<PAGE> 1
AIM BASIC VALUE FUND
[AIM LOGO APPEARS HERE] ANNUAL REPORT DECEMBER 31, 1998
INVEST WITH DISCIPLINE
-- Registered Trademark --
<PAGE> 2
------------------------------------------------------------
STILL LIFE (THE CHEST OF DRAWERS) 1883-1887
BY PAUL CEZANNE, FRENCH (1839-1906)
A CONTEMPORARY OF THE IMPRESSIONISTS, CEZANNE CHALLENGED
THE CONVENTIONAL IDEAS THEIR WORKS EMBODIED IN THE 19TH
CENTURY. AS A RESULT, HIS ART WAS UNDERVALUED AND OFTEN
MISUNDERSTOOD IN HIS LIFETIME. HOWEVER, HIS WORKS AND IDEAS
INFLUENCED THE DEVELOPMENT OF MANY 20TH CENTURY ARTISTS AND
MOVEMENTS, SUCH AS CUBISM, AND SOME NOW REGARD HIM AS THE
FATHER OF MODERN PAINTING. THIS PIECE EXHIBITS THE SIMPLICITY
AND DELICATE TONAL HARMONY THAT TYPIFY CEZANNE'S WORK.
------------------------------------------------------------
AIM Basic Value Fund seeks long-term growth of capital by investing in companies
whose prospects and growth potential are undervalued by investors.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Basic Value Fund (formerly GT Global America Value Fund) performance
figures are historical and reflect reinvestment of all distributions and
changes in net asset value. Unless otherwise indicated, the Fund's
performance is computed at net asset value without a sales charge.
o During the fiscal year ended 12/31/98, the Fund paid distributions of $0.32
per share for Class A, Class B, and Advisor Class shares.
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 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.
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 1000 Stock Index is an unmanaged index generally considered
representative of large-capitalization stocks.
o The Russell 1000 Value Index measures performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values.
o The Standard & Poor's Composite Index of 500 Stocks (S&P 500) is a group of
unmanaged securities widely regarded by investors to be representative of
the stock market in general.
o The Standard & Poor's 400 Mid-Cap Index (S&P 400) is an unmanaged index
comprising common stocks of approximately 400 mid-capitalization companies.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
o The Russell 2000 is an unmanaged index generally considered representative
of small-capitalization stocks.
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 BASIC VALUE FUND
<PAGE> 3
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
As the fiscal year opened, markets were recovering from the
[PHOTO OF concerns produced by financial crises in Asia during 1997,
Charles T. and this optimism early in 1998 led several market indexes
Bauer, to all-time highs in spring and early summer. However, the
Chairman of year was to bring two particularly serious financial shocks,
the Board of first the debt default by Russia, and later the gathering
THE FUND crisis in Brazil, which devalued its currency shortly after
APPEARS HERE] 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 BASIC VALUE FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND FINDS VALUE IN MARKET VOLATILITY
STOCK MARKETS HAD AN EXTREMELY VOLATILE YEAR. HOW DID AIM BASIC VALUE FUND
PERFORM?
In the wake of record market volatility that favored large growth stocks, the
Fund faced a challenging year but rebounded in the fourth quarter to finish on a
positive note.
For the fiscal year ended December 31, 1998, total returns for the Fund were
7.02% for Class A shares and 6.34% for Class B shares. Total return for Advisor
Class shares for the period was 7.43%. Comparatively, the Russell 1000 Value
Index finished the reporting period with a return of 15.63%.
A former GT Global fund, AIM Basic Value Fund was added to The AIM Family of
Funds--Registered Trademark-- in 1998, with AIM assuming day-to-day portfolio
management in September.
WHAT WERE THE MAJOR TRENDS IN THE STOCK MARKET DURING THE FISCAL YEAR?
Early in 1998, U.S. markets shrugged off global financial concerns that had
previously dampened stock performance. Markets peaked in April, then paused. In
June the market rally resumed, and by mid-July various equity indexes, including
the Dow and the S&P 500, had climbed to new highs.
The "Asian contagion" reappeared when Japan's extensive banking problems
were revealed to be worse than expected and Russia effectively defaulted on its
government debt. These events cast doubt on the sustainability of the long
economic expansion in the United States and the boom in Europe's stock markets.
The market downturn that ensued eventually involved even the very large, very
liquid stocks that were chiefly responsible for the U.S. market's earlier rise.
The large-capitalization S&P 500 fell over 19% from its high in mid-July through
the end of August. Mid-cap and smaller stocks fared worse, with the S&P 400 down
almost 25% during the same period. European markets were not immune to the
decline, and many overseas markets were devastated.
In an attempt to calm the nerves of investors who were shifting their money
from equity markets to any security considered liquid-a worldwide flight to
quality and liquidity-the Federal Reserve Board (the Fed) cut the federal funds
rate by 0.25% on September 29. Few people were assuaged by the action. Two weeks
later, in an unusual inter-meeting move, the Fed lowered the federal funds rate
and the discount rate by 0.25%, igniting a fierce market rally. Both rates were
lowered by 0.25% again in November. By the close of the fiscal year, markets
were enjoying relative equilibrium.
HOW DID MARKET TRENDS AFFECT THE FUND?
The Fund underperformed its benchmark partly as a result of a narrow market that
favored a small number of the largest company stocks. The year's market advance
was mainly concentrated in large-cap growth stocks, which outperformed value
stocks by one of the widest margins in history. While the Fund had virtually no
exposure to the 20 largest growth stocks that propelled the market average, the
market's volatility created a number of opportunities for the Fund to purchase
quality holdings at attractive prices.
HAS THE MAKE-UP OF THE PORTFOLIO CHANGED, GIVEN THE MARKET'S VOLATILITY?
Yes. Previously, the Fund had been overweight in financial and industrial
cyclical holdings. These were two of the industries hardest hit as global
economies slowed and the impact of the Asian crisis spread to the United States.
As a result, we repositioned the portfolio to take advantage of opportunities
created by the market correction by increasing the Fund's holdings in
technology, health care and electric utilities. In turn, we reduced our
weighting in financials and industrial cyclicals and further reduced the median
market cap of the Fund to take advantage of the better valuation opportunities
in mid-cap companies.
HOW DO YOU CHOOSE STOCKS FOR THE FUND?
Our bottom-up value strategy allows us to take advantage of investors' tendency
to overreact to negative information by buying stocks that are selling at a
significant discount to their intrinsic value. A stock's intrinsic value is
based on the company's fundamentals and earning power rather than investor
sentiment. We choose companies by analyzing their financial statements; their
industry's structure, profitability, and growth; and their competitive position.
We look for management that has a history and/ or potential of increasing
shareholder value. This allows us to understand the company's business so that
we can make a reasonable estimation of its future prospects. We also require a
50% appreciation potential from price to intrinsic value during our two- to
three-year investment horizon.
----------------------------------------
THE MARKET'S VOLATILITY CREATED A
NUMBER OF OPPORTUNITIES FOR THE FUND
TO PURCHASE QUALITY HOLDINGS AT
ATTRACTIVE PRICES.
----------------------------------------
See important Fund and index disclosures inside front cover.
AIM BASIC VALUE FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
Our aim with this strategy is a low-risk, low-turnover, tax-efficient portfolio
with a concentration in good companies selling at temporarily depressed prices.
Our target number of holdings is in the 40 to 60 range, making the Fund a
good complement to a growth portfolio because there is little or no overlap in
investments. At the end of the fiscal year, the Fund had 50 holdings, including
mid-cap and large-cap stocks.
WHAT HOLDINGS HAVE YOU ESPECIALLY LIKED?
In the health-care sector, we have liked United HealthCare, which owns or
manages more than two dozen HMOs and PPOs. We have also found good value in
Beckman Coulter, a company that makes medical laboratory equipment. In the
technology sector, one company we like is Novellus, a leading semiconductor
equipment company.
Other companies we consider good values include First Data-a leading
provider of transaction processing services for such things as credit cards-and
Millipore, a manufacturer of pharmaceutical and biotechnology products.
Our top sector weightings as of December 31, 1998, were as follows:
technology, 20.8%; financials, 17.5%; utilities, 13.3%; and health care, 12.4%.
WHAT IS YOUR OUTLOOK FOR THE FUTURE?
At the close of 1998, the Consumer Price Index was on track to record its
smallest annual increase since 1986, when the index rose just 1.1%. Meanwhile,
the Fed appeared to have adopted a "wait and see" attitude because inflation sat
at its lowest point in more than a decade. Some analysts expect more interest
rate cuts in the coming year as the U.S. economy continues to slow, with annual
gross domestic product growth likely to be in the 1.5% to 2.5% range, and as
world markets continue to recover and stabilize.
The slowing of the U.S. economy could make things difficult for the mid-cap
companies in which the Fund invests, especially in the technology sector.
Keeping that in mind, the defensive characteristics of our health-care and
utility holdings will, we believe, offset that risk. We view the dramatic
divergence in valuations as an opportunity and will continue to focus on stock
selection that will keep the Fund well positioned in the near term. We believe
many of our holdings will continue to gain ground over the next couple of years,
regardless of near-term volatility.
PORTFOLIO COMPOSITION
As of 12/31/98, based on total net assets
Pie Chart
<TABLE>
<CAPTION>
===============================================================================================================================
Top 10 Equity Holdings Top 10 Industries Sector Allocation
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1. Philip Morris Companies Inc. 3.31% 1. Electric Companies 12.22%
2. First Data Corp. 3.28 2. Banking (Money Center) 5.54 Technology 20.8
3. Computer Associates International Inc. 3.14 3. Retail (Department Stores) 5.52 Financials 17.5
4. United HealthCare Corp. 2.91 4. Health Care (Managed Care) 5.08 Utilities 13.3
5. Millipore Corp. 2.89 5. Computers (Software & Services) 4.71 Health Care 12.4
6. BankAmerica Corp. 2.78 6. Telephone 4.66 Capital Goods 11.8
7. Beckman Coulter Inc. 2.70 7. Electrical Equipment 4.54 Consumer Cyclical 6.8
8. Exel Limited 2.70 8. Financial (Diversified) 4.40 Energy 4.9
9. Texas Utilities 2.63 9. Computers (Peripherals) 3.53 Consumer Staples 4.3
10. Philips Electronics N.V 2.61 10. Tobacco 3.31 Basic Materials 1.5
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>
---------------------------------------
A STOCK'S INTRINSIC VALUE IS BASED
ON THE COMPANY'S FUNDAMENTALS
AND EARNING POWER RATHER THAN
INVESTOR SENTIMENT.
---------------------------------------
See important Fund and index disclosures inside front cover.
AIM BASIC VALUE FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM BASIC VALUE FUND VS. BENCHMARK INDEXES
10/18/95-12/31/98
HYPO Chart
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
AIM Basic Value AIM Basic Value Russell 1000 S&P 500 AIM Basic Value
Fund, Class A Fund, Class B Value Index Index Fund, Advisor
Shares Shares Class Shares
- -------------------------------------------------------------------------------------------------
In thousands
<C> <C> <C> <C> <C> <C>
10/18/95 $ 9,446 $10,000 $10,000 $10,000 $10,000
12/31/95 $10,545 $11,155 $10,770 $10,655 $11,172.4
6/30/96 $11,884 $12,528 $11,576 $11,730 $12,624.7
12/31/96 $12,140 $12,756 $13,101 $13,100 $12,913
6/30/97 $13,855 $14,510 $15,418 $15,799 $14,764
12/31/97 $15,446 $16,128 $17,710 $17,470 $16,500.1
6/30/98 $16,449 $17,122 $19,865 $20,562 $17,602
12/31/98 $16,530 $16,850 $20,482 $22,461 $17,725.5
=================================================================================================
PAST PERFORMANCE IS NO GUARANTEE OF COMPARABLE FUTURE RESULTS.
=================================================================================================
</TABLE>
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 12/31/98, including sales charges
CLASS A SHARES
Inception (10/18/95) 16.99%
1 year 1.15*
CLASS B SHARES
Inception (10/18/95) 17.69%
1 year 1.34**
ADVISOR CLASS SHARES
Inception (10/18/95) 19.57%
1 year 7.43
* 7.02%, excluding sales charge
** 6.34%, excluding CDSC
================================================================================
Sources: Towers Data Systems Hypo--Registered Trademark--, Bloomberg.
================================================================================
Your Fund's total return includes sales charges, expenses, and management
fees. The performance of the Fund's various classes of shares will differ due to
differing fees and expenses. For Fund data performance calculations and
descriptions of indexes cited on this page, please refer to the inside front
cover.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN
INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE
SHOWN.
ABOUT THIS CHART
The chart compares the performance of the Class A, Class B, and Advisor Class
shares of AIM Basic Value Fund to benchmark indexes. It is important to
understand differences between your Fund and these indexes. An index measures
performance of a hypothetical portfolio. Your Fund's total return is shown with
the applicable sales charge and includes Fund expenses and management fees. A
market index such as the Russell 1000 Value Index or the S&P 500 Index is not
managed, incurring no sales charges, expenses or fees. (Please note that the
results for these indexes are from 10/31/95-12/31/98.) If you could buy all the
securities that make up a market index, you would incur expenses that would
affect your investment's return. Use of these indexes is intended to give you a
general idea of how your Fund performed compared to the stock market.
Since the last reporting period, AIM Basic Value Fund has elected to use the
Russell 1000 Value Index as its benchmark. The Fund began using the Russell 1000
Value Index as its benchmark instead of the S&P 500 on 9/8/98 when a new team
assumed day-to-day portfolio management of the Fund. Because of the Fund's
strong value discipline, the new index will be a more accurate reflection of
performance.
The Fund will no longer measure its performance against the S&P 500 Index,
the index published in previous reports to shareholders. Because this is the
first reporting period since we have adopted the new index, SEC guidelines
require that we compare the Fund's performance to both the old and the new
index.
AIM BASIC VALUE FUND
4
<PAGE> 7
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-92.23%
BANKS (MAJOR REGIONAL)-2.60%
Fleet Financial Group, Inc. 16,000 $ 715,000
- --------------------------------------------------------------
BANKS (MONEY CENTER)-5.54%
BankAmerica Corp. 12,725 765,091
- --------------------------------------------------------------
Chase Manhattan Corp. (The) 4,550 309,684
- --------------------------------------------------------------
First Union Corp. 7,400 450,012
- --------------------------------------------------------------
1,524,787
- --------------------------------------------------------------
CHEMICALS (SPECIALTY)-1.41%
Sigma-Aldrich Corp. 13,200 387,750
- --------------------------------------------------------------
COMPUTERS (PERIPHERALS)-3.53%
Adaptec, Inc.(a) 23,500 412,718
- --------------------------------------------------------------
Quantum Corp.(a) 26,300 558,875
- --------------------------------------------------------------
971,593
- --------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-4.71%
Adobe Systems, Inc. 9,200 430,100
- --------------------------------------------------------------
Computer Associates International,
Inc. 20,300 865,287
- --------------------------------------------------------------
1,295,387
- --------------------------------------------------------------
ELECTRIC COMPANIES-12.22%
Carolina Power & Light Co. 5,200 244,725
- --------------------------------------------------------------
DQE, Inc. 7,700 338,318
- --------------------------------------------------------------
Illinova Corp. 13,400 335,000
- --------------------------------------------------------------
Pinnacle West Capital Corp. 7,825 331,584
- --------------------------------------------------------------
GPU, Inc. 8,200 362,337
- --------------------------------------------------------------
Niagara Mohawk Power Corp. 40,500 653,062
- --------------------------------------------------------------
Northeast Utilities 23,400 374,400
- --------------------------------------------------------------
Texas Utilities Co. 15,500 723,656
- --------------------------------------------------------------
3,363,082
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-4.54%
Philips Electronics N.V.-ADR 10,600 717,487
- --------------------------------------------------------------
Raychem Corp. 16,500 533,156
- --------------------------------------------------------------
1,250,643
- --------------------------------------------------------------
ELECTRONICS (INSTRUMENTATION)-1.85%
Perkin-Elmer Corp. 5,200 507,325
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTOR)-3.19%
Analog Devices, Inc.(a) 21,400 671,425
- --------------------------------------------------------------
Micron Technology, Inc. 4,100 207,307
- --------------------------------------------------------------
878,732
- --------------------------------------------------------------
ENGINEERING & CONSTRUCTION-1.31%
McDermott International, Inc. 14,600 360,438
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
EQUIPMENT (SEMICONDUCTOR)-2.55%
Novellus Systems, Inc.(a) 14,200 $ 702,900
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-4.40%
Citigroup Inc. 13,900 688,050
- --------------------------------------------------------------
MGIC Investment Corp. 13,100 521,544
- --------------------------------------------------------------
1,209,594
- --------------------------------------------------------------
HEALTH CARE (LONG TERM CARE)-1.77%
HCR Manor Care, Inc.(a) 16,600 487,625
- --------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-5.08%
PacifiCare Health Systems,
Inc.-Class B(a) 7,500 596,250
- --------------------------------------------------------------
United HealthCare Corp. 18,600 800,963
- --------------------------------------------------------------
1,397,213
- --------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)-1.89%
Pharmacia & Upjohn, Inc. 9,200 520,950
- --------------------------------------------------------------
HEALTH CARE (MEDICAL SUPPLIES)-2.70%
Beckman Coulter Inc. 13,700 743,225
- --------------------------------------------------------------
INSURANCE (PROPERTY CASUALTY)-3.06%
Amerin Corp.(a) 4,200 99,225
- --------------------------------------------------------------
EXEL Limited-Class A 9,900 742,500
- --------------------------------------------------------------
841,725
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-2.89%
Millipore Corp. 28,000 796,250
- --------------------------------------------------------------
OIL (DOMESTIC INTEGRATED)-1.73%
Atlantic Richfield Co. 7,300 476,325
- --------------------------------------------------------------
OIL (INTERNATIONAL INTEGRATED)-1.04%
Mobil Corp. 3,300 287,513
- --------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-2.48%
ENSCO International, Inc. 26,200 280,012
- --------------------------------------------------------------
Schlumberger Ltd. 8,700 401,288
- --------------------------------------------------------------
681,300
- --------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.90%
Conoco Inc.-Class A(a) 11,800 246,325
- --------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST-0.51%
Starwood Hotels & Resorts(a) 6,183 140,278
- --------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-5.52%
Federated Department Stores, Inc.(a) 13,500 588,093
- --------------------------------------------------------------
J.C. Penney Co., Inc. 8,600 403,125
- --------------------------------------------------------------
Saks Inc.(a) 16,700 527,094
- --------------------------------------------------------------
1,518,312
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (SPECIALTY)-0.77%
Toys "R" Us, Inc.(a) 12,600 $ 212,625
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-3.28%
First Data Corp. 28,500 903,095
- --------------------------------------------------------------
SERVICES (FACILITIES & ENVIRONMENTAL)-0.64%
Corrections Corp. of America(a) 10,000 176,250
- --------------------------------------------------------------
TELEPHONE-4.66%
Bell Atlantic Corp. 11,200 636,300
- --------------------------------------------------------------
US West, Inc. 10,000 646,250
- --------------------------------------------------------------
1,282,550
- --------------------------------------------------------------
TOBACCO-3.31%
Philip Morris Companies, Inc. 17,050 912,175
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
WASTE MANAGEMENT-2.15%
Waste Management, Inc. 12,667 $ 590,599
- --------------------------------------------------------------
Total Common Stocks (Cost
$21,863,862) 25,381,566
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
REPURCHASE AGREEMENT-3.73%(b)
SBC Warburg Dillon Read Inc., 4.75%,
01/04/99(c) $1,026,552 $ 1,026,552
- --------------------------------------------------------------
Total Repurchase Agreements
(Cost $1,026,552) 1,026,552
- --------------------------------------------------------------
TOTAL INVESTMENTS-95.96% 26,408,118
- --------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-4.04% 1,110,420
- --------------------------------------------------------------
NET ASSETS-100.00% $27,518,538
==============================================================
</TABLE>
Abbreviation:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(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 sale 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 12/31/98 with a maturing value
$1,000,527,778. Collateralized by $2,207,068,000 U.S. Government
obligations, 0% to 6.75% due 06/30/99 to 11/15/21 with an aggregate market
value at 12/31/98 of $1,020,001,079.
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$22,890,414) $26,408,118
- ---------------------------------------------------------
Receivables for:
Investment Advisor 118,468
- ---------------------------------------------------------
Investments sold 37,475
- ---------------------------------------------------------
Fund shares sold 1,201,931
- ---------------------------------------------------------
Dividends and interest 33,974
- ---------------------------------------------------------
Other assets 37,479
- ---------------------------------------------------------
Total assets 27,837,445
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 37,333
- ---------------------------------------------------------
Fund shares reacquired 156,968
- ---------------------------------------------------------
Accrued investment management &
administration fees 31,765
- ---------------------------------------------------------
Accrued accounting fees 587
- ---------------------------------------------------------
Accrued distribution fees 40,203
- ---------------------------------------------------------
Accrued trustees' fees 9,702
- ---------------------------------------------------------
Accrued transfer agent fees 7,000
- ---------------------------------------------------------
Accrued operating expenses 17,075
- ---------------------------------------------------------
Accrued filing fees 18,274
- ---------------------------------------------------------
Total liabilities 318,907
- ---------------------------------------------------------
Net assets applicable to shares outstanding $27,518,538
=========================================================
NET ASSETS:
Class A $ 9,073,952
=========================================================
Class B $17,406,329
=========================================================
Advisor Class $ 1,038,257
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 500,450
=========================================================
Class B 978,399
=========================================================
Advisor Class 56,634
=========================================================
Class A:
Net asset value and redemption price per
share $ 18.13
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $18.13
divided by 94.50%) $ 19.19
=========================================================
Class B:
Net asset value and offering price per
share $ 17.79
- ---------------------------------------------------------
Advisor Class:
Net asset value and offering price per
share $ 18.33
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $416 foreign withholding
tax) $ 502,395
- ---------------------------------------------------------
Interest 53,825
- ---------------------------------------------------------
Securities lending income 2,035
- ---------------------------------------------------------
Total investment income 558,255
- ---------------------------------------------------------
EXPENSES:
Investment management & administration fees 203,359
- ---------------------------------------------------------
Accounting fees 6,806
- ---------------------------------------------------------
Custodian fees 6,265
- ---------------------------------------------------------
Trustees' fees 16,714
- ---------------------------------------------------------
Distribution fees -- Class A 29,605
- ---------------------------------------------------------
Distribution fees -- Class B 188,068
- ---------------------------------------------------------
Transfer agent fees -- Class A 31,636
- ---------------------------------------------------------
Transfer agent fees -- Class B 70,338
- ---------------------------------------------------------
Transfer agent fees -- Advisor Class 2,932
- ---------------------------------------------------------
Filing fees 43,643
- ---------------------------------------------------------
Printing fees 70,882
- ---------------------------------------------------------
Other 40,141
- ---------------------------------------------------------
Total expenses 710,389
- ---------------------------------------------------------
Less: Fee waivers (102,359)
- ---------------------------------------------------------
Net expenses 608,030
- ---------------------------------------------------------
Net investment income (loss) (49,775)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 52,411
- ---------------------------------------------------------
Option contracts written (7,810)
- ---------------------------------------------------------
44,601
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities 1,516,960
- ---------------------------------------------------------
Net gain from investment securities and
option contracts 1,561,561
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $1,511,786
=========================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
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) $ (49,775) $ 22,242
- ------------------------------------------------------------------------------------------
Net realized gain from investment securities and option
contracts 44,601 1,352,859
- ------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
option contracts 1,516,960 2,016,032
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,511,786 3,391,133
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A -- (12,256)
- ------------------------------------------------------------------------------------------
Advisor Class -- (1,610)
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A (141,471) (482,262)
- ------------------------------------------------------------------------------------------
Class B (313,992) (1,128,861)
- ------------------------------------------------------------------------------------------
Advisor Class (18,735) (30,657)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,006,548 4,423,280
- ------------------------------------------------------------------------------------------
Class B 87,004 10,245,557
- ------------------------------------------------------------------------------------------
Advisor Class 562,783 197,292
- ------------------------------------------------------------------------------------------
Net increase in net assets 2,693,923 16,601,616
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 24,824,615 8,222,999
- ------------------------------------------------------------------------------------------
End of period $27,518,538 $24,824,615
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $24,031,065 $22,421,981
- ------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (2,524) --
- ------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and option contracts (27,707) 401,890
- ------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
option contracts 3,517,704 2,000,744
- ------------------------------------------------------------------------------------------
$27,518,538 $24,824,615
==========================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Basic Value Fund, formerly AIM America Value 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 Value
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 the 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 on that day. 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 the 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,
9
<PAGE> 12
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 additional paid-in capital was decreased by $47,251 and
undistributed net investment income was increased by $47,251 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 YEAR ENDED
---------------------------- DECEMBER 31, 1998
AGGREGATE VALUE CASH -----------------
ON LOANS COLLATERAL FEES RECEIVED
--------------- ---------- -----------------
<S> <C> <C> <C>
$1,431,825 $1,433,821 $2,035
</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 the Fund and the
Portfolio in connection with their organization, their initial registration
with the Securities and Exchange Commission and with various states and the
initial public offering of their shares aggregated $63,500 for the Fund and
$25,000 for the Portfolio. These expenses are being amortized on a
straight-line basis over a five-year period.
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 $87,889 with a weighted average interest rate of 6.24%. Interest
expense for the Fund for the year ended December 31, 1998 was $137, and is
included in "Other Expenses" on the Statement of Operations.
10
<PAGE> 13
NOTE 2-RELATED PARTIES
A I M Advisors, Inc. ("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.
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 Fund's 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: $1,695 and $2,335, 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. No CDSC's for Class A were collected for the period ended
December 31, 1998. 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: $15,167 and $38,159,
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 each 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
11
<PAGE> 14
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. Both 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% to 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.
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
$39,540,620 and $39,657,090, 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 $4,110,581
- ---------------------------------------------------------------
Aggregate unrealized (depreciation) of investment
securities (688,180)
- ---------------------------------------------------------------
Net unrealized appreciation of investment
securities $3,422,401
===============================================================
</TABLE>
Cost of investments for tax purposes is $22,985,717.
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 472,964 $ 8,362,868 781,797 $13,117,280
- ------------------------------------------------------------------------
Class B 587,988 10,276,429 1,148,582 19,043,834
- ------------------------------------------------------------------------
Advisor Class 41,555 747,776 14,203 230,962
- ------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A 7,580 134,463 26,859 454,725
- ------------------------------------------------------------------------
Class B 16,572 288,515 60,093 1,004,744
- ------------------------------------------------------------------------
Advisor Class 1,044 18,735 1,920 32,714
- ------------------------------------------------------------------------
Reacquired:
Class A (424,737) (7,490,783) (536,657) (9,148,725)
- ------------------------------------------------------------------------
Class B (607,196) (10,477,940) (606,167) (9,803,021)
- ------------------------------------------------------------------------
Advisor Class (11,248) (203,728) (3,834) (66,384)
- ------------------------------------------------------------------------
84,522 $ 1,656,335 886,796 $14,866,129
========================================================================
</TABLE>
NOTE 5-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 $1,546 under these arrangements.
12
<PAGE> 15
NOTE 6-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 $17.25 $ 14.65 $ 12.76 $ 11.43
- ------------------------------------------------------------ ------ ------- ------- -------
Income from investment operations:
Net investment income(b) 0.04 0.09(c) (0.01)(c) 0.03(c)
- ------------------------------------------------------------ ------ ------- ------- -------
Net gains on securities (both realized and unrealized) 1.16 3.87 1.94 1.30
- ------------------------------------------------------------ ------ ------- ------- -------
Total from investment operations 1.20 3.96 1.93 1.33
- ------------------------------------------------------------ ------ ------- ------- -------
Less distributions:
Dividends from net investment income -- (0.03) -- --
- ------------------------------------------------------------ ------ ------- ------- -------
Distributions from net realized gains (0.32) (1.33) (0.04) --
- ------------------------------------------------------------ ------ ------- ------- -------
Total distributions (0.32) (1.36) (0.04) --
- ------------------------------------------------------------ ------ ------- ------- -------
Net asset value, end of period $18.13 $ 17.25 $ 14.65 $ 12.76
============================================================ ====== ======= ======= =======
Total Return(d) 7.02% 27.23% 15.12% 11.64%
============================================================ ====== ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $9,074 $ 7,688 $ 2,529 $ 870
============================================================ ====== ======= ======= =======
Ratio of expenses to average net assets:
With expense reductions and/or reimbursement 1.74%(e) 1.99% 2.00% 2.00%(f)
- ------------------------------------------------------------ ------ ------- ------- -------
Without expense reductions and/or reimbursement 2.11%(e) 2.97% 5.51% 50.54%(f)
============================================================ ====== ======= ======= =======
Ratio of net investment income to average net assets:
With expense reductions and/or reimbursement 0.25%(e) 0.56% (0.10)% 1.10%(f)
- ------------------------------------------------------------ ------ ------- ------- -------
Without expense reductions and/or reimbursement (0.08)%(e) (0.42)% (3.61)% (47.44)%(f)
============================================================ ====== ======= ======= =======
Ratio of interest expense to average net assets(g) -- 0.03% -- --
============================================================ ====== ======= ======= =======
Portfolio turnover rate(g) 148% 93% 256% --
============================================================ ====== ======= ======= =======
</TABLE>
(a) The Fund changed Investment Advisors on May 29, 1998.
(b) Before reimbursement the net investment loss per share would have been
$(0.02), $(0.07), $(0.50), and $(1.11) 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 $8,458,715.
(f) Annualized.
(g) Portfolio turnover rates and ratio of interest expense to average net assets
are calculated on the basis of the Value Portfolio as a whole without
distinguishing between the classes of shares issued.
13
<PAGE> 16
NOTE 6-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B ADVISOR CLASS
---------------------------------------------------- -----------
1998(a) 1997 1996 1995 1998(a)
------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.04 $ 14.54 $ 12.75 $ 11.43 $17.37
- ------------------------------------------------------ ------- -------- ------- -------- ------
Income from investment operations:
Net investment income(b) (0.08) (0.01)(c) (0.10)(c) 0.01(c) 0.07
- ------------------------------------------------------ ------- -------- ------- -------- ------
Net gains on securities (both realized and
unrealized) 1.15 3.83 1.93 1.31 1.21
- ------------------------------------------------------ ------- -------- ------- -------- ------
Total from investment operations 1.07 3.82 1.83 1.32 1.28
- ------------------------------------------------------ ------- -------- ------- -------- ------
Less distributions:
Dividends from net investment income -- -- -- -- --
- ------------------------------------------------------ ------- -------- ------- -------- ------
Distributions from net realized gains (0.32) (1.32) (0.04) -- (0.32)
- ------------------------------------------------------ ------- -------- ------- -------- ------
Total distributions (0.32) (1.32) (0.04) -- (0.32)
- ------------------------------------------------------ ------- -------- ------- -------- ------
Net asset value, end of period $ 17.79 $ 17.04 $ 14.54 $ 12.75 $18.33
====================================================== ======= ======== ======= ======== ======
Total Return(d) 6.34% 26.44% 14.35% 11.55% 7.43%
====================================================== ======= ======== ======= ======== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $17,406 $ 16,717 $ 5,503 $ 1,254 $1,038
====================================================== ======= ======== ======= ======== ======
Ratio of expenses to average net assets:
With expense reductions and/or reimbursement 2.39%(e) 2.64% 2.65% 2.65%(f) 1.39%(e)
- ------------------------------------------------------ ------- -------- ------- -------- ------
Without expense reductions and/or reimbursement 2.76%(e) 3.62% 6.16% 51.19%(f) 1.76%(e)
====================================================== ======= ======== ======= ======== ======
Ratio of net investment income to average net assets:
With expense reductions and/or reimbursement (0.40)%(e) (0.09)% (0.75)% 0.45%(f) 0.60%(e)
- ------------------------------------------------------ ------- -------- ------- -------- ------
Without expense reductions and/or reimbursement (0.72)%(e) (1.07)% (4.26)% (48.09)%(f) 0.23%(e)
====================================================== ======= ======== ======= ======== ======
Ratio of interest expense to average net assets(f) -- 0.03% -- -- --
====================================================== ======= ======== ======= ======== ======
Portfolio turnover rate(g) 148% 93% 256% -- 148%
====================================================== ======= ======== ======= ======== ======
<CAPTION>
ADVISOR CLASS
------------------------------------
1997 1996 1995
------- ------- --------
<S> <C> <C> <C>
Net asset value, beginning of period $ 14.72 $ 12.77 $ 11.43
- ------------------------------------------------------ ------- ------- --------
Income from investment operations:
Net investment income(b) 0.15(c) 0.03(c) 0.04(c)
- ------------------------------------------------------ ------- ------- --------
Net gains on securities (both realized and
unrealized) 3.91 1.96 1.30
- ------------------------------------------------------ ------- ------- --------
Total from investment operations 4.06 1.99 1.34
- ------------------------------------------------------ ------- ------- --------
Less distributions:
Dividends from net investment income (0.07) -- --
- ------------------------------------------------------ ------- ------- --------
Distributions from net realized gains (1.34) (0.04) --
- ------------------------------------------------------ ------- ------- --------
Total distributions (1.41) (0.04) --
- ------------------------------------------------------ ------- ------- --------
Net asset value, end of period $ 17.37 $ 14.72 $ 12.77
====================================================== ======= ======= ========
Total Return(d) 27.78% 15.58% 11.72%
====================================================== ======= ======= ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 439 $ 191 $ 81
====================================================== ======= ======= ========
Ratio of expenses to average net assets:
With expense reductions and/or reimbursement 1.64% 1.65% 1.65%(f)
- ------------------------------------------------------ ------- ------- --------
Without expense reductions and/or reimbursement 2.62% 5.16% 50.19%(f)
====================================================== ======= ======= ========
Ratio of net investment income to average net assets:
With expense reductions and/or reimbursement 0.91% 0.25% 1.45%(f)
====================================================== ======= ======= ========
Without expense reductions and/or reimbursement (0.07)% (3.26)% (47.09)%(f)
====================================================== ======= ======= ========
Ratio of interest expense to average net assets(f) 0.03% -- --
====================================================== ======= ======= ========
Portfolio turnover rate(g) 93% 256% --
====================================================== ======= ======= ========
</TABLE>
(a) The Fund changed Investment Advisors on May 29, 1998.
(b) Before reimbursement the net investment loss per share would have been
$(0.15), $(0.17), $(0.59), and $(1.13) for 1998-1995, respectively for Class
B, $0.02, $(0.01), $(0.46) and $(1.10) for 1998-1995, respectively for
Advisor Class.
(c) Calculated based upon average shares outstanding during the period.
(d) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(e) Ratios are based on average net assets of $18,806,810 and $783,941 for Class
B and Advisor Class, respectively.
(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.
14
<PAGE> 17
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of AIM Basic Value Fund
(formerly AIM America Value Fund) and Board of Trustees
of AIM 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 Basic Value 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
15
<PAGE> 18
PROXY RESULTS (UNAUDITED)
A 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 to
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.................................................... 700,750 15,005 213,574*
(2)(b) Approval of sub-advisory and sub-administration contract.... 698,743 16,642 213,944*
(3) Approval of replacement Rule 12b-1 plans of distribution
Class A..................................................... 268,439 7,982 14,140
Class B..................................................... 536,664 9,056 54,846
(4)(a) Modification of Fundamental Restriction on Portfolio
Diversification............................................. 687,746 22,561 219,022*
(4)(b) Modification of Fundamental Restriction on Concentration.... 687,746 22,561 219,022*
(4)(c) Modification of Fundamental Restriction on Issuing Senior
Securities and Borrowing Money.............................. 687,746 22,561 219,022*
(4)(d) Modification of Fundamental Restriction on Making Loans..... 687,746 22,561 219,022*
(4)(e) Modification of Fundamental Restriction on Underwriting
Securities.................................................. 687,746 22,561 219,022*
(4)(f) Modification of Fundamental Restriction on Real Estate
Investments................................................. 687,746 22,561 219,022*
(4)(g) Modification of Fundamental Restriction on Investing in
Commodities................................................. 687,746 22,561 219,022*
(4)(h) Elimination of Fundamental Restriction on Margin
Transactions................................................ 687,746 22,561 219,022*
(4)(i) Elimination of Fundamental Restriction on Pledging Assets... 687,746 22,561 219,022*
(4)(j) Elimination of Fundamental Restriction on Investments in
Oil, Gas and Mineral Leases and Programs.................... 687,746 22,561 219,022*
(4)(k) Elimination of Fundamental Restriction on Investing for the
Purpose of Control.......................................... 687,746 22,561 219,022*
(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................. 687,746 22,561 219,022*
(4)(m) Elimination of Fundamental Restriction on Joint
Participation in a Securities Trading Account............... 687,746 22,561 219,022*
(4)(n) Elimination of Fundamental Restriction on Selling Securities
Short....................................................... 687,746 22,561 219,022*
(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) Approval of the conversion of the portfolios in which
certain Funds invest........................................ 694,778 13,382 221,169*
(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
16
<PAGE> 19
<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 Basic Value Fund paid ordinary dividends in the amount of $0.197 per share
to shareholders during its tax year ended December 31, 1998. Of this amount,
16.04% is eligible for the dividends received deduction for corporations.
The Fund also distributed long-term capital gains of $184,938 for the Fund's tax
year ended December 31, 1998. Of long-term capital gains distributed, 100% is
20% rate gain.
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS INTERNATIONAL GROWTH FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund(1) AIM Advisor International Value Fund leadership in the mutual fund industry
AIM Blue Chip Fund AIM Asian Growth Fund since 1976 and managed approximately $109
AIM Capital Development Fund AIM Developing Markets Fund(2) billion in assets for more than 6.2 million
AIM Constellation Fund AIM Europe Growth Fund(2) shareholders, including individual investors,
AIM Mid Cap Equity Fund(2), (A) AIM European Development Fund corporate clients, and financial institutions,
AIM Select Growth Fund(3) AIM International Equity Fund as of December 31, 1998.
AIM Small Cap Growth Fund(2), (B) AIM International Growth Fund(2) The AIM Family of Funds--Registered Trademark--
AIM Small Cap Opportunities Fund AIM Japan Growth Fund(2) is distributed nationwide, and AIM today is the
AIM Value Fund AIM Latin American Growth Fund(2) 10th-largest mutual fund complex in the U.S. in
AIM Weingarten Fund AIM New Pacific Growth Fund(2) assets under management, according to Strategic
Insight, an independent mutual fund monitor.
GROWTH & INCOME FUNDS GLOBAL GROWTH FUNDS
AIM Advisor Flex Fund AIM Global Aggressive Growth Fund
AIM Advisor Large Cap Value Fund AIM Global Growth Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund GLOBAL GROWTH & INCOME FUNDS
AIM Balanced Fund AIM Global Growth & Income Fund(2)
AIM Basic Value Fund(2), (C) AIM Global Utilities Fund
AIM Charter Fund
GLOBAL INCOME FUNDS
INCOME FUNDS AIM Emerging Markets Debt Fund(2), (D)
AIM Floating Rate Fund(2) AIM Global Government Income Fund(2)
AIM High Yield Fund AIM Global Income Fund
AIM High Yield Fund II AIM Strategic Income Fund(2)
AIM Income Fund
AIM Intermediate Government Fund THEME FUNDS
AIM Limited Maturity Treasury Fund AIM Global Consumer Products and Services Fund(2)
AIM Global Financial Services Fund(2)
TAX-FREE INCOME FUNDS AIM Global Health Care Fund(2)
AIM High Income Municipal Fund AIM Global Infrastructure Fund(2)
AIM Municipal Bond Fund AIM Global Resources Fund(2)
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Telecommunications Fund(2)
AIM Tax-Free Intermediate Fund AIM Global Trends Fund(2), (E)
MONEY MARKET FUNDS
AIM Money Market Fund
AIM Tax-Exempt Cash 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.
