<PAGE> 1
ANNUAL REPORT / DECEMBER 31 1999
AIM BASIC VALUE FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-------------------------------------
STILL LIFE (THE CHEST OF DRAWERS) BY PAUL CEZANNE
A CONTEMPORARY OF THE IMPRESSIONISTS, CEZANNE CHALLENGED THE
CONVENTIONAL IDEAS THEIR WORKS EMBODIED IN THE 19TH CENTURY.
AS A RESULT, HIS ART WAS UNDERVALUED AND OFTEN MISUNDERSTOOD
IN HIS LIFETIME. HOWEVER, HIS WORKS AND IDEAS INFLUENCED THE
DEVELOPMENT OF MANY 20TH-CENTURY ARTISTS AND MOVEMENTS,
SUCH AS CUBISM, AND SOME NOW REGARD HIM AS THE FATHER OF
MODERN PAINTING. THIS PIECE EXHIBITS THE SIMPLICITY AND DELICATE
TONAL HARMONY THAT TYPIFY CEZANNE'S WORK.
-------------------------------------
AIM Basic Value Fund seeks long-term growth of capital by investing in companies
whose prospects and growth potential are undervalued by investors.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Basic Value Fund's (formerly GT Global America Value Fund) performance
figures are historical, and they reflect changes in net asset value and the
reinvestment of distributions.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B, Class C and Advisor Class shares will
differ from that of Class A shares due to different sales-charge structure
and expenses.
o Had fees and expenses not been waived during the reporting period, the
fund's returns would have been lower.
o Because Class C shares have been offered for less than a year (since
5/3/99), all total return figures for Class C shares reflect cumulative
total return that has not yet been annualized.
o Effective 3/1/99, Advisor Class shares were closed to the public. Effective
2/11/00, after the close of the fiscal year, Advisor Class shares were
converted to Class A shares.
o During the fiscal year ended 12/31/99, the fund paid distributions of
$0.0910 per share for Class A, Class B, Class C and Advisor Class shares.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lipper Multi-Cap Value Fund Index represents an average of the
performance of the 30 largest multi-capitalization value funds tracked by
Lipper, Inc., an independent mutual fund performance monitor.
o The unmanaged Russell 1000 Stock Index is generally considered
representative of the performance of stocks of large-capitalization
companies.
o The unmanaged Russell 1000 Value Index measures performance of those Russell
1000 companies with lower price-to-book ratios and lower forecasted growth
values.
o The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500)
is generally considered representative of the stock market in general.
o An investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends and do not reflect sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF
YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the fund.
AIM BASIC VALUE FUND
<PAGE> 3
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
The fiscal year discussed in this report has reconfirmed our
[PHOTO OF faith in two long-established principles of investing:
Charles T. portfolio diversification and long-term thinking. We could
Bauer, title this report "What a Difference a Year Makes."
Chairman of An investor surveying conditions when the fiscal year
the Board of opened on January 1, 1999, would have seen a market
THE FUND dominated by large-capitalization stocks and high-quality
APPEARS HERE] bonds, especially U.S. Treasuries. During 1998, two
well-known indexes of large-capitalization U.S. companies,
the S&P 500 and the Dow Jones Industrial Average, were up
28.60% and 18.15%, respectively. By contrast,
smaller-company stocks in the Russell 2000 had lost 2.55%.
Overseas, many markets were languishing, especially in Asia,
where so many financial difficulties had originated in 1997.
In bond markets as well, name-brand quality was the
place to be. The Lehman Government/Corporate Bond Index,
which follows sovereign issues and investment-grade debt, was up 9.47%, while
the Lehman High Yield Index, which tracks riskier "junk bonds," had risen only
1.60%.
It would be easy for an investor to conclude that blue-chip issues, whether
equity or fixed-income, were the place to be, that it was time to divest himself
of everything else and put all his eggs in the blue-chip basket. The investor,
of course, would be wrong.
MARKETS TURN
While large-capitalization stocks continued to do very well, during 1999 markets
broadened dramatically with many investment sectors performing a complete
turnaround. For example, the small-cap stocks in the Russell 2000 were up 21.26%
for calendar year 1999, and many Asian markets, particularly Japan, had staged a
comeback.
The same holds true of bonds. The higher-quality Lehman index was down 2.15%
during 1999 while the Lehman High Yield index was up 2.39%.
The point, at the risk of sounding repetitive to those of you who have
invested with us for a long time, is that this is why diversification is a
fundamental investing principle. Market sectors and asset classes go in and out
of favor, but over the long run--and the long run is several years--the markets'
overall trend has been upward. Selecting an asset class or a market sector on
the basis of a short-term snapshot of conditions is usually unwise, as is
concentrating your portfolio in one asset class. Staying fully invested in a
diversified portfolio remains a compelling strategy and one of your best
prospects for long-term gain. We also continue to remind you that the past few
years have seen extraordinary gains in some markets, and there is no assurance
that this trend will continue.
LOOKING AHEAD
As we look about at the close of this fiscal year, we are encouraged by multiple
signs of economic health in Europe and Asia, not to mention the prolonged U.S.
economic expansion. However, we are aware of how easily an investor could have
been misled by conditions just 12 months ago. For our shareholders, we therefore
reiterate our commitment to investing through a financial advisor. In addition
to helping you select investments appropriate to your time horizon and risk
tolerance, a financial advisor can keep you informed about how changing market
conditions affect you and your portfolio--and help ensure that when you do alter
your investments, there's a logical reason for doing so. AIM believes every
investor should be guided by a financial professional.
FUND MANAGERS COMMENT
In the pages that follow, your fund's portfolio managers discuss how they
managed your fund during the year ended December 31, how the markets behaved and
what they foresee for the near future. We trust you will find their discussion
informative. If you have any questions or comments, we invite you to contact us,
either at our Web site, aimfunds.com, or through our Client Services department
at 800-959-4246. Information about your account is also available through our
automated AIM Investor Line, 800-246-5463.
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.
-------------------------------------
STAYING FULLY
INVESTED IN A DIVERSIFIED
PORTFOLIO REMAINS
A COMPELLING STRATEGY
AND ONE OF YOUR
BEST PROSPECTS FOR
LONG-TERM GAIN.
-------------------------------------
AIM BASIC VALUE FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND ENJOYS STELLAR YEAR
DESPITE SHIFTING MARKETS
HOW DID AIM BASIC VALUE FUND PERFORM DURING THE FISCAL YEAR?
For the fiscal year ended December 31, 1999, the fund had total returns of
32.04% for Class A shares, 31.13% for Class B shares and 32.45% for Advisor
Class shares. (These returns are at net asset value, which does not include
sales charges.) The fund finished the reporting period well ahead of both the
Russell 1000 Index and the Lipper Multi-Cap Value Fund Index, which had total
returns of 20.91% and 5.94%, respectively. The fund's performance is
particularly noteworthy given that growth outperformed value on the whole for
1999.
The fund's Class C shares, which commenced sales on May 3, 1999, had a
cumulative total return of 10.72% through December 31, excluding sales charges.
Total net assets in the fund shot up from $27.5 million a year ago to $136.2
million at the end of the reporting period.
GIVEN THAT GROWTH OUTPERFORMED VALUE DURING 1999, TO WHAT DO YOU ATTRIBUTE THE
FUND'S EXCELLENT PERFORMANCE?
The primary drivers of the fund's performance were technology and energy. Many
investment opportunities during 1999 were created by 1998's financial crisis,
when recession fears drove investors to dump such economically sensitive stocks
as semiconductors and oil services. We took advantage of this situation and
overweighted the fund in both sectors because the stocks were selling at a
significant discount to their intrinsic value and had an attractive long-term
outlook. Value investors who missed these opportunities were left with another
year of underperformance.
For the second year in a row, value funds as a group underperformed growth
funds by a wide margin. According to Morningstar Inc., a company that tracks
mutual fund performance, the average large growth fund was up 39% for the year,
compared to the average large value fund's return of 7% for the year. This
situation was also reflected in the performance of the Russell 1000 Value Index
vs. the S&P 500 Index, with returns of 7.35% and 21.03%, respectively, for the
year. However, AIM Basic Value Fund bucked this trend, as evidenced by its
performance.
WHAT ELSE HAPPENED IN THE MARKETS DURING THE YEAR?
With the worst of the global financial crisis past, the question throughout much
of 1999 was whether or not the Federal Reserve Board (the Fed) would need to
raise interest rates to forestall inflation. Inflation fears spawned volatility
in the markets, curbing high-flying technology, communications and financial
stocks in the spring and bringing on a resurgence of more cyclical stocks, like
energy and commodities. This environment was quite favorable for the fund.
By midsummer, major stock indexes reached new record highs, lifted by solid
corporate earnings, continued tame inflation and renewed vitality among tech
stocks. But investors' fears again dampened stocks in general as key economic
indicators showed the economy blazing ahead relentlessly. Consequently, a modest
correction in the third quarter caused the average domestic mutual fund to
decline by about 5.3%. The fund also felt the effects of the correction.
Ultimately, in three separate moves, the Fed raised the key federal funds rate
from 4.75% to 5.50%.
Despite persistent inflation fears, the U.S. economy continued to experience
a near-record level of consumer confidence. Markets reached a fever pitch by the
end of 1999, with indexes again reaching new highs by the close of the year.
However, these record-breaking performances masked a rather narrow
market--although the S&P 500 returned 14.9% for the fourth quarter, the average
stock in the index was up only 8.2% for the same period.
HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD?
Top sector weightings for the fund at the end of the fiscal year were as
follows: financials, 16.77%; health care, 13.50%; technology, 12.96%; and
energy, 9.21%.
-------------------------------------
THE PRIMARY DRIVERS OF THE FUND'S PER-
FORMANCE WERE TECHNOLOGY AND ENERGY.
-------------------------------------
FUND BEATS INDEXES
One-year total returns as of 12/31/99,
excluding sales charges
================================================================================
Class A shares 32.04%
Class B shares 31.13%
Advisor Class shares 32.45%
Russell 1000 Index 20.91%
Lipper Multi-Cap 5.94%
Value Index
================================================================================
GROWTH OF NET ASSETS
================================================================================
12/31/98 $27.5 million
12/31/99 $136.2 million
================================================================================
See important fund and index disclosures inside front cover.
AIM BASIC VALUE FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
Our 49 holdings were nearly equally weighted between mid- and large/mega-cap
companies.
We have been reducing the fund's technology exposure because of excessive
valuations. We think the fundamental outlook for technology is exciting, but
this is against a backdrop of unrealistic expectations, decelerating earnings
growth and accelerating global economic growth. We still believe technology is a
good investment for the long term, but today the best valuation opportunities
are outside technology.
We continue to find exciting values in the health-care services industry
following the aftermath of the Medicare cuts to balance the federal budget.
Another area of opportunity for the fund is in failed mergers and acquisitions.
In many cases, investors have overreacted to short-term integration problems,
which creates an opportunity for patient investors.
WHAT WERE SOME STANDOUT HOLDINGS FOR THE FUND?
Holdings from several different sectors enhanced the fund's performance.
Citigroup, one of the world's largest financial-services companies, has bounced
back substantially since 1998's global financial crisis eroded its stock along
with those of many other financial companies. Even though health-care stocks
have been in a slump in recent months, top fund holding Health Management
Associates has continued to grow by acquiring and operating hospitals in rural
areas of the southern United States.
In technology, the fund benefited from owning Computer Associates
International, an independent software company that likens its products to the
plumbing under a sink rather than the fancy faucet on top, and Philips
Electronics, maker of such well-known brands as Magnavox and Norelco and of
everything from televisions to light bulbs to semiconductors.
One new addition to our list of top holdings since our last report is
Transocean Sedco Forex, an offshore drilling contractor. The company, which
specializes in deepwater drilling, was formed in 1999 when Transocean Offshore
merged with Sedco Forex, a former division of oil giant Schlumberger (also a
fund holding).
WHAT IS YOUR NEAR-TERM OUTLOOK?
Many analysts expect the fast pace of U.S. economic growth to continue through
at least the first half of 2000. This has led to the belief that the Fed will
need to raise interest rates at least once--if not more--to slow economic growth
to a more sustainable pace. It seems that the same story that dogged markets in
1999 is so far continuing, with persistent upward pressure on interest rates.
We expect accelerating global economic growth to bring with it broader
earnings growth. With earnings growth spread more evenly across the U.S.
economy, a broader stock market should follow. If this happens, we believe value
investing will once again prove to be a market-beating investment strategy. We
continue to find attractive valuation opportunities, and we feel the portfolio
is well positioned going forward.
PORTFOLIO COMPOSITION
As of 12/31/99, based on total net assets
<TABLE>
<CAPTION>
========================================================================================================================
TOP 10 HOLDINGS TOP 10 INDUSTRIES
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Health Management Associates, Inc. 5.05% 1. Oil & Gas (Drilling & Equipment) 6.98%
2. Novellus Systems Inc. 3.13 2. Electric Companies 6.73
3. Koninklijke (Royal) Philips Electronics N.V. 3.11 3. Computers (Software & Services) 5.57
4. United HealthCare Corp. 2.85 4. Insurance (Property-Casualty) 5.56
5. Computer Associates International Inc. 2.82 5. Health Care (Hospital Management) 5.05
6. McKesson HBOC Inc. 2.73 6. Manufacturing (Specialized) 4.47
7. Bank of America Corp. 2.63 7. Financial (Diversified) 4.18
8. Beckman Coulter Inc. 2.58 8. Electrical Equipment 3.74
9. First Data Corp. 2.57 9. Paper & Forest Products 3.69
10. Transocean Sedco Forex Inc. 2.49 10. Retail (Food Chains) 3.40
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
========================================================================================================================
</TABLE>
See important fund and index disclosures inside front cover.
AIM BASIC VALUE FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM BASIC VALUE FUND VS. BENCHMARK INDEXES
10/18/95-12/31/99
In thousands
<TABLE>
<CAPTION>
======================================================================================================
Lipper
AIM Basic AIM Basic AIM Basic Multi-Cap Russell
Value Fund, Value Fund, Value Fund, Value Russell 1000
Class A Class B Advisor Class Fund 1000 Value
Shares Shares Shares Index Index Index
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10/18/95 9446 10000 10000
10/31/95 10425 10446 10000
12/31/95 10545 11155 11172.4 10589.6 10605.2 10770.5
12/31/96 12140 12756 12913 12812.4 12985.8 13101.5
12/31/97 15446 16128 16500.1 16260.1 17251.7 17710.9
12/31/98 16530 17150 17725.5 17321.1 21913.6 20479.1
12/31/99 $21,826 $22,290 $23,478 $18,350 $26,496 $21,984
Source: Lipper, Inc.
Past performance cannot guarantee comparable future results.
======================================================================================================
</TABLE>
ABOUT THIS CHART
The chart compares your fund's Class A, Class B and Advisor Class shares to
benchmark indexes. It is intended to give you an idea of how your fund performed
compared to these indexes over the period 10/18/95-12/31/99. (Data for these
indexes are for the period 10/31/95-12/31/99.) It is important to understand the
differences between your fund and an index. An index measures the performance of
a hypothetical portfolio. Your fund's total return is shown with the applicable
sales charge, and it includes fund expenses and management fees. A market index
such as the Russell 1000 Index is not managed, incurring no sales charges,
expenses or fees. If you could buy all the securities that make up a market
index, you would incur expenses that would affect your investment's return. An
index of funds such as the Lipper Multi-Cap Value Fund Index includes a number
of mutual funds grouped by investment objective. Each of those funds interprets
that objective differently, and each employs a different management style and
investment strategy.
Since our last report, AIM Basic Value Fund has elected to use the Russell
1000 Index as its primary benchmark. The fund will no longer measure its
performance against the Russell 1000 Value Index because this index does not
meet SEC guidelines as a broad market index. Because this is the first reporting
period since we have adopted the new index, SEC guidelines require that we
include the old index in the performance comparison above.
AVERAGE ANNUAL TOTAL RETURNS
As of 12/31/99, including sales charges
================================================================================
ADVISOR CLASS SHARES*
Inception (10/18/95) 22.52%
1 year 32.45
*Sales charges do not apply.
CLASS B SHARES
Inception (10/18/95) 21.01%
1 year 26.13*
*31.13%, excluding CDSC
CLASS A SHARES
Inception (10/18/95) 20.41%
1 year 24.75*
*32.04%, excluding sales charges
CLASS C SHARES
Inception (5/3/99) 9.72%*
*10.72%, excluding CDSC. Total return provided is cumulative total return that
has not yet been annualized.
================================================================================
Your fund's total return includes sales charges, expenses and management fees.
The performance of the fund's Class A, Class B, Class C and Advisor Class shares
will differ due to differing fees and expenses. For fund performance
calculations and descriptions of the indexes cited on this page, please see 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.
AIM BASIC VALUE FUND
4
<PAGE> 7
WHY GOOD ECONOMIC NEWS SOMETIMES
RATTLES MARKETS
You turn on your television and learn the nation's unemployment rate has dropped
to its lowest level in decades. This latest tidbit of information enhances an
already rosy economic picture. The economy is growing at a brisk pace, wages are
rising and consumer spending is on the upswing.
Later in the day, you hear that financial markets plummeted in reaction to
the positive report on unemployment. Why in the world, you wonder, do markets
act that way?
Market observers often comment that "good news on Main Street is bad news on
Wall Street." And on the surface, it would appear to be that way at times.
RAPID GROWTH CAN SPUR INFLATION
It's not because the markets are opposed to good economic news. It's because a
major school of economic theory holds that when the economy grows too rapidly,
it can lead to runaway inflation. For example, if unemployment is extremely low
and wages are rising, companies have to pay more to hire and retain employees.
To cover increases in labor costs, companies may have to raise the prices of
their goods and services. If prices are rising faster than wages, consumers are
actually losing ground, even if their salaries are increasing.
FED MORE LIKELY TO RAISE INTEREST RATES
Moreover, when inflation looms as a threat, the Federal Reserve Board (the Fed)
is more likely to raise interest rates to keep it in check. And when rumors
abound that the central bank is about to tighten monetary policy, it can have a
disquieting effect on financial markets.
But if the Fed does raise interest rates slightly as a pre-emptive move
against inflation, it's not necessarily a bad thing, even if it causes a
short-term drop in markets. One well-known market analyst likened a modest
interest-rate hike to a flu shot: while it can cause some temporary discomfort,
it can prevent more serious malaise later. As Fed Chairman Alan Greenspan
observed, "Modest pre-emptive actions can obviate the need for more drastic
actions at a later date."
In three seperate moves in 1999, the central bank raised the federal funds
rate--the rate banks charge each other for borrowing surplus reserves--from
4.75% to 5.50%. These moves were a bid to head off inflation, which has been
very low in recent years, but threatened to re-emerge because of torrid economic
growth.
Stocks generally react negatively to a Fed interest-rate hike because it
means higher borrowing costs for corporations, which can affect their
profitability. Bonds also tend to decline in value when their coupons fall below
prevailing interest rates.
RESPONSES OF MARKETS CAN BE A LITTLE SURPRISING
Sometimes the markets will greet a Fed rate increase with a collective
yawn--that is, the actual announcement of a tightening in monetary policy has
very little impact on stocks and bonds. Generally, in such cases, the markets
have anticipated a Fed move in the preceding weeks and have adjusted stock and
bond prices accordingly.
Other times markets will actually rally after the Fed announces a rate
increase, especially if it is more modest than expected. Such a phenomenon is
often referred to as a "relief rally." The Standard & Poor's Composite Index of
500 Stocks (S&P 500) rose 1.57% on June 30, 1999, after the Fed raised rates.
While past performance cannot guarantee comparable future results, in recent
years, Fed rate hikes have only had a transitory impact on the markets. In such
scenarios, it is advisable to remain focused on your long-term financial goals
and not get too concerned about temporary dips in stock and bond prices.
[PHOTO]
AIM BASIC VALUE FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
December 31, 1999
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY
INTERESTS-90.90%
BANKS (MAJOR REGIONAL)-1.32%
FleetBoston Financial Corp. 51,800 $ 1,803,287
- --------------------------------------------------------------
BANKS (MONEY CENTER)-2.63%
Bank of America Corp. 71,425 3,584,642
- --------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.73%
Sigma-Aldrich Corp. 33,300 1,001,081
- --------------------------------------------------------------
COMPUTERS (PERIPHERALS)-0.74%
Adaptec, Inc.(a) 20,200 1,007,475
- --------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-5.57%
Computer Associates International,
Inc. 54,900 3,839,569
- --------------------------------------------------------------
Synopsys, Inc.(a) 21,500 1,435,125
- --------------------------------------------------------------
Unisys Corp.(a) 72,400 2,312,275
- --------------------------------------------------------------
7,586,969
- --------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-2.73%
McKesson HBOC, Inc. 165,000 3,722,812
- --------------------------------------------------------------
ELECTRIC COMPANIES-6.73%
Illinova Corp. 82,900 2,880,775
- --------------------------------------------------------------
Niagara Mohawk Holdings Inc.(a) 172,000 2,397,250
- --------------------------------------------------------------
Northeast Utilities 90,300 1,856,794
- --------------------------------------------------------------
Texas Utilities Co. 57,400 2,041,287
- --------------------------------------------------------------
9,176,106
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-3.74%
Koninklijke (Royal) Philips
Electronics N.V.-ADR
(Netherlands) 31,404 4,239,540
- --------------------------------------------------------------
Sony Corp.-ADR (Japan) 3,000 854,250
- --------------------------------------------------------------
5,093,790
- --------------------------------------------------------------
ELECTRONICS (COMPONENT
DISTRIBUTORS)-1.60%
Agilent Technologies, Inc.(a) 17,000 1,314,312
- --------------------------------------------------------------
Kyocera Corp.-ADR (Japan) 3,300 864,600
- --------------------------------------------------------------
2,178,912
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-1.69%
Analog Devices, Inc.(a) 24,700 2,297,100
- --------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-3.13%
Novellus Systems, Inc.(a) 34,800 4,264,087
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-4.18%
Citigroup Inc. 57,600 3,200,400
- --------------------------------------------------------------
MGIC Investment Corp. 41,400 2,491,762
- --------------------------------------------------------------
5,692,162
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-0.73%
Pharmacia & Upjohn, Inc. 22,000 $ 990,000
- --------------------------------------------------------------
HEALTH CARE (HOSPITAL
MANAGEMENT)-5.05%
Health Management Associates,
Inc.-Class A(a) 514,800 6,885,450
- --------------------------------------------------------------
HEALTH CARE (LONG TERM CARE)-2.04%
Manor Care, Inc.(a) 174,100 2,785,600
- --------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-2.85%
United Healthcare Corp. 73,000 3,878,125
- --------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.58%
Beckman Coulter, Inc. 69,200 3,520,550
- --------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-1.70%
UnumProvident Corp. 72,400 2,321,325
- --------------------------------------------------------------
INSURANCE (PROPERTY-CASUALTY)-5.56%
Radian Group Inc. 64,298 3,070,229
- --------------------------------------------------------------
Travelers Property Casualty
Corp.-Class A 53,800 1,842,650
- --------------------------------------------------------------
XL Capital Ltd.-Class A 51,400 2,666,375
- --------------------------------------------------------------
7,579,254
- --------------------------------------------------------------
LEISURE TIME (PRODUCTS)-2.30%
Mattel, Inc. 238,660 3,132,412
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-4.47%
Millipore Corp. 73,400 2,835,075
- --------------------------------------------------------------
Parker Hannifin Corp. 63,400 3,253,213
- --------------------------------------------------------------
6,088,288
- --------------------------------------------------------------
METAL FABRICATORS-1.91%
Kennametal Inc. 77,300 2,599,213
- --------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-6.98%
Diamond Offshore Drilling, Inc. 49,800 1,522,013
- --------------------------------------------------------------
ENSCO International Inc. 108,000 2,470,500
- --------------------------------------------------------------
Schlumberger Ltd. 37,700 2,120,625
- --------------------------------------------------------------
Transocean Sedco Forex Inc. 100,714 3,392,796
- --------------------------------------------------------------
9,505,934
- --------------------------------------------------------------
OIL (DOMESTIC INTEGRATED)-1.08%
Atlantic Richfield Co. 17,100 1,479,150
- --------------------------------------------------------------
OIL (INTERNATIONAL
INTEGRATED)-0.97%
Exxon Mobil Corp. 16,353 1,317,439
- --------------------------------------------------------------
PAPER & FOREST PRODUCTS-3.69%
Georgia-Pacific Group 44,700 2,268,525
- --------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
PAPER & FOREST PRODUCTS-(CONTINUED)
International Paper Co. 49,000 $ 2,765,438
- --------------------------------------------------------------
5,033,963
- --------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS-1.05%
Starwood Hotels & Resorts
Worldwide, Inc. 60,683 1,426,051
- --------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-3.25%
Federated Department Stores,
Inc.(a) 48,500 2,452,281
- --------------------------------------------------------------
Saks Inc.(a) 127,200 1,979,550
- --------------------------------------------------------------
4,431,831
- --------------------------------------------------------------
RETAIL (FOOD CHAINS)-3.40%
Albertson's, Inc. 74,500 2,402,625
- --------------------------------------------------------------
Kroger Co. (The)(a) 118,100 2,229,138
- --------------------------------------------------------------
4,631,763
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-2.57%
First Data Corp. 71,000 3,501,188
- --------------------------------------------------------------
TELEPHONE-1.64%
Bell Atlantic Corp. 36,400 2,240,875
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
WASTE MANAGEMENT-2.29%
Waste Management, Inc. 181,567 $ 3,120,683
- --------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$108,033,081) 123,877,517
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. TREASURY SECURITIES-0.22%
U.S. TREASURY BILLS-0.22%(b)
5.37%, 03/23/00 (Cost $297,387) $ 301,000(c) 297,659
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
MONEY MARKET FUNDS-7.01%
STIC Liquid Assets Portfolio(d) 4,776,360 4,776,360
- --------------------------------------------------------------
STIC Prime Portfolio(d) 4,776,360 4,776,360
- --------------------------------------------------------------
Total Money Market Funds (Cost
$9,552,720) 9,552,720
- --------------------------------------------------------------
TOTAL INVESTMENTS-98.13% (Cost
$117,883,188) 133,727,896
- --------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.87% 2,548,719
- --------------------------------------------------------------
NET ASSETS-100.00% $136,276,615
==============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(c) A portion of the principal balance was pledged as collateral to cover margin
requirements for open futures contracts. See Note 6.
(d) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$117,883,188) $133,727,896
- ---------------------------------------------------------
Receivables for:
Due from advisor 11,951
- ---------------------------------------------------------
Fund shares sold 2,841,146
- ---------------------------------------------------------
Dividends and interest 178,266
- ---------------------------------------------------------
Variation margin 10,200
- ---------------------------------------------------------
Other assets 57,290
- ---------------------------------------------------------
Total assets 136,826,749
- ---------------------------------------------------------
LIABILITIES:
Payable for fund shares reacquired 125,549
- ---------------------------------------------------------
Accrued advisory fees 142,927
- ---------------------------------------------------------
Accrued accounting services fees 4,247
- ---------------------------------------------------------
Accrued distribution fees 133,065
- ---------------------------------------------------------
Accrued trustees' fees 1,200
- ---------------------------------------------------------
Accrued transfer agent fees 25,891
- ---------------------------------------------------------
Accrued operating expenses 117,255
- ---------------------------------------------------------
Total liabilities 550,134
- ---------------------------------------------------------
Net assets applicable to shares outstanding $136,276,615
=========================================================
NET ASSETS:
Class A $ 70,790,769
=========================================================
Class B $ 55,784,561
=========================================================
Class C $ 7,669,005
=========================================================
Advisor Class $ 2,032,280
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 2,969,093
=========================================================
Class B 2,401,002
=========================================================
Class C 330,070
=========================================================
Advisor Class 84,037
=========================================================
Class A:
Net asset value and redemption price per
share $ 23.84
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $23.84 divided
by 94.50%) $ 25.23
=========================================================
Class B:
Net asset value and offering price per
share $ 23.23
=========================================================
Class C:
Net asset value and offering price per
share $ 23.23
=========================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 24.18
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $3,153 foreign withholding
tax) $ 932,561
- ---------------------------------------------------------
Interest 346,034
- ---------------------------------------------------------
Securities lending income 3,554
- ---------------------------------------------------------
Total investment income 1,282,149
- ---------------------------------------------------------
EXPENSES:
Advisory and administrative fees 480,576
- ---------------------------------------------------------
Accounting services fees 30,215
- ---------------------------------------------------------
Custodian fees 19,843
- ---------------------------------------------------------
Trustees' fees 1,667
- ---------------------------------------------------------
Distribution fees -- Class A 111,548
- ---------------------------------------------------------
Distribution fees -- Class B 311,507
- ---------------------------------------------------------
Distribution fees -- Class C 23,922
- ---------------------------------------------------------
Transfer agent fees 150,366
- ---------------------------------------------------------
Other 225,457
- ---------------------------------------------------------
Total expenses 1,355,101
- ---------------------------------------------------------
Less:
Fee waivers (11,951)
- ---------------------------------------------------------
Expenses paid indirectly (734)
- ---------------------------------------------------------
Net expenses 1,342,416
- ---------------------------------------------------------
Net investment income (loss) (60,267)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM INVESTMENT
SECURITIES AND FUTURES CONTRACTS:
Net realized gain from:
Investment securities 4,400,124
- ---------------------------------------------------------
Futures contracts 276,515
- ---------------------------------------------------------
4,676,639
- ---------------------------------------------------------
Change in net unrealized appreciation of:
Investment securities 12,327,004
- ---------------------------------------------------------
Futures contracts 127,522
- ---------------------------------------------------------
12,454,526
- ---------------------------------------------------------
Net gain from investment securities and
futures contracts 17,131,165
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $17,070,898
=========================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (60,267) $ (49,775)
- -------------------------------------------------------------------------------------------
Net realized gain from investment securities and futures
and option contracts 4,676,639 44,601
- -------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities, futures and option contracts 12,454,526 1,516,960
- -------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 17,070,898 1,511,786
- -------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A (256,018) (141,471)
- -------------------------------------------------------------------------------------------
Class B (210,328) (313,992)
- -------------------------------------------------------------------------------------------
Class C (27,898) --
- -------------------------------------------------------------------------------------------
Advisor Class (7,898) (18,735)
- -------------------------------------------------------------------------------------------
Share transactions-net:
Class A 53,925,709 1,006,548
- -------------------------------------------------------------------------------------------
Class B 30,620,885 87,004
- -------------------------------------------------------------------------------------------
Class C 7,050,778 --
- -------------------------------------------------------------------------------------------
Advisor Class 591,949 562,783
- -------------------------------------------------------------------------------------------
Net increase in net assets 108,758,077 2,693,923
- -------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 27,518,538 24,824,615
- -------------------------------------------------------------------------------------------
End of period $136,276,615 $27,518,538
===========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $116,220,386 $24,031,065
- -------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (2,511) (2,524)
- -------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities, futures and option contracts 4,086,510 (27,707)
- -------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, futures
and option contracts 15,972,230 3,517,704
- -------------------------------------------------------------------------------------------
$136,276,615 $27,518,538
===========================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Basic Value Fund (the "Fund") is a separate series of AIM Growth Series (the
"Trust"). The Trust is organized as a Delaware business trust and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end series management investment company consisting of six separate series
portfolios, each having an unlimited number of shares of beneficial interest.
The Fund consists of four different classes of shares: Class A shares, Class B
shares, Class C shares and Advisor Class shares. Class A shares are sold with a
front-end sales charge. Class B shares and Class C shares are sold with a
contingent deferred sales charge. Advisor Class shares are sold without a sales
charge. Effective March 1, 1999, the Fund discontinued sales of the Advisor
Class to new investors. Matters affecting each portfolio or class will be voted
on exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is long-term growth of capital. The Fund
invests substantially all of its investable assets in Value Portfolio (the
"Portfolio"). The Portfolio is organized as a Delaware business trust which is
registered under the 1940 Act as an open-end management investment company.
The Portfolio has investment objectives, policies and limitations
substantially identical to those of the Fund. Therefore, the financial
statements of the Fund and Portfolio have been presented on a consolidated
basis, and represent all activities of both the Fund and Portfolio. Through
December 31, 1999, all of the shares of beneficial interest of the Portfolio
were owned by either the Fund or INVESCO, Inc., which has a nominal ($100)
investment in the Portfolio.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of the significant accounting policies followed by the
Fund and the Portfolio in the preparation of their financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular
day, the security is valued at the closing bid price on that day. Each
security reported on the NASDAQ National Market System is valued at the
last sales price on the valuation date or absent a last sales price, at the
closing bid price. Debt obligations (including convertible bonds) are
valued on the basis of prices provided by an independent pricing service.
Prices provided by the pricing service may be determined without exclusive
reliance on quoted prices, and may reflect appropriate factors such as
yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued based
upon quotes furnished by independent sources and are valued at the last bid
price in the case of equity securities and in the case of debt obligations,
the mean between the last bid and asked prices. Securities for which market
quotations are not readily available or are questionable are valued at fair
value as determined in good faith by or under the supervision of the
Trust's and Portfolio's officers in a manner specifically authorized by the
Boards of Trustees. Short-term obligations having 60 days or less to
maturity are valued at amortized cost which approximates market value. For
purposes of determining net asset value per share, futures and option
contracts generally will be valued 15 minutes after the close of trading of
the New York Stock Exchange ("NYSE").
Generally, trading in foreign securities is substantially completed each
day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the NYSE. Occasionally, events
affecting the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the NYSE
which would not be reflected in the computation of the Fund's net asset
value. If events materially affecting the value of such securities occur
during such period, then these securities will be valued at their fair
value as determined in good faith by or under the supervision of the Boards
of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions
are accounted for on a trade date basis. Realized gains or losses on sales
are computed on the basis of specific identification of the securities
sold. Interest income is recorded as earned from settlement date and is
recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. On December 31, 1999, undistributed net investment income
was increased by $60,280 and undistributed net realized gains decreased by
$60,280 as a result of net operating loss reclassifications. Net assets of
the Fund were unaffected by the reclassifications.
C. Distributions -- Distributions from income and net realized capital gains,
if any, are generally paid annually and recorded on ex-dividend date. The
Fund may elect to use a portion of the proceeds of fund share redemptions
as distributions for federal income tax purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
10
<PAGE> 13
E. Futures Contracts -- The Portfolio may purchase or sell futures contracts
as a hedge against changes in market conditions. Initial margin deposits
required upon entering into futures contracts are satisfied by the
segregation of specific securities as collateral for the account of the
broker (the Portfolio's agent in acquiring the futures position). During
the period the futures contracts are open, changes in the value of the
contracts are recognized as unrealized gains or losses by "marking to
market" on a daily basis to reflect the market value of the contracts at
the end of each day's trading. Variation margin payments are made or
received depending upon whether unrealized gains or losses are incurred.
When the contracts are closed, the Portfolio recognizes a realized gain or
loss equal to the difference between the proceeds from, or cost of, the
closing transaction and the Portfolio's basis in the contract. Risks
include the possibility of an illiquid market and that a change in value of
the contracts may not correlate with changes in the value of the securities
being hedged.
F. Expenses -- Distribution expenses directly attributable to a class of
shares are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A I M Advisors, Inc. ("AIM") is the Fund's and the Portfolio's investment
manager and administrator. The Fund pays AIM administration fees at an annual
rate of 0.25% of the Fund's average daily net assets. The Portfolio pays AIM
investment management and administration fees at an annual rate of 0.475% on the
first $500 million of the Portfolio's average daily net assets, plus 0.45% on
the next $500 million of the Portfolio's average daily net assets, plus 0.425%
on the next $500 million of the Portfolio's average daily net assets, plus 0.40%
on the Portfolio's average daily net assets exceeding $1.5 billion. AIM has
contractually agreed to limit the Fund's expenses (exclusive of brokerage
commissions, taxes, interest and extraordinary expenses) to the maximum annual
rate of 1.75%, 2.40%, 2.40% and 1.40% of the average daily net assets of the
Fund's Class A, Class B, Class C and Advisor Class shares, respectively. During
the year ended December 31, 1999, AIM reimbursed expenses $11,951.
Effective July 1, 1999, the Trust entered into a master administrative
services agreement with AIM, replacing the prior pricing and accounting
agreement. The Fund, pursuant to the master administrative services agreement
with AIM, has agreed to pay AIM for certain administrative costs incurred in
providing accounting services to the Fund and the Portfolio. Prior to July 1,
1999, AIM was the pricing and accounting agent for the Fund and the Portfolio.
The monthly fee for these services paid to AIM was a percentage, not to exceed
0.03% annually, of a Fund's average daily net assets. The annual fee rate was
derived based on the aggregate net assets of the funds which comprised the
following investment companies: AIM Growth Series, AIM Investment Funds, AIM
Series Trust, G.T. Global Variable Investment Series and G.T. Global Variable
Investment Trust. The fee was calculated at the rate of 0.03% of the first $5
billion of assets and 0.02% to the assets in excess of $5 billion. An amount is
allocated to and paid by each such fund based on its relative average daily net
assets. For the year ended December 31, 1999, AIM was paid $30,215 for such
services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. For the year ended December 31, 1999, AFS was
paid $98,065 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the
1940 Act with respect to the Fund's Class A shares, Class B shares and Class C
shares (collectively, the "Plans"). The Fund, pursuant to the Plans, pays AIM
Distributors compensation at the annual rate of 0.35% of the Fund's average
daily net assets of Class A shares and 1.00% of the average daily net assets of
Class B and C shares. Of these amounts, the Fund may pay a service fee of 0.25%
of the average daily net assets of the Class A, Class B or Class C shares to
selected dealers and financial institutions who furnish continuing personal
shareholder services to their customers who purchase and own the appropriate
class of shares of the Fund. Any amounts not paid as a service fee under the
Plans would constitute an asset-based sales charge. The Plans also impose a cap
on the total sales charges, including asset-based sales charges that may be paid
by the respective classes. For the year ended December 31, 1999, the Class A,
Class B and Class C shares paid AIM Distributors $111,548, $311,507 and $23,922,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $89,199 from sales of the Class A
shares of the Fund during the year ended December 31, 1999. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1999,
AIM Distributors received $6,724 in contingent deferred sales charges imposed on
redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
NOTE 3-INDIRECT EXPENSES
During the year ended December 31, 1999, the Fund received reductions in
custodian fees of $734 an under expense offset arrangement. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of $734
during the year ended December 31, 1999.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. During the year
ended December 31, 1999, the Fund did not borrow under the line of credit
agreement. The funds which are party to the line of credit
11
<PAGE> 14
are charged a commitment fee of 0.09% on the unused balance of the committed
line. The commitment fee is allocated among the funds based on their respective
average net assets for the period. Prior to May 28, 1999, the Fund, along with
certain other funds advised and/or administered by AIM, had a line of credit
with BankBoston and State Street Bank & Trust Company. The arrangements with the
banks allowed the Fund and certain other funds to borrow, on a first come, first
served basis, an aggregate maximum amount of $250,000,000.
NOTE 5-PORTFOLIO SECURITIES LOANED
At December 31, 1999, securities with an aggregate value of $2,912,369 were on
loan to brokers. The loans were secured by cash collateral of $2,970,631
received by the Portfolio. For the year ended December 31, 1999, the Portfolio
received fees of $3,554 for securities lending.
For international securities, cash collateral is received by the portfolio
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. The 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 portfolio against loaned securities in the amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. The
cash collateral is invested in a securities lending trust which consists of a
portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
NOTE 6-FUTURES CONTRACTS
On December 31, 1999, $250,000 principal amount of U.S. Treasury obligations
were pledged as collateral to cover margin requirements for open futures
contracts. Open futures contracts were as follows:
<TABLE>
<CAPTION>
VALUE OF
NO. OF MONTH/ OPEN FUTURES UNREALIZED
CONTRACT CONTRACTS COMMITMENT CONTRACTS APPRECIATION
- --------------------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
S&P 500 Index 12 Mar. 00/Buy $4,452,600 $127,522
- --------------------- --------- ------------ ------------ ------------
</TABLE>
NOTE 7-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Portfolio during the year ended December 31, 1999 was
$118,370,194 and $36,601,100, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 1999 was as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $20,307,083
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (5,008,971)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $15,298,112
=========================================================
</TABLE>
Cost of investments for tax purposes is $118,429,784.
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1999 and 1998
were as follows:
<TABLE>
<CAPTION>
1999 1998
------------------------ -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ------------ -------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 3,261,169 $ 70,510,993 472,964 $ 8,362,868
- ----------------------------------------------------------------------------------------------------------------
Class B 2,206,406 46,519,183 587,988 10,276,429
- ----------------------------------------------------------------------------------------------------------------
Class C* 373,145 7,969,386 -- --
- ----------------------------------------------------------------------------------------------------------------
Advisor Class 55,252 1,198,665 41,555 747,776
- ----------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 10,995 241,403 7,580 134,463
- ----------------------------------------------------------------------------------------------------------------
Class B 9,168 196,233 16,572 288,515
- ----------------------------------------------------------------------------------------------------------------
Class C* 1,007 21,568 -- --
- ----------------------------------------------------------------------------------------------------------------
Advisor Class 355 7,898 1,044 18,735
- ----------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (803,521) (16,826,687) (424,737) (7,490,783)
- ----------------------------------------------------------------------------------------------------------------
Class B (792,971) (16,094,531) (607,196) (10,477,940)
- ----------------------------------------------------------------------------------------------------------------
Class C* (44,082) (940,176) -- --
- ----------------------------------------------------------------------------------------------------------------
Advisor Class (28,204) (614,614) (11,248) (203,728)
- ----------------------------------------------------------------------------------------------------------------
4,248,719 $ 92,189,321 84,522 $ 1,656,335
================================================================================================================
</TABLE>
* Class C Shares commenced sales on May 3, 1999.
12
<PAGE> 15
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A, Class B, and
Advisor Class outstanding during each of the years in the four-year period ended
December 31, 1999 and the period October 18, 1995 (date operations commenced)
through December 31, 1995 and for a share of Class C outstanding during May 3,
1999 (date sales commenced) through December 31, 1999.
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------
1999(a) 1998 1997(a) 1996(a) 1995(a)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.13 $ 17.25 $ 14.65 $ 12.76 $ 11.43
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) 0.05 0.04 0.09 (0.01) 0.03
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) 5.75 1.16 3.87 1.94 1.30
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Total from investment operations 5.80 1.20 3.96 1.93 1.33
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income -- -- (0.03) -- --
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Distributions from net realized gains (0.09) (0.32) (1.33) (0.04) --
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Total distributions (0.09) (0.32) (1.36) (0.04) --
- ------------------------------------------------------------ ------- ------- ------- ------- -------
Net asset value, end of period $ 23.84 $ 18.13 $ 17.25 $ 14.65 $ 12.76
============================================================ ======= ======= ======= ======= =======
Total return(b) 32.04% 7.02% 27.23% 15.12% 11.64%
============================================================ ======= ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $70,791 $ 9,074 $ 7,688 $ 2,529 $ 870
============================================================ ======= ======= ======= ======= =======
Ratio of expenses to average net assets:
With fee waivers and/or reimbursements 1.69%(c) 1.74% 1.99% 2.00% 2.00%(d)
============================================================ ======= ======= ======= ======= =======
Without fee waivers and/or reimbursements 1.71%(c) 2.11% 2.97% 5.51% 50.54%(d)
============================================================ ======= ======= ======= ======= =======
Ratio of net investment income (loss) to average net assets:
With fee waivers and/or reimbursements 0.23%(c) 0.25% 0.56% (0.10)% 1.10%(d)
============================================================ ======= ======= ======= ======= =======
Without fee waivers and/or reimbursements 0.21%(c) (0.08)% (0.42)% (3.61)% (47.44)%(d)
============================================================ ======= ======= ======= ======= =======
Ratio of interest expense to average net assets -- -- 0.03% -- --
============================================================ ======= ======= ======= ======= =======
Portfolio turnover rate 63% 148% 93% 256% --
============================================================ ======= ======= ======= ======= =======
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges and is not annualized for periods less than
one year.
(c) Ratios are based on average net assets of $31,870,865.
(d) Annualized.
13
<PAGE> 16
NOTE 9-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS C
------------
MAY 3, 1999
CLASS B THROUGH ADVISOR CLASS
---------------------------------------------------------------- DECEMBER 31, -------------
1999(a) 1998 1997(a) 1996(a) 1995(a) 1999(a) 1999(a)
------- ------- ------- ------- ------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 17.79 $ 17.04 $ 14.54 $ 12.75 $ 11.43 $ 21.07 $ 18.33
- ----------------------- ------- ------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income
(loss) (0.09) (0.08) (0.01) (0.10) 0.01 (0.06) 0.12
- ----------------------- ------- ------- ------- ------- ------- ------- -------
Net gains on
securities (both
realized and
unrealized) 5.62 1.15 3.83 1.93 1.31 2.31 5.82
- ----------------------- ------- ------- ------- ------- ------- ------- -------
Total from
investment
operations 5.53 1.07 3.82 1.83 1.32 2.25 5.94
- ----------------------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income -- -- -- -- -- -- --
- ----------------------- ------- ------- ------- ------- ------- ------- -------
Distributions from
net realized gains (0.09) (0.32) (1.32) (0.04) -- (0.09) (0.09)
- ----------------------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.09) (0.32) (1.32) (0.04) -- (0.09) (0.09)
- ----------------------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 23.23 $ 17.79 $ 17.04 $ 14.54 $ 12.75 $ 23.23 $ 24.18
======================= ======= ======= ======= ======= ======= ======= =======
Total return(b) 31.13% 6.34% 26.44% 14.35% 11.55% 10.72% 32.45%
======================= ======= ======= ======= ======= ======= ======= =======
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $55,785 $17,406 $16,717 $ 5,503 $ 1,254 $ 7,669 $ 2,032
======================= ======= ======= ======= ======= ======= ======= =======
Ratio of expenses to
average net assets:
With fee waivers
and/or
reimbursements 2.34%(c) 2.39% 2.64% 2.65% 2.65%(d) 2.34%(e) 1.34%(c)
======================= ======= ======= ======= ======= ======= ======= =======
Without fee waivers
and/or
reimbursements 2.36%(c) 2.76% 3.62% 6.16% 51.19%(d) 2.36%(e) 1.36%(c)
======================= ======= ======= ======= ======= ======= ======= =======
Ratio of net investment
income (loss) to
average net assets:
With fee waivers
and/or
reimbursements (0.42)%(c) (0.40)% (0.09)% (0.75)% 0.45%(d) (0.42)%(e) 0.58%(c)
======================= ======= ======= ======= ======= ======= ======= =======
Without fee waivers
and/or
reimbursements (0.44)%(c) (0.72)% (1.07)% (4.26)% (48.09)%(d) (0.44)%(e) 0.56%(c)
======================= ======= ======= ======= ======= ======= ======= =======
Ratio of interest
expense to average
net assets -- -- 0.03% -- -- -- --
======================= ======= ======= ======= ======= ======= ======= =======
Portfolio turnover rate 63% 148% 93% 256% -- 63% 63%
======================= ======= ======= ======= ======= ======= ======= =======
<CAPTION>
ADVISOR CLASS
------------------------------------------------
1998 1997(a) 1996(a) 1995(a)
------ ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $17.37 $ 14.72 $ 12.77 $ 11.43
- ----------------------- ------ ------- ------- -------
Income from investment
operations:
Net investment income
(loss) 0.07 0.15 0.03 0.04
- ----------------------- ------ ------- ------- -------
Net gains on
securities (both
realized and
unrealized) 1.21 3.91 1.96 1.30
- ----------------------- ------ ------- ------- -------
Total from
investment
operations 1.28 4.06 1.99 1.34
- ----------------------- ------ ------- ------- -------
Less distributions:
Dividends from net
investment income -- (0.07) -- --
- ----------------------- ------ ------- ------- -------
Distributions from
net realized gains (0.32) (1.34) (0.04) --
- ----------------------- ------ ------- ------- -------
Total distributions (0.32) (1.41) (0.04) --
- ----------------------- ------ ------- ------- -------
Net asset value, end of
period $18.33 $ 17.37 $ 14.72 $ 12.77
======================= ====== ======= ======= =======
Total return(b) 7.43% 27.78% 15.58% 11.72%
======================= ====== ======= ======= =======
Ratios/supplemental
data:
Net assets, end of
period (000s omitted) $1,038 $ 439 $ 191 $ 81
======================= ====== ======= ======= =======
Ratio of expenses to
average net assets:
With fee waivers
and/or
reimbursements 1.39% 1.64% 1.65% 1.65%(d)
======================= ====== ======= ======= =======
Without fee waivers
and/or
reimbursements 1.76% 2.62% 5.16% 50.19%(d)
======================= ====== ======= ======= =======
Ratio of net investment
income (loss) to
average net assets:
With fee waivers
and/or
reimbursements 0.60% 0.91% 0.25% 1.45%(d)
======================= ====== ======= ======= =======
Without fee waivers
and/or
reimbursements 0.23% (0.07)% (3.26)% (47.09)%(d)
======================= ====== ======= ======= =======
Ratio of interest
expense to average
net assets -- 0.03% -- --
======================= ====== ======= ======= =======
Portfolio turnover rate 148% 93% 256% --
======================= ====== ======= ======= =======
</TABLE>
(a) Calculated based upon average shares outstanding during the period.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are based on average net assets of $31,150,693 and $1,409,352 for
Class B and Advisor Class, respectively.
(d) Annualized.
(e) Ratios are annualized and based on average net assets of $2,389,446.
NOTE 10-SUBSEQUENT EVENT
On November 3, 1999, the Board of Trustees approved the conversion of Advisor
Class Shares into Class A Shares. The effective date of this conversion was
February 11, 2000.
14
<PAGE> 17
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of AIM Growth Series and Shareholders of
AIM Basic Value Fund:
In our opinion, the accompanying statement of assets and
liabilities, including the schedule 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 AIM
Basic Value Fund (hereafter referred to as the "Fund") at
December 31, 1999, the results of its operations, the
changes in its net assets and the financial highlights
for each of the periods indicated therein, in conformity
with accounting principles generally accepted in the
United States. 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 auditing standards generally accepted in
the United States 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, 1999
by correspondence with the custodian and brokers, provide
a reasonable basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
February 16, 2000
15
<PAGE> 18
<TABLE>
<CAPTION>
<S> <C> <C>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
Senior Managing Partner, Plantagenet Capital Chairman and President Suite 100
Management, LLC (an investment Houston, TX 77046
partnership); Chief Executive Officer, Dana R. Sutton
Plantagenet Holdings, Ltd. Vice President and Treasurer INVESTMENT MANAGER
(an investment banking firm)
Samuel D. Sirko A I M Advisors, Inc.
Frank S. Bayley Vice President and Secretary 11 Greenway Plaza
Partner, law firm of Suite 100
Baker & McKenzie Melville B. Cox Houston, TX 77046
Vice President
Robert H. Graham TRANSFER AGENT
President and Chief Executive Officer, Gary T. Crum
A I M Management Group Inc. Vice President A I M Fund Services, Inc.
P.O. Box 4739
Ruth H. Quigley Carol F. Relihan Houston, TX 77210-4739
Private Investor Vice President
CUSTODIAN
Mary J. Benson
Assistant Vice President and State Street Bank and Trust Company
Assistant Treasurer 225 Franklin Street
Boston, MA 02110
Sheri Morris
Assistant Vice President and COUNSEL TO THE FUND
Assistant Treasurer
Kirkpatrick & Lockhart LLP
Nancy L. Martin 1800 Massachusetts Avenue, N.W.
Assistant Secretary Washington, D.C. 20036-1800
Ofelia M. Mayo COUNSEL TO THE TRUSTEES
Assistant Secretary
Paul, Hastings, Janofsky & Walker LLP
Kathleen J. Pflueger Twenty Third Floor
Assistant Secretary 555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers
160 Federal Street
Boston, MA 02110
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION (UNAUDITED)
AIM Basic Value Fund paid ordinary dividends in the amount of $0.0763 per share
to shareholders during its tax year ended December 31, 1999. Of this amount,
16.51% is eligible for the dividends received deduction for corporations.
The Fund also distributed long-term capital gains of $81,096 for the Fund's tax
year ended December 31, 1999. Of long-term capital gains distributed, 100% is
20% rate gain.
16
<PAGE> 19
AIM FUNDS(SM) MAKES INVESTING EASY
-------------------------------------
OUR AUTOMATED
AIM INVESTOR LINE,
800-246-5463,
PROVIDES CURRENT ACCOUNT
INFORMATION AND THE PRICE,
YIELD AND TOTAL RETURN
ON ALL AIM FUNDS
24 HOURS A DAY.
-------------------------------------
o AIM BANK CONNECTION(SM). You can make investments in your AIM account in
amounts from $50 to $100,000 without writing a check. Once you set up this
convenient feature, AIM will draw the funds from your pre-authorized
checking account at your request.
o AIM INTERNET CONNECT(SM). With this service, you can purchase, redeem or
exchange shares of AIM funds in your current AIM account simply by accessing
our Web site at www.aimfunds.com. For a retirement account, such as an IRA
or 403(b), only exchanges are allowed over the Internet because of the
tax-reporting and record-keeping requirements these accounts involve.
o AUTOMATIC REINVESTMENT OF DIVIDENDS AND/OR CAPITAL GAINS. You can receive
distributions in cash, or you can reinvest them in your account without
paying a sales charge. Over time, the power of compounding can significantly
increase the value of your account.
o AUTOMATIC INVESTMENT PLAN. You can add to your account by authorizing your
AIM fund to withdraw a specified amount, minimum $50, from your bank account
on a regular schedule.
o EASY ACCESS TO YOUR MONEY. You can redeem shares of your AIM fund any day
the New York Stock Exchange is open. The value of the shares may be more or
less than their original cost depending on market conditions.
o EXCHANGE PRIVILEGE. As your investment goals change, you may exchange part
or all of your shares of one fund for shares of a different AIM fund within
the same share class. You may make up to 10 such exchanges per calendar
year.
o TAX-ADVANTAGED RETIREMENT PLANS. You can enjoy the tax advantages offered by
a variety of investment plans, including Traditional IRAs, Roth IRAs and
education IRAs, among others.
o E-MAIL ACCESS. You can contact us at [email protected] for general
information. For account information, contact us at
[email protected].
o www.aimfunds.com. Our award-winning Web site provides account information,
shareholder education and fund performance information.
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc.
AIM Aggressive Growth Fund AIM Money Market Fund has provided leadership in
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund the mutual fund industry
AIM Capital Development Fund since 1976 and managed
AIM Constellation Fund(1) INTERNATIONAL GROWTH FUNDS approximately $160 billion
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund in assets for more than 6.6
AIM Large Cap Growth Fund AIM Asian Growth Fund million shareholders,
AIM Mid Cap Equity Fund AIM Developing Markets Fund including individual
AIM Mid Cap Growth Fund AIM Euroland Growth Fund(4) investors, corporate clients
AIM Mid Cap Opportunities Fund AIM European Development Fund and financial institutions,
AIM Select Growth Fund AIM International Equity Fund as of December 31, 1999.
AIM Small Cap Growth Fund(2) AIM Japan Growth Fund The AIM Family of Funds
AIM Small Cap Opportunities Fund(3) AIM Latin American Growth Fund --Registered Trademark-- is
AIM Value Fund AIM New Pacific Growth Fund distributed nationwide, and
AIM Weingarten Fund AIM today is the
GLOBAL GROWTH FUNDS eighth-largest mutual fund
GROWTH & INCOME FUNDS AIM Global Aggressive Growth Fund complex in the United States
AIM Advisor Flex Fund AIM Global Growth Fund in assets under management,
AIM Advisor Large Cap Value Fund according to Strategic
AIM Advisor Real Estate Fund GLOBAL GROWTH & INCOME FUNDS Insight, an independent
AIM Balanced Fund AIM Global Growth & Income Fund mutual fund monitor.
AIM Basic Value Fund AIM Global Utilities Fund
AIM Charter Fund
GLOBAL INCOME FUNDS
INCOME FUNDS AIM Emerging Markets Debt Fund
AIM Floating Rate Fund AIM Global Government Income Fund
AIM High Yield Fund AIM Global Income Fund
AIM High Yield Fund II AIM Strategic Income Fund
AIM Income Fund
AIM Intermediate Government Fund THEME FUNDS
AIM Limited Maturity Treasury Fund AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
TAX-FREE INCOME FUNDS AIM Global Health Care Fund
AIM High Income Municipal Fund AIM Global Infrastructure Fund
AIM Municipal Bond Fund AIM Global Resources Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Telecommunications and Technology Fund(5)
AIM Tax-Free Intermediate Fund AIM Global Trends Fund(6)
</TABLE>
(1) Effective December 1, 1999, AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations. (2) AIM Small
Cap Growth Fund closed to new investors on November 8, 1999. (3) AIM Small Cap
Opportunities Fund closed to new investors on November 4, 1999. (4) On September
1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund. Previously
the fund invested in all size companies in most areas of Europe. The fund now
seeks to invest at least 65% of its assets in large-cap companies within
countries using the euro as their currency (EMU-member countries). (5) On June
1, 1999, AIM Global Telecommunications Fund was renamed AIM Global
Telecommunications and Technology Fund. (6) Effective August 27, 1999, AIM
Global Trends Fund was restructured to operate as a traditional mutual fund.
Before that date, the fund operated as a fund of funds. For more complete
information about any AIM fund(s), including sales charges and expenses, ask
your financial advisor or securities dealer for a free prospectus(es). Please
read the prospectus(es) carefully before you invest or send money. If used as
sales material after April 20, 2000, this report must be accompanied by a
current Quarterly Review of Performance for AIM Funds.
[AIM LOGO APPEARS HERE]
INVEST WITH DISCIPLINE
--Registered Trademark--
A I M Distributors, Inc. BVAL-AR-1
