<PAGE> 1
SEMIANNUAL REPORT / JUNE 30 1999
AIM SMALL CAP GROWTH FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-------------------------------------
REALITY BY G.G. KOPILAK
REALITY IS OFTEN NOT WHAT IS SEEN WITH THE EYES, BUT RATHER
WHAT IS PERCEIVED WITH THE SPIRIT. AIM SMALL CAP GROWTH
FUND SEEKS TO OWN THE STOCKS OF SMALL COMPANIES THAT WE
BELIEVE WILL FLOURISH IN THE MONTHS AND YEARS AHEAD--
LIKE ROSES ABOUT TO BLOOM.
-------------------------------------
AIM Small Cap Growth Fund is for shareholders who seek long-term growth of
capital. The fund invests in small companies with the potential for
above-average earnings growth.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Small Cap Growth Fund (formerly AIM Small Cap Equity Fund) performance
figures are historical and reflect reinvestment of all distributions and
changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B, Class C and Advisor Class shares will
differ from that of Class A shares due to differences in sales charge
structure and class expenses.
o Because Class C shares have been offered for less than one year (since
5/3/99), all total return figures for Class C shares reflect cumulative
total return that has not been annualized.
o Advisor Class shares were closed to the public beginning March 1, 1999.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o The fund's portfolio composition is subject to change, and there is no
assurance that the fund will continue to hold any particular security.
o Investing in smaller companies may involve greater risk and potential reward
than investing in more established companies.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lipper Small Cap Funds Index represents an average of the
performance of the 30 largest small-capitalization growth funds.
o The unmanaged Russell 2000 Index is generally considered representative of
the performance of stocks of small-capitalization companies.
o The Dow Jones Industrial Average (the Dow) is a price-weighted average of 30
actively traded primarily industrial stocks
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS
NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THERE IS A RISK
THAT YOU COULD LOSE SOME OR ALL OF YOUR MONEY.
This report may be distributed only to current shareholders or to persons who
have received a current prospectus of the fund.
AIM SMALL CAP GROWTH FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
With only several months remaining in 1999, the question on
[PHOTO OF many of your minds may be, "How will the year 2000 computer
Charles T. issue affect AIM and my investments?" We would like you to
Bauer, feel comfortable. We are pleased to be able to report to you
Chairman of that as of June 1999 we achieved a major milestone toward
the Board of year 2000 compliance status: we have successfully completed
THE FUND the testing of all of our mission-critical systems.
APPEARS HERE] Earlier this year, AIM participated in an industrywide
test that gave us a chance to see how our technology systems
might be affected by the changeover to the year 2000 (Y2K).
Everything went as well as we had hoped; in general, the
industry sailed through the testing process with flying
colors. The financial industry has been seen as a leader in
planning for year 2000 concerns. Thus, it was no surprise to
most participants that the test was an overwhelming success.
The general purpose of the process was to test
electronic interfaces among financial industry members in the United States and
to follow transactions through a typical trading cycle--from order entry to the
settlement process. Investment banks, broker-dealers, custodian banks and mutual
fund companies all worked together to make this possible. Approximately 400
firms were involved in the testing; AIM was one of 70 asset managers.
During the testing process, thousands of transactions were submitted and
approximately 260,000 steps were tested. Of those, only a handful experienced
minor glitches--just 0.02% of the total number of transactions. All problems
were worked through quickly before the hypothetical trades were settled. Of
course, AIM will keep testing and planning throughout 1999 as a precaution.
AIM'S INTERNAL EFFORTS CONTINUE
As you know from our previous communications to you, AIM has been addressing the
year 2000 issue for several years. Now that we have finished adjusting our
applications and systems, our focus for the rest of 1999 is to continue
monitoring the year 2000 readiness status of outside sources we're linked to
electronically. On the investment side, our portfolio management staff is
continually evaluating the Y2K preparedness of the domestic and foreign
companies in which we invest.
We feel that our preparations for 2000 are very comprehensive, and the
industrywide testing showed that our colleagues in the financial industry are
also working hard to be ready for the new year. We do not think shareholders
need to take any extraordinary measures with their investments to prepare for
2000. However, if you have any lingering concerns, it may reassure you to know
that AIM is finalizing contingency plans that will be ready if necessary. Our
plans will give AIM employees guidelines to follow for a wide variety of
situations.
For a more comprehensive discussion of our Y2K efforts and for periodic
updates, please visit our Web site, www.aimfunds.com.
We are pleased to send you this report covering your fund's performance over
the last six months. If you have any questions or comments, please contact our
Client Services department at 800-959-4246, or e-mail your inquiry to us at
[email protected]. You can access information about your account through our
automated AIM Investor Line at 800-246-5463 or at our Web site.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--. We appreciate your business.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
A I M Advisors, Inc.
PLEASE NOTE THAT THE INFORMATION ABOUT THE YEAR 2000 IN THIS LETTER IS DEEMED
AIM'S YEAR 2000 READINESS DISCLOSURE.
-------------------------------------
THE FINANCIAL INDUSTRY
HAS BEEN SEEN AS A
LEADER IN PLANNING FOR
YEAR 2000 CONCERNS.
-------------------------------------
AIM SMALL CAP GROWTH FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
SMALL-CAP STOCKS REBOUND AND FUND POSTS EXCELLENT RETURNS
SMALL- AND MICRO-CAP STOCKS WERE AMONG THE MARKET LEADERS DURING THE SECOND HALF
OF THE REPORTING PERIOD. HOW DID AIM SMALL CAP GROWTH FUND PERFORM?
While small- and micro-cap stocks recorded solid gains, the fund's performance
was even more impressive for the six-month period ended June 30, 1999. Excluding
sales charges, cumulative total returns over those six month were 32.24%, 31.85%
and 32.48% for Class A and B shares and Advisor Class shares, respectively. That
far exceeded the 9.28% total return for the Russell 2000 Index and the 8.63%
total return for the Lipper Small Cap Funds Index for the same period.
Class C shares which began sales on May 3, 1999, posted a cumulative total
return of 15.24% through June 30, 1999.
Since our last report on December 31, 1998, the fund's net assets have
quadrupled from $52 million to $208 million.
WHAT WERE SOME OF THE KEY TRENDS IN THE STOCK MARKET?
During the first quarter of 1999, mega-cap growth stocks and Internet stocks
outperformed other issues by a wide margin.
In a world of economic uncertainty, exemplified by January's Brazilian currency
crisis, U.S. investors favored mega-cap stocks because of their relative safety
and liquidity. Internet stocks were attractive because of the growth of the Web
as a medium of commerce, communication and entertainment.
However, during the second quarter, relatively expensive mega-cap and
Internet stocks lost much of their luster. Investors shifted their focus to mid-
and small-cap stocks and to value stocks. Additionally, the stocks of cyclical
industries such as energy came back into favor.
For the reporting period, nearly every major market index recorded
impressive gains, with the venerable Dow Jones Industrial Average (the Dow)
passing the 11,000 mark for the first time. Financial markets were volatile,
however, as it became increasingly apparent that the Federal Reserve Board (the
Fed) would raise interest rates to slow strong economic growth and contain
inflation, which rose significantly in April. On June 30, the central bank
raised the federal funds rate from 4.75% to 5%, but announced that it was
shifting from a tightening to a neutral bias with regard to further near-term
interest rate hikes. This announcement sparked a "relief rally" in the stock
market.
WHAT MADE SMALL-AND MICRO-CAP STOCKS ATTRACTIVE TO INVESTORS?
In recent years, small- and micro-cap stocks have dramatically underperformed
large-cap stocks. Consequently, they are relatively cheap in comparison to
large-cap stocks. At the same time, smaller companies are experiencing more
rapid earnings growth than larger corporations. Smaller companies generally
transact most of their business in the United States, where the economy is
booming, and thus they tend to be less affected by overseas economic downturns
than large, multinational corporations. All these factors helped pique investor
interest in small- and micro-cap stocks.
WHY WAS THE FUND'S PERFORMANCE SO STRONG?
We credit the stock-selection process for the fund's impressive performance. We
believe that earnings propel stock prices. In choosing holdings for the
portfolio, we endeavor to own the stocks of companies that we believe have solid
long-term growth prospects.
HOW WAS THE FUND POSITIONED?
At the end of the reporting period, small-cap stocks made up about 50% of the
portfolio, while micro-caps made up 39%. Mid-cap stocks constituted the
remaining 11% of the fund's holdings. Micro-caps are defined as the stocks of
companies that comprise the bottom 20% in market capitalization, while
small-caps comprise the next 30%, according to Ibbotson Associates.
Since our last report on December 31, 1998, we have boosted the fund's
technology weighting from 29% to 35% of the portfolio. Simultaneously, we
reduced the consumer-cyclical weighting from 27% to about 21% of the fund's
holdings.
HOW DID TECHNOLOGY STOCKS FARE?
Technology stocks surged upward, especially toward the end of the reporting
period, when it became apparent that the
================================================================================
SIX MONTH TOTAL RETURNS
As of 6/30/99
- --------------------------------------------------------------------------------
BAR CHART HERE
FUND CLASS A SHARES 32.24%
FUND CLASS B SHARES 31.85%
ADVISOR CLASS SHARES 32.48%
RUSSELL 2000 INDEX 9.28%
LIPPER SMALL CAP FUNDS INDEX 8.63%
================================================================================
================================================================================
GROWTH IN ASSETS
- --------------------------------------------------------------------------------
BAR CHART HERE
AS OF 12/31/98 $ 52 million
AS OF 6/30/99 $ 208 million
================================================================================
See important fund and index disclosures inside front cover.
AIM SMALL CAP GROWTH FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
<TABLE>
<CAPTION>
==============================================================================================================
TOP 10 INDUSTRIES TOP 10 EQUITY HOLDINGS
As of 6/30/99, based on total net assets As of 6/30/99, based on total net assets
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Computers (Software & Services) 10.60% 1. Sunglass Hut International, Inc. 1.24%
2. Electronics (Semiconductors) 4.85 2. Brocade Communications 1.16
Systems, Inc.
3. Retail (Specialty) 3.92 3. Emulex Corp. 1.09
4. Health Care (Specialized Services) 3.72 4. GlobeSpan, Inc. 1.07
5. Electrical Equipment 3.39 5. Zomax Optical Media, Inc. 0.95
6. Leisure Time (Products) 2.78 6. Cree Research, Inc. 0.93
7. Health Care 2.63 7. CareInsite, Inc. 0.80
(Medical Products & Supplies)
8. Services 2.43 8. ANADIGICS, Inc. 0.71
(Commercial & Consumer)
9. Telecommunications 1.99 9. Powerwave Technologies, Inc. 0.70
(Cellular/Wireless)
10. Computers (Networking) 1.96 10. Knight/Trimark 0.70
Group, Inc.-Class A
==============================================================================================================
</TABLE>
Fed would be content with a modest interest-rate hike. When enthusiasm for
Internet stocks waned, semiconductor stocks rallied. We remain optimistic about
the technology sector because of its generally positive earnings-growth
prospects.
Brocade Communications Systems, which makes switches and software for large
corporate computer systems, was the fund's top technology holding. Other tech
stocks in the portfolio included Powerwave Technologies, an independent supplier
of radio frequency amplifiers; Emulex, a designer of computer network products;
and GlobeSpan, a maker of computer chips used in digital subscriber lines (DSL).
This technology allows telecommunications companies to provide high-speed data
transmission over their existing copper lines.
WHAT ABOUT CONSUMER-CYCLICAL STOCKS?
Consumer cyclicals is a broad category that includes hotels, entertainment and
certain retailers. This sector benefited from the booming economy. Low
unemployment and rising wages meant healthy consumer spending for clothing, home
furnishings, recreational products and leisure-time activities. That helped
boost the stocks of many companies in the consumer-cyclical category.
Sunglass Hut International, the fund's top holding, is the world's largest
retail seller of sunglasses with 2,000 outlets worldwide. Other
consumer-cyclical stocks in the portfolio included Zomax, which makes compact
discs and digital video discs for software publishers and computer makers;
Monaco Coach, a leading manufacturer of luxury recreational vehicles; and Jakks
Pacific, which makes action figures for the World Wrestling Federation.
WHAT IS YOUR OUTLOOK?
The climate appears favorable for stocks. The economy is growing at a healthy
pace, corporate profits are solid and inflation is minimal. While interest rates
increased over the reporting period, they remain relatively low. Additionally,
the Asian crisis, which has periodically jolted markets since late 1997, appears
to be receding as a threat as Pacific Rim economies begin to recover.
Perhaps most significant has been the broadening of the market rally to
include small- and micro-cap stocks. We remain optimistic about the long-term
prospects for these stocks because of their attractive valuations and the
positive earnings-growth projections for smaller companies.
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/99 including sales charges
CLASS A SHARES
INCEPTION (10/18/95) 22.21%
1 Year 29.97*
*37.51% excluding sales charges
CLASS B SHARES
INCEPTION (10/18/95) 22.82%
1 Year 31.58**
**36.58% excluding CDSC
CLASS C SHARES
INCEPTION (5/3/99) 14.24***
***15.24 excluding CDSC
ADVISOR CLASS SHARES
INCEPTION (10/18/95) 24.49%
1 Year 37.96
================================================================================
================================================================================
RESULTS OF A $10,000 INVESTMENT
10/18/95-6/30/99, including sales charges
- --------------------------------------------------------------------------------
BAR CHART HERE
FUND CLASS A SHARES $21,007
FUND CLASS B SHARES $21,399
ADVISOR CLASS SHARES $22,498
RUSSELL 2000 INDEX $16,237
================================================================================
Your fund's total return includes sales charges, expenses and management
fees. For fund performance calculations and descriptions of indexes cited on
this page, please refer to the inside front cover. Past performance cannot
guarantee comparable future results.
See important fund and index disclosures inside front cover.
AIM SMALL CAP GROWTH FUND AIM FUND
3
<PAGE> 6
SEMIANNUAL REPORT / FOR CONSIDERATION
[GRAPHIC]
CHOOSE YOUR INVESTMENT PALETTE
No two pieces of art are exactly alike. Just as an artist may use different
paints to create a piece, so does an investor use different kinds of investments
to create a portfolio. And as with art, tastes can change over time--most
investors have different goals at different stages in their lives, as well as
varying tolerance for risk. The biggest advantage mutual funds offer is the
potential for diversification. Providing funds with assorted objectives and
goals allows investors to shape their portfolios to their specific needs and
spread their risk over several different funds, rather than painting their
portfolios all one color.
GROWTH VS. INCOME
If you look at the list of AIM's retail mutual funds on the back of your fund
report, you'll notice that they are divided into different types. Two that
frequently appear are growth and income. Common stock is normally the growth
component of a mutual fund with growth as a primary or secondary objective.
Bonds are typically the income components of a mutual fund with income as a
primary or secondary objective.
Let's take a closer look at the categories into which AIM's retail mutual
funds are divided. Keep in mind that funds listed under the same category don't
necessarily have the same kind of investment strategy or portfolio, even if they
have the same objective.
DOMESTIC MUTUAL FUNDS
GROWTH FUNDS
Growth funds typically invest in common stocks of companies whose businesses are
growing. Growth companies tend to reinvest their profits toward expansion of
their potential to produce greater returns instead of paying dividends. So
growth mutual funds focus on generating capital gains--increasing the value of
the stocks they hold--rather than current income, which means they generally
don't pay regular income dividends. Growth funds usually do, however, make one
capital-gains distribution per year, when there are gains.
An increase over time in the value of a growth fund's portfolio means the
fund's value, or share price, increases over time also. Shareholders in a growth
fund, then, make money by selling their shares for more than they paid for them.
Of course, the opposite is also true--shareholders can lose money by selling
their shares for less than they paid for them. Growth funds usually range from
moderate to very aggressive, depending on the size and types of companies in
which they invest.
GROWTH AND INCOME FUNDS
A growth and income fund generally invests in common and preferred stocks and
bonds of older, more established companies that have a longer track record of
growth and paying dividends.
A typical growth and income mutual fund will pay quarterly or annual income
dividends to its shareholders. (Monthly dividends are not common.) In this way,
growth and income funds can potentially provide long-term growth of investments
and also current income. These funds tend to be more conservative than growth
funds.
INCOME FUNDS
Income funds are generally designed to provide high current income rather than
long-term growth. To that end, income funds usually invest chiefly in
interest-paying corporate and government bonds. They may also own stocks of
companies that pay regular dividends. Some income funds are more aggressive than
others. The aggressiveness of a particular fund depends not only on the kinds of
securities in which it invests, but also on the fund's sector allocation and
maturity structure.
For example, Treasury securities are considered a relatively safe investment
because they are guaranteed by the U.S. government. However, lower risk also
means lower return potential. On the other hand, lower-rated corporate bonds,
often called junk bonds, involve more risk because they are not guaranteed--they
are only as good as the companies that issue them. But the added risk also means
higher return potential.
Income funds are considered more conservative and are suited for investors
seeking income rather than growth.
[GRAPHIC]
AIM SMALL CAP GROWTH FUND
4
<PAGE> 7
SEMIANNUAL REPORT / FOR CONSIDERATION
TAX-FREE INCOME OR MUNICIPAL FUNDS
These funds provide shareholders with current income that is tax-exempt at some
level, depending on the securities in which they invest. So municipal mutual
funds appeal to investors who are looking to reduce income that would otherwise
be subject to tax. Municipal bonds or notes, which are issued by state or local
governments, are generally exempt from federal taxes. Federal securities, like
Treasury bonds, are usually exempt from state taxes. And then there are some
securities that are exempt from both federal and state taxes.(1)
MONEY-MARKET FUNDS
A money-market fund is one of the safest types of mutual funds available because
its main goal is preserving your investment while paying current income in the
form of interest. As a result, these funds tend to appeal to investors looking
for safety, liquidity and some income from their investment. Money-market funds
invest in high-quality, short-term securities such as commercial paper and U.S.
government agency securities. Although money-market funds are not guaranteed or
insured by the U.S. government, the securities they hold are less risky than
other types of fixed-income securities. The trade-off for safety of principal
investment is a lower rate of return.(2)
INTERNATIONAL AND GLOBAL
MUTUAL FUNDS
INTERNATIONAL GROWTH FUNDS
An international growth fund has the same objective as a domestic growth fund,
except it invests in stocks of companies located outside the United States. Like
their domestic counterparts, international growth funds tend to pay
distributions in the form of capital gains rather than dividends. An
international growth mutual fund might invest in a particular country, region or
continent depending on the investment strategy shown in its prospectus.
International funds carry different risks than domestic funds because most
foreign markets are not as established as the markets in the United States.
Other risks include changes in the value of the U.S. dollar compared to foreign
currencies, accounting differences, political risks and foreign regulatory
differences.
GLOBAL GROWTH, GLOBAL GROWTH AND INCOME, AND GLOBAL INCOME FUNDS
These funds are similar to their domestic equivalents in terms of their goals
and the income distributions they pay. Global funds are comparable to
international funds in that they can invest in stocks of companies outside the
United States. But global funds can also invest substantially in U.S. stocks;
international funds generally do not. The amount of a global fund's portfolio
that can be invested in the United States varies greatly from fund to fund,
according to a fund's prospectus. Global funds carry the same risks as
international funds.
SPECIALIZED FUNDS
THEME FUNDS
Theme or sector funds invest primarily in a particular industry or sector of the
economy, either domestically or globally. Theme funds are required by prospectus
to invest a certain percentage of their assets in their industry or sector of
choice under normal market conditions.
As a result, theme funds present greater risk and potential reward than more
diversified funds. The types of securities held by a theme fund determine its
goal of growth and/or income.
TYPES OF FUND DISTRIBUTIONS
INCOME DIVIDENDS are paid from dividends and/or interest from securities in a
fund's portfolio. For example, if a company in which a mutual fund owns stock
distributes some of its earnings to its shareholders as a dividend, the fund
passes on those earnings to its own shareholders. Income dividends are usually
taxed as ordinary income.
CAPITAL GAINS represent the net profit realized from the growth in value of the
holdings in a fund's portfolio. These distributions are usually made once per
year. There are two types of capital gains:
o Short-term capital gains are paid from net profits gained when a mutual fund
sells stocks or bonds it has held for less than a year. Short-term capital
gains are taxed as ordinary income.
o Long-term capital gains are paid from net profits gained when a mutual fund
sells stocks or bonds it has held for more than a year. Long-term capital
gains are usually taxed at the capital-gains rate, which is typically lower
than ordinary income-tax rates.
(1) Investors in tax-free income funds still have a risk of incurring taxes on
capital-gains distributions, for example, so it's wise to see your tax advisor
before investing in such funds.
(2) There is no guarantee that a money-market fund will be able to maintain a
stable net asset value of $1.00 per share.
See the back cover for a complete list of AIM's retail mutual funds. For more
information about your fund's objective, read your fund prospectus. For more
complete information about any AIM fund(s), including sales charges and
expenses, ask your financial consultant or securities dealer for a free
prospectus(es). Please read the prospectus(es) carefully before you invest or
send money.
AIM SMALL CAP GROWTH FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-76.41%
AEROSPACE/DEFENSE-0.41%
Hawk Corp.(a) 10,300 $ 90,769
- --------------------------------------------------------------
Primex Technologies, Inc. 35,000 754,687
- --------------------------------------------------------------
845,456
- --------------------------------------------------------------
AIRLINES-0.52%
Frontier Airlines, Inc.(a) 40,000 645,000
- --------------------------------------------------------------
Mesaba Holdings, Inc.(a) 35,000 446,250
- --------------------------------------------------------------
1,091,250
- --------------------------------------------------------------
AUTO PARTS & EQUIPMENT-0.31%
Tower Automotive, Inc.(a) 25,000 635,937
- --------------------------------------------------------------
BANKS (REGIONAL)-0.68%
Columbia Bancorp 20,000 158,750
- --------------------------------------------------------------
Prosperity Bancshares, Inc. 30,000 438,750
- --------------------------------------------------------------
Southwest Bancorporation of Texas,
Inc.(a) 45,250 814,500
- --------------------------------------------------------------
1,412,000
- --------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.74%
Cox Radio, Inc.-Class A(a) 6,800 368,900
- --------------------------------------------------------------
Radio One, Inc.(a) 25,000 1,162,500
- --------------------------------------------------------------
1,531,400
- --------------------------------------------------------------
BUILDING MATERIALS-0.13%
Simpson Manufacturing Co., Inc.(a) 5,600 266,000
- --------------------------------------------------------------
CHEMICALS (SPECIALTY)-1.73%
Cambrex Corp. 20,000 525,000
- --------------------------------------------------------------
ChiRex, Inc.(a) 35,000 1,124,375
- --------------------------------------------------------------
OM Group, Inc. 20,000 690,000
- --------------------------------------------------------------
Optical Coating Laboratory, Inc. 15,000 1,254,375
- --------------------------------------------------------------
3,593,750
- --------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-1.53%
Copper Mountain Networks, Inc.(a) 15,000 1,158,750
- --------------------------------------------------------------
Harmonic, Inc.(a) 15,000 861,562
- --------------------------------------------------------------
Polycom, Inc.(a) 7,500 292,500
- --------------------------------------------------------------
Proxim, Inc.(a) 15,000 870,000
- --------------------------------------------------------------
3,182,812
- --------------------------------------------------------------
COMPUTERS (HARDWARE)-1.06%
Genesis Microchip, Inc.(a) 18,300 432,337
- --------------------------------------------------------------
IDX Systems Corp.(a) 50,000 1,128,125
- --------------------------------------------------------------
Visual Networks, Inc.(a) 20,000 640,000
- --------------------------------------------------------------
2,200,462
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (NETWORKING)-1.96%
ACT Networks, Inc.(a) 50,000 $ 853,125
- --------------------------------------------------------------
Computer Network Technology
Corp.(a) 45,000 973,125
- --------------------------------------------------------------
Emulex Corp.(a) 20,300 2,257,106
- --------------------------------------------------------------
4,083,356
- --------------------------------------------------------------
COMPUTERS (PERIPHERALS)-0.77%
Actel Corp.(a) 25,000 368,750
- --------------------------------------------------------------
Cybex Computer Products Corp.(a) 20,000 557,500
- --------------------------------------------------------------
QLogic Corp.(a) 3,800 501,600
- --------------------------------------------------------------
Xircom, Inc.(a) 6,000 180,375
- --------------------------------------------------------------
1,608,225
- --------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-9.91%
Activision, Inc.(a) 35,000 509,687
- --------------------------------------------------------------
Allaire Corp.(a) 15,000 1,023,750
- --------------------------------------------------------------
Analytical Surveys, Inc.(a) 9,600 238,800
- --------------------------------------------------------------
AnswerThink Consulting Group,
Inc.(a) 30,000 757,500
- --------------------------------------------------------------
Best Software, Inc.(a) 30,000 483,750
- --------------------------------------------------------------
Brio Technology, Inc.(a) 20,000 400,000
- --------------------------------------------------------------
Concord Communications, Inc.(a) 5,000 225,000
- --------------------------------------------------------------
Descartes Systems Group, Inc.
(The)(a) 50,000 253,125
- --------------------------------------------------------------
Entrust Technologies, Inc. 12,900 428,925
- --------------------------------------------------------------
Great Plains Software, Inc.(a) 20,000 943,750
- --------------------------------------------------------------
InfoCure Corp.(a) 25,000 1,323,437
- --------------------------------------------------------------
InfoSpace.com, Inc.(a) 10,000 470,000
- --------------------------------------------------------------
Integrated Measurement Systems,
Inc.(a) 60,000 772,500
- --------------------------------------------------------------
Internet America, Inc.(a) 5,000 94,375
- --------------------------------------------------------------
ISS Group, Inc.(a) 6,000 226,500
- --------------------------------------------------------------
Macromedia, Inc.(a) 10,000 352,500
- --------------------------------------------------------------
Medical Manager Corp.(a) 20,000 885,000
- --------------------------------------------------------------
Micromuse, Inc.(a) 10,000 498,750
- --------------------------------------------------------------
Natural MicroSystems Corp.(a) 100,000 956,250
- --------------------------------------------------------------
NEON Systems, Inc.(a) 25,000 834,375
- --------------------------------------------------------------
nFront, Inc.(a) 50,000 759,375
- --------------------------------------------------------------
Omega Research, Inc.(a) 75,000 825,000
- --------------------------------------------------------------
Pervasive Software, Inc.(a) 50,000 1,243,750
- --------------------------------------------------------------
Portal Software, Inc.(a) 30,000 1,389,375
- --------------------------------------------------------------
RadiSys Corp.(a) 20,000 777,500
- --------------------------------------------------------------
Rocky Mountain International
Ltd.(a) 25,000 300,000
- --------------------------------------------------------------
ScanSource, Inc.(a) 40,000 865,000
- --------------------------------------------------------------
Spyglass, Inc.(a) 12,000 241,500
- --------------------------------------------------------------
Transaction Systems Architects,
Inc.-Class A(a) 35,000 1,365,000
- --------------------------------------------------------------
USWeb Corp.(a) 14,000 310,625
- --------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
Wiztec Solutions Ltd.(a) 35,000 $ 831,250
- --------------------------------------------------------------
20,586,349
- --------------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES &
GIFTS)-0.58%
Fossil, Inc.(a) 25,000 1,209,375
- --------------------------------------------------------------
CONSUMER FINANCE-0.69%
AmeriCredit Corp.(a) 30,000 480,000
- --------------------------------------------------------------
Federal Agricultural Mortgage
Corp.-Class C(a) 14,000 960,750
- --------------------------------------------------------------
1,440,750
- --------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-0.47%
Accredo Health, Inc.(a) 30,000 982,500
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-3.39%
Architel Systems Corp.(a) 15,000 142,500
- --------------------------------------------------------------
Cree Research, Inc.(a) 25,000 1,923,437
- --------------------------------------------------------------
LaserSight, Inc.(a) 55,000 893,750
- --------------------------------------------------------------
Optimal Robotics Corp.(a) 35,000 347,812
- --------------------------------------------------------------
Pinnacle Systems, Inc.(a) 40,000 1,345,000
- --------------------------------------------------------------
Plexus Corp.(a) 15,000 451,875
- --------------------------------------------------------------
Rayovac Corp.(a) 15,000 340,312
- --------------------------------------------------------------
Sawtek, Inc.(a) 20,000 917,500
- --------------------------------------------------------------
SLI, Inc.(a) 25,000 675,000
- --------------------------------------------------------------
7,037,186
- --------------------------------------------------------------
ELECTRONICS (DEFENSE)-0.81%
Aeroflex, Inc.(a) 60,000 1,185,000
- --------------------------------------------------------------
Anaren Microwave, Inc.(a) 15,000 313,125
- --------------------------------------------------------------
Engineered Support Systems, Inc. 15,000 177,187
- --------------------------------------------------------------
1,675,312
- --------------------------------------------------------------
ELECTRONICS
(INSTRUMENTATION)-1.08%
Alpha Industries, Inc.(a) 30,150 1,435,894
- --------------------------------------------------------------
Varian, Inc.(a) 60,000 810,000
- --------------------------------------------------------------
2,245,894
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-4.85%
American Xtal Technology, Inc.(a) 30,000 714,375
- --------------------------------------------------------------
ANADIGICS, Inc.(a) 40,000 1,480,000
- --------------------------------------------------------------
Apex PC Solutions, Inc.(a) 30,000 615,000
- --------------------------------------------------------------
Applied Micro Circuits Corp.(a) 10,000 822,500
- --------------------------------------------------------------
Elantec Semiconductor, Inc.(a) 70,000 945,000
- --------------------------------------------------------------
GlobeSpan, Inc.(a) 55,700 2,214,075
- --------------------------------------------------------------
Hi/Fn, Inc.(a) 15,069 1,147,128
- --------------------------------------------------------------
PLX Technology, Inc.(a) 12,500 592,187
- --------------------------------------------------------------
RF Micro Devices, Inc.(a) 5,000 373,125
- --------------------------------------------------------------
S3, Inc.(a) 50,000 454,687
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)
TranSwitch Corp.(a) 15,050 $ 712,994
- --------------------------------------------------------------
10,071,071
- --------------------------------------------------------------
ENTERTAINMENT-0.27%
Carmike Cinemas, Inc.(a) 25,000 398,437
- --------------------------------------------------------------
SFX Entertainment, Inc.-Class A(a) 2,500 160,000
- --------------------------------------------------------------
558,437
- --------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-1.45%
Advanced Energy Industries,
Inc.(a) 25,000 1,014,062
- --------------------------------------------------------------
Asyst Technologies, Inc.(a) 25,000 748,437
- --------------------------------------------------------------
Brooks Automation, Inc.(a) 30,000 811,875
- --------------------------------------------------------------
Kulicke & Soffa Industries,
Inc.(a) 16,000 429,000
- --------------------------------------------------------------
3,003,374
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-0.15%
Market Guide, Inc.(a) 15,000 318,750
- --------------------------------------------------------------
FOODS-1.29%
Ben & Jerry's Homemade, Inc.-Class
A(a) 40,000 1,110,000
- --------------------------------------------------------------
Hain Food Group, Inc. (The)(a) 20,000 412,500
- --------------------------------------------------------------
Horizon Organic Holding Corp.(a) 45,000 658,125
- --------------------------------------------------------------
United Natural Foods, Inc.(a) 20,000 495,000
- --------------------------------------------------------------
2,675,625
- --------------------------------------------------------------
FOOTWEAR-0.87%
K-Swiss, Inc. 20,000 930,000
- --------------------------------------------------------------
Saucony, Inc.(a) 40,000 875,000
- --------------------------------------------------------------
1,805,000
- --------------------------------------------------------------
GAMING, LOTTERY & PARIMUTUEL
COMPANIES-0.49%
Station Casinos, Inc.(a) 50,000 1,018,750
- --------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC & OTHER)-1.55%
Anesta Corp.(a) 40,000 817,500
- --------------------------------------------------------------
Barr Laboratories, Inc.(a) 11,800 470,525
- --------------------------------------------------------------
Jones Pharma, Inc. 18,800 740,250
- --------------------------------------------------------------
Kendle International, Inc.(a) 35,000 560,000
- --------------------------------------------------------------
Medicis Pharmaceutical Corp.-Class
A(a) 25,000 634,375
- --------------------------------------------------------------
3,222,650
- --------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-0.65%
LifePoint Hospitals, Inc.(a) 50,000 671,875
- --------------------------------------------------------------
Triad Hospitals, Inc.(a) 50,000 675,000
- --------------------------------------------------------------
1,346,875
- --------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-0.21%
US Oncology, Inc.(a) 36,002 432,024
- --------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.63%
Biosite Diagnostics, Inc.(a) 30,000 303,750
- --------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-(CONTINUED)
CLOSURE Medical Corp.(a) 25,000 $ 750,000
- --------------------------------------------------------------
Colorado MEDtech, Inc.(a) 60,000 1,316,250
- --------------------------------------------------------------
Osteotech, Inc.(a) 29,750 855,312
- --------------------------------------------------------------
ResMed, Inc.(a) 25,000 829,687
- --------------------------------------------------------------
Syncor International Corp.(a) 10,000 360,000
- --------------------------------------------------------------
Xomed Surgical Products, Inc.(a) 15,250 742,484
- --------------------------------------------------------------
Zoll Medical Corp.(a) 25,000 300,000
- --------------------------------------------------------------
5,457,483
- --------------------------------------------------------------
HEALTH CARE (SPECIALIZED
SERVICES)-3.72%
Advance Paradigm, Inc.(a) 20,000 1,220,000
- --------------------------------------------------------------
Capital Senior Living Corp.(a) 80,000 800,000
- --------------------------------------------------------------
CareInsite, Inc.(a) 35,000 1,653,750
- --------------------------------------------------------------
Hooper Holmes, Inc. 24,400 497,150
- --------------------------------------------------------------
MEDE AMERICA Corp.(a) 25,000 943,750
- --------------------------------------------------------------
OEC Medical Systems, Inc.(a) 10,000 245,000
- --------------------------------------------------------------
Orthodontic Centers of America,
Inc.(a) 20,000 282,500
- --------------------------------------------------------------
Priority Healthcare Corp.(a) 25,000 862,500
- --------------------------------------------------------------
Techne Corp.(a) 20,000 507,500
- --------------------------------------------------------------
TLC The Laser Center, Inc.(a) 15,000 720,000
- --------------------------------------------------------------
7,732,150
- --------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.19%
Reinsurance Group of America, Inc. 11,700 391,950
- --------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-0.60%
FPIC Insurance Group, Inc.(a) 15,000 727,500
- --------------------------------------------------------------
Medical Assurance, Inc. 18,350 518,387
- --------------------------------------------------------------
1,245,887
- --------------------------------------------------------------
INSURANCE BROKERS-0.18%
Clark/Bardes Holdings, Inc.(a) 20,000 380,000
- --------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-0.52%
Southwest Securities Group, Inc. 15,000 1,076,250
- --------------------------------------------------------------
INVESTMENT MANAGEMENT-1.06%
Charles River Associates, Inc.(a) 30,000 751,875
- --------------------------------------------------------------
Knight/Trimark Group, Inc.-Class
A(a) 24,000 1,447,500
- --------------------------------------------------------------
2,199,375
- --------------------------------------------------------------
IRON & STEEL-0.24%
Gibraltar Steel Corp. 20,000 495,000
- --------------------------------------------------------------
LEISURE TIME (PRODUCTS)-2.78%
Acclaim Entertainment, Inc.(a) 40,000 255,000
- --------------------------------------------------------------
JAKKS Pacific, Inc.(a) 30,000 894,375
- --------------------------------------------------------------
Monaco Coach Corp.(a) 25,000 1,057,812
- --------------------------------------------------------------
Noodle Kidoodle, Inc.(a) 55,000 292,187
- --------------------------------------------------------------
THQ, Inc.(a) 45,000 1,293,750
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
LEISURE TIME (PRODUCTS)-(CONTINUED)
Zomax Optical Media, Inc.(a) 45,000 $ 1,980,000
- --------------------------------------------------------------
5,773,124
- --------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-0.41%
Matthews International Corp.-Class
A 2,300 68,138
- --------------------------------------------------------------
Spartech Corp. 25,000 790,625
- --------------------------------------------------------------
858,763
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-0.98%
Applied Science and Technology,
Inc.(a) 60,000 1,350,000
- --------------------------------------------------------------
Dril-Quip, Inc.(a) 30,000 688,125
- --------------------------------------------------------------
2,038,125
- --------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-0.06%
CompX International, Inc.(a) 6,800 121,550
- --------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-1.82%
Cal Dive International, Inc.(a) 30,000 896,250
- --------------------------------------------------------------
CARBO Ceramics, Inc. 35,000 1,065,313
- --------------------------------------------------------------
Gulfmark Offshore, Inc.(a) 35,000 665,000
- --------------------------------------------------------------
Maverick Tube Corp.(a) 35,000 487,813
- --------------------------------------------------------------
UTI Energy Corp.(a) 40,000 662,500
- --------------------------------------------------------------
3,776,876
- --------------------------------------------------------------
OIL & GAS (EXPLORATION &
PRODUCTION)-1.34%
Cabot Oil & Gas Corp.-Class A 20,000 372,500
- --------------------------------------------------------------
Evergreen Resources, Inc.(a) 35,000 881,563
- --------------------------------------------------------------
Louis Dreyfus Natural Gas Corp.(a) 30,000 646,875
- --------------------------------------------------------------
Newfield Exploration Co.(a) 9,000 255,938
- --------------------------------------------------------------
Stone Energy Corp.(a) 15,000 635,625
- --------------------------------------------------------------
2,792,501
- --------------------------------------------------------------
PERSONAL CARE-0.59%
D & K Healthcare Resources, Inc. 35,000 835,625
- --------------------------------------------------------------
Steiner Leisure Ltd. 13,000 394,063
- --------------------------------------------------------------
1,229,688
- --------------------------------------------------------------
PUBLISHING-0.19%
Information Holdings, Inc.(a) 20,500 402,313
- --------------------------------------------------------------
REAL ESTATE INVESTMENT
TRUSTS-0.08%
Correctional Properties Trust 10,000 157,500
- --------------------------------------------------------------
RESTAURANTS-1.78%
P.F. Chang's China Bistro, Inc.(a) 10,000 216,250
- --------------------------------------------------------------
PJ America, Inc.(a) 45,000 953,438
- --------------------------------------------------------------
Rubio's Restaurants, Inc.(a) 54,600 842,888
- --------------------------------------------------------------
Sonic Corp.(a) 25,000 815,625
- --------------------------------------------------------------
Taco Cabana-Class A(a) 85,000 865,938
- --------------------------------------------------------------
3,694,139
- --------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (COMPUTERS &
ELECTRONICS)-0.91%
Tweeter Home Entertainment Group,
Inc.(a) 25,000 $ 981,250
- --------------------------------------------------------------
Ultimate Electronics, Inc.(a) 50,000 909,375
- --------------------------------------------------------------
1,890,625
- --------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.53%
99 Cents Only Stores(a) 15,500 774,031
- --------------------------------------------------------------
Stein Mart, Inc.(a) 35,000 328,125
- --------------------------------------------------------------
1,102,156
- --------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.51%
Wild Oats Markets, Inc.(a) 35,000 1,062,031
- --------------------------------------------------------------
RETAIL (HOME SHOPPING)-0.12%
J. Jill Group, Inc.(a) 17,550 256,669
- --------------------------------------------------------------
RETAIL (SPECIALTY)-3.92%
BOWLIN Outdoor Advertising &
Travel Centers Inc.(a) 50,000 300,000
- --------------------------------------------------------------
Cheap Tickets, Inc.(a) 15,000 547,500
- --------------------------------------------------------------
CSK Auto Corp.(a) 25,000 675,000
- --------------------------------------------------------------
eToys, Inc.(a) 15,000 611,250
- --------------------------------------------------------------
Garden Ridge Corp.(a) 50,000 237,500
- --------------------------------------------------------------
Hibbett Sporting Goods, Inc.(a) 25,000 550,000
- --------------------------------------------------------------
Hollywood Entertainment Corp.(a) 65,000 1,271,563
- --------------------------------------------------------------
Rent-A-Center, Inc.(a) 25,000 600,000
- --------------------------------------------------------------
Rent-Way, Inc.(a) 15,000 369,375
- --------------------------------------------------------------
Sunglass Hut International,
Inc.(a) 150,000 2,578,125
- --------------------------------------------------------------
Tuesday Morning Corp.(a) 16,000 408,000
- --------------------------------------------------------------
8,148,313
- --------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-1.63%
Buckle, Inc. (The)(a) 25,000 718,750
- --------------------------------------------------------------
Chico's Fas, Inc.(a) 17,000 399,500
- --------------------------------------------------------------
Children's Place Retail Stores,
Inc. (The)(a) 20,000 810,000
- --------------------------------------------------------------
Factory 2-U Stores, Inc.(a) 50,000 925,000
- --------------------------------------------------------------
Wet Seal, Inc.-Class A(a) 19,000 543,875
- --------------------------------------------------------------
3,397,125
- --------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.52%
Bay View Capital Corp. 40,000 820,000
- --------------------------------------------------------------
Queens County Bancorp, Inc. 8,200 265,475
- --------------------------------------------------------------
1,085,475
- --------------------------------------------------------------
SERVICES
(ADVERTISING/MARKETING)-0.51%
Lamar Advertising Co.(a) 8,600 352,063
- --------------------------------------------------------------
Professional Detailing, Inc.(a) 30,000 705,000
- --------------------------------------------------------------
1,057,063
- --------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.43%
Bright Horizons Family Solutions,
Inc.(a) 20,000 377,500
- --------------------------------------------------------------
Cerner Corp.(a) 30,000 629,063
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SERVICES (COMMERCIAL & CONSUMER)-(CONTINUED)
Championship Auto Racing Teams,
Inc.(a) 14,300 $ 428,106
- --------------------------------------------------------------
Comfort Systems USA, Inc.(a) 22,600 406,800
- --------------------------------------------------------------
Copart, Inc.(a) 35,000 743,750
- --------------------------------------------------------------
Iron Mountain, Inc.(a) 24,150 691,294
- --------------------------------------------------------------
ITT Educational Services, Inc.(a) 10,200 265,838
- --------------------------------------------------------------
Jones Lang LaSalle Inc.(a) 5,000 149,063
- --------------------------------------------------------------
Metzler Group, Inc.(a) 6,600 182,325
- --------------------------------------------------------------
Provant, Inc.(a) 50,000 778,125
- --------------------------------------------------------------
Wilmar Industries, Inc.(a) 30,000 390,000
- --------------------------------------------------------------
5,041,864
- --------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-1.74%
Brocade Communications Systems,
Inc.(a) 25,000 2,410,938
- --------------------------------------------------------------
Critical Path, Inc.(a) 6,000 331,875
- --------------------------------------------------------------
Insight Enterprises, Inc.(a) 34,875 863,156
- --------------------------------------------------------------
3,605,969
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.89%
CheckFree Holdings Corp.(a) 20,000 551,250
- --------------------------------------------------------------
Lason Holdings, Inc.(a) 20,000 992,500
- --------------------------------------------------------------
Mecon, Inc.(a) 40,000 300,000
- --------------------------------------------------------------
1,843,750
- --------------------------------------------------------------
SERVICES (FACILITIES &
ENVIRONMENTAL)-0.96%
Casella Waste Systems, Inc.(a) 10,000 260,000
- --------------------------------------------------------------
Cornell Corrections, Inc.(a) 10,100 166,019
- --------------------------------------------------------------
GP Strategies Corp.(a) 25,000 218,750
- --------------------------------------------------------------
Tetra Tech, Inc.(a) 50,000 825,000
- --------------------------------------------------------------
Waste Connections, Inc.(a) 17,500 533,750
- --------------------------------------------------------------
2,003,519
- --------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-1.99%
Boston Communications Group,
Inc.(a) 75,000 1,007,813
- --------------------------------------------------------------
Metro One Telecommunications,
Inc.(a) 40,000 550,000
- --------------------------------------------------------------
Phone.com, Inc.(a) 20,000 1,120,000
- --------------------------------------------------------------
Powerwave Technologies, Inc.(a) 45,000 1,451,250
- --------------------------------------------------------------
4,129,063
- --------------------------------------------------------------
TEXTILES (APPAREL)-0.62%
Cutter & Buck, Inc.(a) 45,000 759,375
- --------------------------------------------------------------
Quicksilver, Inc.(a) 20,300 529,069
- --------------------------------------------------------------
1,288,444
- --------------------------------------------------------------
TEXTILES (SPECIALTY)-0.23%
Happy Kids, Inc.(a) 55,000 477,813
- --------------------------------------------------------------
TRUCKERS-0.27%
Hub Group, Inc.(a) 25,000 560,938
- --------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TRUCKS & PARTS-0.61%
Mobile Mini, Inc.(a) 65,000 $ 1,271,563
- --------------------------------------------------------------
WASTE MANAGEMENT-0.30%
KTI, Inc.(a) 15,000 213,750
- --------------------------------------------------------------
U.S. Liquids, Inc.(a) 20,000 417,500
- --------------------------------------------------------------
631,250
- --------------------------------------------------------------
Total Common Stocks (Cost
$121,444,252) 158,756,874
- --------------------------------------------------------------
FOREIGN STOCKS-0.92%
BERMUDA-0.14%
Annuity and Life Reassurance, Ltd.
(Insurance-Life/Health) 13,000 291,687
- --------------------------------------------------------------
FRANCE-0.44%
Business Objects S.A.-ADR
(Computer/Software &
Services)(a) 25,000 912,500
- --------------------------------------------------------------
ISRAEL-0.25%
Fundtech Ltd. (Computer/Software &
Services)(a) 20,025 519,398
- --------------------------------------------------------------
NETHERLANDS-0.09%
Core Laboratories N.V. (Oil &
Gas-Drilling & Equipment)(a) 13,000 181,188
- --------------------------------------------------------------
Total Foreign Stocks (Cost
$1,548,545) 1,904,773
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
U.S. TREASURY SECURITIES-0.15%
U.S. TREASURY BILLS-0.15%(b)
4.70%, 09/30/99 (Cost $316,328) $ 320,000(c) $ 316,336
- --------------------------------------------------------------
Total Investments, Excluding
Repurchase Agreement (Cost
$123,309,125) 160,977,983
- --------------------------------------------------------------
REPURCHASE AGREEMENT-21.81%(d)
Chase Securities, Inc., 5.00%,
07/01/99 (Cost $45,319,238)(e) 45,319,238 45,319,238
- --------------------------------------------------------------
TOTAL INVESTMENTS-99.29% 206,297,221
- --------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.71% 1,468,808
- --------------------------------------------------------------
NET ASSETS-100.00% $207,766,029
==============================================================
</TABLE>
Investment Abbreviation:
ADR - American Depositary Receipt
(a) Non-income producing security.
(b) U.S. Treasury Bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(c) A portion of the principal balance was pledged as collateral to cover margin
requirements for open futures contracts. See Note 8.
(d) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value is at least 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts, and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(e) Joint repurchase agreement entered into 06/30/99 with a maturing value of
$200,027,778. Collateralized by U.S. Government obligations.
See Notes to Financial Statements.
10
<PAGE> 13
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$123,309,125) $160,977,983
- ---------------------------------------------------------
Repurchase agreement (cost $45,319,238) 45,319,238
- ---------------------------------------------------------
Receivables for:
Investments sold 1,672
- ---------------------------------------------------------
Fund shares sold 4,913,807
- ---------------------------------------------------------
Dividends and interest 11,072
- ---------------------------------------------------------
Variation margin 57,500
- ---------------------------------------------------------
Other assets 68,727
- ---------------------------------------------------------
Total assets 211,349,999
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 2,861,080
- ---------------------------------------------------------
Fund shares reacquired 413,249
- ---------------------------------------------------------
Accrued management fees 50,886
- ---------------------------------------------------------
Accrued distribution fees 129,876
- ---------------------------------------------------------
Accrued trustees' fees 1,300
- ---------------------------------------------------------
Accrued transfer agent fees 25,884
- ---------------------------------------------------------
Accrued operating expenses 101,695
- ---------------------------------------------------------
Total liabilities 3,583,970
- ---------------------------------------------------------
Net assets applicable to shares outstanding $207,766,029
- ---------------------------------------------------------
NET ASSETS:
Class A $127,947,477
=========================================================
Class B $ 73,229,943
=========================================================
Class C $ 4,272,767
=========================================================
Advisor Class $ 2,315,842
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 5,680,455
=========================================================
Class B 3,338,416
=========================================================
Class C 194,871
=========================================================
Advisor Class 101,566
=========================================================
Class A:
Net asset value and redemption price per
share $ 22.52
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $22.52 $ 23.83
divided by 94.50%)
=========================================================
Class B:
Net asset value and offering price per
share $ 21.94
=========================================================
Class C:
Net asset value and offering price per
share $ 21.93
=========================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 22.80
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 32,338
- ---------------------------------------------------------
Interest 458,881
- ---------------------------------------------------------
Security lending income 19,884
- ---------------------------------------------------------
Total investment income 511,103
- ---------------------------------------------------------
EXPENSES:
Management fees 348,215
- ---------------------------------------------------------
Administrative services fees 14,384
- ---------------------------------------------------------
Custodian fees 15,711
- ---------------------------------------------------------
Distribution fees -- Class A 98,752
- ---------------------------------------------------------
Distribution fees -- Class B 196,287
- ---------------------------------------------------------
Distribution fees -- Class C 3,075
- ---------------------------------------------------------
Transfer agent fees -- Class A 63,894
- ---------------------------------------------------------
Transfer agent fees -- Class B 51,801
- ---------------------------------------------------------
Transfer agent fees -- Class C 677
- ---------------------------------------------------------
Transfer agent fees -- Advisor Class 179
- ---------------------------------------------------------
Printing 71,710
- ---------------------------------------------------------
Other 55,951
- ---------------------------------------------------------
Total expenses 920,636
- ---------------------------------------------------------
Less: Expenses paid indirectly (1,835)
- ---------------------------------------------------------
Net expenses 918,801
- ---------------------------------------------------------
Net investment income (loss) (407,698)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM INVESTMENT
SECURITIES AND FUTURES CONTRACTS:
Net realized gain from:
Investment securities 8,030,594
- ---------------------------------------------------------
Futures contracts 353,650
- ---------------------------------------------------------
8,384,244
- ---------------------------------------------------------
Change in net unrealized appreciation of:
Investment securities 28,034,993
- ---------------------------------------------------------
Futures contracts 77,250
- ---------------------------------------------------------
28,112,243
- ---------------------------------------------------------
Net gain from investment securities and
futures contracts 36,496,487
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $36,088,789
=========================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (407,698) $ (555,353)
- --------------------------------------------------------------------------------------------
Net realized gain from investment securities and futures
contracts 8,384,244 988,423
- --------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and futures contracts 28,112,243 8,890,666
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 36,088,789 9,323,736
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (576,954)
- --------------------------------------------------------------------------------------------
Class B -- (733,412)
- --------------------------------------------------------------------------------------------
Advisor Class -- (30,675)
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A 81,614,187 9,846,073
- --------------------------------------------------------------------------------------------
Class B 33,151,946 1,291,586
- --------------------------------------------------------------------------------------------
Class C 3,896,041 --
- --------------------------------------------------------------------------------------------
Advisor Class 784,203 (600,234)
- --------------------------------------------------------------------------------------------
Net increase in net assets 155,535,166 18,520,120
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 52,230,863 33,710,743
- --------------------------------------------------------------------------------------------
End of period $207,766,029 $52,230,863
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $161,541,773 $42,095,396
- --------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (407,698) --
- --------------------------------------------------------------------------------------------
Undistributed net realized gain from investment securities
and futures contracts 8,732,846 348,602
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
futures contracts 37,899,108 9,786,865
- --------------------------------------------------------------------------------------------
$207,766,029 $52,230,863
============================================================================================
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Small Cap Growth Fund (the "Fund") is a separate series of AIM Growth Series
(the "Trust"). The Trust is organized as a Delaware business trust and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
an open-end series management investment company consisting of six separate
series portfolios, each having an unlimited number of shares of beneficial
interest. The Fund currently offers four different classes of shares: Class A
shares, Class B shares, Class C shares and Advisor Class shares. Class A shares
are sold with a front-end sales charge. Class B shares and Class C shares are
sold with a contingent deferred sales charge. Advisor Class shares are sold
without a sales charge. Effective March 1, 1999, the Fund has discontinued sales
of the Advisor Class shares to new investors. Matters affecting each portfolio
or class will be voted on exclusively by the shareholders of such portfolio or
class.
The Fund's investment objective is to achieve long-term growth of capital.
The Fund invests substantially all of its investable assets in Small Cap
Portfolio (the "Portfolio"). The Portfolio is organized as a Delaware business
trust which is registered under the 1940 Act as an open-end management
investment company.
The Portfolio has investment objectives, policies, and limitations
substantially identical to those of the Fund. Therefore, the financial
statements of the Fund and Portfolio have been presented on a consolidated
basis, and represent all activities of both the Fund and Portfolio. At June 30,
1999, all of the shares of beneficial interest of the Portfolio were owned by
either the Fund or INVESCO (NY) Asset Management, Inc., which has a nominal
($100) investment in the Portfolio.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates. The following is a
summary of significant accounting policies in conformity with generally accepted
accounting principles consistently followed by the Fund and the Portfolio in the
preparation of the financial statements.
A. Security Valuations-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 last available bid
price on that day. Each security reported on the NASDAQ National Market
System is valued at the last sales price on the valuation date or absent a
last sales price, at the closing bid price. Debt 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 prices are not provided by any of the above
methods are valued based upon quotes furnished by independent sources and
are valued at the last bid price in the case of equity securities and in the
case of debt obligations, the mean between the last bid and asked prices.
Securities for which market quotations are not readily available or are
questionable are valued at fair value as determined in good faith by or
under the supervision of the Trust's and Portfolio's officers in a manner
specifically authorized by the Boards 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 New York Stock Exchange ("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 the
Fund's shares are determined at 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 such values are determined and the close of
the NYSE, which will not be reflected in the computation of the Fund's net
asset value. If events materially affecting the value of such securities
occur during such period, then these securities will be valued at their fair
value as determined in good faith by or under the supervision of the Boards
of Trustees of the Trust and the Portfolio.
B. Securities Transactions, Investment Income and Distributions-Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Such distributions, if
any, are declared and paid annually.
C. Federal Income Taxes-The Fund intends to comply with the requirements of the
Internal Revenue Code necessary to qualify as a regulated investment company
and, as such, will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is distributed
to shareholders. Therefore, no provision for federal income taxes is
recorded in the financial statements.
D. Expenses-Distribution and transfer agency expenses directly attributable to
a class of shares are charged to that class' operations. All other expenses
are allocated among the classes.
E. Deferred Organizational Expenses -- Expenses incurred by the AIM Small Cap
Growth Fund and the Portfolio in connection with their organization, their
initial registration with the
13
<PAGE> 16
Securities and Exchange Commission and with various states and the initial
public offering of their shares aggregated $63,500 for the Fund and $25,000
for the Portfolio. These expenses are being amortized on a straight-line
basis over a five-year period.
F. Futures Contracts -- A futures contract is an agreement between two parties
to buy and sell a security at a set price on a future date. Upon entering
into such a contract the Portfolio is required to pledge to the broker an
amount of cash or securities equal to the minimum "initial margin"
requirements of the exchange on which the contract is traded. Pursuant to
the contract, the Portfolio agrees to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as "variation margin" and are recorded by the
Portfolio as unrealized gains or losses. When the contract is closed, the
Portfolio records a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and the value at the
time it was closed. The potential risk to the Portfolio is that the change
in value of the underlying securities may not correlate to the change in
value of the contracts. The Portfolio may use futures contracts to manage
its exposure to the stock market and to fluctuations in interest rates.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's and the Portfolio's investment
manager and administrator. The Fund pays AIM administration fees at an annual
rate of 0.25% of the Fund's average daily net assets. The Portfolio pays AIM
investment management and administration fees at an annual rate of 0.475% on the
first $500 million of the Portfolio's average daily net assets, plus 0.45% on
the next $500 million of the Portfolio's average daily net assets, plus 0.425%
on the next $500 million of the Portfolio's average daily net assets, plus 0.40%
on of the Portfolio's average daily net assets exceeding $1.5 billion. AIM has
contractually agreed to limit the Fund's expenses (exclusive of brokerage
commissions, taxes, interest, and extraordinary expense) to the maximum annual
rate of 1.75%, 2.40%, 2.40%, and 1.40% of the average daily net assets of the
Fund's Class A, Class B, Class C, and Advisor Class shares, respectively.
A I M Fund Services, Inc. ("AFS") is the transfer agent of the Fund. The
Fund, pursuant to a transfer agency and service agreement, has agreed to pay AFS
a fee for providing transfer agency and shareholder services to the Fund. During
the six months ended June 30, 1999, AFS was paid $111,965 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B, Class C and Advisor Class shares of the Fund. The Trust has
adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act with
respect to the Fund's Class A shares and Class C shares (the "Class A and C
Plan"), and the Fund's Class B shares (the "Class B Plan") (collectively, the
"Plans"). The Fund, pursuant to the Class A and C Plan, pays AIM Distributors
compensation at an annual rate of 0.35% of the average daily net assets of the
Class A shares and 1.00% of the average daily net assets of the Class C shares.
The Fund pursuant to the Class B Plan, pays AIM Distributors compensation at an
annual rate of 1.00% of the average daily net assets of the Class B shares. Of
these amounts, the Fund may pay a service fee of 0.25% of the average daily net
assets of the Class A, Class B or Class C shares to selected dealers and
financial institutions who furnish continuing personal shareholder services to
their customers who purchase and own the appropriate class of shares of the
Fund. Any amounts not paid as a service fee under the Plans would constitute an
asset-based sales charge. The Plans also impose a cap on the total sales
charges, including asset-based sales charges, that may be paid by the respective
classes. During the six months ended June 30, 1999, the Class A, Class B and
Class C shares paid AIM Distributors $98,752, $196,287 and $3,075, respectively,
as compensation under the Plans.
AIM is the pricing and accounting agent for the Portfolio and the Fund. The
monthly fee for these services is a percentage, not to exceed 0.03% annually, of
the Fund's average daily net assets. The annual fee rate is derived based on the
aggregate net assets of the funds which comprise the following investment
companies: AIM Growth Series, AIM Investment Funds, AIM Series Trust, G.T.
Global Variable Investment Series and G.T. Global Variable Investment Trust. The
fee is calculated at the rate of 0.03% of the first $5 billion of assets and
0.02% of the assets in excess of $5 billion. An amount is allocated to and paid
by each such fund based on its relative average daily net assets. Effective July
1, 1999, the Trust entered into a master administrative services agreement with
AIM, replacing the above pricing and accounting agreement. The Fund has agreed
to pay AIM for certain administrative costs incurred in providing accounting
services to the Fund.
AIM Distributors received commissions of $102,833 from sales of the Class A
shares of the Fund during the six months ended June 30, 1999. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended June 30,
1999, AIM Distributors received $1,553 in contingent deferred sales charges
imposed on redemption of Fund shares. Certain officers and trustees of the Trust
and Portfolio are officers and directors of AIM, AIM Distributors and AFS.
NOTE 3-INDIRECT EXPENSES
During the six months ended June 30, 1999, the Fund received reductions in
custodian fees of $1,835 under an expense offset arrangement. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of $1,835
during the six months ended June 30, 1999.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an
"interested person" of AIM.
NOTE 5-BANK BORROWINGS
The Fund, along with certain other funds advised and/or administered by AIM, has
lines of credit with BankBoston and State Street Bank & Trust Company. The
arrangements with the banks allow the Fund and certain other funds to borrow, on
a first come, first served basis, an aggregate maximum amount of $250,000,000.
The Fund is limited to borrowing up to 33 1/3% of the Fund's total assets.
Effective May 28, 1999, the above lines of credit were replaced by the
Fund's participation in a committed line of credit facility with a syndicate
administered by The Chase Manhattan Bank. The
14
<PAGE> 17
Fund may borrow up to the lesser of (i) $975,000,000 or (ii) the limits set by
its prospectus for borrowings. The Fund and other funds advised by AIM which are
parties to the line of credit may borrow on a first come, first served basis.
The funds which are party to the line of credit are charged a commitment fee of
0.09% on the unused balance of the committed line. The commitment fee is
allocated among the funds based on their respective average net assets for the
period.
During the six months ended June 30, 1999, the Fund did not borrow under the
lines of credit.
NOTE 6-PORTFOLIO SECURITIES LOANED
At June 30, 1999, securities with an aggregate value of $19,246,757 were on loan
to brokers. The loans were secured by cash collateral of $19,844,022 received by
the Portfolio. For the six months ended June 30, 1999, the Portfolio received
fees of $19,884 for securities lending.
Cash collateral is received by the Portfolio against loaned securities in
the amount at least equal to 102% of the market value of the loaned securities
at the inception of each loan. This collateral must be maintained at not less
than 100% of the market value of the loaned securities during the period of the
loan. The cash collateral is invested in a securities lending trust which
consists of a portfolio of high quality short duration securities whose average
effective duration is restricted to 120 days or less.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Portfolio during the six months ended June 30, 1999
was $120,736,634 and $38,575,186, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities, on a tax basis, as of June 30, 1999 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment
securities $41,231,664
- ---------------------------------------------------------------
Aggregate unrealized (depreciation) of investment
securities (3,573,896)
- ---------------------------------------------------------------
Net unrealized appreciation of investment
securities $37,657,768
===============================================================
</TABLE>
Cost of investments for tax purposes is $123,320,215.
NOTE 8-FUTURES CONTRACTS
On June 30, 1999, $320,000 principal amount of U.S. Treasury obligations were
pledged as collateral to cover margin requirements for futures contracts. Open
contracts were as follows:
<TABLE>
<CAPTION>
NO. OF MONTH/
CONTRACT CONTRACTS COMMITMENT APPRECIATION
-------- --------- -------------- --------------
<S> <C> <C> <C>
Russell 2000 Index 25 September 1999 $230,250
</TABLE>
NOTE 9-SHARE INFORMATION
Changes in the Fund's shares outstanding during the six months ended June 30,
1999 and the year ended December 31, 1998 were as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 6,131,168 $116,886,195 2,808,949 $ 42,444,424
- ------------------------------------------------------------------------------
Class B 2,294,830 42,846,515 1,807,272 26,359,785
- ------------------------------------------------------------------------------
Class C* 245,328 4,923,997 -- --
- ------------------------------------------------------------------------------
Advisor Class 53,716 1,024,105 63,569 992,118
- ------------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A -- -- 35,278 549,813
- ------------------------------------------------------------------------------
Class B -- -- 45,364 690,497
- ------------------------------------------------------------------------------
Advisor Class -- -- 1,482 23,320
- ------------------------------------------------------------------------------
Reacquired:
Class A (1,902,942) (35,272,008) (2,155,365) (33,148,164)
- ------------------------------------------------------------------------------
Class B (546,101) (9,694,569) (1,772,161) (25,758,696)
- ------------------------------------------------------------------------------
Class C* (50,457) (1,027,956) -- --
- ------------------------------------------------------------------------------
Advisor Class (12,898) (239,902) (114,990) (1,615,672)
- ------------------------------------------------------------------------------
6,212,644 $119,446,377 719,398 $ 10,537,425
==============================================================================
* Class C shares commenced sales May 3, 1999.
</TABLE>
15
<PAGE> 18
NOTE 10-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A, Class B, and
Advisor Class outstanding during the six months ended June 30, 1999 and each of
the years in the three-year period ended December 31, 1998 and the period
October 18, 1995 (date operations commenced) through December 31, 1995, and for
a share of Class C outstanding during the period May 3, 1999 (date sales
commenced) through June 30, 1999.
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------
DECEMBER 31,
JUNE 30, ----------------------------------------
1999(c) 1998(a)(c) 1997(c) 1996(c) 1995(c)
-------- ---------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.03 $ 14.27 $ 12.52 $11.80 $11.43
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Income from investment operations:
Net investment income (loss)(b) (0.05) (0.19) (0.18) (0.05) 0.04
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Net gains on securities (both realized and unrealized) 5.54 3.45 2.20 1.69 0.33
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Total from investment operations 5.49 3.26(b) 2.02 1.64 0.37
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Less distributions from net realized gains -- (0.50) (0.27) (0.92) --
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Net asset value, end of period $ 22.52 $ 17.03 $ 14.27 $12.52 $11.80
============================================================ ======== ======= ======= ====== ======
Total return(d) 32.24% 23.15% 16.23% 13.81% 3.24%
============================================================ ======== ======= ======= ====== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $127,947 $24,737 $10,896 $8,448 $1,931
============================================================ ======== ======= ======= ====== ======
Ratio of expenses to average net assets:
With expense waiver and/or reimbursement 1.61%(e) 1.75% 1.92% 2.00% 2.00%(f)
============================================================ ======== ======= ======= ====== ======
Without expense waiver and/or reimbursement 1.62%(e) 2.19% 2.52% 3.09% 24.20%(f)
============================================================ ======== ======= ======= ====== ======
Ratio of net investment income (loss) to average net assets:
With expense waiver and/or reimbursement (0.56)%(e) (1.29)% (1.40)% (0.38)% 1.68%(f)
============================================================ ======== ======= ======= ====== ======
Without expense waiver and/or reimbursement (0.57)%(e) (1.73)% (2.00)% (1.47)% (20.52)%(f)
============================================================ ======== ======= ======= ====== ======
Ratio of interest expense to average net assets -- 0.01% -- -- --
============================================================ ======== ======= ======= ====== ======
Portfolio turnover rate 46% 190% 233% 150% --
============================================================ ======== ======= ======= ====== ======
</TABLE>
(a) The Fund charged investment advisors on May 29, 1998.
(b) Before reimbursement the net investment loss per share would have been
$(0.24), $(0.25), $(0.19), and $(0.47) for 1998-1995, respectively.
(c) Calculated using average shares outstanding.
(d) Does not deduct sales charges and is not annualized for periods less than
one year.
(e) Ratios are annualized and based on average net assets of $56,897,153.
(f) Annualized
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------- ----------------
DECEMBER 31, MAY 3, 1999
JUNE 30, ---------------------------------------- THROUGH
1999(c) 1998(a)(c) 1997(c) 1996(c) 1995(c) JUNE 30, 1999(c)
-------- ---------- ------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.64 $ 14.06 $ 12.42 $ 11.78 $11.43 $19.03
- --------------------------------------- ------- ------- ------- ------- ------ ------
Income from investment operations:
Net investment income (loss)(b) (0.11) (0.29) (0.26) (0.14) 0.02 (0.04)
- --------------------------------------- ------- ------- ------- ------- ------ ------
Net gains on securities (both realized
and unrealized) 5.41 3.37 2.17 1.70 0.33 2.94
- --------------------------------------- ------- ------- ------- ------- ------ ------
Total from investment operations 5.30 3.08 1.91 1.56 0.35 2.90
- --------------------------------------- ------- ------- ------- ------- ------ ------
Less distributions from net realized
gains -- (0.50) (0.27) (0.92) --
- --------------------------------------- ------- ------- ------- ------- ------ ------
Net asset value, end of period $ 21.94 $ 16.64 $ 14.06 $ 12.42 $11.78 $21.93
======================================= ======= ======= ======= ======= ====== ======
Total return(d) 31.85% 22.22% 15.47% 13.14% 3.06% 15.24%
======================================= ======= ======= ======= ======= ====== ======
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $73,230 $26,448 $21,222 $10,694 $2,024 $4,273
======================================= ======= ======= ======= ======= ====== ======
Ratio of expenses to average net
assets:
With expense waiver and/or
reimbursement 2.28%(e) 2.40% 2.57% 2.65% 2.65%(f) 2.28%(e)
======================================= ======= ======= ======= ======= ====== ======
Without expense waiver and/or
reimbursement 2.29%(e) 2.85% 3.17% 3.74% 24.85%(f) 2.28%(e)
======================================= ======= ======= ======= ======= ====== ======
Ratio of net investment income (loss)
to average net assets:
With expense waiver and/or
reimbursement (1.23)%(e) (1.95)% (2.05)% (1.03)% 1.03%(f) (1.23)%(e)
======================================= ======= ======= ======= ======= ====== ======
Without expense waiver and/or
reimbursement (1.24)%(e) (2.39)% (2.65)% (2.12)% --(f) (1.23)%(e)
======================================= ======= ======= ======= ======= ====== ======
Ratio of interest expense to average
net assets -- 0.01% -- -- -- --
======================================= ======= ======= ======= ======= ====== ======
Portfolio turnover rate 46% 190% 233% 150% -- 46%
======================================= ======= ======= ======= ======= ====== ======
<CAPTION>
ADVISOR CLASS
---------------------------------------------------
DECEMBER 31,
JUNE 30, ----------------------------------------
1999(c) 1998(a)(c) 1997(c) 1996 1995(c)
-------- ---------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.21 $14.39 $12.58 $11.81 $ 11.43
- --------------------------------------- ------ ------ ------ ------ -------
Income from investment operations:
Net investment income (loss)(b) (0.02) (0.14) (0.14) 0.00 0.05
- --------------------------------------- ------ ------ ------ ------ -------
Net gains on securities (both realized
and unrealized) 5.61 3.46 2.22 1.69 0.33
- --------------------------------------- ------ ------ ------ ------ -------
Total from investment operations 5.59 3.32 2.08 1.69 0.38
- --------------------------------------- ------ ------ ------ ------ -------
Less distributions from net realized
gains -- (0.50) (0.27) (0.92) --
- --------------------------------------- ------ ------ ------ ------ -------
Net asset value, end of period $22.80 $17.21 $14.39 $12.58 $ 11.81
======================================= ====== ====== ====== ====== ========
Total return(d) 32.48% 23.38% 16.63% 14.22% 3.32%
======================================= ====== ====== ====== ====== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $2,316 $1,045 $1,592 $ 435 $ 52
======================================= ====== ====== ====== ====== ========
Ratio of expenses to average net
assets:
With expense waiver and/or
reimbursement 1.29%(e) 1.40% 1.57% 1.65% 1.65%(f)
======================================= ====== ====== ====== ====== ========
Without expense waiver and/or
reimbursement 1.30%(e) 1.84% 2.17% 2.74% 23.85%(f)
======================================= ====== ====== ====== ====== ========
Ratio of net investment income (loss)
to average net assets:
With expense waiver and/or
reimbursement (0.24)%(e) (0.94)% (1.05)% (0.03)% 2.03%(f)
======================================= ====== ====== ====== ====== ========
Without expense waiver and/or
reimbursement (0.25)%(e) (1.38)% (1.65)% (1.12)% (20.17)%(f)
======================================= ====== ====== ====== ====== ========
Ratio of interest expense to average
net assets -- 0.01% -- -- --
======================================= ====== ====== ====== ====== ========
Portfolio turnover rate 46% 190% 233% 150% --
======================================= ====== ====== ====== ====== ========
</TABLE>
(a) The Fund changed investment advisors on May 29, 1998.
(b) Before reimbursement the net investment loss per share would have been
$(0.35), $(0.33), $(0.28), and $(0.49) for 1998-1995, respectively for Class
B, $(0.20), $(0.21), $(0.14), and $(0.46) for 1998-1995, respectively for
Advisor Class.
(c) Calculated using average shares outstanding.
(d) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(e) Ratios are annualized and based on average net assets of $39,582,692 for
Class B, $1,902,632 for Class C and $1,449,779 for Advisor Class.
(f) Annualized
16
<PAGE> 19
<TABLE>
<CAPTION>
<S> <C> <C>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
President, Plantagenet Capital Chairman and President Suite 100
Management, LLC (an investment Houston, TX 77046
partnership); Chief Executive Officer, Dana R. Sutton
Plantagenet Holdings, Ltd. Vice President and Treasurer INVESTMENT MANAGER
(an investment banking firm)
Samuel D. Sirko A I M Advisors, Inc.
Frank S. Bayley Vice President and Secretary 11 Greenway Plaza
Partner, law firm of Suite 100
Baker & McKenzie Melville B. Cox Houston, TX 77046
Vice President
Robert H. Graham TRANSFER AGENT
President and Chief Executive Officer, Gary T. Crum
A I M Management Group Inc. Vice President A I M Fund Services, Inc.
P.O. Box 4739
Arthur C. Patterson Carol F. Relihan Houston, TX 77210-4739
Managing Partner, Accel Partners Vice President
(a venture capital firm) CUSTODIAN
Mary J. Benson
Ruth H. Quigley Assistant Vice President and State Street Bank and Trust Company
Private Investor Assistant Treasurer 225 Franklin Street
Boston, MA 02110
Sheri Morris
Assistant Vice President and COUNSEL TO THE FUND
Assistant Treasurer
Kirkpatrick & Lockhart LLP
Nancy L. Martin 1800 Massachusetts Avenue, N.W.
Assistant Secretary Washington, D.C. 20036-1800
Ofelia M. Mayo COUNSEL TO THE TRUSTEES
Assistant Secretary
Paul, Hastings, Janofsky & Walker LLP
Kathleen J. Pflueger Twenty Third Floor
Assistant Secretary 555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
</TABLE>
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc.
AIM Aggressive Growth Fund(1) AIM Money Market Fund has provided leadership in the
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund mutual-fund industry since
AIM Capital Development Fund 1976 and managed approximately
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS $121 billion in assets for
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund more than 6.3 million
AIM Large Cap Growth Fund AIM Asian Growth Fund shareholders, including
AIM Mid Cap Equity Fund(A) AIM Developing Markets Fund individual investors,
AIM Select Growth Fund AIM Europe Growth Fund corporate clients and
AIM Small Cap Growth Fund(B) AIM European Development Fund financial institutions, as of
AIM Small Cap Opportunities Fund AIM International Equity Fund June 30, 1999.
AIM Value Fund AIM Japan Growth Fund The AIM Family of Funds
AIM Weingarten Fund AIM Latin American Growth Fund --Registered Trademark-- is
AIM New Pacific Growth Fund distributed nationwide, and
GROWTH & INCOME FUNDS AIM today is the 10th-largest
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS mutual-fund complex in the
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund United States in assets under
AIM Advisor Real Estate Fund AIM Global Growth Fund management, according to
AIM Balanced Fund Strategic Insight, an
AIM Basic Value Fund(C) GLOBAL GROWTH & INCOME FUNDS independent mutual-fund
AIM Charter Fund AIM Global Growth & Income Fund monitor.
AIM Global Utilities Fund
INCOME FUNDS
AIM Floating Rate Fund GLOBAL INCOME FUNDS
AIM High Yield Fund AIM Emerging Markets Debt Fund(D)
AIM High Yield Fund II AIM Global Government Income Fund
AIM Income Fund AIM Global Income Fund
AIM Intermediate Government Fund AIM Strategic Income Fund
AIM Limited Maturity Treasury Fund
THEME FUNDS
TAX-FREE INCOME FUNDS AIM Global Consumer Products and Services Fund
AIM High Income Municipal Fund AIM Global Financial Services Fund
AIM Municipal Bond Fund AIM Global Health Care Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Infrastructure Fund
AIM Tax-Free Intermediate Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund(E)
AIM Global Trends Fund(F)
</TABLE>
(1) A I M Aggressive Growth Fund reopened to new investors November 16, 1998.
(A) On September 8, 1998, AIM Mid Cap Growth Fund was renamed AIM Mid Cap Equity
Fund. (B) On September 8, 1998, AIM Small Cap Equity Fund was renamed AIM Small
Cap Growth Fund. (C) On September 8, 1998, AIM America Value Fund was renamed
AIM Basic Value Fund. (D) On September 8, 1998, AIM Global High Income Fund was
renamed AIM Emerging Markets Debt Fund. (E) On June 1, 1999, AIM Global
Telecommunications Fund was renamed AIM Global Telecommunications and Technology
Fund. (F) On September 8, 1998, AIM New Dimension Fund was renamed AIM Global
Trends Fund. For more complete information about any AIM Fund(s), including
sales charges and expenses, ask your financial consultant or securities dealer
for a free prospectus(es). Please read the prospectus(es) carefully before you
invest or send money.
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