<PAGE> 1
SEMIANNUAL REPORT / JUNE 30 1999
AIM MID CAP EQUITY FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-------------------------------------
TENDING THE GARDEN BY KONSTANTIN RODKO (1908-1995)
THIS CHARMING FOLK-ART PAINTING BY KONSTANTIN RODKO DEPICTS
AN ATTENTIVE GARDENER CARING FOR HER TIDY CROP. LIKE A GARDEN-
ER, FUND MANAGERS LOOK FOR GROWING COMPANIES THAT MAY ONE
DAY BLOSSOM INTO MAJOR CORPORATIONS.
-------------------------------------
AIM Mid Cap Equity Fund seeks long-term growth of capital by investing primarily
in the equity securities of mid-cap companies.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Mid Cap Equity Fund (formerly GT Global America Mid Cap Growth Fund)
performance figures are historical and reflect reinvestment of all
distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B share
performance reflects the applicable contingent deferred sales charge (CDSC)
for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B, C and Advisor Class shares will
differ from that of Class A shares due to differences in sales-charge
structure and expenses.
o Class C shares commenced sales on May 3, 1999. Because Class C shares have
been offered for less than one year, their performance figures reflect
cumulative total returns that have not been annualized.
o Advisor Class shares were closed to new investors on March 1, 1999.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Dow Jones Industrial Average (the Dow) is a price-weighted average of 30
actively traded primarily industrial stocks.
o The Russell Midcap Index is the capitalization-weighted average price of 800
selected common stocks of medium-size domestic companies. Its performance
includes the effect of reinvested dividends and is measured in U.S. dollars.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE
SOME OR ALL OF YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the fund.
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/99, including sales charges
CLASS A SHARES
10 years 13.71
5 years 12.22
1 year -8.54*
CLASS B SHARES
Inception (4/1/93) 14.11%
5 years 12.49
1 year -8.47**
CLASS C SHARES
Inception (5/03/99) 7.20%***
ADVISOR CLASS SHARES****
Inception (6/1/95) 10.69%
3 years 10.47
1 year -3.02
*-3.21 excluding sales charges
**-3.92% excluding CDSC
***cumulative return; 8.20% excluding CDSC
****Advisor Class shares were closed to new investors on March 1, 1999.
================================================================================
MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE.
RESULTS OF AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY
FROM THE HISTORICAL PERFORMANCE SHOWN.
AIM MID CAP EQUITY FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
With only several months remaining in 1999, the question on
[PHOTO OF many of your minds may be, "How will the year 2000 computer
Charles T. issue affect AIM and my investments?" We would like you to
Bauer, feel comfortable. We are pleased to be able to report to you
Chairman of that as of June 1999 we achieved a major milestone toward
the Board of year 2000 compliance status: we have successfully completed
THE FUND the testing of all of our mission-critical systems.
APPEARS HERE] Earlier this year, AIM participated in an industrywide
test that gave us a chance to see how our technology systems
might be affected by the changeover to the year 2000 (Y2K).
Everything went as well as we had hoped; in general, the
industry sailed through the testing process with flying
colors. The financial industry has been seen as a leader in
planning for year 2000 concerns. Thus, it was no surprise to
most participants that the test was an overwhelming success.
The general purpose of the process was to test
electronic interfaces among financial industry members in the United States and
to follow transactions through a typical trading cycle--from order entry to the
settlement process. Investment banks, broker-dealers, custodian banks and mutual
fund companies all worked together to make this possible. Approximately 400
firms were involved in the testing; AIM was one of 70 asset managers.
During the testing process, thousands of transactions were submitted and
approximately 260,000 steps were tested. Of those, only a handful experienced
minor glitches--just 0.02% of the total number of transactions. All problems
were worked through quickly before the hypothetical trades were settled. Of
course, AIM will keep testing and planning throughout 1999 as a precaution.
AIM'S INTERNAL EFFORTS CONTINUE
As you know from our previous communications to you, AIM has been addressing the
year 2000 issue for several years. Now that we have finished adjusting our
applications and systems, our focus for the rest of 1999 is to continue
monitoring the year 2000 readiness status of outside sources we're linked to
electronically. On the investment side, our portfolio management staff is
continually evaluating the Y2K preparedness of the domestic and foreign
companies in which we invest.
We feel that our preparations for 2000 are very comprehensive, and the
industrywide testing showed that our colleagues in the financial industry are
also working hard to be ready for the new year. We do not think shareholders
need to take any extraordinary measures with their investments to prepare for
2000. However, if you have any lingering concerns, it may reassure you to know
that AIM is finalizing contingency plans that will be ready if necessary. Our
plans will give AIM employees guidelines to follow for a wide variety of
situations.
For a more comprehensive discussion of our Y2K efforts and for periodic
updates, please visit our Web site, www.aimfunds.com.
We are pleased to send you this report covering your fund's performance over
the last six months. If you have any questions or comments, please contact our
Client Services department at 800-959-4246, or e-mail your inquiry to us at
[email protected]. You can access information about your account through our
automated AIM Investor Line at 800-246-5463 or at our Web site.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--. We appreciate your business.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
A I M Advisors, Inc.
PLEASE NOTE THAT THE INFORMATION ABOUT THE YEAR 2000 IN THIS LETTER IS DEEMED
AIM'S YEAR 2000 READINESS DISCLOSURE.
-------------------------------------
THE FINANCIAL INDUSTRY
HAS BEEN SEEN AS A
LEADER IN PLANNING FOR
YEAR 2000 CONCERNS.
-------------------------------------
AIM MID CAP EQUITY FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
FUND'S NEW STRATEGY BOOSTS PERFORMANCE
MID-CAP STOCKS MADE A COMEBACK DURING THE REPORTING PERIOD. HOW DID AIM MID CAP
EQUITY FUND PERFORM?
The fund's performance has improved dramatically. For the six months ended June
30, 1999, Class A shares gained 13.71%, Class B shares rose 13.33% and Advisor
Class shares returned 13.89%. These returns are at net asset value and exclude
sales charges. Class C shares, introduced on May 3, 1999, reported a cumulative
return of 8.20% at net asset value and excluding sales charges. With this
turnaround, the fund beat the Russell Midcap Index, which gained 10.34% during
the six-month period.
WHAT WERE THE MAJOR MARKET TRENDS DURING THE REPORTING PERIOD?
Interest-rate changes, earnings improvements and the broadening of the markets
were the major factors driving stock prices. In late 1998, the Federal Reserve
Board (the Fed) lowered interest rates and spurred a market rally. That rally
continued in 1999, and the Dow crossed the 11,000 threshold. In April, concerns
about interest rates shook the markets when the Consumer Price Index revealed an
unexpected increase in inflation. In May, the Fed hinted that it may raise
interest rates, and at its June 30 meeting, it increased the federal funds rate
from 4.75% to 5%, leaving the discount rate unchanged. At the same time, the Fed
announced that it had shifted from a tightening to a neutral bias, indicating
that it planned no further rate hikes in the near future. That announcement
sparked a "relief rally" in the markets.
Earnings improved across a wide spectrum of companies, prompting a change
in market sentiment. In 1998 and early 1999, investors worried about a number of
foreign economic problems. This uncertainty led to a "flight to quality," where
investors favored large-company stocks because of their relative safety and
liquidity. When overseas crises calmed and earnings improved in many different
sectors, investors started looking beyond large companies toward a much broader
array of stocks. In the second quarter of 1999, value stocks--those considered
undervalued relative to the stock market as a whole--returned to favor, as did
small- and mid-cap stocks.
WHY DID YOUR PERFORMANCE IMPROVE?
As we mentioned in our last report, AIM took over management of the fund last
year from GT Global. During the reporting period, we completely changed the
fund's portfolio to reflect our investment strategy. We're applying AIM's
discipline of growth at a reasonable price, or GARP. We look for undiscovered
gems, stocks of mid-sized companies that have been overlooked in the
marketplace. This may happen when a company restructures, hits a speed bump in
execution plans, launches new products or undergoes a management change. It's
our job to determine whether the company has the potential for growth and
whether the market has underestimated this potential. We believe this strategy
offers an opportunity for higher returns.
Another reason for the fund's turn-around was its diversification into
technology and energy stocks, where our GARP discipline led us to find many
good-performing candidates. We select stocks one at a time, and we don't focus
on particular sectors. But when we're shopping for discounted growth, we
sometimes end up with concentrations, and that certainly was the case with
semiconductor stocks.
WHAT STOCKS DID YOU LIKE?
We increased our holdings in the semiconductor industry from 7.47% to 14.07%
during the reporting period. Semi- conductor makers have enjoyed a rebound as
Asian economies improved and demand increased.
Conexant, which makes computer chips for the telecommunications industry,
was a particular success story for the fund. Until its spin-off last year, the
company was a subsidiary of defense giant Rockwell International. During the
first few months after the spin-off, few Wall Street analysts followed the
company, and the stock price was low. We saw this as an opportunity to become
involved in a high-growth area at a relatively cheap price--a real GARP idea.
Since it became its own public company, Conexant's stock has quadrupled in
price.
We also increased our positions in energy stocks, particularly oil and
gas drilling, equipment, exploration and production. At the end of the reporting
period, oil prices reached their highest level
FUND PERFORMANCE IMPROVES
Excluding sales charges
================================================================================
Class Class Advisor
A Shares B Shares Class Shares
- --------------------------------------------------------------------------------
Six months 13.71% 13.33% 13.89%
ended June
30, 1999
Year ended -4.71% -5.41% -4.59%
December
31, 1998
================================================================================
See important fund and index disclosures inside front cover.
AIM MID CAP EQUITY FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 6/30/99, based on total net assets
<TABLE>
<CAPTION>
===========================================================================================================
TOP 10 HOLDINGS TOP 10 INDUSTRIES
- -----------------------------------------------------------------------------------------------------------
<C> <C> <S> <C>
1. Conexant Systems Inc. 2.13% 1. Electronics (Semiconductors) 12.18%
2. Novell Inc. 2.12 2. Computers (Software & Services) 8.02
3. Burr-Brown Corp. 2.05 3. Oil & Gas (Drilling & Equipment) 6.37
4. Lattice Semiconductor Corp. 1.99 4. Electronics Equipment 5.72
5. Analog Devices Inc. 1.77 5. Waste Management 3.64
6. Chancellor Media Corp. 1.75 6. Oil & Gas (Exploration & Production) 3.45
7. Pep Boys--Manny, Moe & Jack 1.65 7. Health Care (Drugs - Generic and Other) 2.88
8. HNC Software Inc. 1.64 8. Communications Equipment 2.69
9. Harman International Industries Inc. 1.46 9. Retail (Specialty) 2.27
10. Rowan Companies Inc. 1.44 10. Health Care (Medical Products & Supplies) 2.24
The fund's portfolio composition is subject to change, and there is no assurance
that the fund will continue to hold any particular security.
===========================================================================================================
</TABLE>
in 19 months. In early 1999, energy stocks were selling at a deep discount,
and we considered this a buying opportunity. Our largest energy-related
holding was Rowan, a company that specializes in heavy-duty offshore drilling
rigs.
WHAT'S YOUR OUTLOOK?
We believe market conditions are favorable for mid-cap stocks. In the second
quarter of 1999, markets broadened considerably, and the rally continued after
the reporting period closed. It is difficult to tell how long this change in
market sentiment will last, but we believe funds that invest in mid-cap stocks
are well-positioned to take advantage of this broadening trend. Many mid-sized
companies are enjoying greater earnings growth than their larger counterparts,
and their stocks remain favorably priced.
THE WORLD ACCORDING TO GARP
GARP isn't just a character played by Robin Williams; it's an important
investment discipline for AIM fund managers. GARP, or Growth at a Reasonable
Price, combines AIM's growth and value investment strategies.
With GARP, we look for undervalued stocks that have what it takes to produce
real growth-- earnings acceleration. These stocks show:
* Growth in earnings. We believe earnings drive stock prices. Can the company
sustain earnings growth in the future?
* Momentum in earnings. Momentum helps us determine when to buy and sell a
stock.
* Value of earnings. Return and risk are both important. It doesn't always pay
to buy a stock just because it's cheap. We look for stocks that have a low
price-to-earnings ratio compared with their projected growth rate.
Our GARP discipline has four basic rules:
1. Remain fully invested at all times.
2. Focus on individual companies rather than industries, sectors or countries.
3. Strive to find the best earnings at attractive prices.
4. Maintain a strong sell discipline.
Why GARP? We believe that stocks purchased at a discount relative to their
potential for growth and the underlying value of the company may realize greater
rewards once earnings start to rise. This performance often comes from a change
in management, a new product or some other catalyst--factors we study carefully.
See important fund and index disclosures inside front cover.
AIM MID CAP EQUITY FUND
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-81.90%
AIR FREIGHT-0.81%
Atlas Air, Inc.(a) 75,000 $ 2,418,750
- --------------------------------------------------------------
BANKS (REGIONAL)-1.23%
Bank United Corp.-Class A 92,000 3,697,250
- --------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-1.75%
Chancellor Media Corp.-Class A(a) 95,500 5,264,437
- --------------------------------------------------------------
CHEMICALS (SPECIALTY)-2.21%
Optical Coating Laboratory, Inc. 30,000 2,508,750
- --------------------------------------------------------------
Sigma-Aldrich Corp. 120,000 4,132,500
- --------------------------------------------------------------
6,641,250
- --------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-2.68%
Andrew Corp.(a) 198,000 3,749,625
- --------------------------------------------------------------
PairGain Technologies, Inc.(a) 275,000 3,162,500
- --------------------------------------------------------------
Tekelec(a) 95,000 1,157,812
- --------------------------------------------------------------
8,069,937
- --------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.40%
Jabil Circuit, Inc.(a) 93,000 4,196,625
- --------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-8.02%
BEA Systems, Inc.(a) 115,000 3,284,687
- --------------------------------------------------------------
Cadence Design Systems, Inc.(a) 91,800 1,170,450
- --------------------------------------------------------------
HNC Software, Inc.(a) 160,000 4,930,000
- --------------------------------------------------------------
I2 Technologies, Inc.(a) 65,000 2,795,000
- --------------------------------------------------------------
Novell, Inc.(a) 240,700 6,378,550
- --------------------------------------------------------------
Synopsys, Inc.(a) 30,000 1,655,625
- --------------------------------------------------------------
Unisys Corp.(a) 100,000 3,893,750
- --------------------------------------------------------------
24,108,062
- --------------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES &
GIFTS)-0.77%
Blyth Industries, Inc.(a) 67,000 2,303,125
- --------------------------------------------------------------
CONTAINERS (METAL & GLASS)-1.14%
Owens-Illinois, Inc.(a) 104,400 3,412,575
- --------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-1.03%
US Foodservice, Inc.(a) 72,600 3,094,575
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-3.59%
Harman International Industries,
Inc. 100,000 4,400,000
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-(CONTINUED)
Molex, Inc.-Class A 135,100 $ 4,255,650
- --------------------------------------------------------------
SCI Systems, Inc.(a) 45,000 2,137,500
- --------------------------------------------------------------
10,793,150
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-12.18%
Altera Corp.(a) 40,000 1,472,500
- --------------------------------------------------------------
Analog Devices, Inc.(a) 106,200 5,329,912
- --------------------------------------------------------------
Burr-Brown Corp.(a) 168,300 6,163,987
- --------------------------------------------------------------
Dallas Semiconductor Corp. 49,000 2,474,500
- --------------------------------------------------------------
Lattice Semiconductor Corp.(a) 96,000 5,976,000
- --------------------------------------------------------------
National Semiconductor Corp.(a) 120,000 3,037,500
- --------------------------------------------------------------
Conexant Systems, Inc.(a) 110,000 6,386,875
- --------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 36,000 2,427,750
- --------------------------------------------------------------
Xilinx, Inc.(a) 58,200 3,331,950
- --------------------------------------------------------------
36,600,974
- --------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-1.89%
KLA-Tencor Corp.(a) 44,200 2,867,475
- --------------------------------------------------------------
Teradyne, Inc.(a) 39,000 2,798,250
- --------------------------------------------------------------
5,665,725
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-1.20%
Ambac Financial Group, Inc. 35,000 1,999,375
- --------------------------------------------------------------
IndyMac Mortgage Holdings, Inc. 100,000 1,600,000
- --------------------------------------------------------------
3,599,375
- --------------------------------------------------------------
FOODS-2.16%
Earthgrains Co. (The) 122,000 3,149,125
- --------------------------------------------------------------
Keebler Foods Co.(a) 110,000 3,341,250
- --------------------------------------------------------------
6,490,375
- --------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.21%
Mallinckrodt, Inc. 100,000 3,637,500
- --------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-1.69%
Barr Laboratories, Inc.(a) 42,000 1,674,750
- --------------------------------------------------------------
Jones Pharma, Inc. 55,400 2,181,375
- --------------------------------------------------------------
Watson Pharmaceuticals, Inc.(a) 35,000 1,227,187
- --------------------------------------------------------------
5,083,312
- --------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.24%
Henry Schein, Inc.(a) 50,000 1,584,375
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-(CONTINUED)
PSS World Medical, Inc.(a) 95,000 $ 1,062,812
- --------------------------------------------------------------
Sybron International Corp.(a) 148,000 4,079,250
- --------------------------------------------------------------
6,726,437
- --------------------------------------------------------------
HOUSEWARES-0.79%
Newell Rubbermaid, Inc. 51,000 2,371,500
- --------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-0.81%
XL Capital Ltd. 43,100 2,435,150
- --------------------------------------------------------------
LEISURE TIME (PRODUCTS)-0.96%
Mattel, Inc. 109,000 2,881,687
- --------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.98%
Applied Power, Inc.-Class A 108,100 2,952,481
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-1.00%
Pall Corp. 135,700 3,010,844
- --------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-6.37%
BJ Services Co.(a) 109,900 3,235,181
- --------------------------------------------------------------
Cooper Cameron Corp.(a) 75,800 2,809,338
- --------------------------------------------------------------
Rowan Companies, Inc.(a) 234,000 4,314,375
- --------------------------------------------------------------
Santa Fe International Corp. 173,000 3,979,000
- --------------------------------------------------------------
Transocean Offshore, Inc. 45,600 1,197,000
- --------------------------------------------------------------
Weatherford International, Inc.(a) 98,400 3,603,900
- --------------------------------------------------------------
19,138,794
- --------------------------------------------------------------
OIL & GAS (EXPLORATION &
PRODUCTION)-3.45%
Anadarko Petroleum Corp. 81,800 3,011,263
- --------------------------------------------------------------
Burlington Resources, Inc. 96,200 4,160,650
- --------------------------------------------------------------
Devon Energy Corp. 50,000 1,787,500
- --------------------------------------------------------------
Noble Affiliates, Inc. 50,000 1,409,375
- --------------------------------------------------------------
10,368,788
- --------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-0.31%
New York Times Co. (The)-Class A 25,000 920,313
- --------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-0.77%
Saks, Inc.(a) 80,000 2,310,000
- --------------------------------------------------------------
RETAIL (DISCOUNTERS)-1.14%
Ames Department Stores, Inc.(a) 75,000 3,421,875
- --------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-1.29%
Kmart Corp.(a) 235,000 3,862,813
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (SPECIALTY)-2.27%
Office Depot, Inc.(a) 85,000 $ 1,875,313
- --------------------------------------------------------------
Pep Boys-Manny, Moe & Jack 228,814 4,948,103
- --------------------------------------------------------------
6,823,416
- --------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-1.11%
Intimate Brands, Inc. 70,350 3,332,831
- --------------------------------------------------------------
SERVICES
(ADVERTISING/MARKETING)-2.02%
Outdoor Systems, Inc.(a) 75,180 2,744,070
- --------------------------------------------------------------
Young & Rubicam, Inc. 73,000 3,316,938
- --------------------------------------------------------------
6,061,008
- --------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.12%
Convergys Corp.(a) 150,000 2,887,500
- --------------------------------------------------------------
Hertz Corp.-Class A 56,000 3,472,000
- --------------------------------------------------------------
6,359,500
- --------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-1.47%
Gerber Scientific, Inc. 82,600 1,822,363
- --------------------------------------------------------------
Policy Management Systems Corp.(a) 86,000 2,580,000
- --------------------------------------------------------------
4,402,363
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.30%
Equifax, Inc. 25,000 892,188
- --------------------------------------------------------------
SERVICES (FACILITIES &
ENVIRONMENTAL)-0.82%
WESCO International, Inc.(a) 120,000 2,460,000
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG
DISTANCE)-0.84%
IXC Communications, Inc.(a) 64,300 2,527,794
- --------------------------------------------------------------
TELEPHONE-0.77%
CenturyTel, Inc. 58,200 2,313,450
- --------------------------------------------------------------
TEXTILES (APPAREL)-0.73%
Tommy Hilfiger Corp.(a) 30,000 2,205,000
- --------------------------------------------------------------
TEXTILES (HOME FURNISHINGS)-0.74%
WestPoint Stevens, Inc. 75,000 2,235,938
- --------------------------------------------------------------
WASTE MANAGEMENT-3.64%
Allied Waste Industries, Inc.(a) 207,000 4,088,250
- --------------------------------------------------------------
Republic Services, Inc.(a) 110,000 2,722,500
- --------------------------------------------------------------
Safety-Kleen Corp.(a) 227,000 4,114,375
- --------------------------------------------------------------
10,925,125
- --------------------------------------------------------------
Total Domestic Common Stocks
(Cost $197,016,299) 246,016,292
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCK-1.19%
ISRAEL-1.19%
Teva Pharmaceutical Industries
Ltd.-ADR (Health
Care-Drugs-Generic & Other)
(Cost $3,312,703) 73,000 $ 3,577,000
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
TIME DEPOSIT-3.99%
CIBC Oppenheimer Corp., 5.50%,
07/01/99 (Cost $12,000,000) $12,000,000 $ 12,000,000
- --------------------------------------------------------------
Total Investments, Excluding
Repurchase Agreements (Cost
$212,329,002) 261,593,292
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENTS-14.43%
Chase Securities, Inc., 5.00%,
07/01/99(c) $42,297,889 $ 42,297,889
- --------------------------------------------------------------
CIBC Oppenheimer Corp., 4.95%,
07/01/99(d) 1,033,966 1,033,966
- --------------------------------------------------------------
Total Repurchase Agreements
(Cost $43,331,855) 43,331,855
- --------------------------------------------------------------
TOTAL INVESTMENTS-101.51% 304,925,147
- --------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(1.51%) (4,537,795)
- --------------------------------------------------------------
NET ASSETS-100.00% $300,387,352
==============================================================
</TABLE>
Investment Abbreviation:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing securities.
(b) 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.
(c) Joint repurchase agreement entered into 06/30/99 with a maturing value of
$200,027,778. Collateralized by U.S. Government obligations.
(d) Joint repurchase agreement entered into 06/30/99 with a maturing value of
$300,041,250. Collateralized by U.S. Government obligations.
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$212,329,002) $261,593,262
- ---------------------------------------------------------
Repurchase Agreements (cost $43,331,885) 43,331,885
- ---------------------------------------------------------
Receivables for:
Fund shares sold 243,669
- ---------------------------------------------------------
Dividends and interest 50,312
- ---------------------------------------------------------
Other assets 24,718
- ---------------------------------------------------------
Total assets 305,243,846
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 3,668,125
- ---------------------------------------------------------
Fund shares reacquired 657,181
- ---------------------------------------------------------
Accrued distribution fees 294,913
- ---------------------------------------------------------
Accrued trustees' fees 2,600
- ---------------------------------------------------------
Accrued transfer agent fees 73,784
- ---------------------------------------------------------
Accrued operating expenses 159,891
- ---------------------------------------------------------
Total liabilities 4,856,494
- ---------------------------------------------------------
Net assets applicable to shares outstanding $300,387,352
- ---------------------------------------------------------
NET ASSETS:
Class A $159,929,333
=========================================================
Class B $138,604,189
=========================================================
Class C $ 219,159
=========================================================
Advisor Class $ 1,634,671
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 7,415,340
=========================================================
Class B 6,735,081
=========================================================
Class C 10,650
=========================================================
Advisor Class 75,227
=========================================================
Class A:
Net asset value and redemption price per
share $ 21.57
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $21.57
divided by 94.50%) $ 22.83
=========================================================
Class B:
Net asset value and offering price per
share $ 20.58
=========================================================
Class C:
Net asset value and offering price per
share $ 20.58
=========================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 21.73
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $2,124 foreign
withholding tax) $ 455,241
- ---------------------------------------------------------
Interest 1,244,987
- ---------------------------------------------------------
Security lending 90,621
- ---------------------------------------------------------
Total investment income 1,790,849
- ---------------------------------------------------------
EXPENSES:
Management fees 1,063,860
- ---------------------------------------------------------
Administrative services fees 42,581
- ---------------------------------------------------------
Trustees fees 5,312
- ---------------------------------------------------------
Distribution fees -- Class A 269,678
- ---------------------------------------------------------
Distribution fees -- Class B 688,635
- ---------------------------------------------------------
Distribution fees -- Class C 232
- ---------------------------------------------------------
Transfer agent fees -- Class A 226,746
- ---------------------------------------------------------
Transfer agent fees -- Class B 202,653
- ---------------------------------------------------------
Transfer agent fees -- Class C 209
- ---------------------------------------------------------
Transfer agent fees -- Advisor Class 2,023
- ---------------------------------------------------------
Other 165,222
- ---------------------------------------------------------
Total expenses 2,667,151
- ---------------------------------------------------------
Less: Expenses paid indirectly (4,655)
- ---------------------------------------------------------
Net expenses 2,662,496
- ---------------------------------------------------------
Net investment income (loss) (871,647)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND OPTION
CONTRACTS:
Net realized gain (loss) from:
Investment securities 47,537,800
- ---------------------------------------------------------
Options contracts (1,025,244)
- ---------------------------------------------------------
46,512,556
- ---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities (12,406,046)
- ---------------------------------------------------------
Option contracts written 2,084,709
- ---------------------------------------------------------
(10,321,337)
- ---------------------------------------------------------
Net gain from investment securities and
option contracts 36,191,219
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $ 35,319,572
=========================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1999 and the year ended December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (871,647) $ (6,126,755)
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
option contracts 46,512,556 (7,289,125)
- ---------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and option contracts (10,321,337) (5,896,122)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 35,319,572 (19,312,002)
- ---------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (8,638,559)
- ---------------------------------------------------------------------------------------------
Class B -- (8,762,197)
- ---------------------------------------------------------------------------------------------
Advisor Class -- (46,305)
- ---------------------------------------------------------------------------------------------
Share transactions-net:
Class A (39,423,848) (59,340,039)
- ---------------------------------------------------------------------------------------------
Class B (42,855,758) (69,635,070)
- ---------------------------------------------------------------------------------------------
Class C 207,211 --
- ---------------------------------------------------------------------------------------------
Advisor Class 521,716 70,469
- ---------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (46,231,107) (165,663,703)
- ---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 346,618,459 512,282,162
- ---------------------------------------------------------------------------------------------
End of period $300,387,352 $ 346,618,459
=============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $214,097,618 $ 295,648,297
- ---------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (871,647) --
- ---------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies and option contracts 37,897,092 (8,615,464)
- ---------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 49,264,289 59,585,626
- ---------------------------------------------------------------------------------------------
$300,387,352 $ 346,618,459
=============================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Mid Cap Equity Fund (the "Fund") is a separate series of AIM Growth Series
(the "Trust"). The Trust is organized as a Delaware business trust and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
an open-end series management investment company consisting of six separate
series portfolios, each having an unlimited number of shares of beneficial
interest. The Fund currently offers four different classes of shares: Class A
shares, Class B shares, Class C shares and Advisor Class shares. Class A shares
are sold with a front-end sales charge. Class B shares and Class C shares are
sold with a contingent deferred sales charge. Advisor Class shares are sold
without a sales charge. Effective March 1, 1999, the Fund has discontinued sales
of the Advisor Class shares to new investors. Matters affecting each portfolio
or class will be voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is long-term growth of
capital.
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 in the preparation of the financial
statements.
A. Security Valuations-Each equity security is valued at its last sales price
on the exchange where the security is principally traded or, lacking any
sales on a particular day, the security is valued at the last available bid
price on that day. Each security reported on the NASDAQ National Market
System is valued at the last sales price on the valuation date or absent a
last sales price, at the closing bid price on that day. Debt securities are
valued on the basis of prices provided by an independent pricing service.
Prices provided by the pricing service may be determined without exclusive
reliance on quoted prices, and may reflect appropriate factors such as
institution-size trading in similar groups of securities, developments
related to special securities, yield, quality, coupon rate, maturity, type
of issue, individual trading characteristics and other market data.
Securities for which market prices are not provided by any of the above
methods are valued based upon quotes furnished by independent sources and
are valued at the last bid price in the case of equity securities and in the
case of debt obligations, the mean between the last bid and asked prices.
Securities for which market quotations are not readily available or are
questionable are valued at fair value as determined in good faith by or
under the supervision of the Trust's officers in a manner specifically
authorized by the Board of Trustees. Short-term obligations having 60 days
or less to maturity are valued on the basis of amortized cost. For purposes
of determining net asset value per share, futures and options contracts
generally will be valued 15 minutes after the close of trading of the New
York Stock Exchange ("NYSE").
Generally, trading in foreign securities, corporate bonds, U.S.
Government securities and money market instruments is substantially
completed each day at various times prior to the close of the NYSE. The
values of such securities used in computing the net asset value of the
Fund's shares are determined at such times. Foreign currency exchange rates
are also generally determined prior to the close of the NYSE. Occasionally,
events affecting the values of such securities and such exchange rates may
occur between the times at which such values are determined and the close of
the NYSE, which will not be reflected in the computation of the Fund's net
asset value. If events materially affecting the value of such securities
occur during such period, then these securities will be valued at their fair
value as determined in good faith by or under the supervision of the Board
of Trustees of the Trust.
B. Securities Transactions, Investment Income and Distributions-Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Such distributions, if
any, are declared and paid annually.
C. Federal Income Taxes-The Fund intends to comply with the requirements of the
Internal Revenue Code necessary to qualify as a regulated investment company
and, as such, will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is distributed
to shareholders. Therefore, no provision for federal income taxes is
recorded in the financial statements. The Fund has a capital loss
carryforward of $8,616,058 as of December 31, 1998 (which may be carried
forward to offset future taxable gains, if any) which expires, if not
previously utilized, in the year 2006.
D. Expenses-Distribution and transfer agency expenses directly attributable to
a class of shares are charged to that class' operations. All other expenses
are allocated among the classes.
E. Option Accounting Principles-When the Fund writes a call or put option, an
amount equal to the premium received is included in the Fund's "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 on that day. If an option expires
on its stipulated expiration date or if the Fund 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
9
<PAGE> 12
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 Fund can write options
only on a covered basis, which, for a call, requires that the Fund hold the
underlying security, and, for a put, requires the Fund 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 Fund may use options to manage its
exposure to the stock market and to fluctuations in interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "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 Fund has purchased expires on
the stipulated expiration date, the Fund realizes a loss in the amount of
the cost of the option. If the Fund enters into a closing sale transaction,
the Fund 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 Fund 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
Fund exercises a put option, it realizes a gain or loss from the sale of the
underlying security, 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 Fund 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 Fund 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 Fund may not be able to enter into a closing
transaction because of an illiquid secondary market.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's investment manager and administrator.
The Fund pays AIM fees at an annual rate of 0.725% on the first $500 million of
the Fund's average daily net assets, plus 0.70% on the next $500 million of the
Fund's average daily net assets, plus 0.675% on the next $500 million of the
Fund's average daily net assets, plus 0.65% on the Fund's average daily net
assets exceeding $1.5 billion. AIM has contractually agreed to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expense) to the maximum annual rate of 1.75%, 2.40%, 2.40%, and 1.40% of the
average daily net assets of the Fund's Class A, Class B, Class C, and Advisor
Class shares, respectively.
A I M Fund Services, Inc. ("AFS") is the transfer agent of the Fund. The
Fund, pursuant to a transfer agency and service agreement, has agreed to pay AFS
a fee for providing transfer agency and shareholder services to the Fund. During
the six months ended June 30, 1999, AFS was paid $431,631 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B, Class C and Advisor Class shares of the Fund. The Trust has
adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act with
respect to the Fund's Class A shares and Class C shares (the "Class A and C
Plan"), and the Fund's Class B shares (the "Class B Plan") (collectively, the
"Plans"). The Fund, pursuant to the Class A and C Plan, pays AIM Distributors
compensation at an annual rate of 0.35% of the average daily net assets of the
Class A shares and 1.00% of the average daily net assets of the Class C shares.
The Fund pursuant to the Class B Plan, pays AIM Distributors compensation at an
annual rate of 1.00% of the average daily net assets of the Class B shares. Of
these amounts, the Fund may pay a service fee of 0.25% of the average daily net
assets of the Class A, Class B or Class C shares to selected dealers and
financial institutions who furnish continuing personal shareholder services to
their customers who purchase and own the appropriate class of shares of the
Fund. Any amounts not paid as a service fee under the Plans would constitute an
asset-based sales charge. The Plans also impose a cap on the total sales
charges, including asset-based sales charges that may be paid by the respective
classes. During the six months ended June 30, 1999, the Class A, Class B and
Class C shares paid AIM Distributors $269,678, $688,636 and $232, respectively,
as compensation under the Plans.
AIM is the pricing and accounting agent for the Fund. The monthly fee for
these services paid to AIM is a percentage, not to exceed 0.03% annually, of a
Fund's average daily net assets. The annual fee rate is derived based on the
aggregate net assets of the funds which comprise the following investment
companies: AIM Growth Series, AIM Investment Funds, AIM Series Trust, G.T.
Global Variable Investment Series and G.T. Global Variable Investment Trust. The
fee is calculated at the rate of 0.03% of the first $5 billion of assets and
0.02% to the assets in excess of $5 billion. An amount is allocated to and paid
by each such fund based on its relative average daily net assets. Effective July
1, 1999, the Trust entered into a master administrative services agreement with
AIM, replacing the above pricing and accounting agreement. The Fund has agreed
to pay AIM for certain administrative costs incurred in providing accounting
services to the Fund.
AIM Distributors received commissions of $17,826 from sales of the Class A
shares of the Fund during the six months ended June 30, 1999. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended June 30,
1999, AIM Distributors received $142 in contingent deferred sales charges
imposed on redemptions of Fund shares. Certain officers and trustees of the
Trust are officers and directors of AIM, AIM Distributors and AFS.
NOTE 3-INDIRECT EXPENSES
During the six months ended June 30, 1999, the Fund received reductions in
custodian fees of $4,655 under an expense offset arrangement. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of $4,655
during the six months ended June 30, 1999.
10
<PAGE> 13
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an
"interested person" of AIM.
NOTE 5-BANK BORROWINGS
The Fund, along with certain other funds advised and/or administered by AIM, has
lines of credit with BankBoston and State Street Bank & Trust Company. The
arrangements with the banks allow the Fund and certain other funds to borrow, on
a first come, first served basis, an aggregate maximum amount of $250,000,000.
The Fund is limited to borrowing up to 33 1/3% of the Fund's total assets.
Effective May 28, 1999, the above lines of credit were replaced by the
Fund's participation in a committed line of credit facility with a syndicate
administered by The Chase Manhattan Bank. The Fund may borrow up to the lesser
of (i) $975,000,000 or (ii) the limits set by its prospectus for borrowings. The
Fund and other funds advised by AIM which are parties to the line of credit may
borrow on a first come, first served basis. The funds which are party to the
line of credit are charged a commitment fee of 0.09% on the unused balance of
the committed line. The commitment fee is allocated among the funds based on
their respective average net assets for the period.
During the six months ended June 30, 1999, the Fund did not borrow under the
line of credit.
NOTE 6-PORTFOLIO SECURITIES LOANED
At June 30, 1999, securities with an aggregate value of $16,054,255 were on loan
to brokers. The loans were secured by cash collateral of $16,054,255 received by
the Fund. For the six months ended June 30, 1999, the Fund received fees of
$90,621 for securities lending.
Cash collateral is received by the Fund against loaned securities in the
amount at least equal to 102% of the market value of the loaned securities at
the inception of each loan. This collateral must be maintained at not less than
100% of the market value of the loaned securities during the period of the loan.
The cash collateral is invested in a securities lending trust which consists of
a portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 1999 was
$117,740,600 and $219,295,027, respectively.
The amount of unrealized appreciation (depreciation) of investment
securities, on a tax basis, as of June 30, 1999 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment
securities $56,616,818
- ---------------------------------------------------------------
Aggregate unrealized (depreciation) of investment
securities (7,352,529)
- ---------------------------------------------------------------
Net unrealized appreciation of investment
securities $49,264,289
===============================================================
</TABLE>
Investments have the same cost for tax and financial statement
purposes.
NOTE 8-CALL OPTIONS CONTRACTS WRITTEN
Transactions in call options written during the six months ended June 30, 1999
are summarized as follows:
<TABLE>
<CAPTION>
CALL OPTION CONTRACTS
-----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -----------
<S> <C> <C>
Beginning of period 11,068 $ 2,262,028
- --------------------------------------- -------- -----------
Written 1,828 245,858
- --------------------------------------- -------- -----------
Closed (1,847) (123,477)
- --------------------------------------- -------- -----------
Expired (1,000) (72,997)
- --------------------------------------- -------- -----------
Exercised (10,049) (2,311,412)
- --------------------------------------- -------- -----------
End of period -- $ --
======================================= ======== ===========
</TABLE>
NOTE 9-SHARE INFORMATION
Changes in the Fund's shares outstanding during six months ended June 30, 1999
and the year ended December 31, 1998 were as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 1,892,842 $ 35,835,758 23,952,734 $ 505,999,810
- ------------------- ------------------------------------------------------
Class B 358,956 6,722,624 5,833,056 120,542,669
- --------------------- ---------- ------------ ----------- -------------
Class C* 10,650 207,211 -- --
- --------------------- ---------- ------------ ----------- -------------
Advisor Class 32,690 624,562 887,277 18,970,978
- --------------------- ---------- ------------ ----------- -------------
Issued as
reinvestment of
dividends:
Class A -- -- 448,265 7,998,160
- --------------------- ---------- ------------ ----------- -------------
Class B -- -- 471,450 8,052,203
- --------------------- ---------- ------------ ----------- -------------
Advisor Class -- -- 2,579 46,305
- --------------------- ---------- ------------ ----------- -------------
Reacquired:
Class A (3,979,167) (75,259,606) (27,068,413) (573,338,009)
- --------------------- ---------- ------------ ----------- -------------
Class B (2,734,332) (49,578,382) (9,774,765) (198,229,942)
- --------------------- ---------- ------------ ----------- -------------
Advisor Class (5,329) (102,846) (896,015) (18,946,814)
- --------------------- ---------- ------------ ----------- -------------
(4,423,690) $(81,550,679) (6,143,832) $(128,904,640)
===================== ========== ============ =========== =============
</TABLE>
* Class C shares commenced sales May 3, 1999.
11
<PAGE> 14
NOTE 10-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A and Class B
outstanding during the six months ended June 30, 1999 and each of the years in
the five-year period ended December 31, 1998, for a share of Class C capital
stock outstanding during the period May 3, 1999 (date sales commenced) through
June 30, 1999 and for a share of Advisor Class capital stock outstanding during
the six months ended June 30, 1999, each of the years in three-year period ended
December 31, 1998 and the period June 1, 1995 (date sales commenced) through
December 31, 1995.
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------------
December 31,
June 30, ------------------------------------------------------
1999 1998(a)(b) 1997 1996 1995 1994(b)
-------- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.97 $ 21.01 $ 20.77 $ 19.07 $ 17.69 $ 17.17
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (0.03) (0.24) (0.20) 0.03 0.24 0.04
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 2.63 (0.81) 3.00 2.96 3.93 2.55
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total from investment operations 2.60 (1.05) 2.80 2.99 4.17 2.59
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income -- -- -- -- (0.21) (0.02)
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Distributions from net realized gains -- (0.99) (2.56) (1.29) (2.58) (2.05)
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total distributions -- (0.99) (2.56) (1.29) (2.79) (2.07)
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 21.57 $ 18.97 $ 21.01 $ 20.77 $ 19.07 $ 17.69
============================================================ ======== ======== ======== ======== ======== ========
Total return(c) 13.71% (4.71)% 14.05% 15.65% 23.23% 15.69%
============================================================ ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $159,929 $180,258 $255,674 $343,427 $396,291 $196,937
============================================================ ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets:
With expense waivers 1.51%(d) 1.56% 1.37% 1.36% 1.46% 1.58%
============================================================ ======== ======== ======== ======== ======== ========
Without expense waivers 1.51%(d) 1.57% 1.48% 1.41% -- --
============================================================ ======== ======== ======== ======== ======== ========
Ratio of net investment income (loss) to average net assets:
With expense waivers (0.29)%(d) (1.09)% (0.90)% 0.12% 1.24% 0.17%
============================================================ ======== ======== ======== ======== ======== ========
Without expense waivers (0.29)%(d) (1.10)% (1.01)% 0.07% -- --
============================================================ ======== ======== ======== ======== ======== ========
Portfolio turnover rate 45% 168% 190% 253% 71% 102%
============================================================ ======== ======== ======== ======== ======== ========
</TABLE>
(a) The Fund changed investment advisors on May 29, 1998.
(b) Calculated using average shares outstanding.
(c) Does not deduct sales charges and is not annualized for periods less than
one year.
(d) Ratios are annualized and based on average net assets of $155,378,560.
<TABLE>
<CAPTION>
Class C
--------
Class B May 3,
---------------------------------------------------------------- 1999
December 31, through
June 30, ----------------------------------------------------- June 30,
1999 1998(a)(b) 1997 1996 1995 1994(a) 1999
-------- ---------- -------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 18.16 $ 20.31 $ 20.28 $ 18.77 $ 17.50 $ 17.09 $19.02
- ----------------------------------- -------- -------- -------- -------- -------- ------- ------
Income from investment operations:
Net investment income (0.10) (0.38) (0.34) (0.11) 0.10 (0.09) (0.02)(b)
- ----------------------------------- -------- -------- -------- -------- -------- ------- ------
Net gains (losses) on securities
(both realized and unrealized) 2.52 (0.78) 2.93 2.91 3.87 2.55 1.58
- ----------------------------------- -------- -------- -------- -------- -------- ------- ------
Total from investment operations 2.42 (1.16) 2.59 2.80 3.97 2.46 1.56
- ----------------------------------- -------- -------- -------- -------- -------- ------- ------
Less distributions:
Dividends from net investment
income -- -- -- -- (0.12) -- --
- ----------------------------------- -------- -------- -------- -------- -------- ------- ------
Distributions from net realized
gains -- (0.99) (2.56) (1.29) (2.58) (2.05) --
- ----------------------------------- -------- -------- -------- -------- -------- ------- ------
Total distributions -- (0.99) (2.56) (1.29) (2.70) (2.05) --
- ----------------------------------- -------- -------- -------- -------- -------- ------- ------
Net asset value, end of period $ 20.58 $ 18.16 $ 20.31 $ 20.28 $ 18.77 $ 17.50 $20.58
=================================== ======== ======== ======== ======== ======== ======= ======
Total return(c) 13.33% (5.41)% 13.35% 14.82% 22.42% 15.06% 8.20%
=================================== ======== ======== ======== ======== ======== ======= ======
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $138,604 $165,447 $255,468 $334,590 $348,435 $80,060 $219
=================================== ======== ======== ======== ======== ======== ======= ======
Ratio of expenses to average net
assets:
With expense waivers 2.16%(d) 2.21% 2.02% 2.01% 2.11% 2.23% 2.16%(d)
=================================== ======== ======== ======== ======== ======== ======= ======
Without expense waivers 2.16%(d) 2.22% 2.13% 2.06% -- -- 2.16%(d)
=================================== ======== ======== ======== ======== ======== ======= ======
Ratio of net investment income
(loss) to average net assets:
With expense waivers (0.94)%(d) (1.74)% (1.55)% (0.53)% 0.59% (0.48)% (0.94)%(d)
=================================== ======== ======== ======== ======== ======== ======= ======
Without expense waivers (0.94)%(d) (1.75)% (1.66)% (0.58)% -- -- (0.94)%(d)
=================================== ======== ======== ======== ======== ======== ======= ======
Portfolio turnover rate 45% 168% 190% 253% 71% 102% 45%
=================================== ======== ======== ======== ======== ======== ======= ======
<CAPTION>
Advisor Class
------------------------------------------------
December 31,
June 30, -------------------------------------
1999 1998(a)(b) 1997 1996 1995
-------- ---------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $19.08 $21.10 $20.76 $19.05 $20.61
- ----------------------------------- ------ ------ ------ ------ ------
Income from investment operations:
Net investment income 0.01 (0.17) (0.15) 0.09 0.21
- ----------------------------------- ------ ------ ------ ------ ------
Net gains (losses) on securities
(both realized and unrealized) 2.64 (0.86) 3.05 2.91 1.09
- ----------------------------------- ------ ------ ------ ------ ------
Total from investment operations 2.65 (1.03) 2.90 3.00 1.30
- ----------------------------------- ------ ------ ------ ------ ------
Less distributions:
Dividends from net investment
income -- -- -- -- (0.28)
- ----------------------------------- ------ ------ ------ ------ ------
Distributions from net realized
gains -- (0.99) (2.56) (1.29) (2.58)
- ----------------------------------- ------ ------ ------ ------ ------
Total distributions -- (0.99) (2.56) (1.29) (2.86)
- ----------------------------------- ------ ------ ------ ------ ------
Net asset value, end of period $21.73 $19.08 $21.10 $20.76 $19.05
=================================== ====== ====== ====== ====== ======
Total return(c) 13.89% (4.59)% 14.54% 15.72% 6.01%
=================================== ====== ====== ====== ====== ======
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $1,635 $ 913 $1,140 $1,986 $1,394
=================================== ====== ====== ====== ====== ======
Ratio of expenses to average net
assets:
With expense waivers 1.16%(d) 1.21% 1.02% 1.01% 1.11%(e)
=================================== ====== ====== ====== ====== ======
Without expense waivers 1.16%(d) 1.22% 1.13% 1.06% --
=================================== ====== ====== ====== ====== ======
Ratio of net investment income
(loss) to average net assets:
With expense waivers 0.06%(d) (0.74)% 0.55% 0.47% 1.59%(e)
=================================== ====== ====== ====== ====== ======
Without expense waivers 0.06%(d) (0.75)% (0.66)% 0.42% --
=================================== ====== ====== ====== ====== ======
Portfolio turnover rate 45% 168% 190% 253% 71%
=================================== ====== ====== ====== ====== ======
</TABLE>
(a) The Fund changed investment advisors on May 29, 1998.
(b) Calculated using average shares outstanding.
(c) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(d) Ratios are annualized and based on average net assets of $138,868,498,
$143,257 and $1,386,494 for Class B, Class C and Advisor Class,
respectively.
(e) Annualized.
12
<PAGE> 15
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
President, Plantagenet Capital Chairman and President Suite 100
Management, LLC (an investment Houston, TX 77046
partnership); Chief Executive Officer, Dana R. Sutton
Plantagenet Holdings, Ltd. Vice President and Treasurer INVESTMENT MANAGER
(an investment banking firm)
Samuel D. Sirko A I M Advisors, Inc.
Frank S. Bayley Vice President and Secretary 11 Greenway Plaza
Partner, law firm of Suite 100
Baker & McKenzie Melville B. Cox Houston, TX 77046
Vice President
Robert H. Graham TRANSFER AGENT
President and Chief Executive Officer, Mary J. Benson
A I M Management Group Inc. Assistant Vice President and A I M Fund Services, Inc.
Assistant Treasurer P.O. Box 4739
Arthur C. Patterson Houston, TX 77210-4739
Managing Partner, Accel Partners Sheri Morris
(a venture capital firm) Assistant Vice President and CUSTODIAN
Assistant Treasurer
Ruth H. Quigley State Street Bank and Trust Company
Private Investor Gary T. Crum 225 Franklin Street
Vice President Boston, MA 02110
Carol F. Relihan COUNSEL TO THE FUND
Vice President
Kirkpatrick & Lockhart LLP
Nancy L. Martin 1800 Massachusetts Avenue, N.W.
Assistant Secretary Washington, D.C. 20036-1800
Ofelia M. Mayo COUNSEL TO THE TRUSTEES
Assistant Secretary
Paul, Hastings, Janofsky & Walker LLP
Kathleen J. Pflueger Twenty Third Floor
Assistant Secretary 555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
</TABLE>
<PAGE> 16
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<CAPTION>
GROWTH FUNDS MONEY MARKET FUNDS
<S> <C> <C>
AIM Aggressive Growth Fund(1) AIM Money Market Fund A I M Management Group Inc. has provided
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund leadership in the mutual-fund industry
AIM Capital Development Fund since 1976 and managed approximately
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS $121 billion in assets for more than 6.3
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund million shareholders, including individual
AIM Large Cap Growth Fund AIM Asian Growth Fund investors, corporate clients and financial
AIM Mid Cap Equity Fund(A) AIM Developing Markets Fund institutions, as of June 30, 1999.
AIM Select Growth Fund AIM Europe Growth Fund The AIM Family of Funds--Registered
AIM Small Cap Growth Fund(B) AIM European Development Fund Trademark-- is distributed nationwide, and
AIM Small Cap Opportunities Fund AIM International Equity Fund AIM today is the 10th-largest mutual-fund
AIM Value Fund AIM Japan Growth Fund complex in the United States in assets under
AIM Weingarten Fund AIM Latin American Growth Fund management, according to Strategic Insight,
AIM New Pacific Growth Fund an independent mutual-fund monitor.
GROWTH & INCOME FUNDS
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund
AIM Advisor Real Estate Fund AIM Global Growth Fund
AIM Balanced Fund
AIM Basic Value Fund(C) GLOBAL GROWTH & INCOME FUNDS
AIM Charter Fund AIM Global Growth & Income Fund
AIM Global Utilities Fund
INCOME FUNDS
AIM Floating Rate Fund GLOBAL INCOME FUNDS
AIM High Yield Fund AIM Emerging Markets Debt Fund(D)
AIM High Yield Fund II AIM Global Government Income Fund
AIM Income Fund AIM Global Income Fund
AIM Intermediate Government Fund AIM Strategic Income Fund
AIM Limited Maturity Treasury Fund
THEME FUNDS
TAX-FREE INCOME FUNDS AIM Global Consumer Products and Services Fund
AIM High Income Municipal Fund AIM Global Financial Services Fund
AIM Municipal Bond Fund AIM Global Health Care Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Infrastructure Fund
AIM Tax-Free Intermediate Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund(E)
AIM Global Trends Fund(F)
</TABLE>
(1) AIM Aggressive Growth Fund reopened to new investors November 16, 1998. (A)
On September 8, 1998, AIM Mid Cap Growth Fund was renamed AIM Mid Cap Equity
Fund. (B) On September 8, 1998, AIM Small Cap Equity Fund was renamed AIM Small
Cap Growth Fund. (C) On September 8, 1998, AIM America Value Fund was renamed
AIM Basic Value Fund. (D) On September 8, 1998, AIM Global High Income Fund was
renamed AIM Emerging Markets Debt Fund. (E) On June 1, 1999, AIM Global
Telecommunications Fund was renamed AIM Global Telecommunications and Technology
Fund. (F) On September 8, 1998, AIM New Dimension Fund was renamed AIM Global
Trends Fund. For more complete information about any AIM Fund(s), including
sales charges and expenses, ask your financial consultant or securities dealer
for a free prospectus(es). Please read the prospectus(es) carefully before you
invest or send money.
[AIM LOGO APPEARS HERE]
INVEST WITH DISCIPLINE--Registered Trademark--
