<PAGE> 1
SEMIANNUAL REPORT / JUNE 30 1999
AIM BASIC VALUE FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[ COVER IMAGE ]
-------------------------------------
STILL LIFE (THE CHEST OF DRAWERS) BY PAUL CEZANNE
A CONTEMPORARY OF THE IMPRESSIONISTS, CEZANNE CHALLENGED
THE CONVENTIONAL IDEAS THEIR WORKS EMBODIED IN THE 19TH
CENTURY. AS A RESULT, HIS ART WAS UNDERVALUED AND OFTEN MIS-
UNDERSTOOD IN HIS LIFETIME. HOWEVER, HIS WORKS AND IDEAS
INFLUENCED THE DEVELOPMENT OF MANY 20TH-CENTURY ARTISTS AND
MOVEMENTS, SUCH AS CUBISM, AND SOME NOW REGARD HIM AS THE
FATHER OF MODERN PAINTING. THIS PIECE EXHIBITS THE SIMPLICITY
AND DELICATE TONAL HARMONY THAT TYPIFY CEZANNE'S WORK.
-------------------------------------
AIM Basic Value Fund seeks long-term growth of capital by investing in companies
whose prospects and growth potential are undervalued by investors.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Basic Value Fund (formerly GT Global America Value 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 expenses.
o Had fees and expenses not been waived during the reporting period, the
fund's returns would have been lower.
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 Beginning March 1, 1999, Advisor Class shares were closed to new investors.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lipper Growth and Income Funds Index represents an average of
the performance of the 30 largest growth-and-income funds. It is compiled by
Lipper, Inc., an independent mutual-fund performance monitor. Results shown
assume the reinvestment of dividends.
o The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values.
o The Standard & Poor's Composite Index of 500 Stocks (S&P 500) is a group of
unmanaged securities widely regarded by investors to be representative of
the stock market in general. Results shown assume the reinvestment of
dividends.
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.
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/99, including sales charges
CLASS A SHARES
Inception (10/18/95) 21.76%
1 year 19.05
CLASS B SHARES
Inception (10/18/95) 22.39%
1 year 20.11
CLASS C SHARES
Inception (5/3/99) 4.51%
ADVISOR CLASS SHARES
Inception (10/18/95) 24.12%
1 year 26.41
Past performance cannot guarantee comparable future results.
================================================================================
MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE. RESULTS
OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM
THE HISTORICAL PERFORMANCE SHOWN.
AIM BASIC VALUE 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 BASIC VALUE FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
RESURGENCE OF VALUE STOCKS PROPELS FUND
THE FIRST HALF OF 1999 USHERED IN A REVERSAL IN THE TRENDS OF THE PAST COUPLE OF
YEARS AS VALUE STOCKS OUTSHINED GROWTH STOCKS. HOW DID AIM BASIC VALUE FUND
PERFORM?
AIM Basic Value Fund performed very well in this environment. For the six months
ended June 30, 1999, the fund posted a total return of 25.37% for Class A
shares, 24.90% for Class B shares and 25.53% for Advisor Class shares. These
returns are at net asset value, which does not include sales charges. The fund
soundly beat both its benchmarks--the Russell 1000 Value Index had a return of
12.87% for the period, while the S&P 500 Index had a return of 12.38%. The fund
also beat the Lipper Growth and Income Funds Index, which had a return of 11.68%
for the period.
Class C shares of the fund, which commenced sales on May 3, 1999, had a
cumulative total return of 5.51% through June 30, excluding sales charges.
Since day-to-day management of AIM Basic Value Fund moved to AIM Advisors,
Inc. on September 8, 1998, Class A, Class B and Advisor Class shares of the fund
are up 45.01%, 44.15% and 45.40%, respectively, through the end of the reporting
period, excluding sales charges. Comparatively, the S&P 500 had a return of
35.61% for the same period.
Total net assets in the fund more than doubled from $27.5 million to $65.3
million during the six-month reporting period.
WHAT CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE?
Last year, growth stocks outperformed value stocks by the largest margin ever.
During the first part of 1999, a handful of large-cap growth stocks drove U.S.
markets,
===============================================================================
FUND OUTPERFORMS INDEXES
Six-month returns as of 6/30/99, excluding sales charges
- -------------------------------------------------------------------------------
Class A Shares 25.37%
Class B Shares 24.90%
Advisor Class Shares 25.53%
Russell 1000 Value Index 12.87%
S&P 500 Index 12.38%
Lipper G&I Index 11.68%
===============================================================================
===============================================================================
GROWTH OF NET ASSETS
As of 6/30/99
- -------------------------------------------------------------------------------
millions
12/31/98 $27.5
6/30/99 $65.3
===============================================================================
causing a narrow environment in which investors looked to large,
well-established companies as well as high-flying Internet stocks. At the end of
the first quarter of 1999, the Russell 1000 Value Index trailed the S&P 500
Index, returning 1.43% vs. 4.98%, respectively.
In recent months, though, value stocks have surged ahead on the heels of
recovering global economies, positive earnings reports and the broadening U.S.
market. Recovery of overseas markets has meant that commodities--stocks such as
paper, steel and oil--have seen improved earnings after being pummeled last year
when markets went south. As often happens with value stocks, a small improvement
in fundamentals can bring about a significant gain in performance. Case in
point: as of June 30, the Russell 1000 Value Index was ahead of the S&P 500 for
the year, up 12.87% vs. 12.38%, respectively.
WHAT HAS THE RECOVERY OF FOREIGN MARKETS MEANT FOR THE FUND?
We believe last year's Asian economic collapse disrupted all major commodity
markets, and now a self-correcting process is occurring at varying degrees.
Semiconductors were the first to recover because of strong end-market growth.
However, we have also seen improving supply and demand in oil, paper and steel.
We have opportunistically added to these cyclical sectors, but the largest
positions in the portfolio remain in quality companies that are temporarily out
of favor.
Our top sector weightings as of June 30, 1999 were as follows: financials,
15.09%; capital goods, 12.90%; technology, 12.40%; and health care, 9.74%. We
had 56 holdings in our portfolio at the end of the reporting period.
HAS THE CHANGED MARKET ENVIRONMENT AFFECTED YOUR STOCK SELECTION?
From a valuation standpoint, the best opportunities recently have been in the
mid-cap universe; the fund is about evenly weighted between mid- and
large/mega-cap stocks, at 45% and 50% of the portfolio, respectively. The way we
select stocks is the same regardless of the size of the company.
We have a clearly defined buy-and-sell discipline within our value universe.
We emphasize stock selection based on primary research on the companies in which
we are interested. A successful value investor studies a company's business
model as well as its balance sheet. Great companies seldom remain undervalued
for more than two or three years, which is our holding period. (For more on
value investing, see the sidebar.)
See important fund and index disclosures inside front cover.
AIM BASIC VALUE FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
----------------------------------------
WHEREAS MARKETS LAST YEAR WERE DOMINATED
BY FEARS OF A GLOBAL RECESSION,
THUS FAR IN 1999 THERE SEEM TO BE
EXPECTATIONS OF GLOBAL EXPANSION . . .
----------------------------------------
WHAT ARE SOME STOCKS THAT HAVE DONE WELL FOR THE FUND?
The basic-materials sector was strong for the fund, with good results from
Georgia-Pacific (a leading manufacturer and distributor of building and paper
products) and International Paper (a worldwide distributor of paper and office
supplies). In capital goods, the fund benefited from owning Parker Hannifin, a
maker of hydraulic (liquid) and pneumatic (gas or air) motion-control products;
Kennametal, which makes metal-cutting, mining and highway construction tools and
equipment; and Raychem, a materials-science company that was recently bought by
Tyco International.
Energy was also a top-performing group for the fund. ENSCO International and
Diamond Offshore Drilling, two international offshore drilling companies that
are also fund holdings, have both benefited from the rebound in oil prices.
In the financial arena, mortgage insurers were strong performers. One such
fund holding is MGIC, a leading provider of mortgage insurance to lenders.
WHAT IS YOUR OUTLOOK?
Some analysts think that summer will bring a slowdown in the markets because of
continued interest-rate and inflation worries. During the last twenty years,
each initial rate increase has left many stocks stumbling after a few months as
rising rates slow the economy down and hamper earnings growth. Even so,
corporate earnings are likely to remain robust for the most part. It remains to
be seen whether the markets will continue to favor value and other cyclical
stocks, as has recently been the case.
Strong economic growth continues to buoy U.S. markets. Whereas markets last
year were dominated by fears of a global recession, thus far in 1999 there seem
to be expectations of global expansion, with many analysts and investors saying
the global financial crisis is over. Other reasons to be optimistic are
acceleration in U.S. gross domestic product and an increase in interest rates,
which has historically favored value funds. We believe that the fund is well
positioned for growth, and we continue to find attractive values in quality
companies that are temporarily out of favor.
PORTFOLIO COMPOSITION
As of 6/30/99, based on total net assets
<TABLE>
<CAPTION>
==================================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. United Healthcare Corp. 3.41% 1. Electric Companies 6.54%
2. Bank of America Corp. 2.99 2. Oil & Gas (Drilling & Equipment) 5.08
3. Citigroup Inc. 2.89 3. Financial (Diversified) 4.49
4. Phillips Electronics N.V. 2.66 4. Electric Equipment 4.41
5. Millipore Corp. 2.63 5. Retail (Department Stores) 4.03
6. Novellus Systems, Inc. 2.62 6. Health Care (Managed Care) 3.89
7. Beckman Coulter Inc. 2.61 7. Banks (Money Center) 3.78
8. Computer Associates International, Inc. 2.55 8. Manufacturing (Specialized) 3.73
9. Mattel, Inc. 2.54 9. Insurance (Property & Casualty) 3.73
10. First Data Corp. 2.41 10. Computers (Software & Services) 3.24
The fund's portfolio is subject to change, and there is no assurance that the fund will continue to hold any
particular security.
==================================================================================================================
</TABLE>
WHAT IS VALUE INVESTING?
Value investing was developed by Benjamin Graham and David Dodd in the 1930s
around a basic notion: buy low and sell high. Graham and Dodd believed that
investors often overreact to short-term negative events. So they suggested
buying stocks in companies that, for some short-term reason or market event, are
oversold, overlooked or unappreciated. They believed that over time, the market
would recognize the true value of such companies, causing their stock prices to
appreciate.
For AIM Basic Value Fund, low prices serve as a starting point for
researching attractive companies with proven track records. We talk a lot about
"intrinsic value" when it comes to value investing. A company's intrinsic
value--what we believe is its fair value--is based on its business model, cash
flows and growth prospects. We compare a company's stock price to its calculated
intrinsic value and then rank the stock based on its appreciation potential.
We follow four rules for our value investment discipline:
1. Focus on companies, not industries, sectors or countries.
2. Buy stocks selling at a substantial discount to their intrinsic value.
3. Concentrate the portfolio in companies with attractive business models
and long-term growth rates.
4. Maintain a strong sell discipline.
See important fund and index disclosures inside front cover.
AIM BASIC VALUE FUND
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-77.16%
BANKS (MAJOR REGIONAL)-1.71%
Fleet Financial Group, Inc. 25,200 $ 1,118,250
- --------------------------------------------------------------
BANKS (MONEY CENTER)-3.78%
Bank of America Corp. 26,625 1,951,945
- --------------------------------------------------------------
Chase Manhattan Corp. (The) 2,650 229,556
- --------------------------------------------------------------
First Union Corp. 6,100 286,700
- --------------------------------------------------------------
2,468,201
- --------------------------------------------------------------
CHEMICALS (SPECIALTY)-1.12%
Sigma-Aldrich Corp. 21,200 730,075
- --------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.98%
Adaptec, Inc.(a) 20,200 713,312
- --------------------------------------------------------------
Quantum Corp.(a) 24,000 579,000
- --------------------------------------------------------------
1,292,312
- --------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-3.24%
Computer Associates International,
Inc. 30,300 1,666,500
- --------------------------------------------------------------
Synopsys, Inc.(a) 8,100 447,019
- --------------------------------------------------------------
2,113,519
- --------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-1.04%
McKesson HBOC, Inc. 21,200 681,050
- --------------------------------------------------------------
ELECTRIC COMPANIES-6.54%
DQE, Inc. 7,700 308,962
- --------------------------------------------------------------
GPU, Inc. 9,800 413,437
- --------------------------------------------------------------
Illinova Corp. 32,200 877,450
- --------------------------------------------------------------
Niagara Mohawk Holdings, Inc.(a) 73,700 1,183,806
- --------------------------------------------------------------
Northeast Utilities(a) 43,400 767,638
- --------------------------------------------------------------
Texas Utilities Co. 17,500 721,875
- --------------------------------------------------------------
4,273,168
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-1.75%
Raychem Corp. 30,900 1,143,300
- --------------------------------------------------------------
ELECTRONICS
(INSTRUMENTATION)-0.77%
PE Corp.-PE Biosystems Group 4,400 504,900
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-1.47%
Analog Devices, Inc.(a) 19,100 958,581
- --------------------------------------------------------------
ENGINEERING & CONSTRUCTION-1.49%
McDermott International, Inc. 34,500 974,625
- --------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-2.62%
Novellus Systems, Inc.(a) 25,100 1,713,075
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-4.49%
Citigroup, Inc. 39,700 1,885,750
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FINANCIAL (DIVERSIFIED)-(CONTINUED)
MGIC Investment Corp. 21,500 $ 1,045,438
- --------------------------------------------------------------
2,931,188
- --------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-0.39%
Pharmacia & Upjohn, Inc. 4,500 255,656
- --------------------------------------------------------------
HEALTH CARE (HOSPITAL
MANAGEMENT)-0.81%
Health Management Associates,
Inc.-Class A(a) 47,100 529,875
- --------------------------------------------------------------
HEALTH CARE (LONG TERM CARE)-2.05%
HCR Manor Care, Inc.(a) 55,300 1,337,569
- --------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-3.89%
PacifiCare Health Systems, Inc.(a) 4,300 309,331
- --------------------------------------------------------------
United Healthcare Corp. 35,600 2,229,450
- --------------------------------------------------------------
2,538,781
- --------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.60%
Beckman Coulter, Inc. 35,000 1,701,875
- --------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.58%
Delphi Financial Group, Inc. 10,488 376,257
- --------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-3.73%
Radian Group, Inc. 27,998 1,366,652
- --------------------------------------------------------------
XL Capital Ltd. 18,900 1,067,850
- --------------------------------------------------------------
2,434,502
- --------------------------------------------------------------
IRON & STEEL-1.51%
LTV Corp. (The) 147,800 988,413
- --------------------------------------------------------------
LEISURE TIME (PRODUCTS)-2.54%
Mattel, Inc. 62,860 1,661,861
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-3.73%
Millipore Corp. 42,400 1,719,850
- --------------------------------------------------------------
Parker Hannifin Corp. 15,700 718,275
- --------------------------------------------------------------
2,438,125
- --------------------------------------------------------------
METAL FABRICATORS-1.56%
Kennametal, Inc. 32,800 1,016,800
- --------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-5.08%
Diamond Offshore Drilling, Inc. 30,400 862,600
- --------------------------------------------------------------
ENSCO International, Inc. 48,000 957,000
- --------------------------------------------------------------
Schlumberger Ltd. 18,500 1,178,219
- --------------------------------------------------------------
Transocean Offshore, Inc. 12,100 317,625
- --------------------------------------------------------------
3,315,444
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL (DOMESTIC INTEGRATED)-1.14%
Atlantic Richfield Co. 8,900 $ 743,706
- --------------------------------------------------------------
OIL (INTERNATIONAL
INTEGRATED)-0.36%
Mobil Corp. 2,400 237,600
- --------------------------------------------------------------
PAPER & FOREST PRODUCTS-1.98%
Georgia Pacific Corp. 7,500 355,313
- --------------------------------------------------------------
International Paper Co. 18,600 939,300
- --------------------------------------------------------------
1,294,613
- --------------------------------------------------------------
REAL ESTATE INVESTMENT
TRUSTS-0.80%
Starwood Hotels & Resorts
Worldwide, Inc. 17,083 522,099
- --------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-4.03%
Federated Department Stores,
Inc.(a) 15,400 815,238
- --------------------------------------------------------------
J.C. Penney Co., Inc. 11,200 543,900
- --------------------------------------------------------------
Saks, Inc.(a) 44,000 1,270,500
- --------------------------------------------------------------
2,629,638
- --------------------------------------------------------------
RETAIL (SPECIALTY)-0.68%
Toys "R" Us, Inc.(a) 21,600 446,850
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-2.41%
First Data Corp. 32,200 1,575,788
- --------------------------------------------------------------
TELEPHONE-1.45%
Bell Atlantic Corp. 14,500 947,938
- --------------------------------------------------------------
TOBACCO-2.13%
Philip Morris Companies, Inc. 34,650 1,392,497
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
WASTE MANAGEMENT-1.71%
Waste Management, Inc. 20,767 $ 1,116,226
- --------------------------------------------------------------
Total Domestic Common Stocks
(Cost $42,900,143) 50,404,357
- --------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-2.66%
NETHERLANDS-2.66%
Koninklijke (Royal) Philips
Electronics N.V.-ADR (Electrical
Equipment) (Cost $1,252,409) 17,204 1,735,454
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. TREASURY SECURITIES-0.07%
U.S. TREASURY BILL-0.07%(B)
4.70%, 09/30/99 (Cost $45,472) $ 46,000 $ 45,473
- --------------------------------------------------------------
Total Investments, Excluding
Repurchase Agreement (Cost
$44,198,024) 52,185,284
- --------------------------------------------------------------
REPURCHASE AGREEMENT-19.96%(C)
CIBC Oppenheimer Corp., 4.95%,
07/01/99 (Cost $13,037,336)(d) 13,037,336 13,037,336
- --------------------------------------------------------------
TOTAL INVESTMENTS-99.85% 65,222,620
- --------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.15% 96,312
- --------------------------------------------------------------
NET ASSETS-100.00% $ 65,318,932
==============================================================
</TABLE>
Investment Abbreviation:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(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) 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.
(d) Joint repurchase agreement entered into 06/30/99 with a maturing value of
$300,041,250. Collateralized by U.S. Government obligations.
See Notes to Financial Statements.
5
<PAGE> 8
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase
agreements, at market value (cost
$44,198,024) $52,185,284
- ---------------------------------------------------------
Repurchase agreement (cost $13,037,336) 13,037,336
- ---------------------------------------------------------
Receivables for:
Variation margin 13,750
- ---------------------------------------------------------
Fund shares sold 1,850,091
- ---------------------------------------------------------
Dividends and interest 49,862
- ---------------------------------------------------------
Other assets 37,479
- ---------------------------------------------------------
Total assets 67,173,802
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 1,536,346
- ---------------------------------------------------------
Fund shares reacquired 217,844
- ---------------------------------------------------------
Accrued administrative services fees 1,039
- ---------------------------------------------------------
Accrued distribution fees 59,024
- ---------------------------------------------------------
Accrued trustees' fees 1,500
- ---------------------------------------------------------
Accrued transfer agent fees 6,935
- ---------------------------------------------------------
Accrued operating expenses 32,182
- ---------------------------------------------------------
Total liabilities 1,854,870
- ---------------------------------------------------------
Net assets applicable to shares outstanding $65,318,932
- ---------------------------------------------------------
NET ASSETS:
Class A $30,834,731
=========================================================
Class B $31,244,848
=========================================================
Class C $ 1,642,288
=========================================================
Advisor Class $ 1,597,065
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 1,356,757
=========================================================
Class B 1,405,948
=========================================================
Class C 73,886
=========================================================
Advisor Class 69,413
=========================================================
Class A:
Net asset value and redemption price per
share $ 22.73
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $22.73
divided by 94.50%) $ 24.05
=========================================================
Class B:
Net asset value and offering price per
share $ 22.22
=========================================================
Class C:
Net asset value and offering price per
share $ 22.23
=========================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 23.01
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $3,153 foreign withholding
tax) $ 225,803
- ---------------------------------------------------------
Interest 94,878
- ---------------------------------------------------------
Securities lending 1,692
- ---------------------------------------------------------
Total investment income 322,373
- ---------------------------------------------------------
EXPENSES:
Management fees 123,049
- ---------------------------------------------------------
Administrative services fees 6,635
- ---------------------------------------------------------
Custodian fees 6,628
- ---------------------------------------------------------
Trustees' fees 5,605
- ---------------------------------------------------------
Distribution fees -- Class A 23,787
- ---------------------------------------------------------
Distribution fees -- Class B 95,941
- ---------------------------------------------------------
Distribution fees -- Class C 1,013
- ---------------------------------------------------------
Transfer agent fees -- Class A 19,112
- ---------------------------------------------------------
Transfer agent fees -- Class B 27,346
- ---------------------------------------------------------
Transfer agent fees -- Class C 298
- ---------------------------------------------------------
Transfer agent fees -- Advisor Class 1,686
- ---------------------------------------------------------
Filing fees 49,274
- ---------------------------------------------------------
Printing fees 28,126
- ---------------------------------------------------------
Professional fees 39,052
- ---------------------------------------------------------
Other 5,139
- ---------------------------------------------------------
Total expenses 432,691
- ---------------------------------------------------------
Less: Fee waivers (75,485)
- ---------------------------------------------------------
Expenses paid indirectly (220)
- ---------------------------------------------------------
Net expenses 356,986
- ---------------------------------------------------------
Net investment income (loss) (34,613)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FUTURES
CONTRACTS:
Net realized gain (loss) from:
Investment securities 3,510,246
- ---------------------------------------------------------
Futures contracts (33,646)
- ---------------------------------------------------------
3,476,600
- ---------------------------------------------------------
Change in net unrealized appreciation of:
Investment securities 4,469,556
- ---------------------------------------------------------
Futures contracts 41,910
- ---------------------------------------------------------
4,511,466
- ---------------------------------------------------------
Net gain from investment securities and
futures contracts 7,988,066
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $7,953,453
=========================================================
</TABLE>
See Notes to Financial Statements.
6
<PAGE> 9
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) $ (34,613) $ (49,775)
- -------------------------------------------------------------------------------------------
Net realized gain from investment securities, futures and
option contracts 3,476,600 44,601
- -------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, futures and option contracts 4,511,466 1,516,960
- -------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 7,953,453 1,511,786
- -------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (141,471)
- -------------------------------------------------------------------------------------------
Class B -- (313,992)
- -------------------------------------------------------------------------------------------
Advisor Class -- (18,735)
- -------------------------------------------------------------------------------------------
Share transactions-net:
Class A 18,521,333 1,006,548
- -------------------------------------------------------------------------------------------
Class B 9,462,102 87,004
- -------------------------------------------------------------------------------------------
Class C 1,602,210 --
- -------------------------------------------------------------------------------------------
Advisor Class 261,296 562,783
- -------------------------------------------------------------------------------------------
Net increase in net assets 37,800,394 2,693,923
- -------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 27,518,538 24,824,615
- -------------------------------------------------------------------------------------------
End of period $65,318,932 $27,518,538
===========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $53,878,006 $24,031,065
- -------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (37,137) (2,524)
- -------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, and futures and option contracts 3,448,893 (27,707)
- -------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, and
futures and option contracts 8,029,170 3,517,704
- -------------------------------------------------------------------------------------------
$65,318,932 $27,518,538
===========================================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Basic Value 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 Value 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.
8
<PAGE> 11
E. Deferred Organizational Expenses-Expenses incurred by the Fund and the
Portfolio in connection with their organization, their initial registration
with the 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. During
the six months ended June 30, 1999, AIM waived fees of $75,485.
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 $46,495 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 $23,787, $95,941 and $1,013, 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 $22,248 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 $3,772 in contingent deferred sales charges
imposed on redemptions 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 $220 under an expense offset arrangement. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of $220
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
9
<PAGE> 12
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 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 $1,103,363 were on loan
to brokers. The loans were secured by cash collateral of $1,103,363 received by
the Portfolio. For the six months ended June 30, 1999, the Portfolio received
fees of $1,692 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 $29,433,523 and $10,655,079, 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 $8,629,238
- ---------------------------------------------------------------
Aggregate unrealized (depreciation) of investment
securities (735,726)
- ---------------------------------------------------------------
Net unrealized appreciation of investment
securities $7,893,512
===============================================================
</TABLE>
Cost of investments for tax purposes is $57,329,108.
NOTE 8-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, 1999 DECEMBER 31, 1998
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold:
Class A 1,210,881 $25,609,813 472,964 $ 8,362,868
- ------------------------------------------------------------------------
Class B 800,272 16,651,824 587,988 10,276,429
- ------------------------------------------------------------------------
Class C* 79,144 1,713,711 -- --
- ------------------------------------------------------------------------
Advisor Class 19,436 396,782 41,555 747,776
- ------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A -- -- 7,580 134,463
- ------------------------------------------------------------------------
Class B -- -- 16,572 288,515
- ------------------------------------------------------------------------
Advisor Class -- -- 1,044 18,735
- ------------------------------------------------------------------------
Reacquired:
Class A (354,574) (7,088,480) (424,737) (7,490,783)
- ------------------------------------------------------------------------
Class B (372,723) (7,189,722) (607,196) (10,477,940)
- ------------------------------------------------------------------------
Class C* (5,258) (111,501) -- --
- ------------------------------------------------------------------------
Advisor Class (6,657) (135,486) (11,248) (203,728)
- ------------------------------------------------------------------------
1,370,521 $29,846,941 84,522 $ 1,656,335
- ------------------------------------------------------------------------
</TABLE>
* Class C shares commenced sales May 3, 1999.
10
<PAGE> 13
NOTE 9-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, 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 May 3, 1999 (date sales commenced) through June
30, 1999.
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
DECEMBER 31,
JUNE 30, --------------------------------------------------
1999 1998(a) 1997 1996 1995
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.13 $17.25 $ 14.65 $ 12.76 $ 11.43
- ------------------------------------------------------------ ------- ------ ------- ------- -------
Income from investment operations:
Net investment income(b) 0.02(c) 0.04 0.09(c) (0.01)(c) 0.03(c)
- ------------------------------------------------------------ ------- ------ ------- ------- -------
Net gains on securities (both realized and unrealized) 4.58 1.16 3.87 1.9 1.30
- ------------------------------------------------------------ ------- ------ ------- ------- -------
Total from investment operations 4.60 1.20 3.96 1.93 1.33
- ------------------------------------------------------------ ------- ------ ------- ------- -------
Less distributions:
Dividends from net investment income -- -- (0.03) -- --
- ------------------------------------------------------------ ------- ------ ------- ------- -------
Distributions from net realized gains -- (0.32) (1.33) (0.04) --
- ------------------------------------------------------------ ------- ------ ------- ------- -------
Total distributions -- (0.32) (1.36) (0.04) --
- ------------------------------------------------------------ ------- ------ ------- ------- -------
Net asset value, end of period $ 22.73 $18.13 $ 17.25 $ 14.65 $ 12.76
- ------------------------------------------------------------ ------- ------ ------- ------- -------
Total return(d) 25.37% 7.02% 27.23% 15.12% 11.64%
- ------------------------------------------------------------ ------- ------ ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $30,835 $9,074 $ 7,688 $ 2,529 $ 870
- ------------------------------------------------------------ ------- ------ ------- ------- -------
Ratio of expenses to average net assets:
With expense waiver and/or reimbursement 1.73%(e) 1.74% 1.99% 2.00% 2.00%(f)
============================================================ ======= ====== ======= ======= =======
Without expense waiver and/or reimbursement 2.17%(e) 2.11% 2.97% 5.51% 50.54%(f)
============================================================ ======= ====== ======= ======= =======
Ratio of net investment income (loss) to average net assets:
With expense waiver and/or reimbursement 0.15%(e) 0.25% 0.56% (0.10)% 1.10%(f)
============================================================ ======= ====== ======= ======= =======
Without expense waiver and/or reimbursement (0.29)%(e) (0.08)% (0.42)% (3.61)% (47.44)%(f)
============================================================ ======= ====== ======= ======= =======
Ratio of interest expense to average net assets(f) -- -- 0.03% -- --
============================================================ ======= ====== ======= ======= =======
Portfolio turnover rate 34% 148% 93% 256% --
============================================================ ======= ====== ======= ======= =======
</TABLE>
(a) The Fund changed Investment Advisors on May 29, 1998.
(b) Before reimbursement the net investment loss per share would have been
$(0.03), $(0.02), $(0.07), $(0.50), and $(1.11) for 1999-1995, 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 $13,705,005.
(f) Annualized.
11
<PAGE> 14
NOTE 9-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS C
--------
CLASS B MAY 3, ADVISOR CLASS
-------------------------------------------------------------------- 1999 ------------
DECEMBER 31, THROUGH
JUNE 30, ---------------------------------------------------- JUNE 30, JUNE 30,
1999 1998(a) 1997 1996 1995 1999 1999
-------- ------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 17.79 $ 17.04 $ 14.54 $ 12.75 $ 11.43 $ 21.07 $ 18.33
- --------------------- ------- ------- -------- ------- -------- ------- -------
Income from
investment
operations:
Net investment
income(b) (0.05)(c) (0.08) (0.01)(c) (0.10)(c) 0.01(c) (0.02)(c) 0.05
- --------------------- ------- ------- -------- ------- -------- ------- -------
Net gains on
securities (both
realized and
unrealized) 4.48 1.15 3.83 1.93 1.31 1.18 4.63
- --------------------- ------- ------- -------- ------- -------- ------- -------
Total from
investment
operations 4.43 1.07 3.82 1.83 1.32 1.16 4.68
- --------------------- ------- ------- -------- ------- -------- ------- -------
Less distributions:
Dividends from net
investment income -- -- -- -- -- -- --
- --------------------- ------- ------- -------- ------- -------- ------- -------
Distributions from
net realized
gains -- (0.32) (1.32) (0.04) -- -- --
- --------------------- ------- ------- -------- ------- -------- ------- -------
Total
distributions -- (0.32) (1.32) (0.04) -- -- --
- --------------------- ------- ------- -------- ------- -------- ------- -------
Net asset value, end
of period $ 22.22 $ 17.79 $ 17.04 $ 14.54 $ 12.75 $ 22.23 $ 23.01
- --------------------- ------- ------- -------- ------- -------- ------- -------
Total return(d) 24.90% 6.34% 26.44% 14.35% 11.55% 5.51% 25.53%
- --------------------- ------- ------- -------- ------- -------- ------- -------
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $31,245 $17,406 $ 16,717 $ 5,503 $ 1,254 $ 1,642 $ 1,597
- --------------------- ------- ------- -------- ------- -------- ------- -------
Ratio of expenses to
average net assets:
With expense waiver
and/or
reimbursement 2.38%(e) 2.39% 2.64% 2.65% 2.65%(f) 2.38%(e) 1.38%(e)
===================== ======= ======= ======== ======= ======== ======= =======
Without expense
waiver and/or
reimbursement 2.82%(e) 2.76% 3.62% 6.16% 51.19%(f) 2.82%(e) 1.82%(e)
===================== ======= ======= ======== ======= ======== ======= =======
Ratio of net
investment income
(loss) to average
net assets:
With expense waiver
and/or
reimbursement (0.50)%(e) (0.40)% (0.09)% (0.75)% 0.45%(f) (0.50)%(e) 0.50%(e)
===================== ======= ======= ======== ======= ======== ======= =======
Without expense
waiver and/or
reimbursement (0.94)%(e) (0.72)% (1.07)% (4.26)% (48.09)%(f) (0.94)%(e) 0.06%(e)
===================== ======= ======= ======== ======= ======== ======= =======
Ratio of interest
expense to average
net assets(f) -- -- 0.03% -- -- -- --
===================== ======= ======= ======== ======= ======== ======= =======
Portfolio turnover
rate 34% 148% 93% 256% -- 34% 34%
===================== ======= ======= ======== ======= ======== ======= =======
<CAPTION>
ADVISOR CLASS
--------------------------------------------------
DECEMBER 31,
--------------------------------------------------
1998(a) 1997 1996 1995
------- ------- ------- --------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $17.37 $ 14.72 $ 12.77 $ 11.43
- --------------------- ------ ------- ------- --------
Income from
investment
operations:
Net investment
income(b) 0.07 0.15(c) 0.03(c) 0.04(c)
- --------------------- ------ ------- ------- --------
Net gains on
securities (both
realized and
unrealized) 1.21 3.91 1.96 1.30
- --------------------- ------ ------- ------- --------
Total from
investment
operations 1.28 4.06 1.99 1.34
- --------------------- ------ ------- ------- --------
Less distributions:
Dividends from net
investment income -- (0.07) -- --
- --------------------- ------ ------- ------- --------
Distributions from
net realized
gains (0.32) (1.34) (0.04) --
- --------------------- ------ ------- ------- --------
Total
distributions (0.32) (1.41) (0.04) --
- --------------------- ------ ------- ------- --------
Net asset value, end
of period $18.33 $ 17.37 $ 14.72 $ 12.77
- --------------------- ------ ------- ------- --------
Total return(d) 7.43% 27.78% 15.58% 11.72%
- --------------------- ------ ------- ------- --------
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $1,038 $ 439 $ 191 $ 81
- --------------------- ------ ------- ------- --------
Ratio of expenses to
average net assets:
With expense waiver
and/or
reimbursement 1.39% 1.64% 1.65% 1.65%(f)
===================== ====== ======= ======= ========
Without expense
waiver and/or
reimbursement 1.76% 2.62% 5.16% 50.19%(f)
===================== ====== ======= ======= ========
Ratio of net
investment income
(loss) to average
net assets:
With expense waiver
and/or
reimbursement 0.60% 0.91% 0.25% 1.45%(f)
===================== ====== ======= ======= ========
Without expense
waiver and/or
reimbursement 0.23% (0.07)% (3.26)% (47.09)%(f)
===================== ====== ======= ======= ========
Ratio of interest
expense to average
net assets(f) -- 0.03% -- --
===================== ====== ======= ======= ========
Portfolio turnover
rate 148% 93% 256% --
===================== ====== ======= ======= ========
</TABLE>
(a) The Fund changed Investment Advisors on May 29, 1998.
(b) Before reimbursement the net investment income (loss) per share would have
been $(0.09), $(0.15), $(0.17), $(0.59), and $(1.13) for 1999-1995,
respectively for Class B, $(0.03) for 1999 for Class C, and $0.01, $0.02,
$(0.01), $(0.46) and $(1.10) for 1999-1995, respectively for Advisor Class.
(c) Calculated based upon average shares outstanding during the period.
(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 $19,347,255,
$626,937 and $1,245,184 for Class B, Class C and Advisor Class,
respectively.
(f) Annualized.
12
<PAGE> 15
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
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> 16
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
AIM Weingarten Fund AIM Latin American Growth Fund Funds--Registered Trademark--
AIM New Pacific Growth Fund is 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) AIM 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.
[AIM FUNDS LOGO APPEARS HERE]
INVEST WITH DISCIPLINE--Registered Trademark--
