<PAGE> 1
SEMIANNUAL REPORT / JUNE 30 1999
AIM JAPAN GROWTH FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-----------------------------------------------------------
THE WAVE, FROM "ONE HUNDRED FAMOUS VIEWS OF EDO"
BY ANDO TOKITARO HIROSHIGE (1797 - 1858, JAPANESE)
ONE OF THE LAST GREAT PRINTMAKERS OF THE UKIYO-E SCHOOL,
HIROSHIGE WAS 19TH-CENTURY JAPAN'S MOST POPULAR ARTIST.
BEFORE HIROSHIGE, JAPANESE LANDSCAPES WERE PAINTED IN A
FORMAL, ACADEMIC MANNER. HIROSHIGE INTRODUCED A MORE
NATURAL, LYRICAL APPROACH THAT HAD ENORMOUS POPULAR APPEAL.
DURING HIS LIFETIME, HIROSHIGE PRODUCED OVER 5,000 PRINTS.
THE WAVE BELONGS TO A SERIES DEPICTING WELL-KNOWN VIEWS
AROUND EDO (NOW TOKYO).
-----------------------------------------------------------
AIM Japan Growth Fund is for shareholders who seek long-term growth of capital.
The fund invests primarily in equity securities of companies located in Japan.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Japan Growth Fund (formerly GT Global Japan 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 and Class C
share performance reflect the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B, Class C and Advisor Class shares will
differ from that of Class A shares due to differences in sales charge
structure and Fund expenses.
o Because Class C shares have been offered for less than one year, total
return provided is cumulative total return that has not been annualized.
o Had fees and expenses not been waived during the reporting period, returns
would have been lower.
o Beginning March 1, 1999, Advisor Class shares were closed to new investors.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o International investing presents certain risks not associated with
investing solely in the United States. These include risks relating to
fluctuations in the value of the U.S. dollar relative to the values of
other currencies, the custody arrangements made for the Fund's foreign
holdings, differences in accounting, political risks and the lesser degree
of public information required to be provided by non-U.S. companies.
o Market volatility can significantly affect short-term performance. Results
of an investment made today may differ substantially from the historical
performance shown.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The MSCI Japan Index is an arithmetic average, weighted by market value, of
the performance of 310 securities listed on the Japanese stock exchanges.
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 ALL OR A PART 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 JAPAN GROWTH FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
With only several months remaining in 1999, the question on
[PHOTO OF many of your minds may be, "How will the year 2000 computer
Charles T. issue affect AIM and my investments?" We would like you to
Bauer, feel comfortable. We are pleased to be able to report to you
Chairman of that as of June 1999 we achieved a major milestone toward
the Board of year 2000 compliance status: we have successfully completed
THE FUND the testing of all of our mission-critical systems.
APPEARS HERE] Earlier this year, AIM participated in an industrywide
test that gave us a chance to see how our technology systems
might be affected by the changeover to the year 2000 (Y2K).
Everything went as well as we had hoped; in general, the
industry sailed through the testing process with flying
colors. The financial industry has been seen as a leader in
planning for year 2000 concerns. Thus, it was no surprise to
most participants that the test was an overwhelming success.
The general purpose of the process was to test
electronic interfaces among financial industry members in the United States and
to follow transactions through a typical trading cycle--from order entry to the
settlement process. Investment banks, broker-dealers, custodian banks and mutual
fund companies all worked together to make this possible. Approximately 400
firms were involved in the testing; AIM was one of 70 asset managers.
During the testing process, thousands of transactions were submitted and
approximately 260,000 steps were tested. Of those, only a handful experienced
minor glitches--just 0.02% of the total number of transactions. All problems
were worked through quickly before the hypothetical trades were settled. Of
course, AIM will keep testing and planning throughout 1999 as a precaution.
AIM'S INTERNAL EFFORTS CONTINUE
As you know from our previous communications to you, AIM has been addressing the
year 2000 issue for several years. Now that we have finished adjusting our
applications and systems, our focus for the rest of 1999 is to continue
monitoring the year 2000 readiness status of outside sources we're linked to
electronically. On the investment side, our portfolio management staff is
continually evaluating the Y2K preparedness of the domestic and foreign
companies in which we invest.
We feel that our preparations for 2000 are very comprehensive, and the
industrywide testing showed that our colleagues in the financial industry are
also working hard to be ready for the new year. We do not think shareholders
need to take any extraordinary measures with their investments to prepare for
2000. However, if you have any lingering concerns, it may reassure you to know
that AIM is finalizing contingency plans that will be ready if necessary. Our
plans will give AIM employees guidelines to follow for a wide variety of
situations.
For a more comprehensive discussion of our Y2K efforts and for periodic
updates, please visit our Web site, www.aimfunds.com.
We are pleased to send you this report covering your fund's performance over
the last six months. If you have any questions or comments, please contact our
Client Services department at 800-959-4246, or e-mail your inquiry to us at
[email protected]. You can access information about your account through our
automated AIM Investor Line at 800-246-5463 or at our Web site.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--. We appreciate your business.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
A I M Advisors, Inc.
-----------------------
THE FINANCIAL INDUSTRY
HAS BEEN SEEN AS A
LEADER IN PLANNING FOR
YEAR 2000 CONCERNS.
-----------------------
PLEASE NOTE THAT THE INFORMATION ABOUT THE YEAR 2000 IN THIS LETTER IS DEEMED
AIM'S YEAR 2000 READINESS DISCLOSURE.
AIM JAPAN GROWTH FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
FUND BEATS INDEX AS JAPANESE MARKETS
SKYROCKET
THE JAPANESE STOCK MARKET SEEMS TO HAVE BOUNCED BACK IN THE FIRST HALF OF 1999.
HOW DID AIM JAPAN GROWTH FUND FARE OVER THE LAST SIX MONTHS?
Boosted by the rising Japanese market, the fund made significant gains during
the first half of 1999. For the six months ended June 30, 1999, total returns
without sales charges were quite impressive: 39.78% for Class A shares, 39.53%
for Class B shares and 40.29% for Advisor Class shares. These results were
nearly double the 20.72% return achieved by the MSCI Japan Index.
Class C shares, offered since May 3, 1999, produced a cumulative total
return of 15.39%, excluding sales charges, for the period ended June 30, 1999.
================================================================================
FUND OUTPERFORMS INDEX
Six-month returns as of 6/30/99, excluding sales charges
- --------------------------------------------------------------------------------
[BAR CHART]
Class A Shares 39.78%
Class B Shares 39.53%
Advisor Shares 40.29%
MSCI Japan Index 20.72%
================================================================================
WHAT'S DRIVING THE JAPANESE MARKETS SO HIGH?
The investment environment in Japan has steadily improved over the past six
months, driven by macroeconomic factors and the quickening pace of corporate
restructuring. The Bank of Japan's decision to lower interest rates to near zero
provided the initial catalyst for the rally in the first part of the year. In
June, a better-than-expected gross domestic product (GDP) number (1.9% for the
first quarter of 1999) also boosted the markets. This was very welcome news
after six consecutive quarters of contraction. Part of the increase in GDP came
from the Japanese government's spending as it made efforts to prime the pump and
get the economy recovering.
THE FUND DID VERY WELL AGAINST ITS COMPETITORS. WHAT ACCOUNTS FOR THIS
OUTPERFORMANCE?
Our stock selection was very concentrated. This proved successful since the fund
had limited exposure to such underperforming areas as banks and utilities and
high exposure to such winners as the telecommunications industry. For example,
our top holding, NTT Mobile Communications, has been very successful. The
company dominates Japan's cellular and paging services markets.
HOW DO YOU SELECT STOCKS FOR THE PORTFOLIO?
We select holdings through a process that combines top-down and bottom-up
analysis. Ultimately, we're looking for growth opportunities available at a
reasonable price. The final determinant of portfolio construction is the
availability of attractive companies.
Our top-down analysis focuses on monetary conditions that may dictate
economic activity six to 18 months in the future. For instance, changes in
industry regulation or expanding levels of public debt could affect the business
environment for a company. From this analysis, we create a model of expected
corporate profits. We also rank our sector preferences within the economy and
the marketplace. The models and rankings provide a framework for the top-down
perspective.
Bottom-up analysis focuses on fundamental company research. From a core
group of about 400 companies, analysts and managers make selections based on
company visits, potential product growth, market share trends, pricing power,
cash-flow generation, balance-sheet strength, management quality and valuation.
IN YOUR SECTOR AND INDUSTRY ANALYSIS DURING THE REPORTING PERIOD, WHICH AREAS
WERE MOST ATTRACTIVE?
Telecommunications, health care and financial services were good sectors; banks
and utilities were weak. Consumers have been holding on to their yen, so retail
hasn't been very strong, although there were a few exceptions. But as people
start to perceive that the economy is improving, they may spend a little more,
which itself could help recovery. As of the end of the reporting period, we were
overweighted in electronics, telecommunications, health care and financial
services.
WHAT WERE SOME OF THE BEST-PERFORMING STOCKS IN THE PORTFOLIO?
The latest wave of restructuring has spurred Japanese firms to use their
resources more productively. As a result, software services have grown rapidly.
One of our best holdings, Fujitsu Support &
------------------------------------
THE INVESTMENT ENVIRONMENT IN JAPAN
HAS STEADILY IMPROVED OVER THE PAST
SIX MONTHS, DRIVEN BY MACROECONOMIC
FACTORS AND THE QUICKENING PACE OF
CORPORATE RESTRUCTURING.
------------------------------------
See important fund and index disclosures inside front cover.
AIM JAPAN GROWTH FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of June 30, 1999, based on total net assets
<TABLE>
<CAPTION>
===============================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. NTT Mobile Communications 1. Electronics
Network Inc. 4.56% (Component Distributors) 12.35%
2. Fujitsu Ltd. 4.52 2. Electrical Equipment 10.91
3. Takeda Chemical Industries 4.33 3. Health Care (Drugs-Generic & Other) 7.37
4. Toshiba Corp. 4.00 4. Financial (Diversified) 7.06
5. Nichiei Co. Ltd. 3.89 5. Telecommunications
6. Sony Corp. 3.63 (Cellular/Wireless) 4.56
7. Ito-Yokado Co. Ltd. 3.50 6. Banks (Money Center) 3.89
8. Bridgestone Corp. 3.39 7. Retail (Department Stores) 3.57
9. Canon Inc. 3.23 8. Retail (Specialty) 3.45
10. Matsushita-Kotobuki 9. Auto Parts & Equipment 3.39
Electronics Ind. Ltd. 3.09 10. Office Equipment & Supplies 3.23
Please keep in mind that the fund's portfolio is subject to change and there is
no assurance that the fund will continue to hold any particular security.
===============================================================================================
</TABLE>
Service, has benefited enormously from this trend. The company helps its clients
find solutions to their computer networking and client/server needs.
Another good holding was specialty apparel company Fast Retailing. Despite
the poor environment for consumption, the company has produced strong sales
growth through some high-profile store openings and a change in its merchandise.
WERE THERE ANY DISAPPOINTMENTS?
Ito-Yokado, a high-quality supermarket operator and owner of the 7-11 company,
has shown very little growth. Similarly, Wacoal, a strong brand in ladies'
lingerie, suffered through a slow season.
WHAT IS YOUR OUTLOOK FOR THE MARKETS AND THE FUND?
The Japanese market landscape is very likely to change over the coming year.
Although restructuring is currently proceeding at a moderate pace, it is
accelerating. Structural changes in Japanese companies will likely create bigger
performance gaps; there will be greater distinctions between winners and losers.
That means that strong stock selection will become increasingly important.
The economic outlook is less certain. The Nikkei hit its high for the first
half of the year on June 28. However, on June 29, it fell nearly 1.5% after the
Japanese government announced a significant decrease in construction orders for
May. May's industrial production figures also were worse than expected. A
full-fledged recovery seems unlikely, though the downward forces are being
counteracted by better global demand.
Despite the uncertainty about the economy, overseas investment houses have
been quite bullish on Japan, making the market environment a little easier.
Nevertheless, the economy is likely to see little growth, and investors could
eventually temper their enthusiasm. We're really pleased with the results for
the first half of 1999, but for the rest of the year we may see more moderate
returns.
================================================================================
RESULTS OF A $10,000 INVESTMENT
AIM JAPAN GROWTH FUND VS. BENCHMARK INDEX
7/19/85 - 6/30/99
- --------------------------------------------------------------------------------
[BAR CHART]
AIM Japan Growth Fund,
Class A Shares $52,576
MSCI Japan Index $33,832
Past performance is no guarantee of comparable future results
================================================================================
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/99, including sales charges
CLASS A SHARES
Inception (7/19/85) 12.64%
10 years 2.14
5 year 0.52
1 year 30.30*
*37.95%, excluding sales charges
CLASS B SHARES
Inception (4/1/93) 6.24%
5 years 0.70
1 year 32.16**
**37.16%, excluding CDSC
CLASS C SHARES
Inception (5/3/99) 14.39%*
*cumulative total return
ADVISOR CLASS SHARES (do not include sales charges)
Inception (6/1/95) 8.77%
1 year 38.63
Sources: Towers Data Systems HYPO--Registered Trademark--, Bloomberg.
Your fund's total return includes sales charges, expenses and management fees.
For fund data performance calculations and descriptions of indexes cited on this
page, please refer to the inside front cover. Please note that index results are
for the period 7/31/85 - 6/30/99.
================================================================================
MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM
PERFORMANCE. RESULTS OF AN INVESTMENT MADE TODAY
MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
See important fund and index disclosures inside front cover.
AIM JAPAN GROWTH FUND
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS (JAPAN)-90.12%
AUTO PARTS & EQUIPMENT-3.39%
Bridgestone Corp. 150,000 $ 4,539,066
- --------------------------------------------------------------
AUTOMOBILES-0.76%
Toyota Motor Corp. 32,000 1,013,311
- --------------------------------------------------------------
BANKS (MONEY CENTER)-3.89%
Nichiei Co., Ltd. 59,400 5,205,787
- --------------------------------------------------------------
COMPUTERS (NETWORKING)-2.49%
Fujitsu Support and Service, Inc. 22,000 3,332,286
- --------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-1.12%
Softbank Corp.(a) 7,400 1,499,578
- --------------------------------------------------------------
CONSUMER FINANCE-2.70%
Acom Co., Ltd.(a) 24,000 2,073,584
- --------------------------------------------------------------
Aeon Credit Service Ltd. 8,000 760,645
- --------------------------------------------------------------
Mycal Card, Inc. 17,000 773,047
- --------------------------------------------------------------
3,607,276
- --------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-2.35%
Nihon Unisys, Ltd. 145,000 3,146,962
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-10.91%
Fujitsu Ltd. 300,000 6,039,686
- --------------------------------------------------------------
TDK Corp. 35,000 3,203,390
- --------------------------------------------------------------
Toshiba Corp. 750,000 5,351,385
- --------------------------------------------------------------
14,594,461
- --------------------------------------------------------------
ELECTRONICS (COMPONENT
DISTRIBUTORS)-12.35%
Matsushita-Kotobuki Electronics
Industries Ltd. 146,000 4,128,317
- --------------------------------------------------------------
Murata Manufacturing Co., Ltd. 55,000 3,619,677
- --------------------------------------------------------------
Rohm Co., Ltd. 25,000 3,916,908
- --------------------------------------------------------------
Sony Corp. 45,000 4,855,312
- --------------------------------------------------------------
16,520,214
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-7.06%
Diamond Lease Co., Ltd. 61,000 589,070
- --------------------------------------------------------------
Jafco Co., Ltd. 50,000 3,307,152
- --------------------------------------------------------------
Shohkoh Fund & Co. 4,650 3,337,081
- --------------------------------------------------------------
Takefuji Corp. 21,300 2,203,084
- --------------------------------------------------------------
9,436,387
- --------------------------------------------------------------
FOODS-0.38%
Nissin Food Products Co., Ltd. 21,000 512,195
- --------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-7.37%
Taisho Pharmaceutical Co., Ltd. 50,000 1,653,576
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (DRUGS-GENERIC & OTHER)-(CONTINUED)
Takeda Chemical Industries 125,000 $ 5,797,850
- --------------------------------------------------------------
Yamanouchi Pharmaceutical Co.,
Ltd. 63,000 2,411,658
- --------------------------------------------------------------
9,863,084
- --------------------------------------------------------------
HOMEBUILDING-1.52%
Sekisui Chemical Co., Ltd. 350,000 2,031,418
- --------------------------------------------------------------
LEISURE TIME (PRODUCTS)-2.89%
Fuji Photo Film Co., Ltd. 37,000 1,401,075
- --------------------------------------------------------------
Nintendo Co., Ltd. 17,500 2,461,141
- --------------------------------------------------------------
3,862,216
- --------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-3.23%
Canon, Inc. 150,000 4,315,833
- --------------------------------------------------------------
PERSONAL CARE-1.96%
Kao Corp.(a) 40,000 1,124,432
- --------------------------------------------------------------
Shiseido Co., Ltd. 100,000 1,499,793
- --------------------------------------------------------------
2,624,225
- --------------------------------------------------------------
PUBLISHING-1.06%
Nichii Gakkan Co.(a) 13,000 1,418,768
- --------------------------------------------------------------
RESTAURANTS-1.89%
Yoshinoya D&C Co., Ltd. 140 2,523,357
- --------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-3.51%
Ito-Yokado Co., Ltd. 70,000 4,687,888
- --------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-2.77%
Paris Miki, Inc. 68,000 3,710,624
- --------------------------------------------------------------
RETAIL (SPECIALTY)-3.45%
Citizen Watch Co., Ltd. 390,000 3,385,697
- --------------------------------------------------------------
Tsutsumi Jewelry Co., Ltd. 45,000 1,227,780
- --------------------------------------------------------------
4,613,477
- --------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-2.39%
Fast Retailing Co., Ltd. 15,000 1,612,236
- --------------------------------------------------------------
Ryohin Keikaku Co., Ltd. 6,300 1,586,069
- --------------------------------------------------------------
3,198,305
- --------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.73%
Secom Co., Ltd. 35,000 3,646,135
- --------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/
WIRELESS)-4.56%
NTT Mobile Communications Network,
Inc. 450 6,101,695
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TELECOMMUNICATIONS (LONG
DISTANCE)-2.40%
Nippon Telegraph & Telephone Corp. 275 $ 3,205,870
- --------------------------------------------------------------
TEXTILES (APPAREL)-0.99%
Wacoal Corp. 130,000 1,324,183
- --------------------------------------------------------------
Total Foreign Stocks (Cost
$94,256,232) 120,534,601
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-7.64%(B)
State Street Bank & Trust Co.,
4.70%, 07/01/99 (Cost
$10,224,000)(c) $10,224,000 $ 10,224,000
- --------------------------------------------------------------
TOTAL INVESTMENTS-97.76% 130,758,601
- --------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-2.24% 2,996,039
- --------------------------------------------------------------
NET ASSETS-100.00% $133,754,640
==============================================================
</TABLE>
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 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) Repurchase agreement entered into 06/30/99 with a maturing value
$10,225,335. Collateralized by U.S. Treasury securities.
See Notes to Financial Statements.
5
<PAGE> 8
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$104,480,232) $130,758,601
- ---------------------------------------------------------
Cash 476
- ---------------------------------------------------------
Foreign currencies, at value (cost $17,369) 17,445
- ---------------------------------------------------------
Receivables for:
Forward currency contracts 372,140
- ---------------------------------------------------------
Fund shares sold 3,793,214
- ---------------------------------------------------------
Dividends and interest 138,614
- ---------------------------------------------------------
Other assets 24,645
- ---------------------------------------------------------
Total assets 135,105,135
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 290,547
- ---------------------------------------------------------
Fund shares reacquired 877,444
- ---------------------------------------------------------
Interest 1,592
- ---------------------------------------------------------
Accrued distribution fees 103,034
- ---------------------------------------------------------
Accrued transfer agent fees 28,246
- ---------------------------------------------------------
Accrued operating expenses 49,632
- ---------------------------------------------------------
Total liabilities 1,350,495
- ---------------------------------------------------------
Net assets applicable to shares outstanding $133,754,640
- ---------------------------------------------------------
NET ASSETS:
Class A $ 77,523,130
=========================================================
Class B $ 49,772,625
=========================================================
Class C $ 1,829,719
=========================================================
Advisor Class $ 4,629,166
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 6,231,521
=========================================================
Class B 4,173,695
=========================================================
Class C 153,480
=========================================================
Advisor Class 366,225
=========================================================
Class A:
Net asset value and redemption price per
share $ 12.44
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $12.44
divided by 94.50%) $ 13.16
=========================================================
Class B:
Net asset value and offering price per
share $ 11.93
=========================================================
Class C:
Net asset value and offering price per
share $ 11.92
=========================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 12.64
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $31,586 foreign
withholding tax) $ 178,988
- ---------------------------------------------------------
Interest 327,683
- ---------------------------------------------------------
Security lending income 13,122
- ---------------------------------------------------------
Total investment income 519,793
- ---------------------------------------------------------
EXPENSES:
Management fees 405,835
- ---------------------------------------------------------
Administrative services fees 13,013
- ---------------------------------------------------------
Interest expense 1,592
- ---------------------------------------------------------
Distribution fees -- Class A 87,503
- ---------------------------------------------------------
Distribution fees -- Class B 154,875
- ---------------------------------------------------------
Distribution fees -- Class C 773
- ---------------------------------------------------------
Transfer agent fees -- Class A 78,200
- ---------------------------------------------------------
Transfer agent fees -- Class B 48,443
- ---------------------------------------------------------
Transfer agent fees -- Class C 242
- ---------------------------------------------------------
Transfer agent fees -- Advisor Class 3,900
- ---------------------------------------------------------
Other 136,572
- ---------------------------------------------------------
Total expenses 930,948
- ---------------------------------------------------------
Less: Expenses paid indirectly and expense
reductions (3,996)
- ---------------------------------------------------------
Net expenses 926,952
- ---------------------------------------------------------
Net investment income (loss) (407,159)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FORWARD CURRENCY CONTRACTS
AND FUTURES:
Net realized gain from:
Investment securities 1,183,792
- ---------------------------------------------------------
Foreign currencies 278,551
- ---------------------------------------------------------
Forward currency contracts 46,031
- ---------------------------------------------------------
Futures contracts 595,294
- ---------------------------------------------------------
2,103,668
- ---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities 26,280,234
- ---------------------------------------------------------
Foreign currencies (5,153)
- ---------------------------------------------------------
Forward currency contracts 4,152,813
- ---------------------------------------------------------
Futures contracts (1,165,922)
- ---------------------------------------------------------
29,261,972
- ---------------------------------------------------------
Net gain from investment securities
foreign currencies, forward currency
contracts and futures 31,365,640
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $ 30,958,481
=========================================================
</TABLE>
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1999 and the year ended December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (407,159) $ (267,417)
- --------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities,
foreign currencies, forward currency contracts and
futures 2,103,668 (14,774,034)
- --------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, foreign currencies, forward currency
contracts and futures 29,261,972 16,253,705
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 30,958,481 1,212,254
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (54,799)
- --------------------------------------------------------------------------------------------
Class B -- (31,189)
- --------------------------------------------------------------------------------------------
Advisor Class -- (1,928)
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A 21,256,431 (8,445,884)
- --------------------------------------------------------------------------------------------
Class B 15,645,796 (1,105,543)
- --------------------------------------------------------------------------------------------
Class C 1,716,569 --
- --------------------------------------------------------------------------------------------
Advisor Class 1,781,009 (28,360,840)
- --------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 71,358,286 (36,787,929)
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 62,396,354 99,184,283
- --------------------------------------------------------------------------------------------
End of period $133,754,640 $ 62,396,354
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $125,480,238 $ 85,080,433
- --------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (407,159) --
- --------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, foreign currencies, forward currency
contracts and futures (17,965,333) (20,069,001)
- --------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities, foreign currencies, forward currency
contracts and futures 26,646,894 (2,615,078)
- --------------------------------------------------------------------------------------------
$133,754,640 $ 62,396,354
============================================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Japan Growth Fund (the "Fund") is a separate series of AIM Growth Series
(the "Trust"). The Trust is organized as a Delaware business trust and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
an open-end series management investment company consisting of six separate
series portfolios, each having an unlimited number of shares of beneficial
interest. The Fund currently offers four different classes of shares: Class A
shares, Class B shares, Class C shares and Advisor Class shares. Class A shares
are sold with a front-end sales charge. Class B shares and Class C shares are
sold with a contingent deferred sales charge. Advisor Class shares are sold
without a sales charge. Effective March 1, 1999, the Fund has discontinued sales
of the Advisor Class shares to new investors. Matters affecting each portfolio
or class will be voted on exclusively by the shareholders of such portfolio or
class. The 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 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 $14,061,105 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. 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 Fund 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
Fund 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 Fund as unrealized
gains or losses. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the value of the
8
<PAGE> 11
contract at the time it was opened and the value at the time it was closed.
The potential risk to the Fund is that the change in value of the underlying
securities may not correlate to the change in value of the contracts. The
Fund may use futures contracts to manage its exposure to the stock market
and to fluctuations in interest rates.
F. Foreign Currency Contracts -- A foreign currency contract is an obligation
to purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably. Outstanding forward currency contracts at June 30, 1999 were as
follows:
<TABLE>
<CAPTION>
CONTRACT TO
SETTLEMENT --------------------------- UNREALIZED
DATE DELIVER RECEIVE VALUE APPRECIATION
------------ ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
08/12/99 JPY 1,300,000,000 $10,887,772 $10,816,715 $ 71,057
08/12/99 JPY 5,500,000,000 46,063,652 45,763,023 300,629
08/12/99 JPY 700,000,000 5,824,839 5,824,385 454
----------- ----------- --------
$62,776,263 $62,404,123 $372,140
=========== =========== ========
</TABLE>
G. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at the date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions. The
Fund does not separately account for that portion of the results of
operations resulting from changes in foreign exchange rates on investments
and the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gain or loss from investments.
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 0.975% on the first $500 million of
the Fund's average daily net assets, plus 0.95% on the next $500 million of the
Fund's average daily net assets, plus 0.925% on the next $500 million of the
Fund's average daily net assets, plus 0.90% 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 2.00%, 2.65%, 2.65%, and 1.65% 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 $122,673 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 $87,503, $154,875 and $773, 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 $56,688 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 $127 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-EXPENSE REDUCTIONS
During the six months ended June 30, 1999, the Fund received reductions in
custodian fees of $148 under an expense offset arrangement and AIM directed
certain portfolio trades to brokers who then paid $3,848 of the Fund's expenses.
The effect of the above arrangements resulted in reductions of the Fund's total
expenses of $3,996.
9
<PAGE> 12
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration accrued 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.
For the six months ended June 30, 1999, the average outstanding daily balance
of bank loans for the Fund was $60,773 with a weighted average interest rate of
5.21%. Interest expense for the Fund for the six months ended June 30, 1999 was
$1,592.
NOTE 6-PORTFOLIO SECURITIES LOANED
At June 30, 1999, securities with an aggregate value of $4,520,819 were on loan
to brokers. The loans were secured by cash collateral of $5,706,020 received by
the Fund. For the six months ended June 30, 1999, the Fund received fees of
$13,122 for securities lending.
For international securities, cash collateral is received by the fund against
loaned securities in an amount at least equal to 105% of the market value of the
loaned securities at the inception of each loan. This collateral must be
maintained at not less than 103% of the market value of the loaned securities
during the period of the loan. For domestic securities, 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
$63,832,364 and $27,596,179, 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 $24,303,726
- ---------------------------------------------------------------
Aggregate unrealized (depreciation) of investment
securities (814,894)
- ---------------------------------------------------------------
Net unrealized appreciation of investment
securities $23,488,832
===============================================================
</TABLE>
Cost of investments for tax purposes is $107,269,769.
NOTE 8-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 10,521,857 $107,974,096 31,462,291 $ 276,913,744
- ------------------------------------------------------------------------------
Class B 3,361,508 34,027,008 3,640,751 31,434,436
- ------------------------------------------------------------------------------
Class C* 224,838 2,525,731 -- --
- ------------------------------------------------------------------------------
Advisor Class 524,832 5,567,720 1,661,544 14,964,767
- ------------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A -- -- 5,162 45,216
- ------------------------------------------------------------------------------
Class B -- -- 3,285 27,680
- ------------------------------------------------------------------------------
Advisor Class -- -- 110 979
- ------------------------------------------------------------------------------
Reacquired:
Class A (8,517,035) (86,717,665) (32,214,010) (285,404,844)
- ------------------------------------------------------------------------------
Class B (1,857,440) (18,381,212) (3,772,881) (32,567,659)
- ------------------------------------------------------------------------------
Class C* (71,358) (809,162) -- --
- ------------------------------------------------------------------------------
Advisor Class (377,657) (3,786,711) (4,795,465) (43,326,586)
- ------------------------------------------------------------------------------
3,809,545 $ 40,399,805 (4,009,213) $ (37,912,267)
==============================================================================
</TABLE>
* Class C shares commenced sales May 3, 1999.
10
<PAGE> 13
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A 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 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 operations commenced)
through December 31, 1995.
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------
December 31,
June 30, --------------------------------------------------
1999 1998(a) 1997(a) 1996(a) 1995(a) 1994
-------- ------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.90 $ 8.96 $ 9.76 $ 11.00 $ 12.15 $ 11.61
- ----------------------------------------------------------- ------- ------- ------- ------- -------- -------
Income from investment operations:
Net investment income (loss) (0.03) (0.02)(b) (0.08) (0.04) (0.04) (0.04)
- ----------------------------------------------------------- ------- ------- ------- ------- -------- -------
Net realized and unrealized gain (loss) on investments 3.57 (0.03) (0.70) (0.77) 0.26 0.79
- ----------------------------------------------------------- ------- ------- ------- ------- -------- -------
Net increase (decrease) from investment operations 3.54 (0.05) (0.78) (0.81) 0.22 0.75
- ----------------------------------------------------------- ------- ------- ------- ------- -------- -------
Less distributions from net realized gains -- (0.01) (0.02) (0.43) (1.37) (0.21)
- ----------------------------------------------------------- ------- ------- ------- ------- -------- -------
Net asset value, end of period $ 12.44 $ 8.90 $ 8.96 $ 9.76 $ 11.00 $ 12.15
=========================================================== ======= ======= ======= ======= ======== =======
Total return(c) 39.78% (0.54)% (7.99)% (7.43)% 1.94% 6.56%
=========================================================== ======= ======= ======= ======= ======== =======
Ratios and supplemental data:
Net assets, end of period (in 000s) $77,523 $37,608 $44,583 $63,585 $111,105 $98,066
=========================================================== ======= ======= ======= ======= ======== =======
Ratio of net investment income (loss) to average net
assets: (0.76)%(d) (0.19)% (0.61)% (0.40)% (0.40)% (0.32)%
=========================================================== ======= ======= ======= ======= ======== =======
Ratio of expenses to average net assets:
with expense waivers(e) 2.00%(d) 1.96% 1.99% 1.84% 1.99% 1.91%
=========================================================== ======= ======= ======= ======= ======== =======
without expense waivers 2.01%(d) 2.33% 2.06% 1.94% 2.14% 2.03%
=========================================================== ======= ======= ======= ======= ======== =======
Portfolio turnover rate 38% 67% 58% 31% 67% 49%
=========================================================== ======= ======= ======= ======= ======== =======
</TABLE>
(a) These selected per share data were calculated based upon average shares
outstanding during the period.
(b) Includes reimbursement of Fund operating expenses per share of $0.03.
(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 $50,416,185.
(e) Prior to the period ended June 30, 1999, ratios include expense reductions.
<TABLE>
<CAPTION>
Class B
---------------------------------------------------------------
December 31,
June 30, -------------------------------------------------
1999 1998(a) 1997(a) 1996(a) 1995(a) 1994
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.55 $ 8.67 $ 9.49 $ 10.78 $ 12.02 $ 11.57
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (0.05) (0.07)(b) (0.14) (0.11) (0.12) (0.13)
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Net realized and unrealized gain (loss) on investments 3.43 (0.04) (0.66) (0.75) 0.25 0.79
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Net increase (decrease) from investment operations 3.38 (0.11) (0.80) (0.86) 0.13 0.66
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Less distributions from net realized gains -- (0.01) (0.02) (0.43) (1.37) (0.21)
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Net asset value, end of period $ 11.93 $ 8.55 $ 8.67 $ 9.49 $ 10.78 $ 12.02
=========================================================== ======= ======= ======= ======= ======= =======
Total return(c) 39.53% (1.25)% (8.42)% (8.05)% 1.20% 5.81%
=========================================================== ======= ======= ======= ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (in 000s) $49,773 $22,815 $24,250 $32,116 $41,274 $27,355
=========================================================== ======= ======= ======= ======= ======= =======
Ratio of net investment income (loss) to average net assets: (1.39)%(d) (0.84)% (1.26)% (1.05)% (1.05)% (0.97)%
=========================================================== ======= ======= ======= ======= ======= =======
Ratio of expenses to average net assets:
with expense waivers(e) 2.63%(d) 2.61% 2.64% 2.49% 2.64% 2.56%
=========================================================== ======= ======= ======= ======= ======= =======
without expense waivers 2.64%(d) 2.98% 2.71% 2.59% 2.79% 2.68%
=========================================================== ======= ======= ======= ======= ======= =======
Portfolio turnover rate 38% 67% 58% 31% 67% 49%
=========================================================== ======= ======= ======= ======= ======= =======
</TABLE>
(a) These selected per share data were calculated based upon average shares
outstanding during the period.
(b) Includes reimbursement of Fund operating expenses per share of $0.03.
(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 $31,231,598.
(e) Prior to the period ended June 30, 1999, ratios include expense reductions.
11
<PAGE> 14
NOTE 9-FINANCIAL HIGHLIGHTS-(CONTINUED)
<TABLE>
<CAPTION>
Class C
--------
May 3, Advisor Class
1999 ------------------------------------------------
through December 31,
June 30, June 30, -------------------------------------
1999 1999 1998(a) 1997(a) 1996(a) 1995(a)
-------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.33 $ 9.01 $ 9.05 $ 9.81 $11.02 $10.50
- ------------------------------------------------------------ ------ ------ ------ ------- ------ ------
Income from investment operations:
Net investment income (loss) (0.01) (0.01) 0.01(b) (0.01) (0.01) 0.00
- ------------------------------------------------------------ ------ ------ ------ ------- ------ ------
Net realized and unrealized gain (loss) on investments 1.60 3.64 (0.04) (0.73) (0.77) 1.89
- ------------------------------------------------------------ ------ ------ ------ ------- ------ ------
Net increase (decrease) from investment operations 1.59 3.63 (0.03) (0.74) (0.78) 1.89
- ------------------------------------------------------------ ------ ------ ------ ------- ------ ------
Less distributions from net realized gains -- -- (0.01) (0.02) (0.43) (1.37)
- ------------------------------------------------------------ ------ ------ ------ ------- ------ ------
Net asset value, end of period $11.92 $12.64 $ 9.01 $ 9.05 $ 9.81 $11.02
============================================================ ====== ====== ====== ======= ====== ======
Total return(c) 15.39% 40.29% (0.31)% (7.54)% (7.14)% 18.14%
============================================================ ====== ====== ====== ======= ====== ======
Ratios and supplemental data:
Net assets, end of period (in 000s) $1,830 $4,629 $1,973 $30,351 $ 413 $ 558
============================================================ ====== ====== ====== ======= ====== ======
Ratio of net investment income (loss) to average net assets: (1.39)%(d) (0.41)%(d) 0.16% (0.26)% (0.05)% (0.05)%(e)
============================================================ ====== ====== ====== ======= ====== ======
Ratio of expenses to average net assets:
with expense waivers(f) 2.63%(d) 1.64%(d) 1.61% 1.64% 1.49% 1.64%
============================================================ ====== ====== ====== ======= ====== ======
without expense waivers 2.64%(d) 1.65%(d) 1.98% 1.71% 1.59% 1.79%
============================================================ ====== ====== ====== ======= ====== ======
Portfolio turnover rate 38% 38% 67% 58% 31% 67%(e)
============================================================ ====== ====== ====== ======= ====== ======
</TABLE>
(a) These selected per share data were calculated based upon average shares
outstanding during the period.
(b) Includes reimbursement of Fund operating expenses per share of $0.03.
(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 $478,399 and
$2,514,548, Class C and Advisor Class, respectively.
(e) Annualized.
(f) Prior to the period ended June 30, 1999, ratios include expense reductions.
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 SUB-ADVISOR
President and Chief Executive Officer, Gary T. Crum
A I M Management Group Inc. Vice President INVESCO Asset Management
(Japan) Limited
Arthur C. Patterson Carol F. Relihan Imperial Tower
Managing Partner, Accel Partners Vice President 1-1-1 Uchisaiwai-cho,
(a venture capital firm) Chiyoda-Ku, Tokyo, 100-0011
Mary J. Benson
Ruth H. Quigley Assistant Vice President and TRANSFER AGENT
Private Investor Assistant Treasurer
A I M Fund Services, Inc.
Sheri Morris P.O. Box 4739
Assistant Vice President and Houston, TX 77210-4739
Assistant Treasurer
CUSTODIAN
Nancy L. Martin
Assistant Secretary State Street Bank and Trust Company
225 Franklin Street
Ofelia M. Mayo Boston, MA 02110
Assistant Secretary
COUNSEL TO THE FUND
Kathleen J. Pflueger
Assistant Secretary Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1800
COUNSEL TO THE TRUSTEES
Paul, Hastings, Janofsky & Walker LLP
Twenty Third Floor
555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
</TABLE>
<PAGE> 16
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc.
AIM Aggressive Growth Fund(1) AIM Money Market Fund has provided leadership in the
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund mutual-fund industry since
AIM Capital Development Fund 1976 and managed approximately
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS $121 billion in assets for
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund more than 6.3 million
AIM Large Cap Growth Fund AIM Asian Growth Fund shareholders, including
AIM Mid Cap Equity Fund,(A) AIM Developing Markets Fund individual investors,
AIM Select Growth Fund(3) AIM Europe Growth Fund corporate clients and
AIM Small Cap Growth Fund,(B) AIM European Development Fund financial institutions, as of
AIM Small Cap Opportunities Fund AIM International Equity Fund June 30, 1999.
AIM Value Fund AIM Japan Growth Fund The AIM Family of
AIM Weingarten Fund AIM Latin American Growth Fund Funds--Registered Trademark--
AIM New Pacific Growth Fund is distributed nationwide, and
GROWTH & INCOME FUNDS AIM today is the 10th-largest
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS mutual-fund complex in the
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund United States in assets under
AIM Advisor Real Estate Fund AIM Global Growth Fund management, according to
AIM Balanced Fund Strategic Insight, an
AIM Basic Value Fund(C) GLOBAL GROWTH & INCOME FUNDS independent mutual-fund
AIM Charter Fund AIM Global Growth & Income Fund monitor.
AIM Global Utilities Fund
INCOME FUNDS
AIM Floating Rate Fund GLOBAL INCOME FUNDS
AIM High Yield Fund AIM Emerging Markets Debt Fund(D)
AIM High Yield Fund II AIM Global Government Income Fund
AIM Income Fund AIM Global Income Fund
AIM Intermediate Government Fund AIM Strategic Income Fund
AIM Limited Maturity Treasury Fund
THEME FUNDS
TAX-FREE INCOME FUNDS AIM Global Consumer Products and Services Fund
AIM High Income Municipal Fund AIM Global Financial Services Fund
AIM Municipal Bond Fund AIM Global Health Care Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Infrastructure Fund
AIM Tax-Free Intermediate Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund(E)
AIM Global Trends Fund(F)
</TABLE>
(1) AIM Aggressive Growth Fund reopened to new investors November 16, 1998. (A)
On September 8, 1998, AIM Mid Cap Growth Fund was renamed AIM Mid Cap Equity
Fund. (B) On September 8, 1998, AIM Small Cap Equity Fund was renamed AIM Small
Cap Growth Fund. (C) On September 8, 1998, AIM America Value Fund was renamed
AIM Basic Value Fund. (D) On September 8, 1998, AIM Global High Income Fund was
renamed AIM Emerging Markets Debt Fund. (E) On June 1, 1999, AIM Global
Telecommunications Fund was renamed AIM Global Telecommunications and Technology
Fund. (F) On September 8, 1998, AIM New Dimension Fund was renamed AIM Global
Trends Fund. For more complete information about any AIM Fund(s), including
sales charges and expenses, ask your financial consultant or securities dealer
for a free prospectus(es). Please read the prospectus(es) carefully before you
invest or send money.
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