, or compare each Fund's performance to performance
data of similar mutual funds as published in the following, among others:
Bank Rate National Monitor Index
Bear Stearns Foreign Bond Index
Bond Buyer Index
CDA/Wiesenberger Investment Company Services
(data and mutual fund rankings and comparisons)
CNBC/Financial News Composite Index
COFI
Consumer Price Index
Datastream
Donoghue's
Dow Jones Industrial Average
EAFE Index
First Boston High Yield Index
Fitch (publications)
Ibbotson Associates International Bond Index
International Bank for Reconstruction and
Development (publications)
International Finance Corporation Emerging
Markets Database
International Financial Statistics
Lehman Bond Indices
Lipper Analytical Data Services, Inc. (data and
mutual fund rankings and comparisons)
Micropal, Inc. (data and mutual fund rankings
and comparisons)
Moody's Investors Service (publications)
Morgan Stanley Capital International All Country
(AC) World Index
Morgan Stanley Capital International World
Indices
Morningstar, Inc. (data and mutual fund rankings
and comparisons)
NASDAQ
Organization for Economic Cooperation and
Development (publications)
Salomon Brothers Global Telecommunications
Index
Salomon Brothers World Government Bond
Index-Non-U.S.
Salomon Brothers World Government Bond
Index
Standard & Poor's (publications)
Standard & Poor's 500 Composite Stock Price
Index
Stangar
Wilshire Associaties
World Bank (publications and reports)
The World Bank Publication of Trends in
Statement of Additional Information Page 37
<PAGE>
AIM EQUITY FUNDS
Developing Countries
Worldscope
Each Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
10-year Treasuries
30-year Treasuries
30-day Treasury Bills
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Funds or AIM
Distributors. Advertising for the Funds may from time to time include
discussions of general economic conditions and interest rates. Advertising for
the Funds may also include reference to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
From time to time, the Funds' sales literature and/or advertisements may discuss
generic topics pertaining to the mutual fund industry. This includes, but is not
limited to, literature addressing general information about mutual funds,
variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
Although performance data may be useful to prospective investors when comparing
a Fund's performance with other funds and other potential investments, investors
should note that the methods of computing performance of other potential
investments are not necessarily comparable to the methods employed by a Fund.
- --------------------------------------------------------------------------------
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF BOND RATINGS
MOODY'S rates the debt securities issued by various entities from "Aaa" to
"C." Investment Grade Ratings are the first four categories:
Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred
to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk appear somewhat
larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered adequate,
but elements may be present which suggest a susceptibility to impairment
some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly secured).
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
Statement of Additional Information Page 38
<PAGE>
AIM EQUITY FUNDS
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
S&P rates the securities debt of various entities in categories ranging from
"AAA" to "D" according to quality. Investment grade ratings are the first four
categories:
AAA -- An obligation rated "AAA" has the highest rating assigned by S&P.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong.
A -- An obligation rated "A" is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations
in higher rated categories.
BBB -- An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.
BB, B, CCC, CC, C -- Obligations rated "BB," "B," "CCC," "CC," and "C"
are regarded as having significant speculative characteristics. "BB"
indicates the least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective characteristics,
these may be outweighed by large uncertainties or major exposures to adverse
conditions.
BB -- An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to the obligor's inadequate capacity to meet its financial commitment
on the obligation.
B -- An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB," but the obligor currently has the capacity to meet
its financial commitment on the obligation. Adverse business, financial, or
economic conditions will likely impair the obligor's capacity or willingness
to meet its financial commitment on the obligation.
CCC -- An obligation rated "CCC" is currently vulnerable to nonpayment,
and is dependent upon favorable business, financial and economic conditions
for the obligor to meet its financial commitment on the obligation. In the
Statement of Additional Information Page 39
<PAGE>
AIM EQUITY FUNDS
event of adverse business, financial, or economic conditions, the obligor is
not likely to have the capacity to meet its financial commitment on the
obligation.
CC -- An obligation rated "CC" is currently highly vulnerable to
nonpayment.
C -- The "C" rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but payments on
this obligation are being continued.
D -- An obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The "D" rating
also will be used upon the filing of a bankruptcy petition or the taking of
a similar action if payments on an obligation are jeopardized.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
MOODY'S employs the designation "Prime-1" to indicate commercial paper
having a superior ability for repayment of senior short-term debt obligations.
Prime-1 repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and
well-established access to a range of financial markets and assured sources of
alternate liquidity. Issues rated Prime-2 have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternative liquidity is maintained.
S&P ratings of commercial paper are graded into several categories ranging
from "A-1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. "A-1" -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. "A-2" -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financials of the Funds as of December 31, 1997 and for the fiscal
year then ended, and the unaudited financial statements as of June 30, 1998 and
for the six months then ended, appear on the following pages.
Statement of Additional Information Page 40
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ADVISOR CLASS SHARES OF
AIM AMERICA VALUE FUND
AIM SMALL CAP EQUITY FUND
(SERIES PORTFOLIOS OF AIM GROWTH SERIES)
11 Greenway Plaza
Suite 100
Houston, TX 77046-1173
(713) 626-1919
-
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
IT SHOULD BE READ IN CONJUNCTION WITH A PROSPECTUS OF THE
ABOVE-NAMED FUNDS, A COPY OF WHICH MAY BE OBTAINED FREE
OF CHARGE FROM AUTHORIZED DEALERS OR BY WRITING
A I M DISTRIBUTORS, INC.,
P.O. BOX 4739, HOUSTON, TX 77210-4739
OR BY CALLING (800) 347-4246.
-
STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 8, 1998
RELATING TO THE AIM AMERICA VALUE FUND PROSPECTUS
AND THE AIM SMALL CAP EQUITY FUND PROSPECTUS,
EACH DATED SEPTEMBER 8, 1998
Statement of Additional Information Page 1
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Introduction............................................................................................................. 3
Investment Objectives and Policies....................................................................................... 4
Options and Futures...................................................................................................... 6
Risk Factors............................................................................................................. 13
Investment Limitations................................................................................................... 14
Execution of Portfolio Transactions...................................................................................... 16
Trustees and Executive Officers.......................................................................................... 18
Control Persons and Principal Holders of Securities...................................................................... 20
Management............................................................................................................... 20
Valuation of Fund Shares................................................................................................. 22
How to Purchase and Redeem Shares........................................................................................ 23
Taxes.................................................................................................................... 24
Additional Information................................................................................................... 26
Investment Results....................................................................................................... 27
Description of Debt Ratings.............................................................................................. 30
Financial Statements..................................................................................................... 32
</TABLE>
[LOGO]
Statement of Additional Information Page 2
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
INTRODUCTION
- --------------------------------------------------------------------------------
This Statement of Additional Information relates to the Advisor Class shares of
AIM Small Cap Equity Fund ("Small Cap Fund") and AIM America Value Fund
("America Value Fund") (individually, a "Fund," and collectively, the "Funds").
Each Fund is a diversified series of AIM Growth Series (the "Trust"), a
registered open-end management investment company. The Small Cap Fund and
America Value Fund invest all of their investable assets in the Small Cap
Portfolio and Value Portfolio (individually, a "Portfolio," and collectively,
the "Portfolios"), respectively.
A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-adviser") serves as the
investment sub-adviser of and sub-administrator for the Portfolios. AIM and the
Sub-adviser also serve as the administrator and sub-administrator, respectively,
for the Funds.
The Trust is a series mutual fund. The rules and regulations of the United
States Securities and Exchange Commission (the "SEC") require all mutual funds
to furnish prospective investors certain information concerning the activities
of the fund being considered for investment. This information for Small Cap Fund
is included in a Prospectus dated September 8, 1998, and for America Value Fund
is included in a separate Prospectus dated September 8, 1998. Additional copies
of the Prospectuses and this Statement of Additional Information may be obtained
without charge by writing the principal distributor of the Funds' shares, A I M
Distributors, Inc. ("AIM Distributors"), P.O. Box 4739, Houston, TX 77210-4739
or by calling (800) 347-4246. Investors must receive a Prospectus before they
invest.
This Statement of Additional Information is intended to furnish prospective
investors with additional information concerning the Funds. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus, and, in order to avoid repetition, reference will be
made to section of the Prospectus. Additionally, the Prospectus and this
Statement of Additional Information omit certain information contained in the
Registration Statement filed with the SEC. Copies of the Registration Statement,
including items omitted from the Prospectus and this Statement of Additional
Information, may be obtained from the SEC by paying the charges prescribed under
its rules and regulations.
GENERAL INFORMATION ABOUT THE FUNDS
THE TRUST AND ITS SHARES
The Trust previously operated under the name G.T. Global Growth Series, which
was organized as a Massachusetts business trust on February 19, 1985. The Trust
was reorganized on May 7, 1998 as a Delaware business trust, and is registered
with the SEC as a diversified open-end series management investment company. The
Trust currently consists of eight separate portfolios: each of the Funds, AIM
New Pacific Growth Fund, AIM Europe Growth Fund, AIM Japan Growth Fund, AIM
International Growth Fund, AIM Worldwide Growth Fund and AIM Mid Cap Growth
Fund. Each of these funds has three separate classes: Class A, Class B and
Advisor Class shares. All historical financial and other information contained
in this Statement of Additional Information for periods prior to May 7, 1998, is
that of the series of G.T. Global Growth Series (renamed AIM Growth Series).
This Statement of Additional Information relates solely to the Advisor Class
shares of the Funds.
The term "majority of the outstanding shares" of the Trust, a particular Fund, a
particular class of a Fund, or a particular Portfolio means, respectively, the
vote of the lesser of (a) 67% or more of the shares of the Trust, such Fund or
such class present at a meeting the Trust's shareholders, if the holders of more
than 50% of the outstanding shares of the Trust, such Fund or such class are
present or represented by proxy, or (b) more than 50% of the outstanding shares
of the Trust, such Fund or such class.
Class A, Class B and Advisor Class shares of each Fund have equal rights and
privileges. Each share of a particular class is entitled to one vote, to
participate equally in dividends and distributions declared by the Trust's Board
of Trustees with respect to the class of such Fund and, upon liquidation of the
Fund, to participate proportionately in the net assets of the Fund allocable to
such class remaining after satisfaction of outstanding liabilities of the Fund
allocable to such class. Fund shares are fully paid, non-assessable and fully
transferable when issued and have no preemptive rights and have such
Statement of Additional Information Page 3
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
conversion and exchange rights as set forth in the Prospectus and this Statement
of Additional Information. Fractional shares have proportionately the same
rights, including voting rights, as are provided for a full share.
Shareholders of the Funds do not have cumulative voting rights, and therefore
the holders of more than 50% of the outstanding shares of all Funds voting
together for election of directors may elect all of the members of the Board of
Trustees of the Trust, in such event, the remaining holders cannot elect any
trustees of the Trust.
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
AND POLICIES
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES
The investment objective of each Fund is long-term capital appreciation. The
Small Cap Fund and America Value Fund each seeks to achieve its investment
objective by investing all of its investable assets in the Small Cap Portfolio
and Value Portfolio, respectively, each of which is a subtrust (a "series") of
Growth Portfolio, a New York Common Law Trust registered as an open-end
management investment company with an investment objective that is identical to
that of its corresponding Fund. Whenever the phrase "all of the Fund's
investable assets" is used herein and in the Prospectus, it means that the only
investment securities that will be held by a Fund will be its interest in its
corresponding Portfolio. A Fund may withdraw its investment in its corresponding
Portfolio at any time, if the Board of Trustees of the Trust determines that it
is in the best interests of the Fund and its shareholders to do so. Upon any
such withdrawal, a Fund's assets would be invested in accordance with the
investment policies described below and in the Prospectus with respect to its
corresponding Portfolio.
INVESTMENTS IN OTHER INVESTMENT COMPANIES
The Portfolios may invest in the securities of closed-end investment companies
(including investment vehicles or companies advised by the Sub-adviser or its
affiliates ("Affiliated Funds")) within the limits of the Investment Company Act
of 1940, as amended (the "1940 Act"). These limitations currently provide that,
in general, each Portfolio may purchase shares of a closed-end investment
company unless (a) such a purchase would cause a Portfolio to own more than 3%
of the total outstanding voting stock of the investment company or (b) such a
purchase would cause a Portfolio to have more than 5% of its assets invested in
the investment company or more than 10% of its assets invested in an aggregate
of all such investment companies. Investment in investment companies may involve
the payment of substantial premiums above the value of such companies' portfolio
securities. The Portfolios do not intend to invest in such vehicles or funds
unless the Sub-adviser determines that the potential benefits of such
investments justify the payment of any applicable premiums. The return on such
securities will be reduced by operating expenses of such companies including
payments to the investment managers of those investment companies. With respect
to investments in Affiliated Funds, the Sub-adviser waives its advisory fee to
the extent that such fees are based on assets of a Fund invested in Affiliated
Funds.
DEPOSITORY RECEIPTS
Each Portfolio may invest up to 10% of its total assets in securities of foreign
issuers in the form of American Depository Receipts ("ADRs"), American
Depository Shares ("ADSs"), Global Depository Receipts ("GDRs") and European
Depository Receipts ("EDRs") or other securities convertible into securities of
eligible European or Far Eastern issuers. These securities may not necessarily
be denominated in the same currency as the securities for which they may be
exchanged. ADRs and ADSs typically are issued by an American bank or trust
company and evidence ownership of underlying securities issued by a foreign
corporation. EDRs, which are sometimes referred to as Continental Depository
Receipts ("CDRs"), are issued in Europe typically by foreign banks and trust
companies and evidence ownership of either foreign or domestic securities. GDRs
are similar to EDRs and are designed for use in several international financial
markets. Generally, ADRs and ADSs in registered form are designed for use in
United States securities markets and EDRs in bearer form are designed for use in
European securities markets. For purposes of a Portfolio's investment policies,
its investments in ADRs, ADSs, GDRs and EDRs will be deemed to be investments in
the equity securities representing securities of foreign issuers into which they
may be converted.
ADR facilities may be established as either "unsponsored" or "sponsored." While
ADRs issued under these two types of facilities are in some respects similar,
there are distinctions between them relating to the rights and obligations of
ADR
Statement of Additional Information Page 4
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
holders and the practices of market participants. A depository may establish an
unsponsored facility without participation by (or even necessarily the
acquiescence of) the issuer of the deposited securities, although typically the
depository requests a letter of non-objection from such issuer prior to the
establishment of the facility. Holders of unsponsored ADRs generally bear all
the costs of such facilities. The depository usually charges fees upon the
deposit and withdrawal of the deposited securities, the conversion of dividends
into U.S. dollars, the disposition of non-cash distributions, and the
performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass through voting
rights to ADR holders with respect to the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Portfolios may invest in both sponsored and unsponsored ADRs.
WARRANTS OR RIGHTS
Warrants or rights may be acquired by a Portfolio in connection with other
securities or separately and provide the Portfolio with the right to purchase at
a later date other securities of the issuer.
LENDING OF PORTFOLIO SECURITIES
For the purpose of realizing additional income, each Portfolio may make secured
loans of its portfolio securities amounting to not more than 30% of its total
assets. Securities loans are made to broker/dealers or institutional investors
pursuant to agreements requiring that the loans continuously be secured by
collateral at least equal at all times to the value of the securities lent, plus
any accrued interest, "marked to market" on a daily basis. The Portfolios may
pay reasonable administrative and custodial fees in connection with the loans of
their securities. While the securities loans are outstanding, the Portfolios
will continue to receive the equivalent of the interest or dividends paid by the
issuer on the securities, as well as interest on the investment of the
collateral or a fee from the borrower. Each Portfolio will have a right to call
each loan at any time and obtain the securities within the stated settlement
period. The Portfolios will not have the right to vote equity securities while
they are being lent, but may call in a loan in anticipation of any important
vote. Loans will only be made to firms deemed by the Sub-adviser to be of good
standing and will not be made unless, in the judgment of the Sub-adviser, the
consideration to be earned from such loans would justify the risk.
COMMERCIAL BANK OBLIGATIONS
For the purposes of each Portfolio's investment policies with respect to bank
obligations, obligations of foreign branches of U.S. banks are obligations of
the issuing bank and may be general obligations of the parent bank. Such
obligations, however, may be limited by the terms of a specific obligation and
by government regulation. Although a Portfolio typically will acquire
obligations issued and supported by the credit of U.S. banks having total assets
at the time of purchase of $1 billion or more, this $1 billion figure is not an
investment policy or restriction of any Portfolio. For the purposes of
calculation with respect to the $1 billion figure, the assets of a bank will be
deemed to include the assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS
A repurchase agreement is a transaction in which a Portfolio purchases a
security from a bank or recognized securities dealer and simultaneously commits
to resell that security to the bank or dealer at an agreed-upon price, date and
market rate of interest unrelated to the coupon rate or maturity of the
purchased security. Although repurchase agreements carry certain risks not
associated with direct investment in securities, including possible decline in
market value of the underlying securities and delays and costs to the Portfolio
if the other party to the repurchase agreement becomes bankrupt, the Portfolios
intend to enter into repurchase agreements only with banks and dealers believed
by the Sub-adviser to present minimal credit risks in accordance with guidelines
approved by Growth Portfolio's Board of Trustees. The Sub-adviser will review
and monitor the creditworthiness of such institutions under the general
supervision of Growth Portfolio's Board.
Each Portfolio will invest only in repurchase agreements collateralized at all
times in an amount at least equal to the repurchase price plus accrued interest.
To the extent that the proceeds from any sale of such collateral upon a default
in the obligation to repurchase were less than the repurchase price, the Fund
would suffer a loss. If the financial institution
Statement of Additional Information Page 5
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
which is party to the repurchase agreement petitions for bankruptcy or otherwise
becomes subject to bankruptcy or other liquidation proceedings, there may be
restrictions on the Portfolio's ability to sell the collateral and the Portfolio
could suffer a loss. However, with respect to financial institutions whose
bankruptcy or liquidation proceedings are subject to the U.S. Bankruptcy Code,
the Portfolios intend to comply with provisions under the U.S. Bankruptcy Code
that would allow them to immediately to resell the collateral. A Portfolio will
not enter into a repurchase agreement with a maturity of more than seven days
if, as a result, more than 15% of the value of its net assets would be invested
in such repurchase agreements and other illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS
Each Portfolio's borrowings will not exceed 33 1/3% of its total assets, i.e.,
each Portfolio's total assets at all times will equal at least 300% of the
amount of outstanding borrowings. If market fluctuations in the value of a
Portfolio's portfolio holdings or other factors cause the ratio of the
Portfolio's total assets to outstanding borrowings to fall below 300%, within
three days (excluding Sundays and holidays) of such event the Portfolio may be
required to sell portfolio securities to restore the 300% asset coverage, even
though from an investment standpoint such sales might be disadvantageous. Each
Portfolio also may borrow up to 5% of its total assets for temporary or
emergency purposes other than to meet redemptions. Any borrowing by a Portfolio
may cause greater fluctuation in the value of its corresponding Fund's shares
than would be the case if the Portfolio did not borrow.
Each Portfolio's fundamental investment limitations permit the Portfolio to
borrow money for leveraging purposes. Each Portfolio, however, currently is
prohibited, pursuant to a non-fundamental investment policy, from borrowing
money in order to purchase securities. Nevertheless, this policy may be changed
in the future by Growth Portfolio's Board of Trustees. If a Portfolio employs
leverage in the future, it would be subject to certain additional risks. Use of
leverage creates an opportunity for greater growth of capital but would
exaggerate any increases or decreases in a Portfolio's net asset value. When the
income and gains on securities purchased with the proceeds of borrowings exceed
the costs of such borrowings, a Portfolio's earnings or net asset value will
increase faster than otherwise would be the case; conversely, if such income and
gains fail to exceed such costs, a Portfolio's earnings or net asset value would
decline faster than would otherwise be the case.
Each Portfolio may enter into reverse repurchase agreements. A reverse
repurchase agreement is a borrowing transaction in which the Portfolio transfers
possession of a security to another party, such as a bank or broker/dealer in
return for cash, and agrees to repurchase the security in the future at an
agreed upon price, which includes an interest component. Each Portfolio also may
engage in "roll" borrowing transactions which involve its sale of Government
National Mortgage Association certificates or other securities together with a
commitment (for which the Portfolio may receive a fee) to purchase similar, but
not identical, securities at a future date. Each Portfolio will segregate with a
custodian, cash or liquid securities in an amount sufficient to cover its
obligations under "roll" transactions and reverse repurchase agreements with
broker/dealers. No segregation is required for reverse repurchase agreements
with banks.
TEMPORARY DEFENSIVE STRATEGIES
Money market instruments in which the Portfolios may invest include the
following: government securities; high grade commercial paper; bank certificates
of deposit; bankers' acceptances; and repurchase agreements related to any of
the foregoing. High grade commercial paper refers to commercial paper rated P-1
by Moody's Investors Service, Inc. ("Moody's") or A-1 by Standard and Poor's, a
division of The McGraw-Hill Companies, Inc. ("S&P"), at the time of investment
or, if unrated, deemed by the Sub-adviser to be of comparable quality.
- --------------------------------------------------------------------------------
OPTIONS AND FUTURES
- --------------------------------------------------------------------------------
SPECIAL RISKS OF OPTIONS AND FUTURES
The use of options and futures contracts involves special considerations and
risks, as described below. Risks pertaining to particular instruments are
described in the sections that follow.
(1) Successful use of most of these instruments depends upon the
Sub-adviser's ability to predict movements of the overall securities
markets, which requires different skills than predicting changes in the
prices of individual
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securities. While the Sub-adviser is experienced in the use of these
instruments, there can be no assurance that any particular strategy adopted
will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if a Portfolio entered
into a short hedge because the Sub-adviser projected a decline in the price
of a security in the Portfolio's securities portfolio, and the price of that
security increased instead, the gain from that increase might be wholly or
partially offset by a decline in the price of the hedging instrument.
Moreover, if the price of the hedging instrument declined by more than the
increase in the price of the security, the Portfolio could suffer a loss. In
either such case, the Portfolio would have been in a better position had it
not hedged at all.
(4) As described below, a Portfolio might be required to maintain assets
as "cover," maintain segregated accounts or make margin payments when it
takes positions in instruments involving obligations to third parties (I.E.,
instruments other than purchased options). If the Portfolio were unable to
close out its positions in such instruments, it might be required to
continue to maintain such assets or accounts or make such payments until the
position expired or matured. The requirements might impair the Portfolio's
ability to sell a portfolio security or make an investment at a time when it
would otherwise be favorable to do so, or require that the Portfolio sell a
portfolio security at a disadvantageous time. The Portfolio's ability to
close out a position in an instrument prior to expiration or maturity
depends on the existence of a liquid secondary market or, in the absence of
such a market, the ability and willingness of the other party to the
transaction ("contra party") to enter into a transaction closing out the
position. Therefore, there is no assurance that any position can be closed
out at a time and price that is favorable to a Portfolio.
WRITING CALL OPTIONS
A Portfolio may write (sell) call options on securities and indices. Call
options generally will be written on securities that, in the opinion of the
Sub-adviser, are not expected to make any major price moves in the near future
but that, over the long term, are deemed to be attractive investments for the
Portfolio.
A call option gives the holder (buyer) the right to purchase a security at a
specified price (the exercise price) at any time until (American style) or on
(European style) a certain date (the expiration date). So long as the obligation
of the writer of a call option continues, he or she may be assigned an exercise
notice, requiring him or her to deliver the underlying security against payment
of the exercise price. This obligation terminates upon the expiration of the
call option, or such earlier time at which the writer effects a closing purchase
transaction by purchasing an option identical to that previously sold.
Portfolio securities on which call options may be written will be purchased
solely on the basis of investment considerations consistent with each
Portfolio's investment objective. When writing a call option, a Portfolio, in
return for the premium, gives up the opportunity for profit from a price
increase in the underlying security above the exercise price, and retains the
risk of loss should the price of the security decline. Unlike one who owns
securities not subject to an option, a Portfolio has no control over when it may
be required to sell the underlying securities, since most options may be
exercised at any time prior to the option's expiration. If a call option that a
Portfolio has written expires, the Portfolio will realize a gain in the amount
of the premium; however, such gain may be offset by a decline in the market
value of the underlying security during the option period. If the call option is
exercised, the Portfolio will realize a gain or loss from the sale of the
underlying security, which will be increased or offset by the premium received.
Neither Portfolio considers a security covered by a call option to be "pledged"
as that term is used in the Portfolio's policy that limits the pledging or
mortgaging of its assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security appreciates to a price
higher than the exercise price of the call option, it can be expected that the
option will be exercised and a Portfolio will be obligated to sell the security
at less than its market value.
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The premium that a Portfolio receives for writing a call option is deemed to
constitute the market value of an option. The premium a Portfolio will receive
from writing a call option will reflect, among other things, the current market
price of the underlying investment, the relationship of the exercise price to
such market price, the historical price volatility of the underlying investment
and the length of the option period. In determining whether a particular call
option should be written, the Sub-adviser will consider the reasonableness of
the anticipated premium and the likelihood that a liquid secondary market will
exist for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security from being called, or
to permit the sale of the underlying security. Furthermore, effecting a closing
transaction will permit a Portfolio to write another call option on the
underlying security with either a different exercise price or expiration date or
both.
Each Portfolio will pay transaction costs in connection with the writing of
options and in entering into closing purchase contracts. Transaction costs
relating to options activity normally are higher than those applicable to
purchases and sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities or indices at the time the options
are written. From time to time, a Portfolio may purchase an underlying security
for delivery in accordance with the exercise of an option, rather than
delivering such security from its portfolio. In such cases, additional costs
will be incurred.
A Portfolio will realize a profit or loss from a closing purchase transaction if
the cost of the transaction is less or more, respectively, than the premium
received from writing the option. Because increases in the market price of a
call option generally will reflect increases in the market price of the
underlying security, any loss resulting from the repurchase of a call option is
likely to be offset in whole or in part by appreciation of the underlying
security owned by the Portfolio.
WRITING PUT OPTIONS
The Portfolios may write put options on securities and indices. A put option
gives the purchaser of the option the right to sell, and the writer (seller) the
obligation to buy, the underlying security at the exercise price at any time
until (American style) or on (European style) the expiration date. The operation
of put options in other respects, including their related risks and rewards, is
substantially identical to that of call options.
A Portfolio generally would write put options in circumstances where the
Sub-adviser wishes to purchase the underlying security for the Portfolio's
portfolio at a price lower than the current market price of the security. In
such event, the Portfolio would write a put option at an exercise price that,
reduced by the premium received on the option, reflects the lower price it is
willing to pay. Since the Portfolio also would receive interest on debt
securities maintained to cover the exercise price of the option, this technique
could be used to enhance current return during periods of market uncertainty.
The risk in such a transaction would be that the market price of the underlying
security would decline below the exercise price, less the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security depreciates to a price
lower than the exercise price of the put option, it can be expected that the put
option will be exercised and a Portfolio will be obligated to purchase the
security at greater than its market value.
PURCHASING PUT OPTIONS
Each Portfolio may purchase put options on securities and indices. As the holder
of a put option, a Portfolio would have the right to sell the underlying
security at the exercise price at any time until (American style) or on
(European style) the expiration date. A Portfolio may enter into closing sale
transactions with respect to such options, exercise such options or permit such
options to expire.
A Portfolio may purchase a put option on an underlying security ("protective
put") owned by the Portfolio in order to protect against an anticipated decline
in the value of the security. Such hedge protection is provided only during the
life of the put option when the Portfolio, as the holder of the put option, is
able to sell the underlying security at the put exercise price regardless of any
decline in the underlying security's market price. The premium paid for the put
option and any transaction costs would reduce any profit otherwise available for
distribution when the security eventually is sold.
A Portfolio also may purchase put options at a time when the Portfolio does not
own the underlying security. By purchasing put options on a security it does not
own, a Portfolio seeks to benefit from a decline in the market price of the
underlying security. If the put option is not sold when it has remaining value,
and if the market price of the underlying security
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remains equal to or greater than the exercise price during the life of the put
option, the Portfolio will lose its entire investment in the put option. In
order for the purchase of a put option to be profitable, the market price of the
underlying security must decline sufficiently below the exercise price to cover
the premium and transaction costs, unless the put option is sold in a closing
sale transaction.
PURCHASING CALL OPTIONS
Each Portfolio may purchase call options on securities and indices. As the
holder of a call option, a Portfolio would have the right to purchase the
underlying security at the exercise price at any time until (American style) or
on (European style) the expiration date. A Portfolio may enter into closing sale
transactions with respect to such options, exercise such options or permit such
options to expire.
Call options may be purchased by a Portfolio for the purpose of acquiring the
underlying security for its portfolio. Utilized
in this fashion, the purchase of call options would enable a Portfolio to
acquire the security at the exercise price of the call option plus the premium
paid. At times, the net cost of acquiring the security in this manner may be
less than the cost of acquiring the security directly. This technique also may
be useful to the Portfolios in purchasing a large block of securities that would
be more difficult to acquire by direct market purchases. As long as it holds
such a call option, rather than the underlying security itself, a Portfolio is
partially protected from any unexpected decline in the market price of the
underlying security and, in such event, could allow the call option to expire,
incurring a loss only to the extent of the premium paid for the option.
Each Portfolio also may purchase call options on underlying securities it owns
to avoid realizing losses that would result in a reduction of its current
return. For example, where a Portfolio has written a call option on an
underlying security having a current market value below the price at which it
purchased the security, an increase in the market price could result in the
exercise of the call option written by the Portfolio and the realization of a
loss on the underlying security. Accordingly, the Portfolio could purchase a
call option on the same underlying security, which could be exercised to fulfill
the Portfolio's delivery obligations under its written call (if it is
exercised). This strategy could allow the Portfolio to avoid selling the
portfolio security at a time when it has an unrealized loss; however, the
Portfolio would have to pay a premium to purchase the call option plus
transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of such
Portfolio's total assets at the time of purchase.
Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (I.E., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation), and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. A Portfolio will not purchase an OTC option unless the Sub-adviser
believes that daily valuations for such options are readily obtainable. OTC
options differ from exchange-traded options in that OTC options are transacted
with dealers directly and not through a clearing corporation (which guarantees
performance). Consequently, there is a risk of non-performance by the dealer.
Since no exchange is involved, OTC options are valued on the basis of an average
of the last bid prices obtained from dealers, unless a quotation from only one
dealer is available in which case only that dealer's price will be used. In the
case of OTC options, there can be no assurance that a liquid secondary market
will exist for any particular option at any specific time.
The staff of the SEC considers purchased OTC options to be illiquid securities.
A Portfolio may also sell OTC options and, in connection therewith, set aside
assets or cover its obligations with respect to OTC options written by the
Portfolio. The assets used as cover for OTC options written by a Portfolio will
be considered illiquid unless the OTC options are sold to qualified dealers who
agree that the Portfolio may repurchase any OTC option it writes at a maximum
price to be calculated by a formula set forth in the option agreement. The cover
for an OTC option written subject to this procedure would be considered illiquid
only to the extent that the maximum repurchase price under the formula exceeds
the intrinsic value of the option.
A Portfolio's ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. A Portfolio intends to
purchase or write only those exchange-listed options for which there appears to
be a liquid secondary market. However, there can be no assurance that such a
market will exist at any particular time. Closing transactions can be made for
OTC options only by negotiating directly with the contra party or by a
transaction in the secondary market if any such market exists. Although a
Portfolio will enter into OTC options only with contra parties that are expected
to be capable of entering into closing transactions with the Portfolio, there is
no assurance that the Portfolio will in fact be able to close out an OTC option
position at a favorable price prior to expiration. In the event of insolvency of
the contra party, the Portfolio might be unable to close out an OTC option
position at any time prior to its expiration.
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INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When a Portfolio writes a call on
an index, it receives a premium and agrees that, prior to the expiration date,
the purchaser of the call, upon exercise of the call, will receive from the
Portfolio an amount of cash if the closing level of the index upon which the
call is based is greater than the exercise price of the call. The amount of cash
is equal to the difference between the closing price of the index and the
exercise price of the call times a specified multiple (the "multiplier"), which
determines the total dollar value for each point of such difference. When a
Portfolio buys a call on an index, it pays a premium and has the same rights as
to such call as are indicated above. When a Portfolio buys a put on an index, it
pays a premium and has the right, prior to the expiration date, to require the
seller of the put, upon the Portfolio's exercise of the put, to deliver to the
Portfolio an amount of cash if the closing level of the index upon which the put
is based is less than the exercise price of the put, which amount of cash is
determined by the multiplier, as described above for calls. When a Portfolio
writes a put on an index, it receives a premium and the purchaser has the right,
prior to the expiration date, to require the Portfolio to deliver to it an
amount of cash equal to the difference between the closing level of the index
and the exercise price times the multiplier, if the closing level is less than
the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when a Portfolio writes a
call on an index it cannot provide in advance for its potential settlement
obligations by acquiring and holding the underlying securities. A Portfolio can
offset some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, a Portfolio cannot, as a practical matter, acquire and
hold a portfolio containing exactly the same securities as underlie the index
and, as a result, bears a risk that the value of the securities held will vary
from the value of the index.
Even if a Portfolio could assemble a securities portfolio that exactly
reproduced the composition of the underlying index, it still would not be fully
covered from a risk standpoint because of the "timing risk" inherent in writing
index options. When an index option is exercised, the amount of cash that the
holder is entitled to receive is determined by the difference between the
exercise price and the closing index level on the date when the option is
exercised. As with other kinds of options, the Portfolio, as the call writer,
will not know that it has been assigned until the next business day at the
earliest. The time lag between exercise and notice of assignment poses no risk
for the writer of a covered call on a specific underlying security, such as
common stock, because there the writer's obligation is to deliver the underlying
security, not to pay its value as of a fixed time in the past. So long as the
writer already owns the underlying security, it can satisfy its settlement
obligations by simply delivering it, and the risk that its value may have
declined since the exercise date is borne by the exercising holder. In contrast,
even if the writer of an index call holds securities that exactly match the
composition of the underlying index, it will not be able to satisfy its
assignment obligations by delivering those securities against payment of the
exercise price. Instead, it will be required to pay cash in an amount based on
the closing index value on the exercise date; and by the time it learns that it
has been assigned, the index may have declined, with a corresponding decline in
the value of its securities portfolio. This "timing risk" is an inherent
limitation on the ability of index call writers to cover their risk exposure by
holding securities positions.
If a Portfolio purchases an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Portfolio will be required to pay the
difference between the closing index value and the exercise price of the option
(times the applicable multiplier) to the assigned writer.
INTEREST RATE AND STOCK INDEX FUTURES CONTRACTS
A Portfolio may enter into interest rate or stock index futures contracts
("Futures" or "Futures Contracts") as a hedge against changes in prevailing
levels of interest rates or stock price levels in order to establish more
definitely the effective return on securities held or intended to be acquired by
the Portfolio. A Portfolio's hedging may include sales of Futures as an offset
against the effect of expected increases in interest rates or decreases in stock
prices, and purchases of Futures as an offset against the effect of expected
declines in interest rates or increases in stock prices.
The Portfolios only will enter into Futures Contracts that are traded on futures
exchanges and are standardized as to maturity date and underlying financial
instrument. Futures exchanges and trading thereon in the United States are
regulated under the Commodity Exchange Act by the Commodity Futures Trading
Commission ("CFTC").
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Although techniques other than sales and purchases of Futures Contracts could be
used to reduce a Portfolio's exposure to interest rate and stock market
fluctuations, the Portfolio may be able to hedge its exposure more effectively
and at a lower cost through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument for a
specified price at a designated date, time and place. A stock index Futures
Contract provides for the delivery, at a designated date, time and place, of an
amount of cash equal to a specified dollar amount times the difference between
the stock index value at the close of trading on the contract and the price at
which the Futures Contract is originally struck; no physical delivery of stocks
comprising the index is made. Brokerage fees are incurred when a Futures
Contract is bought or sold, and margin deposits must be maintained at all times
the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments, Futures Contracts usually are closed out before the
delivery date. Closing out an open Futures Contract sale or purchase is effected
by entering into an offsetting Futures Contract purchase or sale, respectively,
for the same aggregate amount of the identical financial instrument and the same
delivery date. If the offsetting purchase price is less than the original sale
price, the Portfolio realizes a gain; if it is more, the Portfolio realizes a
loss. Conversely, if the offsetting sale price is more than the original
purchase price, the Portfolio realizes a gain; if it is less, the Portfolio
realizes a loss. The transaction costs also must be included in these
calculations. There can be no assurance, however, that a Portfolio will be able
to enter into an offsetting transaction with respect to a particular Futures
Contract at a particular time. If a Portfolio is not able to enter into an
offsetting transaction, the Portfolio will continue to be required to maintain
the margin deposits on the Futures Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one September stock index Futures Contract on an exchange may
be fulfilled at any time before delivery under the Futures Contract is required
(I.E., on a specified date in September, the "delivery month") by the purchase
of the same September stock index Futures Contract on the same exchange. In such
instance, the difference between the price at which the Futures Contract was
sold and the price paid for the offsetting purchase, after allowance for
transaction costs, represents the profit or loss to the Portfolio.
Each Portfolio's Futures transactions will be entered into for hedging purposes
only; that is, Futures Contracts will be sold to protect against a decline in
the price of securities that a Portfolio owns, or Futures Contracts will be
purchased to protect a Portfolio against an increase in the price of securities
it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by a Portfolio in order to initiate Futures trading and to maintain
the Portfolio's open positions in Futures Contracts. A margin deposit made when
the Futures Contract is entered into ("initial margin") is intended to ensure
the Portfolio's performance under the Futures Contract. The margin required for
a particular Futures Contract is set by the exchange on which the Futures
Contract is traded and may be significantly modified from time to time by the
exchange during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Portfolio entered into the Futures
Contract will be made on a daily basis as the price of the underlying security
or index fluctuates making the Futures Contract more or less valuable, a process
known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced by, among other things, actual and anticipated
changes in interest rates and in stock market movements, which in turn are
affected by fiscal and monetary policies and national and international
political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities in the Portfolio's portfolio being
hedged. The degree of imperfection of correlation depends upon circumstances
such as variations in speculative market demand for Futures and for securities,
including technical influences in Futures trading; and differences between the
financial instruments being hedged and the instruments underlying the standard
Futures Contracts available for trading. A decision of whether, when and how to
hedge involves skill and judgment, and even a well-conceived hedge may be
unsuccessful to some degree because of unexpected market behavior or interest
rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any
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deduction for the transaction costs, if the account were then closed out. A 15%
decrease would result in a loss equal to 150% of the original margin deposit, if
the Futures Contract were closed out. Thus, a purchase or sale of a Futures
Contract may result in losses in excess of the amount invested in the Futures
Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and options on Futures Contract prices during a single trading day. The
daily limit establishes the maximum amount that the price of a Futures Contract
or option may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular type of Futures Contract or option, no trades may be made on that day
at a price beyond that limit. The daily limit governs only price movement during
a particular trading day and therefore does not limit potential losses, because
the limit may prevent the liquidation of unfavorable positions. Futures Contract
and option prices occasionally have moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some traders to substantial losses.
If a Portfolio were unable to liquidate a Futures or option on Futures position
due to the absence of a liquid secondary market or the imposition of price
limits, it could incur substantial losses. The Portfolio would continue to be
subject to market risk with respect to the position. In addition, except in the
case of purchased options, the Portfolio would continue to be required to make
daily variation margin payments and might be required to maintain the position
being hedged by the Future or option or to maintain cash or securities in a
segregated account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities, except that
options on Futures Contracts give the purchaser the right, in return for the
premium paid, to assume a position in a Futures Contract (a long position if the
option is a call and a short position if the option is a put) at a specified
exercise price at any time during the period of the option. Upon exercise of the
option, the delivery of the Futures position by the writer of the option to the
holder of the option will be accompanied by delivery of the accumulated balance
in the writer's Futures margin account, which represents the amount by which the
market price of the Futures Contract, at exercise, exceeds (in the case of a
call) or is less than (in the case of a put) the exercise price of the option on
the Futures Contract. If an option is exercised on the last trading day prior to
the expiration date of the option, the settlement will be made entirely in cash
equal to the difference between the exercise price of the option and the closing
level of the securities or index upon which the Futures Contract is based on the
expiration date. Purchasers of options who fail to exercise their options prior
to the exercise date suffer a loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities or indices.
If a Portfolio writes an option on a Futures Contract, it will be required to
deposit initial and variation margin pursuant to requirements similar to those
applicable to Futures Contracts. Premiums received from the writing of an option
on a Futures Contract are included in the initial margin deposit.
A Portfolio may seek to close out an option position by selling an option
covering the same Futures Contract and having the same exercise price and
expiration date. The ability to establish and close out positions on such
options is subject to the maintenance of a liquid secondary market.
LIMITATIONS ON USE OF FUTURES AND OPTIONS ON FUTURES
To the extent that a Portfolio enters into Futures Contracts and options on
Futures Contracts, in each case other than for BONA FIDE hedging purposes (as
defined by the CFTC), the aggregate initial margin and premiums required to
establish these positions (excluding the amount by which options are
"in-the-money") will not exceed 5% of the liquidation value of
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the Portfolio's portfolio, after taking into account unrealized profits and
unrealized losses on any contracts the Portfolio has entered into. In general, a
call option on a Futures Contract is "in-the-money" if the value of the
underlying Futures Contract exceeds the strike, I.E., exercise, price of the
call; a put option on a Futures Contract is "in-the-money" if the value of the
underlying Futures Contract is exceeded by the strike price of the put. This
guideline may be modified by Growth Portfolio's Board of Trustees without a
shareholder vote. This limitation does not limit the percentage of a Portfolio's
assets at risk to 5%.
COVER
Transactions using Futures Contracts and options (other than options purchased
by a Portfolio) expose the Portfolio to an obligation to another party. A
Portfolio will not enter into any such transactions unless it owns either (1) an
offsetting ("covered") position in securities or other options or Futures
Contracts, or (2) cash, receivables and short-term debt securities with a value
sufficient at all times to cover its potential obligations not covered as
provided in (1) above. Each Portfolio will comply with SEC guidelines regarding
cover for these instruments and, if the guidelines so require, set aside cash or
liquid securities.
Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Futures Contract or option is open, unless they
are replaced with other appropriate assets. If a large portion of a Portfolio's
assets are used for cover or otherwise set aside, it could affect portfolio
management or the Portfolio's ability to meet redemption requests or other
current obligations.
- --------------------------------------------------------------------------------
RISK FACTORS
- --------------------------------------------------------------------------------
ILLIQUID SECURITIES
A Portfolio may invest up to 15% of its net assets in illiquid securities.
Securities may be considered illiquid if a Portfolio cannot reasonably expect
within seven days to sell the securities for approximately the amount at which
the Portfolio values such securities. See "Investment Limitations." The sale of
illiquid securities, if they can be sold at all, generally will require more
time and result in higher brokerage charges or dealer discounts and other
selling expenses than the sale of liquid securities such as securities eligible
for trading on U.S. securities exchanges or in the OTC markets. Moreover,
restricted securities, which may be illiquid for purposes of this limitation,
often sell, if at all, at a price lower than similar securities that are not
subject to restrictions on resale.
Illiquid securities include those that are subject to restrictions contained in
the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, a Portfolio may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time the Portfolio may be permitted to sell a
security under an effective registration statement. If, during such a period,
adverse market conditions were to develop, the Portfolio might obtain a less
favorable price than prevailed when it decided to sell.
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended (the "1933 Act"),
including private placements, repurchase agreements, commercial paper, foreign
securities and corporate bonds and notes. These instruments are often restricted
securities because the securities are sold in transactions not requiring
registration. Institutional investors generally will not seek to sell these
instruments to the general public, but instead will often depend either on an
efficient institutional market in which such unregistered securities can be
readily resold or on an issuer's ability to honor a demand for repayment.
Therefore, the fact that there are contractual or legal restrictions on resale
to the general public or certain institutions is not dispositive of the
liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of
Statement of Additional Information Page 13
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
unregistered securities of domestic and foreign issuers, such as the PORTAL
System sponsored by the National Association of Securities Dealers, Inc. An
insufficient number of qualified institutional buyers interested in purchasing
Rule 144A-eligible restricted securities held by a Portfolio, however, could
affect adversely the marketability of such portfolio securities and the
Portfolio might be unable to dispose of such securities promptly or at favorable
prices.
With respect to liquidity determinations generally, Growth Portfolio's Board of
Trustees has the ultimate responsibility for determining whether specific
securities, including restricted securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the 1933 Act, are liquid or
illiquid. That Board of Trustees has delegated the function of making day-to-day
determinations of liquidity to the Sub-adviser in accordance with procedures
approved by that Board of Trustees. The Sub-adviser takes into account a number
of factors in reaching liquidity decisions, including: (i) the frequency of
trading in the security; (ii) the number of dealers who make quotes for the
security; (iii) the number of dealers who have undertaken to make a market in
the security; (iv) the number of other potential purchasers; and (v) the nature
of the security and how trading is effected (e.g., the time needed to sell the
security, how offers are solicited, and the mechanics of transfer). The
Sub-adviser monitors the liquidity of securities in each Portfolio's securities
portfolio and periodically reports such determinations to the Growth Portfolio's
Board of Trustees. If the liquidity percentage restriction of a Portfolio is
satisfied at the time of investment, a later increase in the percentage of
illiquid securities held by a Portfolio resulting from a change in market value
or assets will not constitute a violation of that restriction. If as a result of
a change in market value or assets, the percentage of illiquid securities held
by the Portfolio increases above the applicable limit, the Sub-adviser will take
appropriate steps to bring the aggregate amount of illiquid assets back within
the prescribed limitations as soon as reasonably practicable, taking into
account the effect of any disposition on that Portfolio.
DEBT SECURITIES
Each Portfolio is permitted to purchase investment grade debt securities. In
selecting debt securities for investment, the Sub-adviser reviews and monitors
the creditworthiness of each issuer and issue and analyzes interest rate trends
and specific developments that may affect individual issuers, in addition to
relying on ratings assigned by S&P, Moody's or another nationally recognized
statistical rating organization ("NRSRO") as indicators of quality. Debt
securities rated Baa by Moody's or BBB by S&P are investment grade, although
Moody's considers securities rated Baa to have speculative characteristics.
Changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity for such securities to make principal and interest payments
than is the case for higher grade debt securities. Each Portfolio is also
permitted to purchase debt securities that are not rated by S&P, Moody's or
another NRSRO but that the Sub-adviser determines to be of comparable quality to
that of rated securities in which the Portfolio may invest. Such securities are
included in the computation of any percentage limitations applicable to the
comparable rated securities.
Ratings of debt securities represent the rating agencies' opinions regarding
their quality, are not a guarantee of quality and may be reduced after a
Portfolio has acquired the security. The Sub-adviser will consider such an event
in determining whether a Portfolio should continue to hold the security but is
not required to dispose of it. Credit ratings attempt to evaluate the safety of
principal and interest payments and do not reflect an assessment of the
volatility of the security's market value or the liquidity of an investment in
the security. Also, NRSROs may fail to make timely changes in credit ratings in
response to subsequent events, so that an issuer's current financial condition
may be better or worse than the rating indicates. For a description of Moody's
and S&P ratings, see "Description of Debt Ratings" herein.
- --------------------------------------------------------------------------------
INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
THE FUNDS
The Small Cap Fund and America Value Fund each has the following fundamental
investment policy to enable it to invest in the Small Cap Portfolio and Value
Portfolio, respectively:
Notwithstanding any other investment policy of the Fund, the Fund may invest
all of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having
substantially the same investment objective, policies and limitations as the
Fund.
Statement of Additional Information Page 14
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
All other investment policies and limitations of each Fund and its corresponding
Portfolio are identical. Therefore, although the following discusses certain
investment policies and limitations of each Portfolio and Growth Portfolio's
Board of Trustees, it applies equally to each Fund and the Trust's Board of
Trustees.
Each Portfolio has adopted the following investment limitations as fundamental
policies that (unless otherwise noted) may not be changed without approval by
the affirmative vote of a majority of the outstanding shares of the Portfolio.
Whenever a Fund is requested to vote on a change in the investment limitations
of its corresponding Portfolio, the Fund will hold a meeting of its shareholders
and will cast its votes as instructed by the shareholders. Neither Portfolio
may:
(1) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
a Portfolio may exercise rights under agreements relating to such
securities, including the right to enforce security interests and to hold
real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner.
(2) Purchase or sell physical commodities, but a Portfolio may purchase,
sell or enter into financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or derivative
instruments.
(3) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of a Portfolio's total assets
(including the amount borrowed but reduced by any liabilities not
constituting borrowings) at the time of the borrowing, except that a
Portfolio may borrow up to an additional 5% of its total assets (not
including the amount borrowed) for temporary or emergency purposes;
(4) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this limitation, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, banker's aceptances
or similar instruments will not be considered the making of a loan;
(5) Purchase securities of any one issuer if, as a result, more than 5%
of a Portfolio's total assets would be invested in securities of that issuer
or the Portfolio would own or hold more than 10% of the outstanding voting
securities of that issuer, except that up to 25% of the Portfolio's total
assets may be invested without regard to this limitation, and except that
this limitation does not apply to securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities or to securities issued
by other investment companies;
(6) Engage in the business of underwriting securities of other issuers,
except to the extent that a Portfolio might be considered an underwriter
under the federal securities laws in connection with its disposition of
portfolio securities; or
(7) Purchase any security if, as a result of that purchase, 25% or more
of a Portfolio's total assets would be invested in securities of issuers
having their principal business activities in the same industry, except that
this limitation does not apply to securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities.
The following investment limitations of each Portfolio are not fundamental
policies and may be changed by vote of Growth Portfolio's Board of Trustees
without shareholder approval. Neither Portfolio may:
(1) Invest more than 15% of its net assets in illiquid securities, a
term which means securities that cannot be disposed of within seven days in
the normal course of business at approximately the amount at which the
Portfolio has valued the securities and includes, among other things,
repurchase agreements maturing in more than seven days;
(2) Borrow money except for temporary or emergency purposes (not for
leveraging) in excess of 33 1/3% of the value of the Portfolio's total
assets;
(3) Enter into a futures contract or an option on a futures contract, in
each case other than for BONA FIDE hedging purposes (as defined by the
CFTC), if the aggregate initial margin and premiums required to establish
all of these positions (excluding the amount by which options are
"in-the-money") exceeds 5% of the liquidation value of the Portfolio's
portfolio, after taking into account unrealized profits and unrealized
losses on any contracts the Portfolio has entered into;
Statement of Additional Information Page 15
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
(4) Purchase securities of other investment companies, except to the
extent permitted by the 1940 Act, in the open market at no more than
customary commission rates. This limitation does not apply to securities
received or acquired as dividends, through offers of exchange, or as a
result of reorganization, consolidation, or merger;
(5) Purchase securities on margin, provided that a Portfolio may obtain
short-term credits as may be necessary for the clearance of purchases and
sales of securities, and further provided that a Portfolio may make margin
deposits in connection with its use of financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments; or
(6) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
If a percentage restriction on investment or utilization of assets in an
investment policy or limitation is adhered to at the time an investment is made,
a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of a Portfolio's investment policies or restrictions. A
Portfolio may exchange securities, exercise conversion or subscription rights,
warrants, or other rights to purchase common stock or other equity securities
and may hold, except to the extent limited by the 1940 Act, any such securities
so acquired without regard to the Portfolio's investment policies and
limitations. The original cost of the securities so acquired will be included in
any subsequent determination of a Portfolio's compliance with the investment
percentage limitations referred to above and in the Prospectus.
- --------------------------------------------------------------------------------
EXECUTION OF PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------
Subject to policies established by Growth Portfolio's Board of Trustees, the
Sub-adviser is responsible for the execution of the Portfolios' securities
transactions and the selection of brokers/dealers who execute such transactions
on behalf of the Portfolios. In executing transactions, the Sub-adviser seeks
the best net results for each Portfolio, taking into account such factors as the
price (including the applicable brokerage commission or dealer spread), size of
the order, difficulty of execution and operational facilities of the firm
involved. Although the Sub-adviser generally seeks reasonably competitive
commission rates and spreads, payment of the lowest commission or spread is not
necessarily consistent with the best net results. While the Portfolios may
engage in soft dollar arrangements for research services, as described below,
the Portfolios have no obligation to deal with any broker/dealer or group of
broker/dealers in the execution of portfolio transactions.
Consistent with the interests of the Portfolios, the Sub-adviser may select
brokers to execute the Portfolios' securities transactions on the basis of the
research services they provide to the Sub-adviser for its use in managing the
Portfolios and its other advisory accounts. Such services may include furnishing
analyses, reports and information concerning issuers, industries, securities,
geographic regions, economic factors and trends, portfolio strategy, and
performance of accounts, and effecting securities transactions and performing
functions incidental thereto (such as clearance and settlement). Research and
brokerage services received from such broker are in addition to, and not in lieu
of, the services required to be performed by the Sub-adviser under the
applicable investment management and administration contract. A commission paid
to such broker may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the Sub-adviser
determines in good faith that such commission is reasonable in terms either of
that particular transaction or the overall responsibility of the Sub-adviser to
the Portfolios and its other clients and that the total commissions paid by each
Fund will be reasonable in relation to the benefits received by the Portfolios
over the long term. Research services may also be received from dealers who
execute Portfolio transactions in OTC markets.
The Sub-adviser may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by the Portfolio toward payment of its expenses, such as
custodian fees.
Investment decisions for each Portfolio and for other investment accounts
managed by the Sub-adviser are made independently of each other in light of
differing conditions. However, the same investment decision occasionally may be
Statement of Additional Information Page 16
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
made for two or more of such accounts, including one or more Portfolios. In such
cases, simultaneous transactions may occur. Purchases or sales are then
allocated as to price or amount in a manner deemed fair and equitable to all
accounts involved. While in some cases this practice could have a detrimental
effect upon the price or value of the security as far as a Portfolio is
concerned, in other cases the Sub-adviser believes that coordination and the
ability to participate in volume transactions will be beneficial to the
Portfolios.
Under a policy adopted by Growth Portfolio's Board of Trustees, and subject to
the policy of obtaining the best net results, the Sub-adviser may consider a
broker/dealer's sale of the shares of the Funds and the other funds for which
AIM or the Sub-adviser serves as investment manager and/or administrator in
selecting broker/dealers for the execution of portfolio transactions. This
policy does not imply a commitment to execute portfolio transactions through all
broker/dealers that sell shares of the Funds and such other funds.
Each Portfolio contemplates that, consistent with the policy of obtaining the
best net results, brokerage transactions may be conducted through certain
companies that are affiliated with AIM or the Sub-adviser. Growth Portfolio's
Board of Trustees has adopted procedures in conformity with Rule 17e-1 under the
1940 Act to ensure that all brokerage commissions paid to such affiliates are
reasonable and fair in the context of the market in which they are operating.
Any such transactions will be effected and related compensation paid only in
accordance with applicable SEC regulations.
For the fiscal years ended December 31, 1997 and December 31, 1996, and for the
fiscal period October 18, 1995 (commencement of operations) to December 31,
1995, the Small Cap Portfolio paid aggregate brokerage commissions of $91,971,
$54,241 and $3,317, respectively. For the fiscal years ended December 31, 1997
and December 31, 1996, and for the fiscal period October 18, 1995 (commencement
of operations) to December 31, 1995, the Value Portfolio paid aggregate
brokerage commissions of $22,202, $37,380 and $1,032, respectively.
PORTFOLIO TRADING AND TURNOVER
Although the Portfolios generally do not intend to trade for short-term profits,
the securities held by a Portfolio will be sold whenever the Sub-adviser
believes it is appropriate to do so, without regard to the length of time a
particular security may have been held. Portfolio turnover rate is calculated by
dividing the lesser of sales or purchases of portfolio securities by each
Portfolio's average month-end portfolio value, excluding short-term investments.
The portfolio turnover rate will not be a limiting factor when the Sub-adviser
deems portfolio changes appropriate. Higher portfolio turnover involves
correspondingly greater brokerage commissions and other transaction costs that a
Portfolio will bear directly and may result in the realization of net capital
gains that are taxable when distributed to each corresponding Fund's
shareholders. For the fiscal years ended December 31, 1997 and December 31,
1996, the Small Cap Portfolio's and Value Portfolio's portfolio turnover rates
were 233% and 150%, and 93% and 256%, respectively.
Statement of Additional Information Page 17
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
TRUSTEES AND EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
The Trust's Trustees and Executive Officers are listed below. Unless otherwise
indicated, the address of each Executive Officer is 11 Greenway Plaza, Suite
100, Houston, Texas 77046.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
TRUST AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
William J. Guilfoyle*, 39 Mr. Guilfoyle is President, GT Global, Inc. ("GT Global") since 1995; Director, GT Global
Trustee, Chairman of the Board and since 1991; Senior Vice President and Director of Sales and Marketing, GT Global from May
President 1992 to April 1995; Vice President and Director of Marketing, GT Global from 1987 to 1992;
50 California Street Director, Liechtenstein Global Trust AG (holding company of the various international GT
San Francisco, CA 94111 companies) Advisory Board since January 1996; Director, G.T. Global Insurance Agency ("G.T.
Insurance") since 1996; President and Chief Executive Officer, G.T. Insurance since 1995;
Senior Vice President and Director, Sales and Marketing, G.T. Insurance from April 1995 to
November 1995; Senior Vice President, Retail Marketing, G.T. Insurance from 1992 to 1993.
Mr. Guilfoyle is also a trustee of each of the other investment companies registered under
the 1940 Act that is sub-advised or sub-administered by the Sub-adviser.
C. Derek Anderson, 57 Mr. Anderson is President, Plantagenet Capital Management, LLC (an investment partnership);
Trustee Chief Executive Officer, Plantagenet Holdings, Ltd. (an investment banking firm); Director,
220 Sansome Street Anderson Capital Management, Inc. since 1988; Director, PremiumWear, Inc. (formerly
Suite 400 Munsingwear, Inc.)(a casual apparel company) and Director, "R" Homes, Inc. and various
San Francisco, CA 94104 other companies. Mr. Anderson is also a trustee of each of the other investment companies
registered under the 1940 Act that is sub-advised or sub-administered by the Sub-adviser.
Frank S. Bayley, 58 Mr. Bayley is a partner of the law firm of Baker & McKenzie, and serves as a Director and
Trustee Chairman of C.D. Stimson Company (a private investment company). Mr. Bayley is also a
Two Embarcadero Center trustee of each of the other investment companies registered under the 1940 Act that is
Suite 2400 sub-advised or sub- administered by the Sub-adviser.
San Francisco, CA 94111
Arthur C. Patterson, 54 Mr. Patterson is Managing Partner of Accel Partners (a venture capital firm). He also
Trustee serves as a director of Viasoft and PageMart, Inc. (both public software companies), as
428 University Avenue well as several other privately held software and communications companies. Mr. Patterson
Palo Alto, CA 94301 is also a trustee of each of the other investment companies registered under the 1940 Act
that is sub-advised or sub-administered by the Sub-adviser.
Ruth H. Quigley, 63 Miss Quigley is a private investor. From 1984 to 1986, she was President of Quigley
Trustee Friedlander & Co., Inc. (a financial advisory services firm). Miss Quigley is also a
1055 California Street trustee of each of the other investment companies registered under the 1940 Act that is
San Francisco, CA 94108 sub-advised or sub-administered by the Sub-adviser.
John J. Arthur+, 53 Director, Senior Vice President and Treasurer, A I M Advisors, Inc.; Vice President and
Vice President Treasurer, A I M Management Group Inc., A I M Capital Management, Inc., A I M Distributors,
Inc., A I M Fund Services, Inc. and Fund Management Company.
Kenneth W. Chancey, 52 Senior Vice President -- Mutual Fund Accounting, the Sub-adviser since 1997; Vice President
Vice President and -- Mutual Fund Accounting, the Sub-adviser from 1992 to 1997.
Principal Accounting Officer
50 California Street
San Francisco, CA 94111
</TABLE>
- --------------
* Mr. Guilfoyle is an "interested person" of the Trust as defined by the 1940
Act due to his affiliation with the Sub-adviser.
+ Mr. Arthur and Ms. Relihan are married to each other.
Statement of Additional Information Page 18
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
TRUST AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Melville B. Cox, 54 Vice President and Chief Compliance Officer, A I M Advisors, Inc., A I M Capital
Vice President Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and Fund Management
Company.
Gary T. Crum, 50 Director and President, A I M Capital Management, Inc.; Director and Senior Vice President,
Vice President A I M Management Group Inc. and A I M Advisors, Inc.; and Director, A I M Distributors,
Inc. and AMVESCAP PLC.
Robert H. Graham, 51 Director, President and Chief Executive Officer, A I M Management Group Inc.; Director and
Vice President President, A I M Advisors, Inc.; Director and Senior Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and Fund Management
Company; and Director, AMVESCAP PLC.
Helge K. Lee, 52 Chief Legal and Compliance Officer -- North America, the Sub-adviser since October 1997;
Vice President and Secretary Executive Vice President of the Asset Management Division of Liechtenstein Global Trust
50 California Street since October 1996; Senior Vice President, General Counsel and Secretary of LGT Asset
San Francisco, CA 94111 Management, Inc., Chancellor LGT Asset Management, Inc., GT Global, GT Global Investor
Services, Inc. and G.T. Insurance from May 1994 to October 1996; Senior Vice President,
General Counsel and Secretary of Strong/Corneliuson Management, Inc. and Secretary of each
of the Strong Funds from October 1991 through May 1994.
Carol F. Relihan+, 43 Director, Senior Vice President, General Counsel and Secretary, A I M Advisors, Inc.; Vice
Vice President President, General Counsel and Secretary, A I M Management Group Inc.; Director, Vice
President and General Counsel, Fund Management Company; Vice President and General Counsel,
A I M Fund Services, Inc.; and Vice President, A I M Capital Management, Inc. and A I M
Distributors, Inc.
Dana R. Sutton, 39 Vice President and Fund Controller, A I M Advisors, Inc.; and Assistant Vice President and
Vice President and Assistant Treasurer Assistant Treasurer, Fund Management Company.
</TABLE>
------------------------
The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Trust and the
Funds and recommending firms to serve as independent auditors of the Trust. Each
of the Trustees and Officers of the Trust is also a Trustee and Officer of AIM
Investment Portfolios, AIM Investment Funds, AIM Series Trust, AIM Floating Rate
Fund, AIM Eastern Europe Fund, GT Global Variable Investment Trust, GT Global
Variable Investment Series, Growth Portfolio (of which the Portfolios are
subtrusts), Global High Income Portfolio, Global Investment Portfolio and
Floating Rate Portfolio, which also are registered investment companies advised
by AIM and sub-advised by the Sub-adviser or an affiliate thereof. All of the
Trust's Trustees also serve as directors or trustees of some or all of the other
investment companies managed, administered or advised by AIM. All of the Trust's
executive officers hold similar offices with some or all of the other investment
companies managed, administered or advised by AIM. Each Trustee who is not a
director, officer or employee of the Sub-adviser or any affiliated company is
paid aggregate fees of $5,000 a year, plus $300 per Fund for each meeting of the
Board attended, and reimbursed travel and other expenses incurred in connection
with attendance at such meetings. Other Trustees and Officers receive no
compensation or expense reimbursements from the Trust. For the fiscal year ended
December 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who
are not directors, officers or employees of the Sub-adviser or any affiliated
company, received total compensation of $6,425, $6,681, $5,450 and $6,068,
respectively, from the Trust for their services as Trustees. For the year ended
December 31, 1997, Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who
are not directors, officers or employees of the Sub-adviser or any other
affiliated company, received total compensation of $103,654, $106,556, $89,700
and $98,038, respectively, from the investment companies managed or administered
by AIM and sub-advised or sub-administered by the Sub-adviser for which he or
she served as a Trustee. Fees and expenses disbursed to the Trustees contained
no accrued or payable pension or retirement benefits. As of June 26, 1998, the
Officers and Trustees and their families as a group owned in the aggregate
beneficially or of record less than 1% of the shares of the America Value Fund
and less than 1% of the shares of the Small Cap Fund.
- --------------
+ Mr. Arthur and Ms. Relihan are married to each other.
Statement of Additional Information Page 19
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
- --------------------------------------------------------------------------------
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------
To the best knowledge of the Trust, the names and addresses of the holders of 5%
or more of the outstanding shares of any class of each Fund's equity securities
as of June 26, 1998, and the percentage of the outstanding shares held by such
holders are set forth below.
<TABLE>
<CAPTION>
PERCENT
PERCENT OWNED OF
OWNED OF RECORD AND
FUND NAME AND ADDRESS OF OWNER RECORD* BENEFICIALLY
- ------------------------------ ---------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
Small Cap Fund -- Advisor Donaldson Lufkin Jenrette Securities Corp. Inc. 6.83% -0-
Class P.O. Box 2052
Jersey City, New Jersey 07303-2052
America Value Fund -- Advisor G.T. Capital Holdings, Inc. 9.78% -0-
Class SERP Deferred Compensation
50 California Street, 27th Floor
San Francisco, California 94111-4624
Attn: Ellen Hoke
INVESCO (NY) Asset Management Inc. 7.84% -0-
1166 Avenue of the Americas
New York, New York 10036-2708
Attn: Julio Garcia
</TABLE>
- --------------
*The Trust has no knowledge as to whether all or any portion of the shares owned
of record are also owned beneficially.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION SERVICES RELATING TO THE FUNDS AND THE
PORTFOLIOS
AIM serves as each Portfolio's investment manager and administrator under an
investment management and administration contract between Growth Portfolio and
AIM ("Portfolio Management Contract"). The Sub-adviser serves as each
Portfolio's sub-adviser and sub-administrator under a sub-advisory and
sub-administration agreement between AIM and the Sub-adviser ("Portfolio
Management Sub-Contract," and together with the Portfolio Management Contract,
the "Portfolio Management Contracts"). AIM serves as administrator to each Fund
under an administration contract between the Trust and AIM ("Administration
Contract"). The Sub-adviser serves as sub-administrator to each Fund under a
sub-administration contract between AIM and the Sub-adviser ("Administration
Sub-Contract," and together with the Administration Contract, the
"Administration Contracts").
The Administration Contracts will not be deemed advisory contracts, as defined
under the 1940 Act. As investment managers and administrators, AIM and the
Sub-adviser make all investment decisions for each Portfolio and, as
administrators, AIM and the Sub-adviser administer each Portfolio's and Fund's
affairs. Among other things, AIM and the Sub-adviser furnish the services and
pay the compensation and travel expenses of persons who perform the executive,
administrative, clerical and bookkeeping functions of the Portfolios and the
Funds and provide suitable office space and necessary small office equipment and
utilities.
Statement of Additional Information Page 20
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
The Portfolio Management Contracts may be renewed with respect to a Portfolio
for one-year terms, provided that any such renewal has been specifically
approved at least annually by: (i) Growth Portfolio's Board of Trustees or the
vote of a majority of the Portfolio's outstanding voting securities (as defined
in the 1940 Act), and (ii) a majority of Growth Portfolio's Trustees who are not
parties to the Portfolio Management Contracts or "interested persons" of any
such party (as defined in the 1940 Act), cast in person at a meeting called for
the specific purpose of voting on such approval. The Portfolio Management
Contracts provide that with respect to each Portfolio, and the Administration
Contracts provide that with respect to each Fund, either the Trust, Growth
Portfolio or each of AIM or the Sub-adviser may terminate the contracts without
penalty upon sixty days' written notice to the other party. The Portfolio
Management Contracts terminate automatically in the event of its assignment (as
defined in the 1940 Act).
For the fiscal period October 18, 1995 (commencement of operations) to December
31, 1995, the Small Cap Portfolio and the Value Portfolio paid fees of $1,293
and $622, respectively, to the Sub-adviser. For the same period, the Small Cap
Fund and America Value Fund paid administration fees of $755 and $349,
respectively, to the Sub-adviser. For the fiscal period October 18, 1995
(commencement of operations) to December 31, 1995, the Sub-adviser reimbursed
the Small Cap Portfolio and Value Portfolio for their respective investment
management and administration fees in the amounts of $1,293 and $622,
respectively; for the same period, the Small Cap Fund and America Value Fund
reimbursed administration fees in the amounts of $755 and $349, respectively.
Accordingly, the Sub-adviser reimbursed each Fund and its respective Portfolio
investment management and administration fees in the aggregate amounts of $2,048
and $971, respectively.
For the fiscal years ended December 31, 1997 and December 31, 1996, the Small
Cap Portfolio and the Value Portfolio paid fees of $120,544 and $73,312; and
$74,372 and $27,487, respectively, to the Sub-adviser. For the same periods, the
Small Cap Fund and America Value Fund paid administration fees of $63,460 and
$39,004; and $39,171 and $14,722, respectively, to the Sub-adviser. For the
fiscal years ended December 31, 1997 and December 31, 1996, the Sub-adviser
reimbursed the Small Cap Portfolio and Value Portfolio for their respective
investment management and administration fees in the amounts of $67,837 and
$73,312; and $74,372 and $27,487, respectively; for the same periods, the
Sub-adviser reimbursed the Small Cap Fund and America Value Fund for their
respective administration fees in the amounts of $63,460 and $39,004; and
$39,171 and $14,722, respectively. Accordingly, the Sub-adviser reimbursed each
Fund and its corresponding Portfolio investment management and administration
fees in the aggregate amounts of $131,297 and $112,316; and $113,543 and
$42,209, respectively.
For the fiscal period October 18, 1995 (commencement of operations) to December
31, 1995, the Sub-adviser, pursuant to a voluntary expense undertaking to limit
expenses to the maximum annual level of 1.65% of average daily net assets of
Advisor Class shares of the Funds, reimbursed the Small Cap Fund and America
Value Fund for expenses in the additional amounts of $65,079 and $66,907,
respectively.
For the fiscal years ended December 31, 1997 and December 31, 1996, the
Sub-adviser, pursuant to its voluntary expense undertaking, reimbursed the Small
Cap Fund and America Value Fund for expenses in the additional amounts of $0 and
$58,269; and $38,419 and $164,683, respectively.
DISTRIBUTION SERVICES
Each Fund's Advisor Class shares are offered continuously through the Funds'
principal underwriter and distributor, AIM Distributors on a "best efforts"
basis pursuant to a distribution contract between the Trust and AIM Distributors
without a front-end sales charge or a contingent deferred sales charge.
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
The Transfer Agency and Service Agreement between the Trust and A I M Fund
Services, Inc. ("AFS"), a registered transfer agent and wholly-owned subsidiary
of AIM, provides that AFS will perform certain shareholder services for the
Funds for a fee per account serviced. The Transfer Agency and Service Agreement
provides that AFS will receive a per account fee plus out-of-pocket expenses to
process orders for purchases, redemptions and exchanges of shares; prepare and
transmit payments for dividends and distributions declared by the Funds;
maintain shareholder accounts and provide shareholders with information
regarding the Funds and their accounts. The Transfer Agency and Service
Agreement became effective on September 8, 1998. The Sub-adviser also serves as
each Fund's pricing and accounting agent. For the fiscal years ended December
31, 1997 and December 31, 1996 and the period October 18, 1995 (commencement of
operations) to December 31, 1995, the Small Cap Fund and America Value Fund paid
accounting services fees of $6,379, $3,900 and $76; and $3,938, $1,472 and $36,
respectively.
Statement of Additional Information Page 21
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
EXPENSES OF THE FUNDS AND THE PORTFOLIOS
Each Fund and each Portfolio pays all expenses not assumed by the AIM,
Sub-adviser, AIM Distributors and other agents. These expenses include, in
addition to the advisory, distribution, transfer agency, pricing and accounting
agency and brokerage fees discussed above, legal and audit expenses, custodian
fees, trustees' fees, organizational fees, fidelity bond and other insurance
premiums, taxes, extraordinary expenses and expenses of reports and prospectuses
sent to existing investors. The allocation of general Trust expenses, and
expenses shared by the Funds with one another, are made on a basis deemed fair
and equitable, which may be based on the relative net assets of the Funds or the
nature of the services performed and relative applicability to each Fund.
Similarly, the allocation of general Growth Portfolio expenses, and expenses
shared by the Portfolios with each other, are made on a basis deemed fair and
equitable and may be based on the relative net assets of the Portfolios or the
nature of the services performed and relative applicability to each Portfolio.
Expenditures, including costs incurred in connection with the purchase or sale
of portfolio securities, that are capitalized in accordance with generally
accepted accounting principles applicable to investment companies, are accounted
for as capital items and not as expenses.
- --------------------------------------------------------------------------------
VALUATION OF FUND SHARES
- --------------------------------------------------------------------------------
The net asset value per share of each Fund and Portfolio is normally determined
daily as of the close of trading on the New York Stock Exchange ("NYSE")
(generally 4:00 p.m. Eastern time) on each business day of the Fund and
Portfolio. In the event the NYSE closes early (i.e., before 4:00 p.m. Eastern
time) on a particular day, the net asset value of a Fund or Portfolio is
determined as of the close of the NYSE on such day. Net asset value per share is
determined by dividing the value of a Fund's or a Portfolio's securities, cash
and other assets (including interest accrued but not collected) attributable to
a particular class, less all its liabilities (including accrued expenses and
dividends payable) attributable to that class, by the total number of shares
outstanding of that class. Determination of a Fund's or a Portfolio's net asset
value per share is made in accordance with generally accepted accounting
principles.
Each equity security held 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 mean between the closing bid and the asked
prices on that day. Each security traded in the over-the-counter market (but not
including securities reported on the NASDAQ National Market System) is valued at
the mean between the last bid and asked prices based upon quotes furnished by
market makers for such securities. 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 mean between the closing bid and asked prices on that
day. Debt securities 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 institution-size trading in similar groups of
securities, developments related to special securities, yield, quality, coupon
rate, maturity, type of issue, individual trading characteristics and other
market data. 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 specially authorized
by the Growth Portfolio's Board of Trustees. Short-term obligations having 60
days or less to maturity are valued on the basis of amortized cost. For purposes
of determining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the NYSE.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments 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 each Fund's or Portfolio's shares are
determined at such times. Foreign currency exchange rates are also generally
determined prior the close of the NYSE. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the times at
which such values are determined and the close of the NYSE which will not be
reflected in the computation of a Fund's or Portfolio'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 Growth Portfolio's Board of
Trustees.
Statement of Additional Information Page 22
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
HOW TO PURCHASE AND REDEEM SHARES
- --------------------------------------------------------------------------------
A complete description of the manner in which shares of the Funds may be
purchased appears in the Funds' Prospectuses under the headings "How to Purchase
Shares," "Terms and Conditions of Purchase of the AIM Funds" and "Special
Plans."
For purposes of a Letter of Intent entered into prior to June 1, 1998, any
registered investment adviser, trust company or bank trust department which
exercises investment discretion and which intends within thirteen months to
invest $500,000 or more can be treated as a single purchaser, provided further
that such entity places all purchases and redemption orders. Such entities
should be prepared to establish their qualifications for such treatment.
Complete information concerning the method of exchanging shares of the Funds for
shares of the other AIM Funds is set forth in the Prospectuses under the heading
"Exchange Privilege."
Information concerning redemption of the Funds' shares is set forth in the
Prospectuses under the heading "How to Redeem Shares." In addition to the Funds'
obligation to redeem shares, AIM Distributors may also repurchase shares as an
accommodation to shareholders. To effect a repurchase, those dealers who have
executed Selected Dealer Agreements with AIM Distributors must phone orders to
the order desk of the Funds at (800) 959-4246 and guarantee delivery of all
required documents in good order. A repurchase is effected at the net asset
value per share of the applicable Fund next determined after the repurchase
order is received. Such an arrangement is subject to timely receipt by A I M
Fund Services, Inc., the Funds' transfer agent, of all required documents in
good order. If such documents are not received within a reasonable time after
the order is placed, the order is subject to cancellation. While there is no
charge imposed by a Fund or by AIM Distributors (other than any applicable
contingent deferred sales charge) when shares are redeemed or repurchased,
dealers may charge a fair service fee for handling the transaction.
The right of redemption may be suspended or the date of payment postponed when
(a) trading on the NYSE is restricted, as determined by applicable rules and
regulations of the SEC, (b) the NYSE is closed for other than customary weekend
and holiday closings, (c) the SEC has by order permitted such suspension, or (d)
an emergency as determined by the SEC exists making disposition of portfolio
securities or the valuation of the net assets of a Fund not reasonably
practicable.
PROGRAMS AND SERVICES FOR SHAREHOLDERS
The Funds provide certain services for shareholders and certain investment or
redemption programs. See "Exchange Privilege" and "How to Redeem Shares" in the
Prospectus. All inquiries concerning these programs should be made directly to
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, toll free
at (800) 959-4246.
DIVIDEND ORDER
Dividends may be paid to someone other than the registered owner, or sent to an
address other than the address of record. (Please note that signature guarantees
are required to effect this option.) An investor also may direct that his or her
dividends be invested in one of the other AIM Funds and there is no sales charge
for these investments; initial investment minimums apply. See "Dividends,
Distributions and Tax Matters--Dividends and Distributions" in the Prospectus.
To effect this option, please contact your authorized dealer. For more
information concerning AIM Funds other than the Funds, please obtain a current
prospectus by contacting your authorized dealer, by writing to A I M Fund
Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, or by calling toll
free (800) 959-4246.
Statement of Additional Information Page 23
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
TAXES
- --------------------------------------------------------------------------------
TAXATION OF THE FUNDS
Each Fund is treated as a separate corporation for federal income tax purposes.
In order to continue to qualify for treatment as a regulated investment company
("RIC") under the Code, each Fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income (consisting
generally of net investment income and net short-term capital gain and must meet
several additional requirements. With respect to each Fund, these requirements
include the following: (1) the Fund must derive at least 90% of its gross income
each taxable year from dividends, interest, payments with respect to securities
loans and gains from the sale or other disposition of securities or other income
(including gains from options or Futures) derived with respect to its business
of investing in securities ("Income Requirement"); and (2) the Diversification
Requirements. Each Fund, as an investor in its corresponding Portfolio, is
deemed to own a proportionate share of the Portfolios assets, and to earn a
proportionate share of the Portfolio's income, for purposes of determining
whether the Fund satisfies all of the requirements described above to qualify as
a RIC.
Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the
extent it fails to distribute by the end of any calendar year substantially all
of its ordinary income for that year and capital gain net income for the
one-year period ending on October 31 of that year, plus certain other amounts.
See the next section for a discussion of the tax consequences to each Fund of
hedging transactions engaged in by its corresponding Portfolio.
TAXATION OF THE PORTFOLIOS
THE PORTFOLIOS AND THEIR RELATIONSHIP TO THE FUND. Each Portfolio is treated
as a separate partnership for federal income tax purposes and is not a "publicly
traded partnership." As a result, each Portfolio is not subject to federal
income tax; instead, each Fund, as an investor in its corresponding Portfolio,
is required to take into account in determining its federal income tax liability
its share of the Portfolio's income, gains, losses, deductions and credits,
without regard to whether it has received any cash distributions from the
Portfolio. Each Portfolio also is not subject to New York income or franchise
tax.
Because, as noted above, each Fund is deemed to own a proportionate share of its
corresponding Portfolio's assets, and to earn a proportionate share of its
corresponding Portfolio's income, for purposes of determining whether the Fund
satisfies the requirements to qualify as a RIC, each Portfolio intends to
conduct its operations so that its corresponding Fund will be able to continue
to satisfy all those requirements.
Distributions to each Fund from its corresponding Portfolio (whether pursuant to
a partial or complete withdrawal or otherwise) will not result in the Fund's
recognition of any gain or loss for federal income tax purposes, except that (1)
gain will be recognized to the extent any cash that is distributed exceeds the
Fund's basis for its interest in the Portfolio before the distribution, (2)
income or gain will be recognized if the distribution is in liquidation of the
Fund's entire interest in the Portfolio and includes a disproportionate share of
any unrealized receivables held by the Portfolio, and (3) loss will be
recognized if a liquidation distribution consists solely of cash and/or
unrealized receivables. Each Fund's basis for its interest in its corresponding
Portfolio generally will equal the amount of cash and the basis of any property
the Fund invests in the Portfolio, increased by the Fund's share of the
Portfolio's net income and gains and decreased by (a) the amount of cash and the
basis of any property the Portfolio distributes to the Fund and (b) the Fund's
share of the Portfolio's losses.
OPTIONS AND FUTURES TRANSACTIONS. The Portfolios' use of hedging
transactions, such as selling (writing) and purchasing options and Futures,
involves complex rules that will determine, for federal income tax purposes, the
character and timing of recognition of the gains and losses a Portfolio realizes
in connection therewith. Gains from options and Futures derived by a Portfolio
with respect to its business of investing in securities will qualify as
permissible income under the Income Requirement for its corresponding Fund.
Statement of Additional Information Page 24
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
Futures that are subject to section 1256 of the Code (other than those that are
part of a "mixed straddle") ("Section 1256 Contracts") and that are held by a
Portfolio at the end of its taxable year generally will be deemed to have been
sold at that time at market value for federal income tax purposes. Sixty percent
of any net gain or loss recognized on these deemed sales, and 60% of any net
realized gain or loss from any actual sales of Section 1256 Contracts, will be
treated as long-term capital gain or loss, and the balance will be treated as
short-term capital gain or loss. That 60% portion will qualify for the reduced
maximum tax rates on noncorporate taxpayers' net capital gain (i.e., the excess
of net long-term capital gain over net short-term capital loss) enacted by the
Taxpayer Relief Act of 1997 -- 20% (10% for taxpayers in the 15% marginal tax
bracket) for gain recognized on capital assets held for more than 18 months --
instead of the 28% rate in effect before that legislation, which now applies to
gain on capital assets held for more than one year but not more than 18 months.
However, technical corrections legislation passed by the House of
Representatives late in 1997 would clarify that the lower rates apply.
If a Portfolio has an "appreciated financial position" -- generally, an interest
(including an interest through an option, Futures Contract or short sale) with
respect to any stock, debt instrument (other than "straight debt") or
partnership interest the fair market value of which exceeds its adjusted basis
- -- and enters into a "constructive sale" of the same or substantially similar
property, the Portfolio will be treated as having made an actual sale thereof,
with the result that gain will be recognized at that time. A constructive sale
generally consists of a short sale, an offsetting notional principal contract or
Futures Contract entered into by a Portfolio or a related person with respect to
the same or substantially similar property. In addition, if the appreciated
financial position is itself a short sale or such a contract, acquisition of the
underlying property or substantially similar property will be deemed a
constructive sale.
TAXATION OF THE FUNDS' SHAREHOLDERS
Dividends and distributions declared by a Fund in, and payable to shareholders
of record as of a date in, October, November or December of any year will be
deemed to have been paid by the Fund and received by the shareholders on
December 31 of that year if the distributions are paid by the Fund during the
following January. Accordingly, those distributions will be taxed to
shareholders for the year in which that December 31 falls.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
Dividends paid by a Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by a Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by a
Fund to a foreign shareholder generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Funds, their shareholders and the Portfolios.
Investors are urged to consult their own tax advisers for more detailed
information and for information regarding any foreign, state and local taxes
applicable to distributions received from a Fund.
Statement of Additional Information Page 25
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
AIM was organized in 1976, and along with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. AIM is a direct, wholly owned subsidiary of AIM
Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are an
independent investment management group that has a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston, MA 02110, acts
as custodian of the Portfolios' assets.
INDEPENDENT ACCOUNTANTS
The Trust's, the Funds' and the Portfolios' independent accountants are
, conducts annual audits of the
Funds and the Portfolios, assists in the preparation of the Funds' and the
Portfolios' federal and state income tax returns and consults with the Trust and
the Funds and Growth Portfolio and the Portfolios as to matters of accounting,
regulatory filings and federal and state income taxation.
The audited financial statements of the Trust and Growth Portfolio included in
this Statement of Additional Information have been examined by
as stated in their opinion appearing herein and are
included in reliance upon such opinion given upon the authority of that firm as
experts in accounting and auditing.
SHAREHOLDER LIABILITY
Under Delaware law, the shareholders of the Trust enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances shareholders of
the Trust may be held personally liable for the Trust's obligations. However,
the Trust's Agreement and Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or a trustee. The Trust's Agreement and Declaration of Trust provides
for indemnification from the Trust property for all losses and expenses of any
shareholder held personally liable for the Trust's obligations. Thus, the risk
of a shareholder incurring financial loss on account of such liability is
limited to circumstances in which the Trust itself would be unable to meet its
obligations and where the other party was held not to be bound by the
disclaimer.
NAMES
Prior to May 29, 1998, AIM Small Cap Equity Fund operated under the name of GT
Global America Small Cap Growth Fund, and AIM America Value Fund operated under
the name of GT Global America Value Fund.
Statement of Additional Information Page 26
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
STANDARDIZED RETURNS
TOTAL RETURN QUOTATIONS. The standard formula for calculating total return,
as described in the Prospectus, is as follows:
P(1+T)to the power of n=ERV
<TABLE>
<S> <C> <C> <C>
Where P = a hypothetical initial payment of $1,000.
T = average annual total return (assuming the applicable maximum sales load is deducted at
the beginning of the 1, 5, or 10 year periods).
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of the 1, 5, or 10
year periods (or fractional portion of such period).
</TABLE>
The standardized returns for the Class A and Advisor Class shares of the Small
Cap Fund, stated as average annualized total returns for the periods shown,
were:
<TABLE>
<CAPTION>
SMALL CAP
SMALL CAP FUND
FUND (ADVISOR
PERIOD (CLASS A) CLASS)
- -------------------------------------------------- ----------- ------------
<S> <C> <C>
Fiscal year ended Dec. 31, 1997................... [9.83%] [16.63%]
Oct. 18, 1995 (commencement of operations) through
Dec. 31, 1997.................................... [12.27%] [15.61%]
</TABLE>
The Standardized Returns for the Class A and Advisor Class shares of the America
Value Fund, stated as average annualized total returns for the periods shown,
were:
<TABLE>
<CAPTION>
AMERICA
AMERICA VALUE FUND
VALUE FUND (ADVISOR
PERIOD (CLASS A) CLASS)
- -------------------------------------------------- ----------- ------------
<S> <C> <C>
Fiscal year ended Oct. 31, 1997................... [20.24%] [27.78%]
Oct. 18, 1995 (commencement of operations) through
Dec. 31, 1997.................................... [21.84%] [25.53%]
</TABLE>
NON-STANDARDIZED RETURNS
Standard total return quotes may be accompanied by total return figures
calculated by alternative methods. For example, average annual total return may
be calculated without assuming payment of the full sales load according to the
following formula:
P(1+U)to the power of n=ERV
<TABLE>
<S> <C> <C> <C>
Where P = a hypothetical initial payment of $1,000.
U = average annual total return assuming payment of only a stated portion of, or none of, the
applicable maximum sales load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of stated period.
</TABLE>
Cumulative total return across a stated period may be calculated as follows:
P(1+V)to the power of n=ERV
<TABLE>
<S> <C> <C> <C>
Where P = a hypothetical initial payment of $1,000.
V = cumulative total return assuming payment of all of, a stated portion of, or none of, the
applicable maximum sales load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment at the end of the stated period.
</TABLE>
Statement of Additional Information Page 27
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the Small Cap Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
SMALL CAP
SMALL CAP FUND
FUND (ADVISOR
PERIOD (CLASS A) CLASS)
- -------------------------------------------------- ----------- ------------
<S> <C> <C>
Oct. 18, 1995 (commencement of operations) through
Dec. 31, 1997.................................... [36.55%] [37.64%]
</TABLE>
The aggregate non-standardized returns (not taking sales charges into account)
for the Class A and Advisor Class shares of the America Value Fund, stated as
aggregate total returns for the periods shown, were:
<TABLE>
<CAPTION>
AMERICA
AMERICA VALUE FUND
VALUE FUND (ADVISOR
PERIOD (CLASS A) CLASS)
- -------------------------------------------------- ----------- ------------
<S> <C> <C>
Oct. 18, 1995 (commencement of operations) through
Dec. 31, 1997.................................... [63.52%] [65.00%]
</TABLE>
Each Fund's investment results will vary from time to time depending upon market
conditions, the composition of each Fund's portfolio and operating expenses of
each Fund, so that current or past yield or total return should not be
considered representative of what an investment in each Fund may earn in any
future period. These factors and possible differences in the methods used in
calculating investment results should be considered when comparing each Fund's
investment results with those published for other investment companies and other
investment vehicles. Each Fund's results also should be considered relative to
the risks associated with such Fund's investment objective and policies.
PERFORMANCE INFORMATION
Total return and yield figures for the Funds are neither fixed nor guaranteed,
and no Fund's principal is insured. Performance quotations reflect historical
information and should not be considered representative of a Fund's performance
for any period in the future. Performance is a function of a number of factors
which can be expected to fluctuate. The Funds may provide performance
information in reports, sales literature and advertisements. The Funds may also,
from time to time, quote information about the Funds published or aired by
publications or other media entities which contain articles or segments relating
to investment results or other data about one or more of the Funds. Such
publications or media entities may include the following, among others:
Advertising Age
Barron's
Best's Review
Broker World
Business Week
Changing Times
Christian Science Monitor
Consumer Reports
Economist
EuroMoney
FACS of the Week
Financial Planning
Financial Product News
Financial World
Forbes
Fortune
Global Finance
Hartford Courant Inc.
Institutional Investor
Insurance Forum
Insurance Week
Investor's Daily
Journal of the American
Society of CLU & ChFC
Kiplinger Letter
Money
Mutual Fund Forecaster
Mutual Fund Magazine
Nation's Business
New York Times
Pension World
Pensions & Investments
Personal Investor
Financial Services Week
Philadelphia Inquirer
Smart Money
USA Today
U.S. News & World Report
Wall Street Journal
Washington Post
CNN
CNBC
PBS
Statement of Additional Information Page 28
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
The Funds and AIM Distributors may from time to time, in advertisements, sales
literature and reports furnished to present or prospective shareholders, compare
each Fund with the following, or compare each Fund's performance to performance
data of similar mutual funds as published in the following, among others:
Bank Rate National Monitor Index
Bear Stearns Foreign Bond Index
Bond Buyer Index
CDA/Wiesenberger Investment Company Services
(data and mutual fund rankings and comparisons)
CNBC/Financial News Composite Index
COFI
Consumer Price Index
Datastream
Donoghue's
Dow Jones Industrial Average
EAFE Index
First Boston High Yield Index
Fitch (publications)
Ibbotson Associates International Bond Index
International Bank for Reconstruction and
Development (publications)
International Finance Corporation Emerging
Markets Database
International Financial Statistics
Lehman Bond Indices
Lipper Analytical Data Services, Inc. (data and
mutual fund rankings and comparisons)
Micropal, Inc. (data and mutual fund rankings
and comparisons)
Moody's Investors Service (publications)
Morgan Stanley Capital International All Country
(AC) World Index
Morgan Stanley Capital International World
Indices
Morningstar, Inc. (data and mutual fund rankings
and comparisons)
NASDAQ
Organization for Economic Cooperation and
Development (publications)
Salomon Brothers Global Telecommunications
Index
Salomon Brothers World Government Bond
Index-Non-U.S.
Salomon Brothers World Government Bond
Index
Standard & Poor's (publications)
Standard & Poor's 500 Composite Stock Price
Index
Stangar
Wilshire Associaties
World Bank (publications and reports)
The World Bank Publication of Trends in
Developing Countries
Worldscope
Each Fund may also compare its performance to rates on Certificates of Deposit
and other fixed rate investments such as the following:
10-year Treasuries
30-year Treasuries
30-day Treasury Bills
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Funds or AIM
Distributors. Advertising for the Funds may from time to time include
discussions of general economic conditions and interest rates. Advertising for
the Funds may also include reference to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
From time to time, the Funds' sales literature and/or advertisements may discuss
generic topics pertaining to the mutual fund industry. This includes, but is not
limited to, literature addressing general information about mutual funds,
variable annuities, dollar-cost averaging, stocks, bonds, money markets,
certificates of deposit, retirement, retirement plans, asset allocation,
tax-free investing, college planning, and inflation.
Although performance data may be useful to prospective investors when comparing
a Fund's performance with other funds and other potential investments, investors
should note that the methods of computing performance of other potential
investments are not necessarily comparable to the methods employed by a Fund.
Statement of Additional Information Page 29
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF BOND RATINGS
MOODY'S rates the debt securities issued by various entities from "Aaa" to
"C." Investment grade ratings are the first four categories:
Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred
to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk appear somewhat
larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered adequate,
but elements may be present which suggest a susceptibility to impairment
some time in the future.
Baa -- Bonds which are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor poorly secured).
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca -- Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Statement of Additional Information Page 30
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa to Caa. The modifier 1 indicates that the Company ranks
in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the Company ranks in the
lower end of its generic rating category.
S&P, rates the securities debt of various entities in categories ranging
from "AAA" to "D" according to quality. Investment grade ratings are the first
four categories:
AAA -- An obligation rated "AAA" has the highest rating assigned by S&P.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
AA -- An obligation rated "AA" differs from the highest rated
obligations only in a small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong.
A -- An obligation rated "A" is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations
in higher rated categories.
BBB -- An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.
BB, B, CCC, CC, C -- Obligations rated "BB," "B," "CCC," "CC," and "C"
are regarded as having significant speculative characteristics. "BB"
indicates the least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective characteristics,
these may be outweighed by large uncertainties or major exposures to adverse
conditions.
BB -- An obligation rated "BB" is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to the obligor's inadequate capacity to meet its financial commitment
on the obligation.
B -- An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB," but the obligor currently has the capacity to meet
its financial commitment on the obligation. Adverse business, financial, or
economic conditions will likely impair the obligor's capacity or willingness
to meet its financial commitment on the obligation.
CCC -- An obligation rated "CCC" is currently vulnerable to nonpayment,
and is dependent upon favorable business, financial, and economic conditions
for the obligor to meet its financial commitment on the obligation. In the
event of adverse business, financial, or economic conditions, the obligor is
not likely to have the capacity to meet its financial commitment on the
obligation.
CC -- An obligation rated "CC" is currently highly vulnerable to
nonpayment.
C -- The "C" rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but payments on
this obligation are being continued.
D -- An obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The "D" rating
also will be used upon the filing of a bankruptcy petition or the taking of
a similar action if payments on an obligation are jeopardized.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
MOODY'S employs the designation "Prime-1" to indicate commercial paper
having a superior ability for repayment of senior short-term debt obligations.
Prime-1 repayment ability will often be evidenced by many of the following
characteristics: leading market positions in well-established industries; high
rates of return on funds employed; conservative capitalization structure with
moderate reliance on debt and ample asset protection; broad margins in earnings
coverage of
Statement of Additional Information Page 31
<PAGE>
AIM SMALL CAP EQUITY FUND
AIM AMERICA VALUE FUND
fixed financial charges and high internal cash generation; and well-established
access to a range of financial markets and assured sources of alternate
liquidity. Issues rated Prime-2 have a strong ability for repayment of senior
short-term debt obligations. This normally will be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings trends and coverage
ratios, while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
S&P ratings of commercial paper are graded into several categories ranging
from "A-1" for the highest quality obligations to "D" for the lowest. Issues in
the "A" category are delineated with numbers 1, 2, and 3 to indicate the
relative degree of safety. "A-1" -- This highest category indicates that the
degree of safety regarding timely payment is strong. Those issues determined to
possess extremely strong safety characteristics will be denoted with a plus sign
(+) designation. "A-2" -- Capacity for timely payments on issues with this
designation is satisfactory; however, the relative degree of safety is not as
high as for issues designated "A-1."
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financials for the Funds as of December 31, 1997 and for the fiscal
year then ended, and the unaudited financial statements as of June 30, 1998 and
for the six months then ended, appear on the following pages.
Statement of Additional Information Page 32
<PAGE>
AIM GROWTH SERIES
PART C: OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS -- To be Filed.
(b) EXHIBITS REQUIRED BY PART C, ITEM 24 OF FORM N-1A.
<TABLE>
<S> <C>
(1) Registrant's Agreement and Declaration of Trust dated May 7, 1998 (3).
(2) Registrant's By-Laws dated May 7, 1998 (3).
(3) Not Applicable.
(4) Provisions of instruments defining the rights of holders of Registrant's
securities are contained in the Agreement and Declaration of Trust Articles
II, VI, VII, VIII and IX and By-laws Articles IV, V, VI, VII and VIII,
which are included as part of Exhibits (b)(1) and (2) of this Registration
Statement.
(5)(a) Form of Investment Management and Administration Contract (3).
(5)(b) Form of Investment Sub-Advisory and Sub-Administration Contract (3).
(6)(a) Form of Distribution Agreement with respect to Class A shares (3).
(6)(b) Form of Distribution Agreement with respect to Class B shares (3).
(6)(c) Form of Distribution Agreement with respect to Advisor Class shares (3).
(7) Not Applicable.
(8)(a) Custodian Agreement between Registrant and State Street Bank and Trust
Company (1).
(8)(b) Letter Agreement assigning Custodian Agreement (3).
(9)(a) Transfer Agency Contract -- To be Filed.
(9)(b) Form of Fund Accounting and Pricing Agent Agreement (3).
(9)(c) Other material contracts:
</TABLE>
(i) Form of Selected Dealer Agreement (3).
(ii) Form of Bank Sales Contract (3).
(iii) Form of Shareholder Service Agreement (3).
(iv) Form of Bank Shareholder Service Agreement (3).
(v) Form of Service Agreement for Bank Trust Department and
for Broker -- To be Filed.
(vi) Form of Administration Agreement (3).
(vii) Form of Sub-Administration Agreement (3).
<TABLE>
<S> <C>
(10)(a) Opinion and Consent of Counsel relating to AIM Growth Series (consisting of
the following series: AIM Worldwide Growth Fund, AIM International Growth
Fund, AIM New Pacific Growth Fund, AIM Europe Growth Fund, AIM Japan Growth
Fund, AIM Mid Cap Growth Fund, AIM Small Cap Equity Fund and AIM America
Value Fund) (3).
(10)(b) Opinion and Consent of Delaware Counsel (3).
</TABLE>
C-1
<PAGE>
<TABLE>
<S> <C>
(11) Consents of Coopers & Lybrand L.L.P., Independent Accountants relating to:
</TABLE>
(i) AIM Worldwide Growth Fund -- To be Filed.
(ii) AIM International Growth Fund -- To be Filed.
(iii) AIM New Pacific Growth Fund -- To be Filed.
(iv) AIM Europe Growth Fund -- To be Filed.
(v) AIM Japan Growth Fund -- To be Filed.
(vi) AIM Mid Cap Growth Fund -- To be Filed.
(vii) AIM Small Cap Equity Fund -- To be Filed.
(viii) AIM America Value Fund -- To be Filed.
<TABLE>
<S> <C>
(12) Not Applicable.
(13) Not Applicable.
(14)(i) IRA Application (3).
(14)(ii) SEP and SARSEP IRA Adoption Agreement (3).
(14)(iii) Profit Sharing/Money Purchase Pension Plan (3).
(14)(iv) 403(b) Plan (3).
(14)(v) SIMPLE IRA Application (3).
(14)(vi) Roth IRA Application (3).
(15)(a) Form of Distribution Plan adopted pursuant to Rule 12b-1 with respect to
Class A shares (3).
(15)(b) Form of Distribution Plan adopted pursuant to Rule 12b-1 with respect to
Class B shares (3).
(16) Schedules of Computation of Performance Quotations relating to the Class A,
Class B and Advisor Class shares of:
</TABLE>
(a) AIM Mid Cap Growth Fund (3).
(b) AIM Europe Growth Fund (3).
(c) AIM International Growth Fund (3).
(d) AIM Japan Growth Fund (3).
(e) AIM New Pacific Growth Fund (3).
(f) AIM Worldwide Growth Fund (3).
(g) AIM Small Cap Equity Fund (3).
(h) AIM America Value Fund (3).
<TABLE>
<S> <C>
(17) Financial Data Schedules (2).
(18) Multiple Class Plan adopted pursuant to Rule 18f-3 -- Filed herewith.
</TABLE>
<TABLE>
<S> <C>
Other Exhibits:
(a) Power of Attorney for Helge K. Lee and Michael A. Silver for AIM Growth
Series (3).
(b) Power of Attorney for Helge K. Lee and Michael A. Silver for Growth
Portfolio (3).
</TABLE>
- ------------------------
(1) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 40 to the Registration Statement on Form N-1A,
filed on April 29, 1997.
(2) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 41 to the Registration Statement on Form N-1A,
filed on March 10, 1998.
(3) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 43 to the Registration Statement on Form N-1A,
filed on June 1, 1998.
C-2
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of May 7, 1998:
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
- ------------------------------------------------------------------------------------ ----------------
<S> <C>
Shares of Beneficial Interest, no par value, of:
AIM Mid Cap Growth Fund Class A............................................... 21,405
AIM Mid Cap Growth Fund Class B............................................... 20,236
AIM Mid Cap Growth Fund Advisor Class......................................... 220
AIM Europe Growth Fund Class A................................................ 46,192
AIM Europe Growth Fund Class B................................................ 9,501
AIM Europe Growth Fund Advisor Class.......................................... 173
AIM International Growth Fund Class A......................................... 14,778
AIM International Growth Fund Class B......................................... 5,729
AIM International Growth Fund Advisor Class................................... 81
AIM Japan Growth Fund Class A................................................. 6,769
AIM Japan Growth Fund Class B................................................. 3,004
AIM Japan Growth Fund Advisor Class........................................... 87
AIM New Pacific Growth Fund Class A........................................... 24,468
AIM New Pacific Growth Fund Class B........................................... 10,975
AIM New Pacific Growth Fund Advisor Class..................................... 275
AIM Worldwide Growth Fund Class A............................................. 9,227
AIM Worldwide Growth Fund Class B............................................. 4,999
AIM Worldwide Growth Fund Advisor Class....................................... 142
AIM Small Cap Equity Fund Class A............................................. 1,608
AIM Small Cap Equity Fund Class B............................................. 2,185
AIM Small Cap Equity Fund Advisor Class....................................... 263
AIM America Value Fund Class A................................................ 1,303
AIM America Value Fund Class B................................................ 1,957
AIM America Value Fund Advisor Class.......................................... 172
</TABLE>
ITEM 27. INDEMNIFICATION
The Registrant's Agreement and Declaration of Trust dated May 7, 1998,
provides, among other things, (1) that a Trustee shall not be liable for any
act, omission, or obligation of the Registrant or any Trustee (except for
liability to the Registrant or its shareholders by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the Trustee's
duties); (2) that the Trustees and Officers shall be indemnified by the
Registrant to the fullest extent permitted by the Delaware Business Trust Act
and other applicable law; and (3) that the shareholders and former shareholders
of the Registrant shall be held harmless by the Registrant (or applicable
portfolio or class) from personal liability arising from their status as such,
and shall be indemnified by the Registrant (or applicable portfolio or class)
against all loss and expense arising from such personal liability in accordance
with the Registrant's By-Laws and applicable law.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER AND SUB-ADVISER
See the material under the heading "Management" included in Part A
(Prospectus) of this amendment and the material appearing under the headings
"Trustees and Executive Officers" and "Management" included in Part B (Statement
of Additional Information) of this Amendment. Information as to the Directors
and Officers of A I M Advisors, Inc. and INVESCO (NY), Inc. is included in
Schedule A and Schedule D of Part I of each entity's Form ADV (File
C-3
<PAGE>
No. 801-12313 and File No. 801-10254, respectively), filed with the Securities
and Exchange Commission, which are incorporated herein by reference.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) AIM Distributors, Inc. is also the principal underwriter for the
following other investment companies: AIM Advisor Funds, Inc. (which includes
five funds: AIM Advisor Flex Fund, AIM Advisor International Value Fund, AIM
Advisor Large Cap Value Fund, AIM Advisor Multiflex Fund and AIM Advisor Real
Estate Fund); AIM Equity Funds, Inc. (which includes six funds: AIM Aggressive
Growth Fund, AIM Blue Chip Fund, AIM Capital Development Fund, AIM Charter Fund,
AIM Constellation Fund and AIM Weingarten Fund); AIM Funds Group (which includes
nine funds: AIM Balanced Fund, AIM Global Utilities Fund, AIM High Yield Fund,
AIM Income Fund, AIM Intermediate Government Fund, AIM Money Market Fund, AIM
Municipal Bond Fund, AIM Select Growth Fund and AIM Value Fund); AIM
International Funds, Inc. (which includes six funds: AIM Asian Growth Fund, AIM
European Development Fund, AIM International Equity Fund, AIM Global Aggressive
Growth Fund, AIM Global Growth Fund and AIM Global Income Fund); AIM Investment
Securities Funds (which includes one fund: AIM Limited Maturity Treasury Fund);
AIM Summit Fund, Inc.; AIM Tax-Exempt Funds, Inc. (which includes four funds:
AIM High Income Municipal Fund, AIM Tax-Exempt Bond Fund of Connecticut, AIM
Tax-Exempt Cash Fund and AIM Tax-Free Intermediate Fund); AIM Variable Insurance
Funds, Inc. (which includes thirteen funds: AIM V.I. Aggressive Growth Fund, AIM
V.I. Balanced Fund, AIM V.I. Capital Appreciation Fund, AIM V.I. Capital
Development Fund AIM V.I. Diversified Income Fund, AIM V.I. Global Utilities
Fund, AIM V.I. Government Securities Fund, AIM V.I. Growth and Income Fund, AIM
V.I. Growth Fund, AIM V.I. High Yield Fund, AIM V.I. International Equity Fund,
AIM V.I. Money Market Fund, and AIM V.I. Value Fund); AIM Investment Portfolios,
Inc. (which includes one fund: AIM Dollar Fund); and AIM Investment Funds, Inc.
(which includes thirteen funds: AIM Strategic Income Fund, AIM Global Government
Income Fund, AIM Global High Income Fund, AIM Global Growth & Income Fund, AIM
Latin American Growth Fund, AIM Global Telecommunications Fund, AIM Global
Health Care Fund, AIM Global Financial Services Fund, AIM Global Infrastructure
Fund, AIM Global Consumer Products and Services Fund, AIM Global Resources Fund,
AIM Developing Markets Fund and AIM Emerging Markets Fund); AIM Series Trust
(which includes one fund: AIM Global Trends Fund); and GT Global Floating Rate
Fund, Inc.
(b) Directors and Officers of A I M Distributors, Inc.
The business address of each person listed is 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES WITH
BUSINESS ADDRESS PRINCIPAL UNDERWRITER
- -------------------------------------- ---------------------------------------------------------------------------
<S> <C>
Charles T. Bauer Chairman of the Board of Directors
Michael J. Cemo President & Director
Gary T. Crum Director
Robert H. Graham Senior Vice President & Director
William G. Littlepage Senior Vice President & Director
John J. Caldwell Senior Vice President
Marilyn M. Miller Senior Vice President
James L. Salners Senior Vice President
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES WITH
BUSINESS ADDRESS PRINCIPAL UNDERWRITER
- -------------------------------------- ---------------------------------------------------------------------------
<S> <C>
Gordon J. Sprague Senior Vice President
Michael C. Vessels Senior Vice President
B.J. Thompson First Vice President
James R. Anderson Vice President
John J. Arthur Vice President & Treasurer
Mary K. Coleman Vice President
Melville B. Cox Vice President & Chief Compliance Officer
Charles R. Dewey Vice President
Sidney M. Dilgren Vice President
Tony D. Green Vice President
William H. Kleh Vice President
Ofelia M. Mayo Vice President, General Counsel & Assistant Secretary
Terri L. Ransdell Vice President
Carol F. Relihan Vice President
Kamala C. Sachidanandan Vice President
Frank V. Serebrin Vice President
Christopher T. Simutis Vice President
Robert D. Van Sant, Jr. Vice President
Gary K. Wendler Vice President
David E. Hessel Assistant Vice President, Assistant Treasurer & Controller
Kathleen J. Pflueger Secretary
Luke P. Beausoleil Assistant Vice President
Tisha B. Christopher Assistant Vice President
Glenda A. Dayton Assistant Vice President
Kathleen M. Douglas Assistant Vice President
Terri N. Fiedler Assistant Vice President
Mary E. Gentempo Assistant Vice President
</TABLE>
C-5
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES WITH
BUSINESS ADDRESS PRINCIPAL UNDERWRITER
- -------------------------------------- ---------------------------------------------------------------------------
<S> <C>
Jeffrey L. Horne Assistant Vice President
Melissa E. Hudson Assistant Vice President
Jodie L. Johnson Assistant Vice President
Kathryn A. Jordan Assistant Vice President
Wayne W. LaPlante Assistant Vice President
Kim T. Lankford Assistant Vice President
Ivy B. McLemore Assistant Vice President
David B. O'Neil Assistant Vice President
Patricia M. Shyman Assistant Vice President
Nicholas D. White Assistant Vice President
Norman W. Woodson Assistant Vice President
Nancy L. Martin Assistant General Counsel & Assistant Secretary
Samuel D. Sirko Assistant General Counsel & Assistant Secretary
Stephen I. Winer Assistant Secretary
</TABLE>
(c) None.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other records required by Rules 31a-1 and 31a-2 under
the Investment Company Act of 1940, as amended, are maintained and held in the
offices of the Registrant and its sub-adviser, INVESCO (NY), Inc., 50 California
Street, San Francisco, CA 94111.
Records covering shareholder accounts and portfolio transactions are also
maintained and kept by the Registrant's Transfer Agent, A I M Fund Services,
Inc., 11 Greenway Plaza, Suite 100, Houston, Texas 77046, and by the
Registrant's Custodian, State Street Bank and Trust Company, 225 Franklin
Street, Boston, MA 02110.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
None.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly caused
this Post-Effective Amendment to this Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of San Francisco
and the State of California, on the 6th day of July, 1998.
AIM GROWTH SERIES
By: William J. Guilfoyle*
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following persons in the
capacities indicated on the 6th day of July, 1998.
<TABLE>
<S> <C>
William J. Guilfoyle* President, Trustee and
Chairman of the Board
(Principal Executive Officer)
/s/ KENNETH W. CHANCEY Vice President and Principal
- ------------------------------------------- Accounting Officer
Kenneth W. Chancey
C. Derek Anderson* Trustee
Arthur C. Patterson* Trustee
Frank S. Bayley* Trustee
Ruth H. Quigley* Trustee
*By: /s/ MICHAEL A. SILVER
-------------------------------------------
Michael A. Silver
Attorney-in-Fact, pursuant to
Power of Attorney previously filed
</TABLE>
C-7
<PAGE>
SIGNATURES
Growth Portfolio has duly caused this Post-Effective Amendment to be signed
on its behalf by the undersigned, thereto duly authorized, in the City of San
Francisco, and the State of California, on the 6th day of July, 1998.
GROWTH PORTFOLIO
By: William J. Guilfoyle*
President
This Post-Effective Amendment has been signed below by the following persons
in the capacities indicated on the 6th day of July, 1998.
<TABLE>
<S> <C>
William J. Guilfoyle* President, Trustee and
Chairman of the Board
(Principal Executive Officer)
/S/ KENNETH W. CHANCEY Vice President and
- ------------------------------------------- Principal Accounting Officer
Kenneth W. Chancey
C. Derek Anderson* Trustee
Arthur C. Patterson* Trustee
Frank S. Bayley* Trustee
Ruth H. Quigley* Trustee
*By: /S/ MICHAEL A. SILVER
-------------------------------------------
Michael A. Silver
Attorney-in-Fact, pursuant to
Power of Attorney previously filed
</TABLE>
C-8
<PAGE>
MULTIPLE CLASS PLAN
OF
AIM INVESTMENT FUNDS
AIM INVESTMENT PORTFOLIOS
AIM GROWTH SERIES
AIM SERIES TRUST
1. This Multiple Class Plan ("Plan") adopted in accordance with Rule 18f-3
under the Act shall govern the terms and conditions under which the Funds
may issue separate Classes of Shares representing interests in one or more
Portfolios of each Fund.
2. DEFINITIONS. As used herein, the terms set forth below shall have the
meanings ascribed to them below.
a. ACT - Investment Company Act of 1940, as amended.
b. ADVISOR CLASS SHARES - shall mean those Shares of a Fund designated as
Advisor Class Shares in the Fund's organizing documents.
c. CDSC - contingent deferred sales charge.
d. CDSC PERIOD - the period of years following acquisition of Shares
during which such Shares may be assessed a CDSC upon redemption.
e. CLASS - a class of Shares of a Fund representing an interest in a
Portfolio.
f. CLASS A SHARES - shall mean those Shares designated as Class A Shares
in the Fund's organizing documents, as well as those Shares deemed to
be Class A Shares for purposes of this Plan.
g. CLASS B SHARES - shall mean those Shares designated as Class B Shares
in the Fund's organizing documents.
h. CLASS C SHARES - shall mean those Shares designated as Class C Shares
in the Fund's organizing documents, as well as those Shares deemed to
be Class C Shares for purposes of this Plan. Class C Shares may not
be available for each Fund.
i. DIRECTORS - the directors or trustees of a Fund.
j. DISTRIBUTION EXPENSES - expenses incurred in activities which are
primarily intended to result in the distribution and sale of Shares as
defined in a Plan of Distribution and/or agreements relating thereto.
k. DISTRIBUTION FEE - a fee paid by a Fund to the Distributor to
compensate the Distributor for Distribution Expenses.
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l. DISTRIBUTOR - A I M Distributors, Inc. or Fund Management Company, as
applicable.
m. FUND - each of AIM Investment Funds, AIM Investment Portfolios, AIM
Growth Series, and AIM Series Trust.
n. PLAN OF DISTRIBUTION - any plan adopted under Rule 12b-1 under the Act
with respect to payment of a Distribution Fee.
o. PORTFOLIO - a series of the Shares of a Fund constituting a separate
investment portfolio of the Fund.
p. SERVICE FEE - a fee paid to financial intermediaries for the ongoing
provision of personal services to Fund shareholders and/or the
maintenance of shareholder accounts.
q. SHARE - a share of common stock or of beneficial interest in a Fund,
as applicable.
3. ALLOCATION OF INCOME AND EXPENSES.
a. DISTRIBUTION AND SERVICE FEES - Each Class shall bear directly any and
all Distribution Fees and/or Service Fees payable by such Class
pursuant to a Plan of Distribution adopted by the Fund with respect to
such Class.
b. ALLOCATION OF OTHER EXPENSES - Each Class shall bear proportionately
all other expenses incurred by a Fund based on the relative net assets
attributable to each such Class.
c. ALLOCATION OF INCOME, GAINS, AND LOSSES - Except to the extent
provided in the following sentence, each Portfolio will allocate
income and realized and unrealized capital gains and losses to a Class
based on the relative net assets of each Class. Notwithstanding the
foregoing, each Portfolio that declares dividends on a daily basis
will allocate income on the basis of settled shares.
d. WAIVER AND REIMBURSEMENT OF EXPENSES - A Portfolio's adviser,
underwriter, or any other provider of services to the Portfolio may
waive or reimburse the expenses of a particular Class or Classes.
4. DISTRIBUTION AND SERVICING ARRANGEMENTS. The distribution and servicing
arrangements identified below will apply for the following Classes offered
by a Fund with respect to a Portfolio. The provisions of the Fund's
prospectus describing the distribution and servicing arrangements in detail
are incorporated herein by this reference.
a. CLASS A SHARES. Class A Shares shall be offered at net asset value
plus a front-end sales charge as approved from time to time by the
Directors and set forth in the Fund's prospectus, which may be reduced
or eliminated for certain money market fund shares, for larger
purchases, under a combined purchase privilege, under a right of
accumulation, under a letter of intent or for certain categories of
purchasers as permitted by Rule 22(d)
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<PAGE>
of the Act and as set forth in the Fund's prospectus. Class A Shares
that are not subject to a front-end sales charge as a result of the
foregoing shall be subject to a CDSC for the CDSC Period set forth in
Section 5(a) of this Plan if so provided in the Fund's prospectus. The
offering price of Shares subject to a front-end sales charge shall be
computed in accordance with Rule 22c-1 and Section 22(d) of the Act
and the rules and regulations thereunder. Class A Shares shall be
subject to ongoing Service Fees and/or Distribution Fees approved from
time to time by the Directors and set forth in the Fund's prospectus.
b. CLASS B SHARES. Class B Shares shall be (i) offered at net asset
value, (ii) subject to a CDSC for the CDSC Period set forth in Section
5(b), (iii) subject to ongoing Service Fees and Distribution Fees
approved from time to time by the Directors and set forth in the
Fund's prospectus, and (iv) to the extent provided for in the Fund's
prospectus, converted to Class A Shares eight years from the end of
the calendar month in which the shareholder's order to purchase was
accepted as set forth in the Fund's prospectus, except that Class B
Shares of AIM Series Trust which were acquired prior to June 1, 1998
shall convert to Class A Shares as of the close of business on the
last business day of the month in which the seventh anniversary of the
initial issuance of such Class B Shares occurs.
c. CLASS C SHARES. Class C Shares shall be (i) offered at net asset
value, (ii) subject to a CDSC for the CDSC Period set forth in Section
5(c), and (iii) subject to ongoing service Fees and Distribution Fees
approved from time to time by the Directors and set forth in the
Fund's prospectus.
d. ADVISOR CLASS SHARES. Advisor Class Shares shall be (i) offered at net
asset value and (ii) offered only to certain categories of investors
as approved from time to time by the Trustees and as set forth in the
Fund's prospectus.
5. CDSC. A CDSC shall be imposed upon redemptions of Class A Shares that do
not incur a front-end sales charge and of Class B Shares and Class C Shares
as follows:
a. CLASS A SHARES. The CDSC Period for Class A Shares shall be the period
set forth in the Fund's prospectus. The CDSC Rate shall be as set
forth in the Fund's prospectus, the relevant portions of which are
incorporated herein by this reference. No CDSC shall be imposed on
Class A Shares unless so provided in a Fund's prospectus.
b. CLASS B SHARES. The CDSC Period for the Class B Shares shall be six
years. The CDSC Rate for the Class B Shares shall be as set forth in
the Fund's prospectus, the relevant portions of which are incorporated
herein by this reference.
c. CLASS C SHARES. The CDSC Period for the Class C Shares shall be one
year. The CDSC Rate for the Class C Shares shall be as set forth in
the Fund's prospectus, the relevant portions of which are incorporated
herein by reference.
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<PAGE>
d. METHOD OF CALCULATION. The CDSC shall be assessed on an amount equal
to the lesser of the then current market value or the cost of the
Shares being redeemed. No CDSC shall be imposed on increases in the
net asset value of the Shares being redeemed above the initial
purchase price. No CDSC shall be assessed on Shares derived from
reinvestment of dividends or capital gains distributions. The order in
which Shares are to be redeemed when not all of such Shares would be
subject to a CDSC shall be determined by the Distributor in accordance
with the provisions of Rule 6c-10 under the Act.
e. WAIVER. The Distributor may in its discretion waive a CDSC otherwise
due upon the redemption of Shares and disclosed in the Fund's
prospectus or statement of additional information and, for the Class A
Shares, as allowed under Rule 6c-10 under the Act.
6. EXCHANGE PRIVILEGES. Exchanges of Shares shall be permitted as follows:
a. Class A Shares may be exchanged for Class A Shares of such other
mutual funds as are disclosed in the Fund's prospectus, subject to
such terms and limitations as disclosed in the Fund's prospectus and
statement of additional information.
b. Class B Shares may be exchanged for Class B Shares of such other
mutual funds as are disclosed in the Fund's prospectus, subject to
such terms and limitations as disclosed in the Fund's prospectus and
statement of additional information.
c. Class C Shares may be exchanged for Class C Shares of such other
mutual funds as are disclosed in the Fund's prospectus, subject to
such terms and limitations as disclosed in the Fund's prospectus and
statement of additional information.
d. Advisor Class Shares may be exchanged for Advisor Class Shares of such
other mutual funds as are disclosed in the Fund's prospectus, subject
to such terms and limitations as disclosed in the Fund's prospectus
and statement of additional information.
e. Depending upon the Portfolio from which and into which an exchange is
being made and when the shares were purchased, shares being acquired
in an exchange may be acquired at their offering price, at their net
asset value or by paying the difference in sales charges, as disclosed
in the Fund's prospectus and statement of additional information.
f. CDSC Computation. The CDSC payable upon redemption of Class A Shares,
Class B Shares, and Class C Shares subject to a CDSC shall be computed
in the manner described in the Fund's prospectus.
7. SERVICE AND DISTRIBUTION FEES. The Service Fee and Distribution Fee
applicable to any Class shall be those set forth in the Fund's prospectus,
relevant portions of which are incorporated herein by this reference. All
other terms and conditions with respect to Service Fees and Distribution
Fees shall be governed by the Plan of Distribution adopted by the Fund with
respect to such fees and Rule 12b-1 under the Act.
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<PAGE>
8. CONVERSION OF CLASS B SHARES.
a. SHARES RECEIVED UPON REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS -
Shares purchased through the reinvestment of dividends and
distributions paid on Shares subject to conversion shall be treated as
if held in a separate sub-account. Each time any Shares in a
shareholder's account (other than Shares held in the sub-account)
convert to Class A Shares, a proportionate number of Shares held in
the sub-account shall also convert to Class A Shares.
b. CONVERSIONS ON BASIS OF RELATIVE NET ASSET VALUE - All conversions
shall be effected on the basis of the relative net asset values of the
two Classes without the imposition of any sales load or other charge.
c. AMENDMENTS TO PLAN OF DISTRIBUTION FOR CLASS A SHARES - If any
amendment is proposed to the Plan of Distribution under which Service
Fees and Distribution Fees are paid with respect to Class A Shares of
a Fund that would increase materially the amount to be borne by those
Class A Shares, then no Class B Shares shall convert into Class A
Shares of that Fund until the holders of Class B Shares of that Fund
have also approved the proposed amendment. If the holders of such
Class B Shares do not approve the proposed amendment, the Directors of
the Fund and the Distributor shall take such action as is necessary to
ensure that the Class voting against the amendment shall convert into
another Class identical in all material respects to Class A Shares of
the Fund as constituted prior to the amendment.
9. This Plan shall not take effect until a majority of the Directors of a
Fund, including a majority of the Directors who are not interested persons
of the Fund, shall find that the Plan, as proposed and including the
expense allocations, is in the best interests of each Class individually
and the Fund as a whole.
10. This Plan may not be amended to materially change the provisions of this
Plan unless such amendment is approved in the manner specified in Section 9
above.
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