<PAGE> 1
[COVER IMAGE]
AIM
SMALL CAP GROWTH FUND
[AIM LOGO APPEARS HERE] ANNUAL REPORT DECEMBER 31, 1998
INVEST WITH DISCIPLINE--Registered Trademark--
<PAGE> 2
[COVER IMAGE]
-------------------------------------
REALITY BY G.G. KOPILAK (1942-, AMERICAN)
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. Unless otherwise indicated, the Fund's
performance is computed at net asset value without a sales charge.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B 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 performance of the Fund's Class B shares and Advisor Class shares
will differ from that of Class A shares due to differences in sales charge
structure and class expenses.
o Advisor Class shares are not sold directly to the general public and are
available only through certain employee benefit plans, financial
institutions and other entities that have entered into specific agreements
with the Fund's distributor. Please see the Fund's Advisor Class prospectus
for more complete information.
o The Fund's investment return and principal value will fluctuate so that 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 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.
o Past performance cannot guarantee comparable future results.
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 The Standard and 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.
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 A PORTION 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
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
[PHOTO OF As the fiscal year opened, markets were recovering from the
Charles T. concerns produced by financial crises in Asia during 1997,
Bauer, and this optimism early in 1998 led several market indexes
Chairman of to all-time highs in spring and early summer. However, the
the Board of year was to bring two particularly serious financial shocks,
THE FUND first the debt default by Russia, and later the gathering
APPEARS HERE] crisis in Brazil, which devalued its currency shortly after
the fiscal year closed. The result was another year of
significant market volatility here and abroad.
Optimism yielded to pessimism over the summer amid
global financial crises and a widespread decline in U.S.
corporate earnings growth. Particularly from July through
October, a major market correction for equities, including
previously high-flying blue chips, bolstered U.S. Treasury
issues, whose safety attracts investors in doubtful times.
Beginning in late September, the U.S. Federal Reserve Board
intervened to pump liquidity and confidence into markets.
Investors responded favorably, and the year closed on a positive note with
domestic equities rallying and bonds displaying much less momentum.
Some stock indexes produced excellent total return for
the year, with the S&P 500 index of large-company stocks up a dramatic 28.60%.
But focusing on one market benchmark may give you an incomplete view. There was
wide divergence among market segments this fiscal year. For example, the Russell
2000 index of small-company stocks declined 2.55%. Even within the S&P 500, the
bigger the company, the better the performance.
HOW SHOULD INVESTORS RESPOND?
We understood how unnerving 1998's level of volatility could have been. Of
course, our repeated message to you is to keep a long-term outlook on
investments rather than responding to short-term fluctuations. And we are
pleased to note that most mutual fund shareholders remained cool headed and did
not pull out of the markets during 1998. In the end, most were rewarded for
their long-term perspective.
In view of recent volatility and the divergent performance of market
sectors, this may be a very good time to meet with your financial consultant to
review your current asset allocation and the diversification of your portfolio.
Broad portfolio diversification remains one of the most fundamental principles
of investing, along with long-term thinking and realistic expectations.
YOUR FUND MANAGERS' COMMENTS
On the pages that follow, your Fund's managers, experienced professionals who
have weathered previous periods of market turbulence, offer more detailed
discussion of how markets behaved, how they managed the portfolio in light of
recent volatility, and what they foresee for markets and your Fund. We hope you
find their discussion informative.
YEAR 2000 CONCERN
Many of our shareholders have asked us about AIM's year 2000 readiness status.
We appreciate these concerns, and we take the year 2000 issue seriously. AIM has
devoted considerable effort to creating a comprehensive plan for assessing,
correcting and testing our in-house systems. We will also participate in an
industrywide testing effort scheduled to begin in March. But no matter how well
we prepare and test, no one can know for sure what the year 2000 will bring. Our
industry's systems are connected in complex ways to many third parties, and
there may be unforeseen problems when the year 2000 actually arrives. Though we
cannot predict what all those problems might be, we are working with our
business recovery team to develop contingency plans appropriate for a variety of
year 2000 scenarios.
We are pleased to send you this report on your Fund's fiscal year. 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 AIM Investor Line at
800-246-5463 or at our Web site, www.aimfunds.com. We often post market updates
on our Web site.
We thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Advisors, Inc.
-------------------------------------
. . . WE ARE PLEASED TO NOTE THAT MOST
MUTUAL FUND SHAREHOLDERS REMAINED COOL
HEADED AND DID NOT PULL OUT OF THE
MARKETS DURING 1998.
-------------------------------------
AIM SMALL CAP GROWTH FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND SHRUGS OFF MARKET WOES,
NOTCHES IMPRESSIVE GAIN
SMALL- AND MICRO-CAP STOCKS WERE IN A BEAR MARKET FOR MUCH OF THE YEAR. HOW DID
AIM SMALL CAP GROWTH FUND PERFORM?
Despite a sharp sell-off in small- and micro-cap stocks from mid-April through
early October, the Fund posted impressive gains for the fiscal year ended
December 31, 1998. Total returns were 23.15% for Class A shares, 22.22% for
Class B shares and 23.38% for Advisor Class shares. That far exceeded the -2.55%
total return for the Russell 2000 Index and the -0.85% total return for the
Lipper Small Cap Funds Index for the same period.
Since our last report on June 30, 1998, the Fund's net assets grew from $35
million to $52 million.
WHAT WERE MARKET CONDITIONS LIKE IN 1998?
Early in the year, markets shook off initial concerns about the potential impact
of the economic turmoil in Asia and soared to new heights in April. Although
renewed fears about Asia's impact halted the rally, large-cap stocks rebounded
and the Dow Jones Industrial Average (the Dow) set a record in July. The Dow
then lost 16.82% of its value between July 17 and October 8. Severe economic
problems in Russia and Latin America as well as Asia, combined with political
controversy in the United States, prompted the sell-off.
However, the market rebounded impressively in October. The Federal Reserve
Board (the Fed) cut interest rates three times in the fall. These Fed moves,
combined with encouraging economic indicators, sparked a strong rally in the
stock market.
THE DOW ENDED THE YEAR UP 18.15%. HOW DID SMALL-CAP STOCKS FARE IN THIS
ENVIRONMENT?
For much of the reporting period, small-cap stocks were in the grip
of a severe bear market, generally defined as a drop in value of at least 20%.
After hitting a record high on April 21, the Russell 2000 Index lost 36.49% of
its value by October 8, when it sank to its lowest level in more than two years.
In the unsettled market environment, investors favored more liquid assets such
as large-cap stocks and U.S. Treasury bonds.
During the last three months of the year, however, small-cap stocks rallied
strongly, benefiting from the Fed's interest rate cuts. Investors also found
small-cap stocks attractive because earnings growth projections for smaller
companies remained in the double-digit range while the corresponding figures for
larger companies were gravitating toward the single-digit level. Finally,
small-cap stocks represented one of the best bargains in the equity market as
their prices relative to large-cap stocks were at their lowest levels in
decades.
HOW DID YOU REACT TO THE BEAR MARKET IN SMALL-CAP STOCKS?
The market downturn provided an excellent opportunity to purchase the stocks of
attractive companies at low prices. In choosing stocks, we look at the
underlying fundamentals of companies, not the overall market. We endeavor to own
the stocks of the best small- and micro-cap companies because we are very
optimistic about their long-term prospects.
WHY WAS THE FUND'S PERFORMANCE SO STRONG IN A "DOWN" YEAR FOR SMALL-CAP STOCKS?
Our disciplined stock-selection process enabled us to pick equities that
generally performed well despite a difficult market environment. The Fund also
benefited from its heavy weighting in the high-flying technology sector and its
emphasis on the stocks of companies expected to experience strong earnings
growth.
WHAT CHANGES HAVE YOU MADE TO THE PORTFOLIO?
Since our last report on June 30, 1998, we have increased the Fund's exposure to
micro-cap stocks, which formed 37% of the portfolio at the end of the fiscal
year. Small-cap stocks constituted 51% of the Fund's equity holdings while
mid-cap stocks made up most of the remainder. We expect the Fund's holdings
ultimately to be about equally divided between small- and micro-cap stocks.
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.
We also nearly doubled the Fund's weighting in technology stocks to 29% of
the portfolio as of December 31. Consumer cyclical stocks and health-care
FUND VS. INDEXES
As of 12/31/98
<TABLE>
<CAPTION>
================================================================================
BAR CHART
SMALL CAP SMALL CAP SMALL CAP RUSSELL LIPPER
GROWTH GROWTH GROWTH 2000 SMALL CAP
CLASS A CLASS B ADVISOR INDEX FUNDS
SHARES SHARES CLASS INDEX
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
23.15% 22.22% 23.38% -2.55% -0.85%
================================================================================
</TABLE>
See important Fund and index disclosures inside front cover.
AIM SMALL CAP GROWTH FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 12/31/98, based on total net assets
<TABLE>
<CAPTION>
=================================================================================================================
Top 10 Industries Top 10 Equity Holdings
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Computers 10.46% 1. Insight Enterprises, Inc. 2.26%
(Software & Services) 2. Iron Mountain, Inc. 1.67
2. Services 7.04 3. Lason Holdings, Inc. 1.51
(Commercial & Consumer) 4. 99 Cents Only Stores 1.46
3. Health Care (Drugs-Generic) 3.47 5. DM Management Co. 1.42
4. Health Care 3.23 6. Jones Pharma, Inc. 1.31
(Specialized Services) 7. Allied Waste Industries, Inc. 1.20
5. Communications Equipment 2.97 8. Barr Laboratories, Inc. 1.08
6. Services (Computer Systems) 2.74 9. Physician Reliance Network 0.96
7. Retail (Specialty) 2.55 10. Reinsurance Group 0.91
8. Waste Management 2.43 of America, Inc.
9. Electronic (Semicondutor) 2.37
10. Services 2.27
(Facilities & Environment)
Please keep in mind that the Fund's portfolio is subject to change and there is no
assurance the Fund will continue to hold any particular security.
=================================================================================================================
</TABLE>
stocks composed 27% and 12% of the Fund's holdings, respectively.
HOW DID TECHNOLOGY STOCKS PERFORM?
Despite volatility, technology stocks were the top-performing equity class for
the year. Several factors drove tech stocks to new heights in 1998. Investors
flocked to Internet-related companies as they considered the possibilities for
explosive growth in the new medium. Technology companies also benefited from
consumer demand for computers costing less than $1,000 and the need to upgrade
computers to avoid complications associated with the Year 2000 problem.
Our technology stocks included Insight Enterprises, the Fund's largest
holding. A direct marketer, Insight Enterprises offers more than 50,000 computer
hardware and software products. USWeb is a provider of Internet and intranet
consulting development services while Infospace.com is a leading packager of
content services for Internet providers.
WHERE WAS YOUR FOCUS IN THE CONSUMER-CYCLICAL SECTOR?
Our focus was on retail stocks. For most of the year, the nation's retailers
benefited from healthy consumer spending, stemming from low unemployment and
rising wages. However, sales dipped in the summer when foreign and domestic
concerns caused stock markets to plummet, shaking consumer confidence. Sales
revived around Thanksgiving, then declined in December when much of the United
States experienced balmy weather, curtailing demand for cold-weather items.
Still, holiday sales were robust, largely because of a growth in online and
Internet sales.
Retail stocks that performed well for the Fund included 99 Cents Only
Stores, which has about 60 outlets in Southern California; Hollywood
Entertainment, operator of more than 1,100 video rental stores in 42 states; and
Blue Rhino, which is involved in the propane cylinder business.
WHAT ABOUT HEALTH-CARE STOCKS?
Within the health-care sector, the stocks of medical-supply and
pharmaceutical companies soared while the stocks of health-care service
providers languished. Pharmaceutical companies in particular enjoyed robust
earnings as they continued to offer a wide range of new products that were
enthusiastically received by a health-conscious population.
The Fund's health-care holdings included Barr Laboratories, a manufacturer
and marketer of generic drugs; and Jones Pharma, which manufactures and
distributes specialty pharmaceutical products, including several thyroid
disorder drugs.
WHAT IS YOUR OUTLOOK?
We expect the low-inflation, low-interest-rate environment that proved so
favorable to certain segments of the stock market in l998 to persist in the
months ahead. We also believe the economy will continue to grow, but at a slower
pace. Profits are expected to decline for larger companies while remaining
robust for small- and micro-cap companies. Moreover, small- and micro-cap stocks
continue to be comparatively cheap in comparison to large-cap stocks. These
factors could make small- and micro-cap stocks increasingly attractive to
investors and thus prove beneficial to the Fund.
Given the unsettling economic problems in Asia, Russia and Latin America,
as well as political controversy in the United States, stock markets could
remain volatile. In such an environment, investors would be well advised to
focus on their long-term financial goals, rather than transitory market
fluctuations.
See important Fund and index disclosures inside front cover.
AIM SMALL CAP GROWTH
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM SMALL CAP GROWTH FUND VS. BENCHMARK INDEX
10/18/95-12/31/98
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 12/31/98 including sales charges
CLASS A SHARES
Inception (10/18/95) 15.55%
1 Year 16.38*
CLASS B SHARES
Inception (10/18/95) 16.16%
1 Year 17.22**
ADVISOR CLASS SHARES
Inception (10/18/95) 17.98%
1 Year 23.38
*23.15% excluding sales charges
**22.22% excluding CDSC
================================================================================
Source: Towers Data Systems HYPO--Registered Trademark--
The performance of the various share classes will differ due to differing
fees and expenses. For Fund performance calculations and descriptions of indexes
cited on this page, please refer to the inside front cover.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT THE SHORT-TERM PERFORMANCE RESULTS OF
AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
ABOUT THIS CHART
The chart above compares your Fund's Class A, Class B and Advisor Class shares
to a benchmark index. It is intended to give you a general idea of how your Fund
performed compared to the stock market over the period 10/18/95-12/31/98. Index
returns are from 10/31/95-12/31/98. It is important to understand the difference
between your Fund and an index. Your Fund's total return is shown with a sales
charge and includes Fund expenses and management fees. An index measures the
performance of a hypothetical portfolio, in this case the Russell 2000 Index.
Market indexes are not managed, incurring no sales charges, expenses or fees. If
you could buy all the securities that make up a market index, you would incur
expenses that would affect your investment's return.
AIM SMALL CAP GROWTH FUND
<PAGE> 7
ANNUAL REPORT / PERFORMANCE HISTORY
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN
INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE
SHOWN.
- --------------------------------------------------------------------------------
AIM AIM RUSSELL 2000 AIM
SMALL CAP SMALL CAP STOCK INDEX SMALL CAP
GROWTH FUND GROWTH FUND GROWTH FUND
CLASS A SHARES CLASS B SHARES ADVISOR CLASS SHARES
- --------------------------------------------------------------------------------
In thousands
10/18/95 $ 9,446.00 $10,000.00 $10,000.00 $10,000.00
12/31/95 9,752.00 10,306.00 10,695.00 10,332.00
3/31/96 10,777.00 11,374.00 11,241.00 11,426.00
6/30/96 11,512.00 12,135.00 11,803.00 12,213.00
9/30/96 11,587.00 12,196.00 11,843.00 12,309.00
12/31/96 11,098.00 11,661.00 12,459.00 11,801.00
3/31/97 9,547.00 10,008.00 11,815.00 10,150.00
6/30/97 11,249.00 11,783.00 13,730.00 11,980.00
9/30/97 13,651.00 14,271.00 15,774.00 14,541.00
12/31/97 12,899.00 13,465.00 15,245.00 13,764.00
3/31/98 15,096.00 15,725.00 16,779.00 16,107.00
6/30/98 15,276.00 15,888.00 15,997.00 16,308.00
9/30/98 12,194.00 12,641.00 12,774.00 13,018.00
12/31/98 15,886.00 16,157.00 14,857.00 16,982.00
================================================================================
PAST PERFORMANCE IS NO GUARANTEE OF COMPARABLE FUTURE RESULTS.
================================================================================
AIM SMALL CAP GROWTH FUND
4
<PAGE> 8
ANNUAL REPORT / FOR CONSIDERATION
TAKE A CLOSER LOOK AT MARKET INDEXES
You step into your car after work and hear the radio announcer say, "The market
was down 200 points today." Instantly you start to worry. But should you? The
question is, what exactly is "the market"? And how are your investments going to
be affected by it? You need the facts, and fast. Market indexes are a good place
to start. They can help you gauge how your investments are performing.
"The market" actually is much broader than newspapers and television
reports make it out to be. The media often report movements in the Dow Jones
Industrial Average (the Dow) as indicative of the market as a whole. But the Dow
is made up of just 30 stocks; the U.S. market is made up of more than 12,000
stocks traded on the New York Stock Exchange, regional exchanges, and over the
counter. The Dow only measures the performance of the largest American
companies.
If you're like most investors, you've got a range of investments across
market segments, not just blue-chip stocks. The best way to compare your
investments to their peers in the marketplace is to find the right index. An
index measures the performance of a particular group of stocks. But keep in
mind, there is rarely a perfect match between the stocks in a mutual fund and
the stocks in an index.
Indexes and funds have different purposes. Mutual funds select stocks based
on their past performance or future potential. Indexes pick stocks based on
their ability to act as reliable measuring tools. For example, index makers for
the S&P 500 look for actively traded, widely owned stocks that reflect the
active stock market.
There are other important differences between a fund and an index. You
cannot invest directly in an index. Because indexes are unmanaged, they incur no
sales charges, expenses, or fees. Even if you bought all the securities making
up an index, your transaction expenses would lower your investment returns.
As you follow the various indexes, you'll notice that their tracks often
diverge. When large-caps are up, small-caps or overseas stocks are down--and
THE USUAL INDEXES
THE DOW JONES INDUSTRIAL AVERAGE
WHAT IT IS: In its 102-year history, the Dow always has focused on the largest,
most successful U.S. companies. The types of firms in the index have changed
drastically over the years--from the cotton companies of the 19th century to the
computer icons of the 20th. The 30 stocks now in the Dow include household names
such as International Business Machines Corp., Boeing Co., McDonald's Corp., and
Walt Disney Co.
WHAT IT TELLS YOU: While stocks in the Dow make up about 20% of
the value of all U.S. stocks, the index leaves out many sectors of the market.
For most mutual fund investors, the Dow is an inadequate and often inappropriate
measure of comparison. Use it to check the pulse of American big business, but
look elsewhere for a more inclusive market view.
S&P 500
WHAT IT IS: The S&P 500 (Standard & Poor's Composite Index of 500 Stocks) is
often used as a gauge of the whole market. But it measures only 500 stocks in
the large-capitalization portion of the U.S. stock market. Included in the index
are Apple Computer, Hilton Hotels, NIKE Inc., and Pennzoil Co.
WHAT IT TELLS YOU: The S&P 500 is useful for evaluating a fund that invests in
large-capitalization U.S. stocks. It's a poor gauge for others funds, such as a
small-cap aggressive growth fund.
Keep in mind that the S&P 500 is very concentrated. The top 50 companies
represent about half the S&P 500's assets. For the past few years, the total
return of the S&P 500 has been unusually high, but much of this performance can
be attributed to just a few stocks in the index. Most mutual funds are more
diversified than this index.
NASDAQ COMPOSITE INDEX
WHAT IT IS: The NASDAQ (National Association of Securities Dealers Automated
Quotation System) Composite Index measures the performance of all NASDAQ
domestic and foreign stocks. Often associated with the over-the-counter market,
the index also includes some exchange-listed stocks. More than 5,300 stocks are
in the NASDAQ Composite Index.
WHAT IT TELLS YOU: Many consider NASDAQ a barometer for small- and mid-cap
stocks. However, the index is market-value weighted--each company's stock
affects the index in proportion to that company's market value. Large-cap
technology stocks such as Microsoft, Intel, and Dell Computer dominate it.
The NASDAQ is not a good measure of small- and mid-cap stock performance. It
basically tells you how large-cap technology stocks are doing. It is not a
suitable index for most mutual funds.
AIM SMALL CAP GROWTH FUND
5
<PAGE> 9
ANNUAL REPORT / FOR CONSIDERATION
vice versa. The chart at the right shows calendar-year returns for two domestic
and one foreign equity index for 12/31/88 through 12/31/98. The market segments
often move out of synch, and performance leadership often rotates from one
segment to another.
By positioning your investments strategically in various market segments,
you're less likely to miss out on the peaks, and you'll be more protected from
the valleys. Remember, patience is the key. If you jump in and out of
investments, you could miss out on some of the market's best moments. See your
financial advisor to build a diversified portfolio suited to fluctuating
markets.
DIVERGING INDEXES
Total Return per Calendar Year
1989-1998
- --------------------------------------------------------------------------------
12/31/88 16.55% 25.02% 28.59%
12/31/89 31.64 16.26 10.80
12/31/90 -3.09 19.48 23.20
12/31/91 30.41 46.04 12.50
12/31/92 7.61 18.41 11.85
12/31/93 10.06 18.88 32.94
12/31/94 1.32 -1.82 8.06
12/31/95 37.54 28.45 11.55
12/31/96 22.95 16.49 6.36
12/31/97 33.35 22.36 2.06
12/31/98 27.10 -2.55 20.00
Past performance is no guarantee of future investment results.
================================================================================
*International investing presents risks not associated with investing solely in
the United States. These include risks relating to fluctuation in the value of
the U.S. dollar, custody arrangements made for a Fund's foreign holdings,
differences in accounting, political risks, and the lesser degree of public
information required to be provided by non-U.S. companies.
================================================================================
A FEW MORE INDEXES
S&P 400
WHAT IT IS: The Standard & Poor's 400 Mid-Cap Index is a relatively new index
that dates to 1981 and measures performance of 400 stocks in the
mid-capitalization sector of the domestic stock market. Companies in the index
include CompuWare Corp., Starbucks Corp., and Office Depot. As of December 31,
1998 the median market capitalization in the S&P 400 was approximately $1.8
billion, but some stocks in the index have capitalizations as large as $5
billion or more.
WHAT IT TELLS YOU: If your fund invests primarily in mid-caps, this is one of
the best benchmarks to use. But keep in mind that the index may include
companies smaller or larger than the ones in your fund.
RUSSELL 2000 INDEX
WHAT IT IS: The Russell 2000 Index measures the performance of small-cap stocks.
A total of 2,000 U.S. companies are represented in the index, including such
well-known firms as Bally Total Fitness, Bethlehem Steel, Coca-Cola Bottling
Co., and Coors Brewing Co. The index, which is cap-weighted, represents about
10% of the U.S. stock market. More than 900 of the stocks in the Russell 2000
trade on either the New York Stock Exchange or the American Stock Exchange.
WHAT IT TELLS YOU: The Russell 2000 Index is a very good indicator of small-cap
stock performance. It is a true small-cap index with the market value of
companies represented in this index ranging from less than $200 million to more
than $1 billion. Many mutual funds investing in small-cap stocks use the Russell
2000 as their benchmark index.
EUROPE, AUSTRALASIA, AND THE
FAR EAST INDEX (EAFE--Registered Trademark--)
WHAT IT IS: The EAFE consists of approximately 1,600 foreign stocks tracked by
Morgan Stanley Capital International (MSCI). They are listed on stock exchanges
in 20 developed countries. Stocks are chosen to reflect 60% of the market
capitalization of each country and of each major industry group.
WHAT IT TELLS YOU: As international investing has grown, a need has arisen to
measure global stock-market performance. The EAFE fulfills this need for
developed markets in Europe, Australia and the Far East. It is frequently used
as a benchmark for mutual funds investing in stocks in these markets. MSCI also
has developed indexes for specific countries and regions and for emerging
markets. Since your fund's country allocation may be different from EAFE, you
may need to look at a more specific index.
An index is not an investment product available for purchase. An index measures
the performance of a hypothetical portfolio. An index is not managed, incurring
no sales charges, expenses, or fees. If you could buy all the securities that
make up a particular index, you would incur expenses that would affect the
return on your investment.
AIM SMALL CAP GROWTH FUND
6
<PAGE> 10
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-78.64%
AEROSPACE/DEFENSE-0.17%
Hawk Corp.(a) 10,300 $ 86,263
- --------------------------------------------------------------
AIRLINES-0.14%
Mesaba Holdings, Inc.(a) 3,500 72,188
- --------------------------------------------------------------
AUTO PARTS & EQUIPMENT-0.74%
Tower Automotive, Inc.(a) 15,600 389,025
- --------------------------------------------------------------
BANKING (REGIONAL)-0.91%
Centennial Bancorp(a) 6,500 121,875
- --------------------------------------------------------------
Columbia Bancorp 20,000 180,000
- --------------------------------------------------------------
Fort Bend Holdings Corp. 5,000 122,500
- --------------------------------------------------------------
Silicon Valley Bancshares(a) 3,000 51,094
- --------------------------------------------------------------
475,469
- --------------------------------------------------------------
BIOTECHNOLOGY-0.86%
Curative Health Services, Inc.(a) 1,400 46,900
- --------------------------------------------------------------
Scios, Inc.(a) 38,900 403,582
- --------------------------------------------------------------
450,482
- --------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-0.55%
Cox Radio, Inc.-Class A(a) 6,800 287,300
- --------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.81%
Cambrex Corp. 8,400 201,600
- --------------------------------------------------------------
ChiRex, Inc.(a) 6,000 128,250
- --------------------------------------------------------------
OM Group, Inc. 2,500 91,250
- --------------------------------------------------------------
421,100
- --------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-2.97%
Brightpoint, Inc.(a) 20,000 275,000
- --------------------------------------------------------------
Excel Switching Corp.(a) 7,100 269,800
- --------------------------------------------------------------
Periphonics Corp.(a) 35,000 461,560
- --------------------------------------------------------------
REMEC, Inc.(a) 20,000 360,000
- --------------------------------------------------------------
VideoServer, Inc.(a) 10,000 183,750
- --------------------------------------------------------------
1,550,110
- --------------------------------------------------------------
COMPUTERS (HARDWARE)-0.39%
Visual Networks, Inc.(a) 5,500 206,250
- --------------------------------------------------------------
COMPUTERS (NETWORKING)-0.28%
ACT Networks, Inc.(a) 12,000 147,000
- --------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.44%
Actel Corp.(a) 15,000 300,000
- --------------------------------------------------------------
Cybex Computer Products Corp.(a) 3,600 105,750
- --------------------------------------------------------------
QLogic Corp.(a) 1,100 143,963
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (PERIPHERALS)-(CONTINUED)
Xircom, Inc.(a) 6,000 $ 204,000
- --------------------------------------------------------------
753,713
- --------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-10.46%
AnswerThink Consulting Group,
Inc.(a) 12,600 338,625
- --------------------------------------------------------------
Best Software, Inc.(a) 4,000 95,000
- --------------------------------------------------------------
Computer Management Sciences,
Inc.(a) 19,100 331,863
- --------------------------------------------------------------
Concord Communications, Inc.(a) 8,200 465,350
- --------------------------------------------------------------
Documentum, Inc.(a) 2,900 154,969
- --------------------------------------------------------------
Engineering Animation, Inc.(a) 3,700 199,800
- --------------------------------------------------------------
Entrust Technologies, Inc. 12,900 307,988
- --------------------------------------------------------------
InfoSpace.com, Inc.(a) 10,000 381,250
- --------------------------------------------------------------
Internet America, Inc.(a) 6,000 174,000
- --------------------------------------------------------------
ISS Group, Inc.(a) 3,000 165,000
- --------------------------------------------------------------
Macromedia, Inc.(a) 10,000 336,875
- --------------------------------------------------------------
MAPICS, Inc.(a) 19,300 318,450
- --------------------------------------------------------------
Metro Information Services, Inc.(a) 12,400 372,000
- --------------------------------------------------------------
MindSpring Enterprises, Inc.(a) 2,000 122,125
- --------------------------------------------------------------
Pervasive Software, Inc.(a) 10,000 192,500
- --------------------------------------------------------------
QuadraMed Corp.(a) 5,000 102,500
- --------------------------------------------------------------
ScanSource, Inc.(a) 11,000 236,500
- --------------------------------------------------------------
Software AG Systems, Inc.(a) 20,000 362,500
- --------------------------------------------------------------
Spyglass, Inc.(a) 12,000 264,000
- --------------------------------------------------------------
Stac Software, Inc.(a) 20,000 27,500
- --------------------------------------------------------------
USWeb Corp.(a) 14,000 369,250
- --------------------------------------------------------------
Wiztec Solutions Ltd.(a) 10,000 144,375
- --------------------------------------------------------------
5,462,420
- --------------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES AND GIFTS)-0.80%
Department 56, Inc.(a) 3,200 120,200
- --------------------------------------------------------------
Fossil, Inc.(a) 7,000 201,250
- --------------------------------------------------------------
Media Arts Group, Inc.(a) 7,000 98,438
- --------------------------------------------------------------
419,888
- --------------------------------------------------------------
CONSUMER FINANCE-0.42%
AmeriCredit Corp.(a) 15,800 218,238
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-1.89%
AFC Cable Systems, Inc.(a) 5,000 168,125
- --------------------------------------------------------------
General Cable Corp. 15,200 311,600
- --------------------------------------------------------------
Hadco Corp.(a) 1,700 59,500
- --------------------------------------------------------------
Hypercom Corp.(a) 12,500 123,438
- --------------------------------------------------------------
Optimal Robotics Corp.(a) 10,000 140,000
- --------------------------------------------------------------
Sawtek Inc.(a) 4,900 85,750
- --------------------------------------------------------------
</TABLE>
7
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-(CONTINUED)
SLI, Inc.(a) 3,500 $ 97,125
- --------------------------------------------------------------
985,538
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-2.36%
Apex PC Solutions, Inc.(a) 5,000 144,375
- --------------------------------------------------------------
Applied Micro Circuits Corp.(a) 3,100 105,303
- --------------------------------------------------------------
Hi/Fn, Inc.(a) 5,069 119,757
- --------------------------------------------------------------
RF Micro Devices, Inc.(a) 7,000 324,625
- --------------------------------------------------------------
Sipex Corp.(a) 8,000 281,000
- --------------------------------------------------------------
TranSwitch Corp.(a) 6,700 260,881
- --------------------------------------------------------------
1,235,941
- --------------------------------------------------------------
ENTERTAINMENT-0.26%
SFX Entertainment, Inc.-Class A(a) 2,500 137,188
- --------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-0.51%
Asyst Technologies, Inc.(a) 7,500 152,813
- --------------------------------------------------------------
Etec Systems, Inc.(a) 2,900 116,000
- --------------------------------------------------------------
268,813
- --------------------------------------------------------------
FOODS-1.47%
Ben & Jerry's Homemade, Inc.-Class
A(a) 13,000 290,875
- --------------------------------------------------------------
Fresh Del Monte Produce Inc.(a) 3,000 65,063
- --------------------------------------------------------------
Hain Food Group, Inc. (The)(a) 6,200 155,000
- --------------------------------------------------------------
Horizon Organic Holding Corp.(a) 4,000 62,000
- --------------------------------------------------------------
United Natural Foods, Inc.(a) 8,000 193,000
- --------------------------------------------------------------
765,938
- --------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC AND OTHER)-3.47%
Anesta Corp.(a) 5,000 133,125
- --------------------------------------------------------------
Barr Laboratories, Inc.(a) 11,800 566,400
- --------------------------------------------------------------
Jones Pharma, Inc. 18,800 686,200
- --------------------------------------------------------------
Medicis Pharmaceutical-Class A(a) 3,000 178,875
- --------------------------------------------------------------
Parexel International Corp.(a) 10,000 250,000
- --------------------------------------------------------------
1,814,600
- --------------------------------------------------------------
HEALTH CARE (HOSPITAL
MANAGEMENT)-0.13%
New American Healthcare Corp.(a) 6,300 70,481
- --------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-1.92%
Colorado MEDtech, Inc.(a) 25,000 331,250
- --------------------------------------------------------------
Hologic, Inc.(a) 8,000 97,000
- --------------------------------------------------------------
Osteotech, Inc.(a) 5,000 232,500
- --------------------------------------------------------------
PSS World Medical, Inc.(a) 11,700 269,100
- --------------------------------------------------------------
Xomed Surgical Products, Inc.(a) 2,250 72,000
- --------------------------------------------------------------
1,001,850
- --------------------------------------------------------------
HEALTH CARE (SPECIALIZED
SERVICES)-3.23%
Hooper Holmes, Inc. 12,200 353,800
- --------------------------------------------------------------
Orthodontic Centers of America,
Inc.(a) 16,000 311,000
- --------------------------------------------------------------
Physician Reliance Network, Inc.(a) 38,300 502,688
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (SPECIALIZED SERVICES)-(CONTINUED)
Superior Consultant Holdings
Corp.(a) 5,000 $ 217,500
- --------------------------------------------------------------
Total Renal Care Holdings, Inc.(a) 10,300 304,493
- --------------------------------------------------------------
1,689,481
- --------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-1.36%
Healthcare Recoveries, Inc.(a) 14,000 238,000
- --------------------------------------------------------------
Reinsurance Group of America, Inc. 7,800 473,850
- --------------------------------------------------------------
711,850
- --------------------------------------------------------------
INSURANCE (PROPERTY &
CASUALTY)-0.52%
FPIC Insurance Group, Inc. 3,000 142,500
- --------------------------------------------------------------
Medical Assurance, Inc. 3,850 127,291
- --------------------------------------------------------------
269,791
- --------------------------------------------------------------
INSURANCE BROKERS-0.39%
Clark/Bardes Holdings, Inc.(a) 12,200 205,875
- --------------------------------------------------------------
INVESTMENT MANAGEMENT-0.85%
Knight/Trimark Group, Inc.-Class
A(a) 18,600 445,238
- --------------------------------------------------------------
IRON & STEEL-0.44%
Gibraltar Steel Corp.(a) 10,000 227,500
- --------------------------------------------------------------
LEISURE TIME (PRODUCTS)-1.94%
Acclaim Entertainment, Inc.(a) 20,000 245,000
- --------------------------------------------------------------
JAKKS Pacific, Inc.(a) 7,500 80,625
- --------------------------------------------------------------
Noodle Kidoodle, Inc.(a) 20,000 190,000
- --------------------------------------------------------------
THQ, Inc.(a) 9,000 252,000
- --------------------------------------------------------------
Zomax Optical Media, Inc.(a) 15,000 243,750
- --------------------------------------------------------------
1,011,375
- --------------------------------------------------------------
LODGING (HOTELS)-0.63%
ExecuStay Corp.(a) 25,400 330,200
- --------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.12%
Gradall Industries, Inc.(a) 4,400 63,250
- --------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-0.39%
Matthews International Corp.-Class A 2,300 72,450
- --------------------------------------------------------------
Spartech Corp. 6,000 132,000
- --------------------------------------------------------------
204,450
- --------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-1.01%
CompX International, Inc.(a) 6,800 179,350
- --------------------------------------------------------------
Knoll, Inc.(a) 11,700 346,613
- --------------------------------------------------------------
525,963
- --------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-0.32%
Cal Dive International, Inc.(a) 3,500 72,625
- --------------------------------------------------------------
Gulfmark Offshore Inc.(a) 6,000 94,500
- --------------------------------------------------------------
167,125
- --------------------------------------------------------------
OIL & GAS (EXPLORATION AND PRODUCTION)-0.66%
Cabot Oil & Gas Corp.-Class A 4,000 60,000
- --------------------------------------------------------------
</TABLE>
8
<PAGE> 12
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL & GAS (EXPLORATION AND
PRODUCTION)-(CONTINUED)
Evergreen Resources, Inc.(a) 5,900 $ 104,725
- --------------------------------------------------------------
Louis Dreyfus Natural Gas Corp.(a) 2,000 28,500
- --------------------------------------------------------------
Newfield Exploration Co.(a) 5,700 118,988
- --------------------------------------------------------------
Seagull Energy Corp.(a) 5,000 31,563
- --------------------------------------------------------------
343,776
- --------------------------------------------------------------
PERSONAL CARE-0.70%
D & K Healthcare Resources, Inc.(a) 5,000 136,250
- --------------------------------------------------------------
Steiner Leisure Ltd.(a) 4,300 137,600
- --------------------------------------------------------------
Twinlab Corp.(a) 7,000 91,875
- --------------------------------------------------------------
365,725
- --------------------------------------------------------------
PUBLISHING-0.62%
Information Holdings, Inc.(a) 20,500 322,875
- --------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST-0.35%
Correctional Properties Trust 10,000 180,621
- --------------------------------------------------------------
RESTAURANTS-1.15%
P.F. Chang's China Bistro, Inc.(a) 10,000 227,500
- --------------------------------------------------------------
PJ America, Inc.(a) 12,000 217,500
- --------------------------------------------------------------
Taco Cabana-Class A(a) 20,000 155,000
- --------------------------------------------------------------
600,000
- --------------------------------------------------------------
RETAIL (COMPUTERS &
ELECTRONICS)-0.55%
Tweeter Home Entertainment Group,
Inc.(a) 10,000 287,500
- --------------------------------------------------------------
RETAIL (DISCOUNTERS)-1.46%
99 Cents Only Stores(a) 15,500 761,438
- --------------------------------------------------------------
RETAIL (DRUG STORES)-0.49%
Duane Reade, Inc.(a) 6,700 257,950
- --------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.30%
Wild Oats Markets Inc.(a) 5,000 157,500
- --------------------------------------------------------------
RETAIL (HOME SHOPPING)-1.74%
DM Management Co.(a) 38,950 740,050
- --------------------------------------------------------------
Micro Warehouse, Inc.(a) 5,000 169,063
- --------------------------------------------------------------
909,113
- --------------------------------------------------------------
RETAIL (SPECIALTY)-2.55%
Blue Rhino Corp.(a) 13,000 289,250
- --------------------------------------------------------------
CSK Auto Corp.(a) 3,300 88,069
- --------------------------------------------------------------
Hollywood Entertainment Corp.(a) 10,000 272,500
- --------------------------------------------------------------
Renters Choice, Inc.(a) 8,000 254,000
- --------------------------------------------------------------
Rent-Way, Inc.(a) 8,000 194,500
- --------------------------------------------------------------
School Specialty, Inc. 6,000 126,000
- --------------------------------------------------------------
UBid, Inc.(a) 1,000 106,626
- --------------------------------------------------------------
1,330,945
- --------------------------------------------------------------
RETAIL (SPECIALTY APPAREL)-1.59%
Buckle, Inc. (The)(a) 5,200 124,800
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (SPECIALTY APPAREL)-(CONTINUED)
Chico's Fas, Inc.(a) 10,000 $ 233,750
- --------------------------------------------------------------
Children's Place Retail Stores, Inc.
(The)(a) 14,000 351,750
- --------------------------------------------------------------
Goody's Family Clothing, Inc.(a) 11,900 119,372
- --------------------------------------------------------------
829,672
- --------------------------------------------------------------
SAVINGS & LOAN COMPANY-0.66%
TeleBanc Financial Corp.(a) 10,100 343,400
- --------------------------------------------------------------
SERVICES
(ADVERTISING/MARKETING)-2.08%
Abacus Direct Corp.(a) 2,000 91,000
- --------------------------------------------------------------
Hagler Bailly, Inc.(a) 5,000 100,000
- --------------------------------------------------------------
HA-LO Industries, Inc.(a) 3,000 112,875
- --------------------------------------------------------------
Healthworld Corp.(a) 10,000 103,750
- --------------------------------------------------------------
Lamar Advertising Co.(a) 8,600 320,350
- --------------------------------------------------------------
Metris Companies Inc. 4,000 201,250
- --------------------------------------------------------------
Professional Detailing, Inc.(a) 5,500 155,375
- --------------------------------------------------------------
1,084,600
- --------------------------------------------------------------
SERVICES (COMMERCIAL &
CONSUMER)-7.04%
American Dental Partners, Inc.(a) 20,900 241,656
- --------------------------------------------------------------
Bright Horizons Family Solutions,
Inc.(a) 10,000 270,000
- --------------------------------------------------------------
Championship Auto Racing Teams,
Inc.(a) 14,300 423,638
- --------------------------------------------------------------
Comfort Systems USA, Inc.(a) 22,600 403,975
- --------------------------------------------------------------
Iron Mountain, Inc.(a) 24,150 870,909
- --------------------------------------------------------------
ITT Educational Services, Inc.(a) 10,200 346,800
- --------------------------------------------------------------
LaSalle Partners, Inc.(a) 5,000 147,188
- --------------------------------------------------------------
Metzler Group, Inc.(a) 6,600 321,338
- --------------------------------------------------------------
Strayer Education, Inc. 6,000 211,500
- --------------------------------------------------------------
United Road Services, Inc.(a) 23,900 439,163
- --------------------------------------------------------------
3,676,167
- --------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-2.74%
Analysts International Corp. 7,300 140,525
- --------------------------------------------------------------
Cotelligent Group, Inc.(a) 5,000 106,563
- --------------------------------------------------------------
Insight Enterprises, Inc.(a) 23,250 1,182,844
- --------------------------------------------------------------
1,429,932
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-2.02%
Lason Holdings, Inc.(a) 13,600 791,350
- --------------------------------------------------------------
Mecon, Inc.(a) 25,000 262,500
- --------------------------------------------------------------
1,053,850
- --------------------------------------------------------------
SERVICES (EMPLOYMENT)-1.40%
Data Processing Resources Corp.(a) 12,200 356,850
- --------------------------------------------------------------
Personnel Group of America, Inc.(a) 21,400 374,500
- --------------------------------------------------------------
731,350
- --------------------------------------------------------------
SERVICES (FACILITIES & ENVIRONMENTAL)-2.27%
Casella Waste Systems, Inc.(a) 10,000 371,250
- --------------------------------------------------------------
Cornell Corrections, Inc.(a) 11,100 210,900
- --------------------------------------------------------------
</TABLE>
9
<PAGE> 13
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SERVICES (FACILITIES &
ENVIRONMENTAL)-(CONTINUED)
GP Strategies Corp.(a) 10,000 $ 150,000
- --------------------------------------------------------------
Tetra Tech, Inc.(a) 10,000 270,625
- --------------------------------------------------------------
Waste Connections, Inc.(a) 10,000 183,750
- --------------------------------------------------------------
1,186,525
- --------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.76%
Boston Communications Group, Inc.(a) 10,000 130,000
- --------------------------------------------------------------
Metro One Telecommunications,
Inc.(a) 20,000 265,000
- --------------------------------------------------------------
395,000
- --------------------------------------------------------------
TEXTILES (APPAREL)-0.29%
Quicksilver, Inc.(a) 5,000 150,000
- --------------------------------------------------------------
TEXTILES (SPECIALTY)-0.49%
Happy Kids, Inc.(a) 20,000 255,000
- --------------------------------------------------------------
TRUCKERS-0.15%
Hub Group, Inc.(a) 4,000 77,500
- --------------------------------------------------------------
WASTE MANAGEMENT-2.43%
Allied Waste Industries, Inc.(a) 26,565 627,598
- --------------------------------------------------------------
Eastern Environmental Services,
Inc.(a) 14,400 426,600
- --------------------------------------------------------------
KTI, Inc.(a) 10,000 216,250
- --------------------------------------------------------------
1,270,448
- --------------------------------------------------------------
Total Domestic Common Stocks
(Cost $31,794,190) 41,072,780
- --------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-2.49%
BERMUDA-0.67%
Annuity and Life Re, Ltd.
(Insurance-Life) 13,000 351,000
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
CANADA-0.36%
Architel Systems Corp. (Electrical
Equipment)(a) 15,000 $ 189,375
- --------------------------------------------------------------
FRANCE-0.72%
Business Objects S.A.-ADR(a) 11,500 373,750
- --------------------------------------------------------------
ISRAEL-0.34%
Fundtech Ltd.
(Computers-Software)(a) 8,525 175,828
- --------------------------------------------------------------
NETHERLANDS-0.24%
Core Laboratories N.V. (Oil &
Gas-Drilling & Equipment)(a) 6,700 128,137
- --------------------------------------------------------------
UNITED KINGDOM-0.16%
ICON, PLC-ADR (Biotechnology)(a) 2,500 83,750
- --------------------------------------------------------------
Total Foreign Stocks and Other
Equity Interests (Cost
$946,565) 1,301,840
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. TREASURY SECURITIES-3.80%
U.S. TREASURY BILLS-3.80%(b)(c)
4.44%, 03/25/99 (Cost $1,984,429) $2,005,000 $ 1,984,429
- --------------------------------------------------------------
REPURCHASE AGREEMENT-10.74%(d)
SBC Warburg Dillon Read Inc., 4.75%,
01/04/99(e) (Cost $5,607,969) 5,607,969 5,607,969
- --------------------------------------------------------------
TOTAL INVESTMENTS-95.67% 49,967,018
- --------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-4.33% 2,263,845
- --------------------------------------------------------------
NET ASSETS-100.00% $52,230,863
==============================================================
</TABLE>
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) A portion of the principal balance was pledged as collateral to cover margin
requirements for open futures contracts. See Note 5.
(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 12/31/98 with a maturing value of
$1,000,527,778. Collateralized by $2,207,068,000 U.S. Government
obligations, 0% to 6.75% with a market value at 12/31/98 of $1,020,001,079.
Abbreviation:
ADR - American Depositary Receipt
See Notes to Financial Statements
10
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$34,735,184) $44,359,049
- ---------------------------------------------------------
Repurchase agreement (cost $5,607,969) 5,607,969
- ---------------------------------------------------------
Receivables for:
Investments sold 445,267
- ---------------------------------------------------------
Fund shares sold 2,665,706
- ---------------------------------------------------------
Dividends and interest 1,724
- ---------------------------------------------------------
Variation margin 38,750
- ---------------------------------------------------------
Other assets 50,560
- ---------------------------------------------------------
Total assets 53,169,025
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 327,944
- ---------------------------------------------------------
Fund shares reacquired 501,597
- ---------------------------------------------------------
Accrued investment management &
administration fees 17,798
- ---------------------------------------------------------
Accrued accounting fees 790
- ---------------------------------------------------------
Accrued distribution fees 30,568
- ---------------------------------------------------------
Accrued trustees' fees 10,919
- ---------------------------------------------------------
Accrued transfer agent fees 8,700
- ---------------------------------------------------------
Accrued operating expenses 39,846
- ---------------------------------------------------------
Total liabilities 938,162
- ---------------------------------------------------------
Net assets applicable to shares outstanding $52,230,863
- ---------------------------------------------------------
NET ASSETS:
Class A $24,737,557
=========================================================
Class B $26,447,897
=========================================================
Advisor Class $ 1,045,409
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 1,452,229
=========================================================
Class B 1,589,687
=========================================================
Advisor Class 60,748
=========================================================
Class A:
Net asset value and redemption price per
share $ 17.03
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $17.03
divided by 94.50%) $ 18.02
=========================================================
Class B:
Net asset value and offering price per
share $ 16.64
=========================================================
Advisor Class:
Net asset value and offering price per
share $ 17.21
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 42,607
- ---------------------------------------------------------
Interest 94,407
- ---------------------------------------------------------
Security lending income 17,459
- ---------------------------------------------------------
Total investment income 154,473
- ---------------------------------------------------------
EXPENSES:
Investment management & administration fees 243,996
- ---------------------------------------------------------
Accounting fees 6,564
- ---------------------------------------------------------
Custodian fees 31,093
- ---------------------------------------------------------
Trustees' fees 20,474
- ---------------------------------------------------------
Distribution fees -- Class A 44,266
- ---------------------------------------------------------
Distribution fees -- Class B 192,719
- ---------------------------------------------------------
Transfer agent fees -- Class A 41,468
- ---------------------------------------------------------
Transfer agent fees -- Class B 63,188
- ---------------------------------------------------------
Transfer agent fees -- Advisor Class 5,847
- ---------------------------------------------------------
Printing 95,135
- ---------------------------------------------------------
Professional fees 54,802
- ---------------------------------------------------------
Other 59,001
- ---------------------------------------------------------
Total expenses 858,553
- ---------------------------------------------------------
Less: expense reimbursements/reductions (148,727)
- ---------------------------------------------------------
Net expenses 709,826
- ---------------------------------------------------------
Net investment income (loss) (555,353)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FUTURES
CONTRACTS:
Net realized gain (loss) from:
Investment securities 1,040,498
- ---------------------------------------------------------
Futures contracts (52,075)
- ---------------------------------------------------------
988,423
- ---------------------------------------------------------
Net unrealized appreciation of:
Investment securities 8,737,666
- ---------------------------------------------------------
Futures contracts 153,000
- ---------------------------------------------------------
8,890,666
- ---------------------------------------------------------
Net gain from investment securities,
foreign currencies and futures
contracts 9,879,089
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $ 9,323,736
=========================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 15
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (555,353) $ (449,560)
- ------------------------------------------------------------------------------------------
Net realized gain from investment securities and futures
contracts 988,423 2,524,251
- ------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
futures contracts 8,890,666 1,674,235
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 9,323,736 3,748,926
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A (576,954) (213,287)
- ------------------------------------------------------------------------------------------
Class B (733,412) (410,555)
- ------------------------------------------------------------------------------------------
Advisor Class (30,675) (32,021)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A 9,846,073 990,794
- ------------------------------------------------------------------------------------------
Class B 1,291,586 8,950,465
- ------------------------------------------------------------------------------------------
Advisor Class (600,234) 1,099,105
- ------------------------------------------------------------------------------------------
Net increase in net assets 18,520,120 14,133,427
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 33,710,743 19,577,316
- ------------------------------------------------------------------------------------------
End of period $52,230,863 $33,710,743
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $42,095,396 $31,557,971
- ------------------------------------------------------------------------------------------
Undistributed net investment income (loss) -- --
- ------------------------------------------------------------------------------------------
Undistributed net realized gain from investment securities
and futures contracts 348,602 1,256,573
- ------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
futures contracts 9,786,865 896,199
- ------------------------------------------------------------------------------------------
$52,230,863 $33,710,743
==========================================================================================
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Small Cap Growth Fund, formerly AIM Small Cap Equity Fund, (the "Fund"), is
a separate series of AIM Growth Series (the "Trust"). The Trust is a Delaware
business trust and is registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end management investment company. The Trust
has six diversified series of shares in operation, each series corresponding to
a distinct portfolio of investments.
The Fund invests substantially all of its investable assets in the Small Cap
Portfolio ("the Portfolio"). The Portfolio is organized as a Delaware business
trust and is registered under the 1940 Act as a diversified, open-end management
investment company.
The Portfolio has investment objectives, policies, and limitations
substantially identical to the Fund. Therefore, the financial statements of the
Fund and the Portfolio have been presented on a consolidated basis, and
represent all activities of both the Fund and the Portfolio. At December 31,
1998, all of the shares of beneficial interest of the Portfolio were owned
either by the Fund or INVESCO (NY), Inc., which has a nominal ($100) investment
in the Portfolio.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective distribution expenses, and may differ
in its transfer agent, registration, and certain other class-specific fees and
expenses.
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 Portfolio in the preparation of
the financial statements.
A. Portfolio Valuation -- The Fund calculates the net asset value of and
completes orders to purchase, exchange or repurchase Fund shares on each
business day, with the exception of those days on which the New York Stock
Exchange is closed.
Equity securities are valued at the last sale price on the exchange on
which such securities are traded or on the principal over-the-counter market
on which such securities are traded, as of the close of business on the day
the securities are being valued or, lacking any sales, at the mean between
the closing bid and asked prices. In cases where securities are traded on
more than one exchange, the securities are valued on the exchange determined
by A I M Advisors, Inc. (the "Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted
bid and ask prices for such investments or, if such prices are not available,
at prices for investments of comparative maturity, quality and type; however,
when the Manager deems it appropriate, prices obtained for the day of
valuation from a bond pricing service will be used. Short-term investments
with a maturity of 60 days or less are valued at amortized cost, which
approximates market value.
Investments for which market quotations are not readily available
(including restricted securities which are subject to limitations on their
sale) are valued at fair value as determined in good faith by or under the
direction of the Trust's Board of Trustees.
B. Repurchase Agreements -- With respect to repurchase agreements entered into
by the Portfolio, it is the Portfolio's policy to always receive, as
collateral, United States government securities or other high quality debt
securities of which the value, including accrued interest, is at least equal
to the amount to be repaid to the Portfolio under each agreement at its
maturity.
C. Option Accounting Principles -- When the Portfolio writes a call or put
option, an amount equal to the premium received is included in Fund's
consolidated "Statement of Assets and Liabilities" as an asset and an
equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. The
current market value of an option is the mean between the last bid and asked
prices. If an option expires on its stipulated expiration date or if the
Portfolio enters into a closing purchase transaction, a gain or loss is
realized without regard to any unrealized gain or loss on the underlying
security, and the liability related to such option is extinguished. If a
written call option is exercised, a gain or loss is realized from the sale of
the underlying security and the proceeds of the sale are increased by the
premium originally received. If a written put option is exercised, the cost
of the underlying security purchased would be decreased by the premium
originally received. The Portfolio can write options only on a covered basis,
which, for a call, requires that the Portfolio hold the underlying security,
and, for a put, requires the Portfolio to set aside cash, U.S. government
securities or other liquid securities in an amount not less than the exercise
price or otherwise provide adequate cover at all times while the put option
is outstanding. The Portfolio may use options to manage its exposure to the
stock market and to fluctuations in interest rates.
The premium paid by the Portfolio for the purchase of a call or put option
is included in Fund's consolidated "Statement of Assets and Liabilities" as
an investment and subsequently "marked-to-market" to reflect the current
market value of the option. If an option which the Portfolio has purchased
expires on the stipulated expiration date, the Portfolio realizes a loss in
the amount of the cost of the option. If the Portfolio enters into a closing
sale transaction, the Portfolio realizes a gain or loss, depending on whether
proceeds from the closing sale transaction are greater or less than the cost
of the option. If the Portfolio exercises a call option, the cost of the
securities acquired by exercising the call is increased by the premium paid
to buy the call. If the Portfolio exercises a put option, it realizes a gain
or loss from the sale of the underlying security,
13
<PAGE> 17
and the proceeds from such sale are decreased by the premium originally paid.
The risk associated with purchasing options is limited to the premium
originally paid. The risk in writing a call option is that the Portfolio may
forego the opportunity of profit if the market value of the underlying
security or index increases and the option is exercised. The risk in writing
a put option is that the Portfolio may incur a loss if the market value of
the underlying security or index decreases and the option is exercised. In
addition, there is the risk the Portfolio may not be able to enter into a
closing transaction because of an illiquid secondary market.
D. 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.
E. Security Transactions and Related Investment Income -- Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed). Realized gains and losses are calculated on the basis of specific
identification of the Securities sold. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a
high level of uncertainty exists as to its collection, income is recorded net
of all withholding tax with any rebate recorded when received. The Portfolio
may trade securities on other than normal settlement terms. This may increase
the risk if the other party to the transaction fails to deliver and causes
the Portfolio to subsequently invest at less advantageous prices.
On December 31, 1998, undistributed net investment income was increased and
undistributed net realized gains was decreased by $555,353 in order to comply
with the requirements of the American Institute of Certified Public
Accountants Statement of Position 93-2. Net assets of the Fund were
unaffected by the reclassifications discussed above.
F. Portfolio Securities Loaned -- At December 31, 1998, stocks with an aggregate
value listed below were on loan to brokers. The loans were secured by cash
collateral received by the Portfolio:
<TABLE>
<CAPTION>
DECEMBER 31, 1998 PERIOD ENDED
---------------------------- DECEMBER 31, 1998
AGGREGATE VALUE CASH -----------------
ON LOANS COLLATERAL FEES RECEIVED
--------------- ---------- -----------------
<S> <C> <C>
$5,453,825 $5,571,152 $17,459
</TABLE>
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.
G. 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 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.
H. Taxes -- It is the policy of the Fund and the Portfolio to meet the
requirements for qualification as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended ("Code"). It is also the intention
of the Fund to make distributions sufficient to avoid imposition of any
excise tax under Section 4982 of the Code. Therefore, no provision has been
made for Federal taxes on income, capital gains, or unrealized appreciation
of securities held, and excise tax on income and capital gains.
I. Distributions to Shareholders -- Distributions to shareholders are recorded
by the Fund on the ex-date. Income and capital gain distributions are
determined in accordance with Federal income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments of income and gains on various
investment securities held by the Portfolio and timing differences.
J. Restricted Securities -- The Portfolio is permitted to invest in privately
placed restricted securities. These securities may be resold in transactions
exempt from registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations and
expense, and prompt sale at an acceptable price may be difficult.
K. Indexed Securities -- The Portfolio may invest in indexed securities whose
value is linked either directly or indirectly to changes in foreign
currencies, interest rates, equities, indices, or other reference
instruments. Indexed securities may be more volatile than the reference
instrument itself, but any loss is limited to the amount of the original
investment.
L. Line of Credit -- The Fund, along with certain other funds advised and/or
administered by the Manager, has a line 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 value of the Fund's total assets.
For the year ended December 31, 1998, the average outstanding daily balance
of bank loans (based on the number of days the loans were outstanding) for
the Fund was $591,476 with a weighted average interest rate of 5.87%.
Interest expense for the Fund for the year ended December 31, 1998 was
$3,706, and is included in "Other Expenses" on the Statement of Operations.
14
<PAGE> 18
NOTE 2-RELATED PARTIES
A I M Advisors, Inc. (the "Manager") is the Fund's and the Portfolio's
investment manager and administrator. As of the close of business on May 29,
1998, Liechtenstein Global Trust AG ("LGT"), the former indirect parent
organization of Chancellor LGT Asset Management, Inc. ("Chancellor LGT"),
consummated a purchase agreement with AMVESCAP PLC pursuant to which AMVESCAP
PLC acquired LGT's Asset Management Division, which included Chancellor LGT and
certain other affiliates. As a result of this transaction, Chancellor LGT was
renamed INVESCO (NY), Inc., and is now an indirect wholly-owned subsidiary of
AMVESCAP PLC. In connection with this transaction, A I M Advisors, Inc., an
indirect wholly-owned subsidiary of AMVESCAP PLC, became the administrator of
the Fund and the investment manager and administrator of the Portfolio. Also, on
May 29, 1998, A I M Distributors, Inc. ("AIM Distributors"), a wholly-owned
subsidiary of the Manager, became the Fund's distributor, and the Trust was
reorganized from a Massachusetts business trust into a Delaware business trust,
and the Portfolio was reorganized from a New York trust into a Delaware business
trust. Finally, on September 4, 1998, A I M Fund Services, Inc. ("AFS"), a
wholly-owned subsidiary of the Manager, became the transfer agent of the Fund.
The Fund pays the Manager administration fees at the annualized rate of 0.25%
of the Fund's average daily net assets. The Portfolio pays investment management
and administration fees to the Manager at the annualized rate of 0.475% on the
first $500 million of average daily net assets of the Portfolio; 0.45% on the
next $500 million; 0.425% on the next $500 million; and 0.40% on amounts
thereafter. These fees are computed daily and paid monthly.
AIM Distributors, serves as the Fund's distributor. For the period ended May
29, 1998, GT Global, Inc. ("GT Global"), an affiliate of Chancellor LGT, served
as the Funds' distributor. The Fund offers Class A, Class B, and Advisor Class
shares for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. AIM Distributors collects the sales charges imposed on sales of
Class A shares, and reallows a portion of such charges to dealers through which
the sales are made. For the year ended December 31, 1998, AIM Distributors and
GT Global retained the following sales charges: $12,218 and $6,814,
respectively. Purchases of Class A shares exceeding $1,000,000 may be subject to
a contingent deferred sales charge ("CDSC") upon redemption, in accordance with
the Fund's current prospectus. AIM Distributors also makes ongoing shareholder
servicing and trail commission payments to dealers whose clients hold Class A
shares.
Class B shares are not subject to initial sales charges. When Class B shares
are sold, AIM Distributors from its own resources pays commissions to dealers
through which the sales are made. Certain redemptions of Class B shares made
within six years of purchase are subject to CDSCs, in accordance with the Fund's
current prospectus. For the year ended December 31, 1998, AIM Distributors and
GT Global collected such CDSCs in the amount of: $244 and $16,156, respectively.
In addition, AIM Distributors makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class B shares.
For the period ended May 29, 1998, pursuant to the then effective separate
distribution plans adopted under the 1940 Act Rule 12b-1 by the Trust's Board of
Trustees with respect to the Fund's Class A shares ("Old Class A Plan") and
Class B shares ("Old Class B Plan"), the Fund reimbursed GT Global for a portion
of its shareholder servicing and distribution expenses. Under the Old Class A
Plan, the Fund was permitted to pay GT Global a service fee at the annualized
rate of up to 0.25% of the average daily net assets of the Fund's Class A shares
for GT Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.35% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global was reimbursed under the Old Class A Plan would
have been incurred within one year of such reimbursement.
For the period ended May 29, 1998, pursuant to the Old Class B Plan, the Fund
was permitted to pay GT Global a service fee at the annualized rate of up to
0.25% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Old Class B Plan in excess of 1.00%
annually were permitted to be carried forward for reimbursement in subsequent
years as long as that Plan continued in effect.
Effective as of the close of business May 29, 1998, pursuant to Rule 12b-1
under the 1940 Act, the Trust's Board of Trustees adopted a Master Distribution
Plan applicable to the Fund's Class A shares ("Class A Plan") and Class B shares
("Class B Plan"), pursuant to which the Fund compensates AIM Distributors for
the purpose of financing any activity that is intended to result in the sale of
Class A or Class B shares of the Fund. Under the Class A Plan, the Fund
compensates AIM Distributors at the annualized rate of 0.35% of the average
daily net assets of the Fund's Class A shares.
Pursuant to the Class B Plan, the Fund compensates AIM Distributors at an
annualized rate of 1.00% of the average daily net assets of the Fund's Class B
shares.
The Class A Plan and the Class B Plan (together, the "Plans") are designed to
compensate AIM Distributors for certain promotional and other sales-related
costs, and to implement a dealer incentive program that provides for periodic
payments to selected dealers who furnish continuing personal shareholder
services to their customers who purchase and own Class A and Class B shares of
the Fund. Payments also can be directed by AIM Distributors to financial
institutions who have entered into service agreements with respect to Class A
and Class B shares of the Fund and who provide continuing personal services to
their customers who own Class A and Class B shares of the Fund. The service fees
payable to selected financial institutions are calculated at the annual rate of
0.25% of the average daily net asset value of those Fund shares that are held in
such institution's customers' accounts that were purchased on or after a
prescribed date set forth in the Plans.
The Manager and AIM Distributors have undertaken to limit the Fund's expenses
(exclusive of brokerage commissions, taxes, interest, and extraordinary
expenses) to the annual rate of 1.75%, 2.40%, and 1.40% of the average daily net
assets of the Fund's Class A, Class B, and Advisor Class shares, respectively.
This
15
<PAGE> 19
undertaking may be changed or eliminated in the future. If necessary, this
limitation will be effected by waivers by the Manager of investment management
and administration fees, waivers by AIM Distributors of payments under the Class
A Plan and/or Class B Plan and/or reimbursements by the Manager or AIM
Distributors of portions of the Fund's other operating expenses.
Effective as of the close of business September 4, 1998, the Fund, pursuant to
a transfer agency and service agreement, has agreed to pay A I M Fund Services,
Inc. ("AFS") an annualized fee of $24.85 for each shareholder account that is
open during any calendar month (this fee includes all out-of-pocket expenses),
and an annualized fee of $0.70 per shareholder account that is closed during any
calendar month fees are billed by AFS monthly in arrears on a prorated basis of
1/12 of the annualized fee for all such accounts.
For the period January 1, 1998 to September 4, 1998, GT Global Investor
Services, Inc., an affiliate of Chancellor LGT, was the transfer agent of the
Fund. For performing shareholder servicing, reporting, and general transfer
agent services, GT Services received an annual maintenance fee of $17.50 per
account, a new account fee of $4.00 per account, a per transaction fee of $1.75
for all transactions other than exchanges and a per exchange fee of $2.25. GT
Services was also reimbursed by the Fund for its out-of-pocket expenses for such
items as postage, forms, telephone charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Fund. The monthly fee
for these services to the Manager 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 of such
investment companies, 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.
The Trust pays each of its Trustees who is not an employee, officer or
director of the Manager, AIM Distributors or GT Services $5,000 per year plus
$300 for each meeting of the board or any committee thereof attended by the
Trustee. The Portfolio pays each of its Trustees who is not an employee, officer
or director of the Manager, AIM Distributors or AFS $500 per year plus $150 for
each meeting of the board or any committee thereof attended by the Trustee.
At December 31, 1998, all of the shares of beneficial interest of the
Portfolio were owned either by the Fund or INVESCO (NY), Inc.
NOTE 3-PURCHASES AND SALES OF SECURITIES
The aggregate amount of investment securities (other than short-term
securities) purchased and sold by the Portfolio during the year ended December
31, 1998 was $61,020,877 and $61,119,926, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of December 31, 1998 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment
securities $10,571,589
- ---------------------------------------------------------------
Aggregate unrealized (depreciation) of investment
securities (967,318)
- ---------------------------------------------------------------
Net unrealized appreciation of investment
securities $ 9,604,271
===============================================================
</TABLE>
Cost of investments for tax purposes is $34,754,778.
NOTE 4-SHARE INFORMATION
Changes in the Fund's shares outstanding during the years ended December 31,
1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1998 1997
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 2,808,949 $ 42,444,424 2,067,494 $ 28,341,345
- ----------------------------------------------------------------------------
Class B 1,807,272 26,359,785 2,192,656 29,216,057
- ----------------------------------------------------------------------------
Advisor Class 63,569 992,118 156,123 2,292,127
- ----------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A 35,278 549,813 14,194 195,720
- ----------------------------------------------------------------------------
Class B 45,364 690,497 26,438 359,234
- ----------------------------------------------------------------------------
Advisor Class 1,482 23,320 507 7,039
- ----------------------------------------------------------------------------
Reacquired:
Class A (2,155,365) (33,148,164) (1,992,960) (27,546,271)
- ----------------------------------------------------------------------------
Class B (1,772,161) (25,758,696) (1,570,899) (20,624,826)
- ----------------------------------------------------------------------------
Advisor Class (114,990) (1,615,672) (80,540) (1,200,061)
- ----------------------------------------------------------------------------
719,398 $ 10,537,425 813,013 $ 11,040,364
============================================================================
</TABLE>
NOTE 5-FUTURES CONTRACTS
On December 31, 1998, $100,000 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 10 March 99 $153,000
</TABLE>
NOTE 6-EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who then paid a
portion of the Portfolio's expenses. For the year ended December 31, 1998, the
expenses of the Portfolio were reduced by $1,695 under these arrangements.
16
<PAGE> 20
NOTE 7-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A, Class B, and
Advisor Class outstanding during 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;
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------
1998(a) 1997 1996 1995
------- ------- ------ ------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.27 $ 12.52 $11.80 $11.43
- ------------------------------------------------------------ ------- ------- ------ ------
Income from investment operations:
Net investment income(b) (0.19)(c) (0.18)(c) (0.05)(c) 0.04(c)
- ------------------------------------------------------------ ------- ------- ------ ------
Net gains on securities (both realized and unrealized) 3.45 2.20 1.69 0.33
- ------------------------------------------------------------ ------- ------- ------ ------
Total from investment operations 3.26(b) 2.02 1.64 0.37
- ------------------------------------------------------------ ------- ------- ------ ------
Less distributions:
- ------------------------------------------------------------ ------- ------- ------ ------
Distributions from net realized gains (0.50) (0.27) (0.92) --
- ------------------------------------------------------------ ------- ------- ------ ------
Total distributions (0.50) (0.27) (0.92) --
- ------------------------------------------------------------ ------- ------- ------ ------
Net asset value, end of period $ 17.03 $ 14.27 $12.52 $11.80
============================================================ ======= ======= ====== ======
Total Return(d) 23.15% 16.23% 13.81% 3.24%
============================================================ ======= ======= ====== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $24,737 $10,896 $8,448 $1,931
============================================================ ======= ======= ====== ======
Ratio of expenses to average net assets:
With expense reductions and/or reimbursement 1.75%(e) 1.92% 2.00% 2.00%(f)
============================================================ ======= ======= ====== ======
Without expense reductions and/or reimbursement 2.19%(e) 2.52% 3.09% 24.20%(f)
============================================================ ======= ======= ====== ======
Ratio of net investment income to average net assets:
With expense reductions and/or reimbursement (1.29)%(e) (1.40)% (0.38)% 1.68%(f)
============================================================ ======= ======= ====== ======
Without expense reductions and/or reimbursement (1.73)%(e) (2.00)% (1.47)% (20.52)%(f)
============================================================ ======= ======= ====== ======
Ratio of interest expense to average net assets(g) 0.01% -- -- --
============================================================ ======= ======= ====== ======
Portfolio turnover rate(g) 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 based on average net assets of $12,647,418.
(f) Annualized
(g) Portfolio turnover rates and ratio of interest expense to average net assets
are calculated on the basis of the Portfolio as a whole without
distinguishing between the classes of shares issued.
<TABLE>
<CAPTION>
CLASS B ADVISOR CLASS
--------------------------------------- -------------------------------------
1998(a) 1997 1996 1995 1998(a) 1997 1996 1995
------- ------- ------- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.06 $ 12.42 $ 11.78 $11.43 $14.39 $12.58 $11.81 $ 11.43
- ------------------------------------------- ------- ------- ------- ------ ------ ------ ------ -------
Income from investment operations:
Net investment income(b) (0.29)(c) (0.26)(c) (0.14)(c) 0.02(c) (0.14)(c) (0.14)(c) -- 0.05(c)
- ------------------------------------------- ------- ------- ------- ------ ------ ------ ------ -------
Net gains on securities (both
realized and unrealized) 3.37 2.17 1.70 0.33 3.46 2.22 1.69 0.33
- ------------------------------------------- ------- ------- ------- ------ ------ ------ ------ -------
Total from investment
operations 3.08 1.91 1.56 0.35 3.32 2.08 1.69 0.38
- ------------------------------------------- ------- ------- ------- ------ ------ ------ ------ -------
Less distributions:
- ------------------------------------------- ------- ------- ------- ------ ------ ------ ------ -------
Distributions from net
realized gains (0.50) (0.27) (0.92) -- (0.50) (0.27) (0.92) --
- ------------------------------------------- ------- ------- ------- ------ ------ ------ ------ -------
Total distributions (0.50) (0.27) (0.92) -- (0.50) (0.27) (0.92) --
- ------------------------------------------- ------- ------- ------- ------ ------ ------ ------ -------
Net asset value, end of period $ 16.64 $ 14.06 $ 12.42 $11.78 $17.21 $14.39 $12.58 $ 11.81
=========================================== ======= ======= ======= ====== ====== ====== ====== =======
Total Return(d) 22.22% 15.47% 13.14% 3.06% 23.38% 16.63% 14.22% 3.32%
=========================================== ======= ======= ======= ====== ====== ====== ====== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $26,448 $21,222 $10,694 $2,024 $1,045 $1,592 $ 435 $ 52
=========================================== ======= ======= ======= ====== ====== ====== ====== =======
Ratio of expenses to average net assets:
With expense reductions
and/or reimbursement 2.40%(e) 2.57% 2.65% 2.65%(f) 1.40%(e) 1.57% 1.65% 1.65%(f)
=========================================== ======= ======= ======= ====== ====== ====== ====== =======
Without expense reductions
and/or reimbursement 2.85%(e) 3.17% 3.74% 24.85%(f) 1.84%(e) 2.17% 2.74% 23.85%(f)
=========================================== ======= ======= ======= ====== ====== ====== ====== =======
Ratio of net investment income to
average net assets:
With expense reductions
and/or reimbursement (1.95)%(e) (2.05)% (1.03)% 1.03%(f) (0.94)%(e) (1.05)% (0.03)% 2.03%(f)
=========================================== ======= ======= ======= ====== ====== ====== ====== =======
Without expense reductions
and/or reimbursement (2.39)%(e) (2.65)% (2.12)% --(f) (1.38)%(e) (1.65)% (1.12)% (20.17)%(f)
=========================================== ======= ======= ======= ====== ====== ====== ====== =======
Ratio of interest expense
to average net assets(g) 0.01% -- -- -- 0.01% -- -- --
=========================================== ======= ======= ======= ====== ====== ====== ====== =======
Portfolio turnover rate(g) 190% 233% 150% -- 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 based on average net assets of $19,271,876 for Class B and
$1,783,361 for Advisor Class.
(f) Annualized
(g) Portfolio turnover rates and ratio of interest expense to average net assets
are calculated on the basis of the Small Cap Growth Portfolio as a whole
without distinguishing between the classes of shares issued.
17
<PAGE> 21
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Small Cap Growth Fund
(formerly AIM Small Cap Equity Fund) and Board of
Trustees of AIM Growth Series (formerly GT Global Growth
Series):
In our opinion, the accompanying statement of assets and
liabilities, including the portfolio of investments, and
the related statements of operations and of changes in
net assets and the financial highlights present fairly,
in all material respects, the financial position of the
AIM Small Cap Growth Fund at December 31, 1998, and the
results of its operations, the changes in its net assets
and the financial highlights for the periods indicated,
in conformity with generally accepted accounting
principles. These financial statements and financial
highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion
on these financial statements based on our audits. We
conducted our audits of these financial statements in
accordance with generally accepted auditing standards
which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our
audits, which included confirmation of securities at
December 31, 1998 by correspondence with the custodian
and brokers, provide a reasonable basis for the opinion
expressed above.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
February 19, 1999
18
<PAGE> 22
PROXY RESULTS (UNAUDITED)
The Special Meeting of Shareholders of G.T. Global Growth Series, now known as
AIM Growth Series (the "Trust"), was held on May 20, 1998. The meeting was held
for the following purposes:
(1) To elect Trustees as follows: C. Derek Anderson, Frank S. Bayley, William
J. Guilfoyle, Arthur C. Patterson and Ruth H. Quigley.
(2) To approve a new investment management and administration contract and
sub-advisory and sub-administration contract with respect to each series of
the Trust (each, a "Fund," and collectively, the "Funds").
(3) To approve replacement Rule 12b-1 plans of distribution with respect to
Class A and B shares of each Fund.
(4) To approve changes to the fundamental investment restrictions of each Fund.
(5) To approve an agreement and plan of conversion and termination for the
Trust.
(6) To approve the conversion of the portfolios in which certain Funds invest
in Delaware business trusts.
(7) To ratify the selection of Coopers & Lybrand L.L.P., now known as
PricewaterhouseCoopers LLP, as the Trust's independent public accountants.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
VOTES WITHHELD/
TRUSTEE/MATTER VOTES FOR AGAINST ABSTENTIONS
-------------- ---------- --------- -----------
<S> <C> <C> <C> <C>
(1) C. Derek Anderson........................................... 71,221,289 N/A 5,894,682
Frank S. Bayley............................................. 71,241,614 N/A 5,874,357
William J. Guilfoyle........................................ 71,251,357 N/A 5,864,614
Arthur C. Patterson......................................... 71,255,705 N/A 5,860,266
Ruth H. Quigley............................................. 71,264,495 N/A 5,851,476
(2)(a) Approval of investment management and administration
contract.................................................. 873,646 17,272 316,814*
(2)(b) Approval of sub-advisory and sub-administration contract.... 858,639 22,465 326,628*
(3) Approval of replacement Rule 12b-1 plans of distribution
CLASS A..................................................... 334,676 12,616 38,442
CLASS B..................................................... 623,974 10,099 52,209
(4)(a) Modification of Fundamental Restriction on Portfolio
Diversification........................................... 856,986 17,697 333,049*
(4)(b) Modification of Fundamental Restriction on Concentration.... 856,986 17,697 333,049*
(4)(c) Modification of Fundamental Restriction on Issuing Senior
Securities and Borrowing Money............................ 856,986 17,697 333,049*
(4)(d) Modification of Fundamental Restriction on Making Loans..... 856,986 17,697 333,049*
(4)(e) Modification of Fundamental Restriction on Underwriting
Securities................................................ 856,986 17,697 333,049*
(4)(f) Modification of Fundamental Restriction on Real Estate
Investments............................................... 856,986 17,697 333,049*
(4)(g) Modification of Fundamental Restriction on Investing in
Commodities............................................... 855,321 19,362 333,049*
(4)(h) Elimination of Fundamental Restriction on Margin
Transactions.............................................. 855,160 19,523 333,049*
(4)(i) Elimination of Fundamental Restriction on Pledging Assets... 856,986 17,697 333,049*
(4)(j) Elimination of Fundamental Restriction on Investments in
Oil, Gas and Mineral Leases and Programs.................. 856,986 17,697 333,049*
(4)(k) Elimination of Fundamental Restriction on Investing for the
Purpose of Control........................................ 856,986 17,697 333,049*
(4)(l) Elimination of Fundamental Restriction on Purchasing
Securities of Issuers in Which Officers and Board Members
of the Trust and Its Affiliates Own Securities............ 855,160 19,523 333,049*
(4)(m) Elimination of Fundamental Restriction on Joint
Participation in a Securities Trading Account............. 856,986 17,697 333,049*
(4)(n) Elimination of Fundamental Restriction on Selling Securities
Short..................................................... 855,160 19,523 333,049*
(5) Approval of an agreement and plan of conversion and
termination with respect to the Trust..................... 54,496,135 2,507,411 20,112,425*
(6) Approve of the conversion of the portfolios in which certain
Funds invest.............................................. 853,168 24,903 329,661*
(7) Ratification of the selection of Coopers and Lybrand L.L.P.,
now known as PricewaterhouseCoopers LLP, as the Trust's
Independent Public Accountants............................ 71,858,619 1,177,277 4,080,070
</TABLE>
- ------------------
* Includes Broker Non-Votes
19
<PAGE> 23
<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 & Assistant Treasurer INVESTMENT MANAGER
(an investment banking firm)
Samuel D. Sirko A I M Advisors, Inc.
Frank S. Bayley Vice President & Secretary 11 Greenway Plaza
Partner, law firm of Suite 100
Baker & McKenzie Kenneth W. Chancey Houston, TX 77046
Vice President & Principal
Robert H. Graham Accounting Officer TRANSFER AGENT
President and Chief Executive Officer,
A I M Management Group Inc. John J. Arthur A I M Fund Services, Inc.
Vice President P.O. Box 4739
Arthur C. Patterson Houston, TX 77210-4739
Managing Partner, Accel Partners Melville B. Cox
(a venture capital firm) Vice President CUSTODIAN
Ruth H. Quigley Gary T. Crum State Street Bank and Trust Company
Private Investor Vice President 225 Franklin Street
Boston, MA 02110
Carol F. Relihan
Vice President COUNSEL TO THE FUND
Nancy L. Martin Kirkpatrick & Lockhart LLP
Assistant Secretary 1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
Ofelia M. Mayo
Assistant Secretary COUNSEL TO THE TRUSTEES
Kathleen J. Pflueger Paul, Hastings, Janofsky & Walker LLP
Assistant Secretary Twenty Third Floor
555 South Flower Street
Pamela Ruddock Los Angeles, CA 90071
Assistant Treasurer
DISTRIBUTOR
Paul Wozniak
Assistant Treasurer A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, MA 02109
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
AIM Small Cap Growth Fund paid ordinary dividends in the amount of $0.475 per
share to shareholders of Class A, Class B, and Advisor Class shares during its
tax year ended December 31, 1998. Of this amount 3.06% is eligible for the
dividends received deduction for corporations.
The Fund also distributed long-term capital gains of $63,212 for the Fund's tax
year ended December 31, 1998. Of long-term capital gains distributed, 100% is
20% rate gain.
20
<PAGE> 24
HOW AIM MAKES INVESTING
EASY FOR YOU
o LOW INITIAL INVESTMENT. You can get your investment program started for as
little as $500. Subsequent investments can be made for only $50.
o AUTOMATIC REINVESTMENT of Dividends and/or Capital Gains. Distributions may
be received in cash or reinvested in the Fund free of charge. Over time,
the power of compounding can significantly increase the value of your
assets.
o AUTOMATIC INVESTMENT PLAN. You may build your investment by regularly
purchasing additional shares. Pre-authorized checks for $50 or more can be
drafted monthly from your personal checking account.
o EASY ACCESS TO YOUR MONEY. Your shares may be redeemed at net asset value
any day the New York Stock Exchange is open. The price of shares sold may
be more or less than their original cost, depending on market conditions.
o SYSTEMATIC WITHDRAWAL PLAN. You may elect to receive checks of at least $50
monthly or quarterly through a systematic withdrawal plan.
o EXCHANGE PRIVILEGE. As your goals change, you may exchange all or part of
your assets for those of other funds within the same share class of The AIM
Family of Funds--Registered Trademark--. The exchange privilege may be
modified or discontinued for any of the AIM funds. Certain restrictions
apply.
o RETIREMENT PLANS. You may purchase shares of an AIM fund for your
Individual Retirement Account (IRA), Roth IRA, or any other type of
retirement plan, and earn tax-deferred dollars for your retirement.
o Toll-Free Access. Current shareholders can call our AIM Investor Line at
800-246-5463 for 24-hour-a-day account information. Or, of course, you may
contact your financial consultant for assistance.
o WWW.AIMFUNDS.COM. As a current shareholder, you can check account balances
24 hours a day over the Internet. State-of-the-art encryption lets you send
us questions that include confidential information without the fear of
eavesdropping, tampering, or forgery.
-------------------------------------
CURRENT SHAREHOLDERS
CAN CALL OUR
AIM INVESTOR LINE AT
800-246-5463
FOR 24-HOUR-A-DAY
ACCOUNT INFORMATION.
-------------------------------------
<PAGE> 25
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS AIM Asian Growth Fund A I M Management Group Inc. has provided leadership
AIM Aggressive Growth Fund(1) AIM Developing Markets Fund(2) in the mutual fund industry since 1976 and managed
AIM Blue Chip Fund AIM Europe Growth Fund(2) approximately $109 billion in assets for more than
AIM Capital Development Fund AIM European Development Fund 6.2 million shareholders, including individual
AIM Constellation Fund AIM International Equity Fund investors, corporate clients, and financial
AIM Mid Cap Equity Fund(2), (A) AIM Japan Growth Fund(2) institutions, as of December 31, 1998.
AIM Select Growth Fund(3) AIM Latin American Growth Fund(2) The AIM Family of Funds--Registered Trademark--
AIM Small Cap Growth Fund(2), (B) AIM New Pacific Growth Fund(2) is distributed nationwide, and AIM today is the
AIM Small Cap Opportunities Fund 10th-largest mutual fund complex in the U.S. in
AIM Value Fund GLOBAL GROWTH FUNDS assets under management, according to Strategic
AIM Weingarten Fund AIM Global Aggressive Growth Fund Insight, an independent mutual fund monitor.
AIM Global Growth Fund
GROWTH & INCOME FUNDS
AIM Advisor Flex Fund GLOBAL GROWTH & INCOME FUNDS
AIM Advisor Large Cap Value Fund AIM Global Growth & Income Fund(2)
AIM Advisor MultiFlex Fund AIM Global Utilities Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund GLOBAL INCOME FUNDS
AIM Basic Value Fund(2), (C) AIM Emerging Markets Debt Fund(2), (D)
AIM Charter Fund AIM Global Government Income Fund(2)
AIM Global Income Fund
INCOME FUNDS AIM Strategic Income Fund(2)
AIM Floating Rate Fund(2)
AIM High Yield Fund THEME FUNDS
AIM High Yield Fund II AIM Global Consumer Products and Services Fund(2)
AIM Income Fund AIM Global Financial Services Fund(2)
AIM Intermediate Government Fund AIM Global Health Care Fund(2)
AIM Limited Maturity Treasury Fund AIM Global Infrastructure Fund(2)
AIM Global Resources Fund(2)
TAX-FREE INCOME FUNDS AIM Global Telecommunications Fund(2)
AIM High Income Municipal Fund AIM Global Trends Fund(2), (E)
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
MONEY MARKET FUNDS
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
INTERNATIONAL GROWTH FUNDS
AIM Advisor International Value Fund
</TABLE>
(1)AIM Aggressive Growth Fund reopened to new investors November 16, 1998.
(2)Effective May 29, 1998, A I M Advisors, Inc. became advisor to the former GT
Global Funds. (3)On May 1, 1998, AIM Growth Fund was renamed AIM Select Growth
Fund. (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 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.
