<PAGE>
ANNUAL REPORT / DECEMBER 31 1998
AIM INTERNATIONAL GROWTH FUND
COVER PHOTO FOR INTERNATIONAL GROWTH
HUMAN ACHIEVEMENT
AIM LOGO
INVEST WITH DISCIPLINE-Registered Trademark-
<PAGE>
HUMAN ACHIEVEMENT BY TSING-FANG CHEN FOR THIS STUDY
IN MODERN ICONOGRAPHY, TSING-FANG CHEN CREATED A
IFC PHOTO FOR HUMAN MULTICULTURAL COLLAGE OF SYMBOLS REPRESENTING THE
ACHIEVEMENT FINEST ACHIEVEMENTS OF PEOPLE AROUND THE WORLD.
TODAY, THE INTERNATIONAL MARKETPLACE HELPS PUT MANY
OF THE WORLD'S GREAT IDEAS INTO ACTION-IDEAS THAT
COULD BECOME THE SYMBOLS OF HUMAN ACHIEVEMENT FOR
THE 21ST CENTURY.
AIM International Growth Fund is for shareholders who seek long-term growth
of capital. The Fund invests primarily in equity securities of companies
located outside the United States.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
- - AIM International Growth Fund (formerly GT Global International Growth
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.
- - During the fiscal year ended December 31, 1999, the Fund paid the
following distributions per share: Class A shares, $0.36; Class B
shares, $0.32; and Advisor Class shares, $0.39.
- - 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.
- - 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 prospectus
for more complete information.
- - 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.
- - 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.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
- - The EAFE-Registered Trademark- (Europe, Australasia, and the Far East)
Index is a group of unmanaged foreign securities tracked by Morgan
Stanley Capital International.
- - An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. THERE IS A RISK THAT YOU COULD LOSE A PORTION OR ALL OF YOUR MONEY.
This report may be distributed only to current shareholders or to persons who
have received a current prospectus of the Fund.
AIM INTERNATIONAL GROWTH FUND
<PAGE>
ANNUAL REPORT / CHAIRMAN'S LETTER
DEAR FELLOW SHAREHOLDER:
As the fiscal year opened, markets were recovering
from the concerns produced by financial crises in
Asia during 1997, and this optimism early in 1998
led several market indexes to all-time highs in
spring and early summer. However, the year was to
MR. bring two particularly serious financial shocks,
BAUER'S first the debt default by Russia, and later the
PHOTO gathering crisis in Brazil, which devalued its
currency shortly after the fiscal year closed. The
result was another year of significant market
volatility. Optimism yielded to pessimism over the
summer as global financial crises precipitated a
worldwide loss of confidence that affected even
U.S. blue chips and market-leading European
stocks. The correction 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. Numerous interest rate
cuts in other countries followed. Investors
responded favorably and markets rallied. Europe
and the U.S. regained their market leadership, but
investors in most emerging markets suffered
serious financial loss over the year.
HOW SHOULD INVESTORS RESPOND?
We understood how unnerving 1998's level of
volatility could have been. Our repeated message
to you is to keep a long-term outlook on
investments, 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.
. . . WE ARE PLEASED In view of recent volatility, this may be a
TO NOTE THAT MOST very good time to meet with your financial
MUTUAL FUND consultant to review your current asset allocation
SHAREHOLDERS REMAINED and the diversification of your portfolio. Broad
COOL HEADED AND portfolio diversification remains one of the most
DID NOT PULL OUT OF THE fundamental principles of investing, along with
MARKETS DURING 1998. 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 they managed the
portfolio in light of recent volatility. We hope
you find their discussion informative.
MERGER APPROVED
We are pleased to report that AIM International
Growth Fund shareholders approved the merger of
that Fund into AIM International Equity Fund. In
accordance with the merger agreement, the assets
of AIM International Growth Fund have been
transferred to AIM International Equity Fund and
shares of AIM International Equity Fund have been
issued in exchange. This merger took place on
February 12, 1999.
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. 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 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.
AIM INTERNATIONAL GROWTH FUND
<PAGE>
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND SURVIVES GLOBAL FINANCIAL CRISIS
HOW DID THE FUND PERFORM DURING THE LAST FISCAL YEAR?
Falling world markets and record volatility created a challenging environment
for the AIM International Growth Fund. Despite these difficulties, the Fund
avoided deep losses and ended the fiscal year with a total return of 4.97%
for Class A shares, 4.13% for Class B shares, and 4.84% for Advisor Class
shares. In comparison, over the same period the EAFE index returned 20.00%.
WHAT CONTRIBUTED TO GLOBAL MARKET VOLATILITY DURING THE REPORTING PERIOD?
Pressures from the Asian financial crisis, plummeting commodity prices,
currency devaluations around the world, and the Russian government's default
on a substantial portion of its foreign debt all converged in mid-year.
Nervous investors abandoned riskier investments and fled to such safe havens
as U.S. Treasuries. Investor flight was most dramatic in emerging markets,
but few world markets were spared. As a result, many of the gains enjoyed
from booming European and U.S. markets early in 1998 were reversed during the
summer and early fall.
Unfortunately, the Fund did not escape this turmoil; it took quite a
beating during summer's global selloff. The Fund's holdings in the United
States and Europe were hit particularly hard during that period. Developed
markets stabilized then rallied in the fall, reassured by declining interest
rates, but many emerging markets continued to be extremely volatile. The Fund
had a relatively small exposure to emerging markets, but the poor performance
of these stocks, especially in Brazil and South Africa, had a
disproportionate influence on performance.
WHAT CHANGES HAVE YOU MADE TO THE PORTFOLIO RECENTLY?
Our strategy during the entire reporting period was to focus on stocks with
strong, sustainable earnings growth. We sought companies with good products
and healthy consumer demand, as well as companies that stood to benefit from
lower long-term interest rates.
The portfolio remained relatively stable during the last half of 1998,
although we did reduce our holdings in technology slightly. We continued to
favor financials, focusing on asset quality as a key determinant for
selection. European banks were especially attractive, as the banking industry
has been consolidating in anticipation of European Economic and Monetary
Union (EMU). The European telecommunications industry also offered good
opportunities, largely as a result of deregulation. For instance, Telecom
Italia has made some strong competitive moves by expanding its services to
consumers.
We avoided such industries as commodity manufacturing companies, capital
goods comanies, and basic industries because they are generally less
successful in a falling interest-rate environment.
WHICH GEOGRAPHIC AREAS INTERESTED YOU MOST?
We increased our holdings in continental Europe to take advantage of bargain
prices after summer's declines. However, a few of these selections proved
disappointing; their prices continued to drop, contributing to the Fund's
underperformance. Nevertheless, holdings in Europe and the U.K. composed over
75% of the portfolio's total net assets.
EUROPEAN COMPANIES ARE SHOWING STRONGER GROWTH THAN THEIR U.S. COUNTERPARTS,
AND INVESTORS CAN GET THAT GROWTH AT A CHEAPER PRICE.
THE EURO ZONE
MAP OF EUROPE
SEE IMPORTANT FUND AND INDEX DISCLOSURES INSIDE FRONT COVER.
AIM INTERNATIONAL GROWTH FUND
<PAGE>
ANNUAL REPORT / MANAGERS' OVERVIEW
We reduced our exposure to companies in emerging markets and the
Asia-Pacific region. The move was beneficial in Latin America, but in Asia it
meant that we missed out on some opportunities that came from a surprise
rally in the fall.
WHY DOES THE FUND FAVOR EUROPE?
The Fund has been bullish on European stocks for several reasons. The first
is price: European equities are trading at much lower valuations compared to
U.S. stocks. In addition, we're positioning the Fund to benefit from
structural changes as the EMU takes shape. Huge opportunities exist as
governments turn over state-run companies to private hands. The coming union
also is prompting European companies to develop more competitive practices,
and the results are starting to be seen on the bottom line.
We believe stable interest rates and subdued inflation will continue to
attract global investors to Europe. We expect inflation to decrease further
as countries in the EMU gravitate toward a single currency, the euro. In
addition, stock markets in Europe are broadening, giving investors an
unprecedented range of choice.
HOW WILL THE NEW CURRENCY IN EUROPE AFFECT THE FUND?
Europe launched the euro on January 1, 1999. At first, only 11 countries are
adopting it: Austria, Belgium, Finland, France, Germany, Ireland, Italy,
Luxembourg, the Netherlands, Portugal and Spain. (See "the euro zone" map on
the facing page). The changeover will take place gradually. New coins and
paper will not be introduced until January 2002.
The euro is expected to bring greater unity to the European business
world. Price comparisons of goods, services and labor across Europe will be
much easier. Because of this "price transparency," European companies may be
forced to become more competitive. The current wave of mergers, including
many cross-border deals, is also expected to continue; many companies are
joining together to increase productivity and enhance their access to
Europe's consolidating markets.
WHAT IS YOUR OUTLOOK FOR WORLD MARKETS AND FOR THE FUND?
In early December, European markets soared when the countries preparing to
enter the EMU participated in a coordinated interest-rate cut. Looking
forward, though, there may be a period of transition as EMU countries work to
align their economies. Furthermore, even though fundamentals are still in
place for strong growth in Europe and in the United States, global turmoil
could put a dent in corporate profits.
Smaller markets are likely to remain weak. Brazil's devaluation of its
currency in mid-January caused steep drops in Latin American markets; we will
remain cautious in the region until there are clear signs of stabilization.
In Asia, we think the outlook will start to improve in the latter half of
1999, but as of the close of the reporting period, most Asian economies were
still deteriorating.
PORTFOLIO COMPOSITION
As of December 31, 1998, based on total net assets
TOP 10 EQUITY HOLDINGS
<TABLE>
<S> <C> <C>
1. Telecom Italia SPA (Italy) 3.8%
2. Roche Holdings Genusscheine
(Switzerland) 3.3
3. Abbey National PLC (UK) 2.6
4. Vodafone Group PLC (UK) 2.5
5. Lloyds TSB Group PLC (UK) 2.4
6. SmithKlein Beecham (UK) 2.4
7. Zurich Allied AG (Switzerland) 2.2
8. Wolters Kluwer (Netherlands) 2.2
9. Nestle (Switzerland) 2.2
10. UBS AG (Switzerland) 2.2
</TABLE>
TOP 5 INDUSTRIES
<TABLE>
<S> <C> <C>
1. Services 34.1%
2. Finance 29.3
3. Health Care 12.0
4. Consumer Non-Durables 10.4
5. Capital Goods 3.3
</TABLE>
TOP 10 COUNTRIES
<TABLE>
<S> <C> <C>
1. United Kingdom 27.5%
2. Switzerland 15.3
3. Netherlands 11.0
4. Japan 6.8
5. Germany 5.3
6. Italy 5.3
7. France 5.2
8. United States 4.6
9. Australia 4.1
10. Portugal 3.0
</TABLE>
Please keep in mind the Fund's portfolio is subject to change and there is no
assurance the Fund will continue to hold any particular security.
SEE IMPORTANT FUND AND INDEX DISCLOSURES INSIDE FRONT COVER.
AIM INTERNATIONAL GROWTH FUND
<PAGE>
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM INTERNATIONAL GROWTH FUND VS. BENCHMARK
INDEXES
12/31/88-12/31/98
<TABLE>
<CAPTION>
AIM INTERNATIONAL EAFE INDEX
GROWTH FUND, CLASS A
In thousands
<S> <C> <C>
12/88 9,451 10,000
12/89 13,096 11,080
12/90 11,222 8,510
12/91 12,705 9,573
12/92 11,964 8,439
12/93 16,059 11,219
12/94 14,809 12,123
12/95 15,383 13,524
12/96 16,810 14,384
12/97 18,237 14,680
12/98 19,144 17,665
</TABLE>
Past performance is no guarantee of comparable future results.
AVERAGE ANNUAL TOTAL RETURNS
As of 12/31/98, including sales charges
<TABLE>
<CAPTION>
CLASS A SHARES
<S> <C>
Inception (7/19/85) 12.11%
10 years 6.72
5 years 2.42
1 year (0.80*)
</TABLE>
<TABLE>
<CAPTION>
CLASS B SHARES
<S> <C>
Inception (4/1/93) 6.53%
5 years 2.63
1 year (0.85)**
</TABLE>
<TABLE>
<CAPTION>
ADVISOR CLASS SHARES
<S> <C>
Inception (6/1/95) 9.55%
1 year 4.84
</TABLE>
*4.97%, excluding sales charges
**4.13%, excluding CDSC
Source: Towers Data System HYPO-Registered Trademark-
Your Fund's total return includes sales charges, expenses, and management
fees. The performance of the Fund's Class B and Advisor Class shares will
differ from Class A shares due to differing fees and expenses. For Fund
performance calculations and descriptions of indexes cited on this page,
please refer to the inside front cover.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF
AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
ABOUT THIS CHART
The chart above compares your Fund's Class A shares to a benchmark index. The
purpose of this comparison is to give you a general idea of your Fund's
relative performance.
It is important to understand the differences between your Fund and this
index. An index measures performance of a hypothetical portfolio. A market
index such as the EAFE is not managed and incurs no sales charges, expenses,
or fees. If you could buy all the securities that make up a market index, you
would incur expenses that would affect your investment's return.
AIM INTERNATIONAL GROWTH FUND
<PAGE>
PORTFOLIO OF INVESTMENTS
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Services (34.1%)
Telecom Italia SpA ........................................ ITLY 725,500 $ 6,175,986 3.8
TELEPHONE NETWORKS
Vodafone Group PLC ........................................ UK 253,000 4,095,287 2.5
WIRELESS COMMUNICATIONS
Wolters Kluwer CVA ........................................ NETH 16,680 3,568,323 2.2
BROADCASTING & PUBLISHING
EMAP PLC .................................................. UK 182,000 3,426,937 2.1
BROADCASTING & PUBLISHING
Orange PLC-/- ............................................. UK 292,000 3,367,807 2.1
WIRELESS COMMUNICATIONS
Mannesmann AG ............................................. GER 28,700 3,289,546 2.0
WIRELESS COMMUNICATIONS
Swisscom AG-/- ............................................ SWTZ 7,227 3,026,162 1.9
TELEPHONE NETWORKS
Telecel - Comunicacaoes Pessoais S.A. ..................... PORT 14,171 2,899,331 1.8
WIRELESS COMMUNICATIONS
Reuters Group PLC ......................................... UK 272,000 2,850,092 1.8
BROADCASTING & PUBLISHING
TNT Post Group N.V. ....................................... NETH 88,080 2,837,206 1.7
TRANSPORTATION - SHIPPING
Adecco S.A. ............................................... SWTZ 5,291 2,415,859 1.5
CONSUMER SERVICES
Telecom Corporation of New Zealand Ltd. ................... NZ -- -- 1.5
TELEPHONE NETWORKS
Common .................................................. -- 509,300 2,209,267 --
Installment Receipts .................................... -- 52,600 114,777 --
Pinault-Printemps-Redoute S.A. ............................ FR 12,150 2,321,531 1.4
RETAILERS-APPAREL
Koninklijke Ahold N.V. .................................... NETH 62,314 2,302,519 1.4
RETAILERS-FOOD
Koninklijke KPN N.V. ...................................... NETH 45,000 2,252,156 1.4
TELEPHONE NETWORKS
Woolworths Ltd. ........................................... AUSL 610,900 2,078,245 1.3
RETAILERS-OTHER
Telefonica de Espana ...................................... SPN 38,000 1,687,760 1.0
TELEPHONE NETWORKS
Great Universal Stores PLC ................................ UK 148,000 1,548,326 0.9
RETAILERS-OTHER
EM.TV & Merchandising AG .................................. GER 2,310 1,316,911 0.8
BROADCASTING & PUBLISHING
Telecomunicacoes Brasileiras S.A. (Telebras) Preferred -
ADR-/- {\/} .............................................. BRZL 17,300 1,257,494 0.8
TELEPHONE NETWORKS
Panafon Hellenic Telecom S.A.-/- .......................... GREC 9,563 256,399 0.2
WIRELESS COMMUNICATIONS
Fast Retailing Co., Ltd. .................................. JPN 44 778 --
RETAILERS-APPAREL
------------
55,298,699
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Finance (29.3%)
Abbey National PLC ........................................ UK 198,000 $ 4,234,953 2.6
BANKS-SUPER REGIONAL
Lloyds TSB Group PLC ...................................... UK 276,000 3,912,577 2.4
BANKS-MONEY CENTER
Zurich Allied AG .......................................... SWTZ 4,830 3,577,126 2.2
INSURANCE - MULTI-LINE
UBS AG - Registered ....................................... SWTZ 11,422 3,510,111 2.2
BANKS-MONEY CENTER
Axa - UAP ................................................. FR 24,140 3,498,238 2.2
INSURANCE - MULTI-LINE
ING Groep N.V. ............................................ NETH 47,114 2,872,193 1.8
OTHER FINANCIAL
Royal & Sun Alliance Insurance Group PLC .................. UK 335,000 2,708,523 1.7
INSURANCE - MULTI-LINE
Australia & New Zealand Banking Group Ltd. ................ AUSL 370,600 2,423,489 1.5
BANKS-REGIONAL
San Paolo - IMI SpA ....................................... ITLY 135,400 2,393,730 1.5
BANKS-MONEY CENTER
Bank of Ireland{*} ........................................ IRE 104,000 2,283,184 1.4
BANKS-MONEY CENTER
CGU PLC ................................................... UK 145,000 2,263,965 1.4
INSURANCE - MULTI-LINE
Schroders PLC ............................................. UK 124,000 2,237,981 1.4
BANKS-MONEY CENTER
M & G Group PLC ........................................... UK 83,500 2,046,837 1.3
INVESTMENT MANAGEMENT
BPI-SGPS S.A. ............................................. PORT 59,797 2,031,093 1.2
BANKS-MONEY CENTER
Nordbanken Holding AB ..................................... SWDN 316,079 2,024,151 1.2
BANKS-REGIONAL
Nichiei Co., Ltd. ......................................... JPN 24,600 1,959,639 1.2
OTHER FINANCIAL
Skandia Forsakrings AB Free ............................... SWDN 123,300 1,882,906 1.2
INSURANCE - MULTI-LINE
United Overseas Bank Ltd. - Foreign ....................... SING 222,300 1,428,542 0.9
BANKS-MONEY CENTER
------------
47,289,238
------------
Health Care (12.0%)
Roche Holding AG .......................................... SWTZ 433 5,284,795 3.3
PHARMACEUTICALS
SmithKline Beecham PLC .................................... UK 278,000 3,897,039 2.4
PHARMACEUTICALS
Nycomed Amersham PLC ...................................... UK 492,100 3,393,957 2.1
PHARMACEUTICALS
Novartis AG ............................................... SWTZ 1,688 3,318,963 2.0
PHARMACEUTICALS
Takeda Chemical Industries ................................ JPN 60,000 2,310,143 1.4
PHARMACEUTICALS
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Health Care (Continued)
Fresenius AG Preferred-/- ................................. GER 6,556 $ 1,380,915 0.8
MEDICAL TECHNOLOGY & SUPPLIES
------------
19,585,812
------------
Consumer Non-Durables (10.4%)
Nestle S.A. - Registered .................................. SWTZ 1,621 3,529,559 2.2
FOOD
Benckiser N.V. "B" ........................................ NETH 41,650 2,727,585 1.7
HOUSEHOLD PRODUCTS
Diageo PLC ................................................ UK 225,000 2,525,880 1.6
BEVERAGES - ALCOHOLIC
Asahi Breweries Ltd. ...................................... JPN 140,000 2,063,197 1.3
BEVERAGES - ALCOHOLIC
Foster's Brewing Group Ltd. ............................... AUSL 757,300 2,049,531 1.3
BEVERAGES - ALCOHOLIC
United Biscuits (Holdings) PLC ............................ UK 471,516 1,882,629 1.2
FOOD
Tabacalera S.A. "A" ....................................... SPN 60,550 1,525,790 0.9
TOBACCO
Adidas AG-/- .............................................. GER 2,500 271,543 0.2
TEXTILES & APPAREL
------------
16,575,714
------------
Technology (3.3%)
SAP AG Non-Voting ......................................... GER 5,060 2,414,614 1.5
COMPUTERS & PERIPHERALS
Equant N.V.-/- {V} ........................................ NETH 19,709 1,371,291 0.8
NETWORKING
Matsushita-Kotobuki Electronics Ltd. ...................... JPN 50,000 1,079,837 0.7
COMPUTERS & PERIPHERALS
Rohm Co., Ltd. ............................................ JPN 6,000 546,468 0.3
SEMICONDUCTORS
------------
5,412,210
------------
Capital Goods (3.0%)
Nokia Oyj "A" ............................................. FIN 27,880 3,391,661 2.1
TELECOM EQUIPMENT
Canon, Inc. ............................................... JPN 70,000 1,496,283 0.9
OFFICE EQUIPMENT
------------
4,887,944
------------
Multi-Industry/Miscellaneous (1.6%)
Vivendi ................................................... FR 9,820 2,547,455 1.6
------------
MULTI-INDUSTRY
Consumer Durables (1.0%)
Mabuchi Motor Co., Ltd. ................................... JPN 22,000 1,684,369 1.0
------------
AUTOMOBILES
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE % OF NET
EQUITY INVESTMENTS COUNTRY SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Energy (0.7%)
Petroleo Brasileiro S.A. (Petrobras) - ADR{\/} ............ BRZL 109,700 $ 1,206,700 0.7
GAS PRODUCTION & DISTRIBUTION
------------ -----
TOTAL EQUITY INVESTMENTS (cost $126,506,997) ................ 154,488,141 95.4
------------ -----
<CAPTION>
NO. OF VALUE % OF NET
RIGHTS COUNTRY RIGHTS (NOTE 1) ASSETS
- ------------------------------------------------------------- -------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
Telefonica S.A. Bonus Rights, expire 1/30/99 (cost $0) .... SPN 38,000 33,702 --
------------ -----
TELEPHONE NETWORKS
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
Dated December 31, 1998, with State Street Bank & Trust
Co., due January 4, 1999, for an effective yield of 4.50%,
collateralized by $12,695,000 U.S.Treasury Notes, 6.25%
due 4/30/01 (market value of collateral is $13,266,275,
including accrued interest). (cost $13,004,000) .......... 13,004,000 8.1
------------ -----
TOTAL INVESTMENTS (cost $139,510,997) * .................... 167,525,843 103.5
Other Assets and Liabilities ................................ (5,624,132) (3.5)
------------ -----
NET ASSETS .................................................. $161,901,711 100.0
------------ -----
------------ -----
</TABLE>
- --------------
-/- Non-income producing security.
{\/} U.S. currency denominated.
{V} Security is denominated in French Francs.
{*} Security is denominated in British Pounds.
* For Federal income tax purposes, cost is $140,101,056 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ 30,617,903
Unrealized depreciation: (3,193,116)
-------------
Net unrealized appreciation: $ 27,424,787
-------------
-------------
</TABLE>
Abbreviation:
ADR--American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
December 31, 1998
- --------------------------------------------------------------------------------
The Fund's Portfolio of Investments at December 31, 1998, was concentrated in
the following countries:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS
{D}
---------------------------
SHORT-TERM
COUNTRY (COUNTRY CODE/CURRENCY CODE) EQUITY & OTHER TOTAL
- -------------------------------------- ------ ---------- -----
<S> <C> <C> <C>
Australia (AUSL/AUD) ................. 4.1 4.1
Brazil (BRZL/BRL) .................... 1.5 1.5
Finland (FIN/FIM) .................... 2.1 2.1
France (FR/FRF) ...................... 5.2 5.2
Germany (GER/DEM) .................... 5.3 5.3
Greece (GREC/GRD) .................... 0.2 0.2
Ireland (IRE/IEP) .................... 1.4 1.4
Italy (ITLY/ITL) ..................... 5.3 5.3
Japan (JPN/JPY) ...................... 6.8 6.8
Netherlands (NETH/NLG) ............... 11.0 11.0
New Zealand (NZ/NZD) ................. 1.5 1.5
Portugal (PORT/PTE) .................. 3.0 3.0
Singapore (SING/SGD) ................. 0.9 0.9
Spain (SPN/ESP) ...................... 1.9 1.9
Sweden (SWDN/SEK) .................... 2.4 2.4
Switzerland (SWTZ/CHF) ............... 15.3 15.3
United Kingdom (UK/GBP) .............. 27.5 27.5
United States (US/USD) ............... 4.6 4.6
------ ----- -----
Total ............................... 95.4 4.6 100.0
------ ----- -----
------ ----- -----
</TABLE>
- --------------
{d} Percentages indicated are based on net assets of $161,901,711.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET VALUE UNREALIZED
(U.S. CONTRACT DELIVERY APPRECIATION
CONTRACTS TO SELL: DOLLARS) PRICE DATE (DEPRECIATION)
- ---------------------------------------- ------------ --------- -------- --------------
<S> <C> <C> <C> <C>
British Pounds.......................... 13,593,736 0.60285 1/29/99 $ 8,424
Japanese Yen............................ 10,190,663 116.63000 1/21/99 (330,421)
Swiss Francs............................ 3,119,828 1.37000 2/23/99 (10,339)
------------ --------------
Total Contracts to Sell (Receivable
amount $26,571,891).................. 26,904,227 (332,336)
------------ --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 16.62%.
Total Open Forward Foreign Currency
Contracts............................ $(332,336)
--------------
--------------
</TABLE>
- ----------------
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $139,510,997) (Note 1)................................. $167,525,843
U.S. currency.................................................................................... 736
Dividends and dividend withholding tax reclaims receivable....................................... 303,438
Receivable for Fund shares sold.................................................................. 67,879
Interest receivable.............................................................................. 1,625
-----------
Total assets................................................................................... 167,899,521
-----------
Liabilities:
Payable for Fund shares repurchased.............................................................. 5,207,197
Payable for open forward foreign currency contracts (Note 1)..................................... 332,336
Payable for service and distribution expenses (Note 2)........................................... 154,849
Payable for investment management and administration fees (Note 2)............................... 134,059
Payable for professional fees.................................................................... 103,250
Payable for printing and postage expenses........................................................ 25,395
Payable for registration and filing fees......................................................... 15,320
Payable for transfer agent fees (Note 2)......................................................... 7,356
Payable for Trustees' fees and expenses (Note 2)................................................. 2,059
Payable for fund accounting fees (Note 2)........................................................ 2,005
Payable for custodian fees....................................................................... 628
Other accrued expenses........................................................................... 13,356
-----------
Total liabilities.............................................................................. 5,997,810
-----------
Net assets......................................................................................... $161,901,711
-----------
-----------
Class A:
Net asset value and redemption price per share ($118,607,894 DIVIDED BY 15,453,753 shares
outstanding)...................................................................................... $ 7.68
-----------
-----------
Maximum offering price per share (100/94.50 of $7.68) *............................................ $ 8.13
-----------
-----------
Class B:+
Net asset value and offering price per share ($42,080,215 DIVIDED BY 5,732,052 shares
outstanding)...................................................................................... $ 7.34
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($1,213,602 DIVIDED BY
157,862 shares outstanding)....................................................................... $ 7.69
-----------
-----------
Net assets consist of:
Paid in capital (Note 4)......................................................................... $131,279,106
Undistributed net investment income.............................................................. 244,010
Accumulated net realized gain on investments and foreign currency transactions................... 2,691,433
Net unrealized depreciation on translation of assets and liabilities in foreign currencies....... (327,684)
Net unrealized appreciation of investments....................................................... 28,014,846
-----------
Total -- representing net assets applicable to capital shares outstanding.......................... $161,901,711
-----------
-----------
<FN>
- --------------
* On sales of $25,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
STATEMENT OF OPERATIONS
Year ended December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $401,779)............................... $3,995,968
Interest income............................................................................ 579,790
Securities lending income.................................................................. 261,478
----------
Total investment income.................................................................. 4,837,236
----------
Expenses:
Investment management and administration fees (Note 2)..................................... 1,825,797
Service and distribution expenses: (Note 2)
Class A...................................................................... $ 481,556
Class B...................................................................... 490,287 971,843
----------
Transfer agent fees (Note 2)............................................................... 484,800
Printing and postage expenses.............................................................. 204,570
Professional fees.......................................................................... 183,029
Custodian fees............................................................................. 125,290
Registration and filing fees............................................................... 88,000
Fund accounting fees (Note 2).............................................................. 51,031
Trustees' fees and expenses (Note 2)....................................................... 10,140
Other expenses (Note 1).................................................................... 23,910
----------
Total expenses before reductions......................................................... 3,968,410
----------
Expense reductions (Note 5)............................................................ (10,495)
----------
Total net expenses....................................................................... 3,957,915
----------
Net investment income........................................................................ 879,321
----------
Net realized and unrealized gain on investments and foreign currencies: (Note 1)
Net realized gain on investments............................................... 5,090,619
Net realized gain on foreign currency transactions............................. 1,027,957
----------
Net realized gain during the year........................................................ 6,118,576
Net change in unrealized depreciation on translation of assets and liabilities
in foreign currencies......................................................... (1,882,901)
Net change in unrealized appreciation of investments........................... 11,058,757
----------
Net unrealized appreciation during the year.............................................. 9,175,856
----------
Net realized and unrealized gain on investments and foreign currencies....................... 15,294,432
----------
Net increase in net assets resulting from operations......................................... $16,173,753
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1997
------------- -------------
<S> <C> <C>
Decrease in net assets
Operations:
Net investment income.................................................... $ 879,321 $ 427,766
Net realized gain on investments and foreign currency transactions....... 6,118,576 38,105,893
Net change in unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies............................ (1,882,901) 286,534
Net change in unrealized appreciation (depreciation) of investments...... 11,058,757 (14,668,685)
------------- -------------
Net increase in net assets resulting from operations................... 16,173,753 24,151,508
------------- -------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income............................................... (568,059) (425,877)
From net realized gain on investments.................................... (5,025,907) (29,789,043)
Class B:
Distributions to shareholders: (Note 1)
From net realized gain on investments.................................... (1,805,680) (10,955,953)
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income............................................... (1,602) (1,888)
From net realized gain on investments.................................... (7,988) (56,864)
------------- -------------
Total distributions.................................................... (7,409,236) (41,229,625)
------------- -------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested......................... 914,085,093 663,662,225
Decrease from capital shares repurchased................................. (965,397,923) (703,298,069)
------------- -------------
Net decrease from capital share transactions........................... (51,312,830) (39,635,844)
------------- -------------
Total decrease in net assets............................................... (42,548,313) (56,713,961)
Net assets:
Beginning of year........................................................ 204,450,024 261,163,985
------------- -------------
End of year *............................................................ $161,901,711 $204,450,024
------------- -------------
------------- -------------
*Includes undistributed net investment income............................. $ 244,010 $ --
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1998 (d) 1997 (d) 1996 (d) 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 7.67 $ 8.92 $ 9.08 $ 9.17 $ 11.02
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).......... 0.05 0.03 (0.01) 0.03 (0.04)
Net realized and unrealized gain
(loss) on investments................ 0.32 0.69 0.84 0.32 (0.82)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from
investment operations.............. 0.37 0.72 0.83 0.35 (0.86)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ (0.04) (0.03) -- -- (0.04)
From net realized gain on
investments.......................... (0.32) (1.94) (0.99) (0.24) (0.95)
In excess of net realized gain on
investments.......................... -- -- -- (0.20) --
---------- ---------- ---------- ---------- ----------
Total distributions................. (0.36) (1.97) (0.99) (0.44) (0.99)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 7.68 $ 7.67 $ 8.92 $ 9.08 $ 9.17
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (c)............. 4.97% 8.51% 9.28% 3.88% (7.78)%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 118,608 $ 148,143 $ 196,601 $ 308,816 $ 430,701
Ratio of net investment income (loss) to
average net assets..................... 0.64% 0.35% (0.14)% 0.24% (0.04)%
Ratio of expenses to average net assets:
With expense reductions (Note 5)...... 1.94% 1.69% 1.80% 1.70% 1.70%
Without expense reductions 1.95% 1.82% 1.91% 1.78% 1.75%
Portfolio turnover rate++............... 63% 72% 74% 75% 96%
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the year.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1998 (d) 1997 (d) 1996 (d) 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 7.36 $ 8.68 $ 8.91 $ 9.07 $ 10.98
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss).......... -- (0.03) (0.07) (0.04) (0.10)
Net realized and unrealized gain
(loss) on investments................ 0.30 0.65 0.83 0.32 (0.82)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from
investment operations.............. 0.30 0.62 0.76 0.28 (0.92)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ -- -- -- -- (0.04)
From net realized gain on
investments.......................... (0.32) (1.94) (0.99) (0.24) (0.95)
In excess of net realized gain on
investments.......................... -- -- -- (0.20) --
---------- ---------- ---------- ---------- ----------
Total distributions................. (0.32) (1.94) (0.99) (0.44) (0.99)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 7.34 $ 7.36 $ 8.68 $ 8.91 $ 9.07
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (c)............. 4.13% 7.71% 8.67% 3.15% (8.36)%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 42,080 $ 56,023 $ 64,102 $ 69,654 $ 71,794
Ratio of net investment income (loss) to
average net assets..................... (0.01)% (0.30)% (0.79)% (0.41)% (0.69)%
Ratio of expenses to average net assets:
With expense reductions (Note 5)...... 2.59% 2.34% 2.45% 2.35% 2.35%
Without expense reductions 2.60% 2.47% 2.56% 2.43% 2.40%
Portfolio turnover rate++............... 63% 72% 74% 75% 96%
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the year.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout each period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
ADVISOR CLASS+
----------------------------------------------------
JUNE 1, 1995
YEAR ENDED DECEMBER 31, TO
------------------------------------- DECEMBER 31,
1998 (d) 1997 (d) 1996 (d) 1995
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 7.72 $ 9.01 $ 9.11 $ 8.49
----------- ----------- ----------- -------------
Income from investment operations:
Net investment income (loss).......... 0.06 0.07 0.02 0.03
Net realized and unrealized gain
(loss) on investments................ 0.30 0.65 0.87 1.03
----------- ----------- ----------- -------------
Net increase (decrease) from
investment operations.............. 0.36 0.72 0.89 1.06
----------- ----------- ----------- -------------
Distributions to shareholders:
From net investment income............ (0.07) (0.07) -- --
From net realized gain on
investments.......................... (0.32) (1.94) (0.99) (0.24)
In excess of net realized gain on
investments.......................... -- -- -- (0.20)
----------- ----------- ----------- -------------
Total distributions................. (0.39) (2.01) (0.99) (0.44)
----------- ----------- ----------- -------------
Net asset value, end of period.......... $ 7.69 $ 7.72 $ 9.01 $ 9.11
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
Total investment return (c)............. 4.84% 8.53% 9.79% 12.56%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 1,214 $ 284 $ 461 $ 381
Ratio of net investment income (loss) to
average net assets..................... 0.99% 0.70% 0.21% 0.59%(a)
Ratio of expenses to average net assets:
With expense reductions (Note 5)...... 1.59% 1.34% 1.45% 1.35%(a)
Without expense reductions 1.60% 1.47% 1.56% 1.43%(a)
Portfolio turnover rate++............... 63% 72% 74% 75%(a)
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the year.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates are calculated on the basis of the Fund as a
whole without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
NOTES TO
FINANCIAL STATEMENTS
December 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
AIM International Growth Fund (the "Fund") formerly GT Global International
Growth Fund, is a separate series of AIM Growth Series (the "Trust") formerly GT
Global Growth Series. The Trust is organized as a Delaware business trust and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
a diversified, open-end management investment company. The Trust has eight
series of shares in operation, each series corresponding to a distinct portfolio
of investments.
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 in the preparation of the financial
statements.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of Fund shares 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 in 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 last available bid
price. 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
asked 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 to amortized cost, adjusted for foreign exchange
translation and market fluctuation, if any.
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.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Trust's Board of Trustees.
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. The market
values of foreign securities, currency holdings, other assets and liabilities
are recorded in the books and records of the Fund after translation to U.S.
dollars based on the exchange rates on that day. The cost of each security is
determined using historical exchange rates. Income and withholding taxes are
translated at prevailing exchange rates when earned or incurred.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuation
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains and losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from changes in the
value of assets and liabilities other than investments in securities at period
end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, U.S. 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 Fund under each agreement at
its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
Forward Contract is closed, the Fund records a realized gain or loss equal to
the difference between the value at the time it was opened
12
<PAGE>
and the value at the time it was closed. The Fund could be exposed to risk if a
counter party is unable to meet the terms of a contract or if the value of the
currency changes unfavorably. The Fund may enter into Forward Contracts in
connection with planned purchases or sales of securities, or to hedge against
adverse fluctuations in exchange rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Fund writes a call or put option, an amount equal to the premium
received is included in the Fund's "Statement of Assets and Liabilities" as an
asset and an equivalent liability. The amount of the liability is subsequently
market-to-market to reflect the current market value of the option. The current
market value of an option listed on a traded exchange is valued at its last bid
price, or, in the case of on over-the-counter option, is valued at the average
of the last bid prices obtained from brokers, unless a quotation from only one
broker is available, in which case only that broker's price will be used. If an
option expires on its stipulated expiration date or if the Fund enters into a
closing purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Fund can write options only on
a covered basis, which, for a call, requires that the Fund hold the underlying
security, and, for a put, requires the Fund to set aside cash, U.S. government
securities or other liquid securities in an amount not less than the exercise
price or otherwise provide adequate cover at all times while the put option is
outstanding. The Fund may use options to manage its exposure to the stock market
and to fluctuations in currency values or interest rates.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's "Statement of Assets and Liabilities" as an investment
and subsequently "marked-to-market" to reflect the current market value of the
option. If an option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost of the
option. If the Fund enters into a closing sale transaction, the Fund realizes a
gain or loss, depending on whether proceeds from the closing sale transaction
are greater or less than the cost of the option. If the Fund exercises a call
option, the cost of the securities acquired by exercising the call is increased
by the premium paid to buy the call. If the Fund exercises a put option, it
realizes a gain or loss from the sale of the underlying security, and the
proceeds from such sale are decreased by the premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market.
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
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 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 currency values or interest rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out basis, unless otherwise specified. 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 Fund may trade
securities on other then normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At December 31, 1998, stocks with an aggregate value of approximately $2,764,780
were on loan to brokers. The loans were secured by cash collateral of
$2,962,323, received by the Fund. For the year ended December 31, 1998, the Fund
received securities lending fees of $261,478.
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 an 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.
(I) TAXES
It is the policy of the Fund 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
13
<PAGE>
unrealized appreciation of securities held, or excise tax on income and capital
gains.
(J) DISTRIBUTION TO SHAREHOLDERS
Distribution 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 Fund and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Fund's investments in emerging market
countries may involve greater risks than investments in more developed markets,
and the prices of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
(L) RESTRICTED SECURITIES
The Fund 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.
(M) INDEXED SECURITIES
The Fund 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.
(N) 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 and 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. On December 31, 1998, the Fund had no outstanding loans.
For the year ended December 31, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
was $1,614,114 with a weighted average interest rate of 6.24%. Interest expense
for the year ended December 31, 1998 was $12,331, and is included in "Other
Expenses" on the Statement of Operations.
2. RELATED PARTIES
A I M Advisors, Inc. (the "Manager"), an indirect wholly-owned subsidiary of
AMVESCAP PLC, is the Fund's investment manager and administrator, and as of
December 14, 1998, sub-advisory and sub-administration responsibility for the
Fund was transferred from INVESCO (NY), Inc.,(formerly, Chancellor LGT Asset
Management, Inc.) to INVESCO Asset Management Ltd., both indirect wholly-owned
subsidiaries of AMVESCAP PLC. 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.
Also, as of the close of business 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. Finally, A I M Fund Services, Inc. ("AFS"), an
affiliate of the Manager and AIM Distributors, replaced GT Global Investor
Services, Inc. ("GT Services") as transfer agent of the Fund as of the close of
business on September 4, 1998.
The Fund pays investment management and administration fees to the Manager at
the following annualized rates: 0.975% on the first $500 million of the average
daily net assets of the Fund; 0.95% on the next $500 million; 0.925% on the next
$500 million and 0.90% on amounts thereafter. These fees are computed daily and
paid monthly.
AIM Distributors serves as the Fund's distributor. For the period ended May 29,
1998, GT Global, Inc. ("GT Global"), an affiliate of the investment sub-advisor,
served as the Fund's distributor.
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 $26,853 and $2,625, respectively, of such sales charges.
Purchases of Class A shares exceeding $1,000,000 may be subject to a contingent
deferred sales charge ("CDSC") upon redemption, in accordance with the Fund's
current prospectus. AIM Distributors and GT Global collected such CDSCs in the
amount of $18 and $0, respectively, for the year 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. During the year ended December 31, 1998, AIM Distributors
and GT Global collected such CDSCs in the amount of $86,748 and $118,618,
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 ("Class A Plan") and Class B
shares ("Class B Plan"), the Fund reimbursed GT Global for a portion of its
shareholder servicing
14
<PAGE>
and distribution expenses. Under the 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 its expenditures incurred in
providing services as distributor. All expenses for which GT Global was
reimbursed under the Class A Plan would have been incurred within one year of
such reimbursement.
For the period ended May 29, 1998, pursuant to the 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 its
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 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 a Fund compensates AIM Distributors for the
purpose of financing any activity that is intended to result in the sale of
Class A or Class B shares of the Fund. Under the Class A Plan, the Fund
compensates AIM Distributors at the annualized rate of 0.35% of the average
daily net assets of the Fund's Class A shares. Under 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. Of these amounts, the Fund may pay a
service fee of 0.25% of the average daily net assets of the Class A or Class B
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 Manager and AIM Distributors have voluntarily undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes,interest, and extraordinary
items) to the maximum annual level of 2.00%, 2.65%, and 1.65% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. 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 AFS an annualized fee
of $24.85 per shareholder accounts that are open during any monthly period (this
fee includes all out-of-pocket expenses), and an annualized fee of $0.70 per
shareholder account that is closed during any monthly period. Both fees shall be
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 Services, an affiliate
of the Manager and AIM Distributors, 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
also was 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 Investment Portfolios,
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 Trust pays each of its Trustees who is not an employee, officer or director
of the Manager, AIM Distributors or GT Services $5,000 per year plus $300 for
each meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1998, purchases and sales of investment
securities by the Fund, other than U.S. government obligations and short-term
investments, aggregated $110,135,604 and $161,110,337, respectively. There were
no purchases or sales of U.S. government obligations by the Fund during the
period.
15
<PAGE>
4. CAPITAL SHARES
At December 31, 1998, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
CLASS A
- ---------------------------------------------------------------
Shares sold.................................................... 87,754,204 $697,691,420 40,276,923 $372,306,238
Shares issued in connection with reinvestment of
distributions................................................ 648,752 4,776,698 3,306,465 24,897,200
----------- ------------ ----------- ------------
88,402,956 702,468,118 43,583,388 397,203,438
Shares repurchased............................................. (92,269,965) (739,672,292) (46,298,211) (433,072,839)
----------- ------------ ----------- ------------
Net decrease................................................... (3,867,009) $(37,204,174) (2,714,823) $(35,869,401)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
<CAPTION>
CLASS B
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold.................................................... 24,034,557 $185,003,546 25,433,444 $233,714,318
Shares issued in connection with reinvestment of
distributions................................................ 237,487 1,671,974 1,311,193 9,480,349
----------- ------------ ----------- ------------
24,272,044 186,675,520 26,744,637 243,194,667
Shares repurchased............................................. (26,146,795) (201,399,971) (26,525,397) (246,915,890)
----------- ------------ ----------- ------------
Net increase (decrease)........................................ (1,874,751) $(14,724,451) 219,240 $ (3,721,223)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
<CAPTION>
ADVISOR CLASS
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold.................................................... 3,115,903 $ 24,931,866 2,419,305 $ 23,205,242
Shares issued in connection with reinvestment of
distributions................................................ 1,296 9,589 7,757 58,878
----------- ------------ ----------- ------------
3,117,199 24,941,455 2,427,062 23,264,120
Shares repurchased............................................. (2,996,134) (24,325,660) (2,441,431) (23,309,340)
----------- ------------ ----------- ------------
Net increase (decrease)........................................ 121,065 $ 615,795 (14,369) $ (45,220)
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
5. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who then paid a
portion of the Fund's expenses. For the year ended December 31, 1998, the Fund's
expenses were reduced by $10,495 under these arrangements.
6. SUBSEQUENT EVENT
The Board of Trustees of AIM Growth Series unanimously approved on September 23,
1998, an Agreement and Plan of Reorganization (the "Plan") pursuant to which the
Fund would transfer substantially all of its assets to AIM International Equity
Fund ("International Equity Fund"). On February 10, 1999, a Special Meeting of
Shareholders approved the Plan. As a result of Shareholders' and Board of
Trustee's approval, effective as of the close of business on February 12, 1999,
shareholders of the Fund received shares of the International Equity Fund in
exchange for their shares of the Fund, and the Fund has ceased operation.
Like the Fund, International Equity Fund seeks long-term growth of capital.
International Equity Fund seeks to achieve its objective by investing in
diversified portfolio of international equity securities, the issuers of which
are considered by the Fund's investment adviser to have strong earnings
momentum.
16
<PAGE>
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
For its fiscal year ended December 31, 1998, the total amount of income received
by the Fund from sources within foreign countries and possessions of the United
States was $.1832 per share (representing a total of $3,915,902). The total
amount of taxes paid by the Fund to such countries for the fiscal year ended
December 31, 1998 was $.0191 per share (representing a total of $408,652). The
following table provides a breakdown by country of ordinary income dividends and
foreign taxes paid by the Fund during the fiscal year ended December 31, 1998:
<TABLE>
<CAPTION>
COUNTRY GROSS INCOME % FOREIGN TAX PAID %
- -------------------------------------------------------------------------------- -------------- ------------------
<S> <C> <C>
Australia....................................................................... 5.16 2.59
Brazil.......................................................................... 1.41 1.55
France.......................................................................... 1.88 5.69
Italy........................................................................... 1.55 4.62
Japan........................................................................... 2.03 6.15
Netherlands..................................................................... 2.84 6.97
New Zealand..................................................................... 3.31 10.66
Sweden.......................................................................... 3.98 11.87
Switzerland..................................................................... 3.50 11.80
United Kingdom.................................................................. 17.87 30.75
Various......................................................................... 4.47 7.09
------- -------
48.00 99.74
Nonqualifying................................................................... 0.84 0.26
United States................................................................... 51.16 --
------- -------
100.00% 100.00%
------- -------
------- -------
</TABLE>
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$5,494,941 as a capital gain dividend for the fiscal year ended December 31,
1998.
17
<PAGE>
REPORT OF
INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders of AIM International Growth Fund (formerly GT Global
International Growth Fund) and Board of Trustees of AIM Growth Series (formerly
GT Global Growth Series):
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the AIM International Growth Fund
at December 31, 1998, and the results of its operations, the changes in its net
assets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
BOSTON, MASSACHUSETTS
FEBRUARY 19, 1999
18
<PAGE>
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 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................................................... 9,849,548 410,130 3,208,218*
(2)(b) Approval of sub-advisory and sub-administration contract.... 9,748,843 452,310 3,266,743*
(3) Approval of replacement Rule 12b-1 plans of distribution
CLASS A.................................................... 8,217,306 366,769 859,753
CLASS B..................................................... 3,415,925 90,431 370,400
(4)(a) Modification of Fundamental Restriction on Portfolio
Diversification............................................ 9,706,775 453,043 3,308,078*
(4)(b) Modification of Fundamental Restriction on Concentration.... 9,707,507 452,311 3,308,078*
(4)(c) Modification of Fundamental Restriction on Issuing Senior
Securities and Borrowing Money............................. 9,701,156 458,662 3,308,078*
(4)(d) Modification of Fundamental Restriction on Making Loans..... 9,706,938 452,880 3,308,078*
(4)(e) Modification of Fundamental Restriction on Underwriting
Securities................................................. 9,707,329 452,489 3,308,078*
(4)(f) Modification of Fundamental Restriction on Real Estate
Investments................................................ 9,707,507 452,311 3,308,078*
(4)(g) Modification of Fundamental Restriction on Investing in
Commodities................................................ 9,698,891 460,927 3,308,078*
(4)(h) Elimination of Fundamental Restriction on Margin
Transactions............................................... 9,672,226 487,592 3,308,078*
(4)(i) Elimination of Fundamental Restriction on Pledging Assets... 9,706,669 453,149 3,308,078*
(4)(j) Elimination of Fundamental Restriction on Investments in
Oil, Gas and Mineral Leases and Programs................... 9,681,310 478,508 3,308,078*
(4)(k) Elimination of Fundamental Restriction on Investing for the
Purpose of Control......................................... 9,706,035 453,783 3,308,078*
(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............. 9,707,329 452,489 3,308,078*
(4)(m) Elimination of Fundamental Restriction on Joint
Participation in a Securities Trading Account.............. 9,707,507 452,311 3,308,078*
(4)(n) Elimination of Fundamental Restriction on Selling Securities
Short...................................................... 9,661,924 497,894 3,308,078*
(4)(o) Approval of New Fundamental Investment Policy Regarding
Investment of All of Each Fund's Assets in an Open-End
Fund....................................................... 9,700,120 459,698 3,308,078*
(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) Ratification of the selection of Coopers and Lybrand L.L.P.,
now known as PricewaterhouseCoopers LLP, as the Trust's
Independent Public Accountants............................. 71,858,619 1,177,277 4,080,070
</TABLE>
- ------------------------
* Includes Broker Non-Votes
19
<PAGE>
BOARD OF TRUSTEES
C. Derek Anderson
President, Plantagenet Capital
Management, LLC (an investment partnership); Chief Executive Officer,
Plantagenet Holdings, Ltd. (an investment banking firm)
Frank S. Bayley
Partner, law firm of Baker & McKenzie
Robert H. Graham
President and Chief Executive Officer, A I M Management Group Inc.
Arthur C. Patterson
Managing Partner, Accel Partners (a venture capital firm)
Ruth H. Quigley
Private Investor
OFFICERS
Robert H. Graham
Chairman and President
Dana R. Sutton
Vice President & Assistant Treasurer
Samuel D. Sirko
Vice President & Secretary
Kenneth W. Chancey
Vice President & Principal Accounting Officer
John J. Arthur
Vice President
Melville B. Cox
Vice President
Gary T. Crum
Vice President
Carol F. Relihan
Vice President
Nancy L. Martin
Assistant Secretary
Ofelia M. Mayo
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Pamela Ruddock
Assistant Treasurer
Paul Wozniak
Assistant Treasurer
OFFICE OF THE FUND
11 Greenway Plaza
Suite 100
Houston, TX 77046
INVESTMENT MANAGER
A I M Advisors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
SUB-ADVISOR
INVESCO (NY), Inc.
1166 Avenue of the Americas
New York, NY 10036
TRANSFER AGENT
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
COUNSEL TO THE FUND
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 Angles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, MA 02109
<PAGE>
THE AIM FAMILY OF FUNDS-Registered Trademark-
GROWTH FUNDS
AIM Aggressive Growth Fund(1)
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Constellation Fund
AIM Mid Cap Equity Fund(2), (A)
AIM Select Growth Fund(3)
AIM Small Cap Growth Fund(2), (B)
AIM Small Cap Opportunities Fund
AIM Value Fund
AIM Weingarten Fund
GROWTH & INCOME FUNDS
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund
AIM Balanced Fund
AIM Basic Value Fund(2), (C)
AIM Charter Fund
INCOME FUNDS
AIM Floating Rate Fund(2)
AIM High Yield Fund
AIM High Yield Fund II
AIM Income Fund
AIM Intermediate Government Fund
AIM Limited Maturity Treasury Fund
TAX-FREE INCOME FUNDS
AIM High Income Municipal Fund
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
MONEY MARKET FUNDS
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
INTERNATIONAL GROWTH FUNDS
AIM Advisor International Value Fund
AIM Asian Growth Fund
AIM Developing Markets Fund2
AIM Europe Growth Fund(2)
AIM European Development Fund
AIM International Equity Fund
AIM Japan Growth Fund(2)
AIM Latin American Growth Fund(2)
AIM New Pacific Growth Fund(2)
GLOBAL GROWTH FUNDS
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
GLOBAL GROWTH & INCOME FUNDS
AIM Global Growth & Income Fund(2)
AIM Global Utilities Fund
GLOBAL INCOME FUNDS
AIM Emerging Markets Debt Fund(2), (D)
AIM Global Government Income Fund(2)
AIM Global Income Fund
AIM Strategic Income Fund(2)
THEME FUNDS
AIM Global Consumer Products and Services Fund(2)
AIM Global Financial Services Fund(2)
AIM Global Health Care Fund(2)
AIM Global Infrastructure Fund(2)
AIM Global Resources Fund(2)
AIM Global Telecommunications Fund(2)
AIM Global Trends Fund(2), (E)
A I M MANAGEMENT GROUP INC. HAS PROVIDED LEADERSHIP IN THE MUTUAL FUND
INDUSTRY SINCE 1976 AND MANAGED APPROXIMATELY $109 BILLION IN ASSETS FOR MORE
THAN 6.2 MILLION SHAREHOLDERS, INCLUDING INDIVIDUAL INVESTORS, CORPORATE
CLIENTS, AND FINANCIAL INSTITUTIONS, AS OF DECEMBER 31, 1998.
THE AIM FAMILY OF FUNDS-REGISTERED TRADEMARK- IS DISTRIBUTED NATIONWIDE,
AND AIM TODAY IS THE 10TH-LARGEST MUTUAL FUND COMPLEX IN THE U.S. IN ASSETS
UNDER MANAGEMENT, ACCORDING TO STRATEGIC INSIGHT, AN INDEPENDENT MUTUAL FUND
MONITOR.
(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.
