<PAGE> 1
SEMIANNUAL REPORT / JUNE 30 2000
AIM MID CAP EQUITY FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
--Registered Trademark--
<PAGE> 2
[ COVER IMAGE ]
------------------------------------
TENDING THE GARDEN BY KONSTANTIN RODKO
THIS CHARMING FOLK-ART PAINTING BY KONSTANTIN RODKO DEPICTS
AN ATTENTIVE GARDENER CARING FOR HER TIDY CROP. LIKE A GARDENER,
FUND MANAGERS LOOK FOR GROWING COMPANIES THAT MAY ONE
DAY BLOSSOM INTO MAJOR CORPORATIONS.
------------------------------------
AIM MID CAP EQUITY FUND SEEKS LONG-TERM GROWTH OF CAPITAL BY INVESTING PRIMARILY
IN THE EQUITY SECURITIES OF MID-CAP COMPANIES.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Mid Cap Equity Fund's performance figures are historical, and they
reflect the reinvestment of distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B share
performance reflects the applicable contingent deferred sales charge (CDSC)
for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B and Class C shares will differ from
that of its Class A shares due to different sales-charge structure and class
expenses.
o Investing in small and mid-sized companies may involve greater risk and
potential reward than investing in more established companies.
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 Dow Jones Industrial Average (the Dow) is a price-weighted
average of 30 actively traded primarily industrial stocks.
o The unmanaged Lipper Mid-Cap Core Fund Index represents an average of the
performance of the 30 largest mid-capitalization core funds tracked by
Lipper, Inc., an independent mutual fund performance monitor.
o The unmanaged National Association of Securities Dealers Automated Quotation
System Composite Index (the Nasdaq) is a market-value-weighted index
comprising all domestic and non-U.S.-based common stocks listed on the
Nasdaq system. It includes more than 5,000 companies, and it is often
considered representative of the small and medium-sized company stock
universe. While it includes many small and mid-sized company stocks,
large-capitalization technology companies tend to dominate the index.
o The unmanaged Russell Midcap Index represents the performance of the stocks
of domestic mid-capitalization companies.
o The unmanaged Standard & Poor's MidCap 400 Index (the S&P 400) comprises the
common stocks of approximately 400 mid-capitalization companies.
o An investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends, and they 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 MID CAP EQUITY FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
When we started AIM in 1976, we had only a table, two chairs
[PHOTO OF and a telephone. At the time, Bob Graham, Gary Crum and I
Charles T. had the idea of creating a mutual fund company that put
Bauer, people first. Our slogan, "people are the product," means
Chairman of that people--our employees and our investors--are our
the Board of company.
THE FUND
APPEARS HERE] Almost a quarter-century later, we've grown to more
than eight million investors, $176 billion in assets under
[PHOTO OF management and 55 retail funds. Over that time, the industry
Robert H. as a whole has grown from $51 billion in assets to more than
Graham $7 trillion today. I never dreamed we would see such
APPEARS HERE] phenomenal growth. You are the main reason for our success,
and I want you to know how much I appreciate your loyalty
and trust over the past 24 years.
Usually in this letter I review market activity during the period covered by the
report. This time, I'd just like to say thank you. I am retiring as chairman of
the AIM Funds effective September 30, and as chairman of AIM effective December
31, 2000. Bob Graham, whose picture appears under mine, will succeed me as AIM's
chairman and chairman of the AIM Funds. Gary Crum will remain president of A I M
Capital Management, Inc., leading our investment division. I am enormously proud
to leave AIM in such capable hands.
I'm also very proud of our team of employees, now more than 2,500 strong.
Because of their collective commitment to excellence and ethical business
practices, AIM has earned the trust of investors and financial advisors alike.
And every employee, from portfolio managers to client services representatives,
is dedicated to serving our shareholders.
Rest assured that nothing at AIM will change because of my retirement. You can
still depend on this company to manage your money responsibly and provide you
with top-notch service. As chairman of AIM and chairman of the AIM Funds, Bob is
committed to preserving the things that have made AIM great in the past and
positioning it to succeed in the future. And Gary is dedicated to maintaining
the quality and long-term performance you've come to expect from AIM.
In the pages that follow, the managers of your fund comment on recent market
activity, how they have managed your fund over the past six months and their
outlook for the coming months. We trust you will find their comments helpful.
If you have any questions or comments, please contact us through our Web site,
www.aimfunds.com, or call our Client Services department at 800-959-4246 during
normal business hours. Information about your account is available at our Web
site and on our automated AIM Investor Line, 800-246-5463.
Thank you again for the support and trust you've shown us. I feel privileged to
have helped you with your financial goals, and I wish you success in all your
endeavors.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Advisors, Inc.
AIM MID CAP EQUITY FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
MID-CAP STOCKS EMERGE AS LEADERS IN TURBULENT MARKET ENVIRONMENT
MID-CAP STOCKS OUTPERFORMED LARGE- AND SMALL-CAP STOCKS DURING THE REPORTING
PERIOD. HOW DID AIM MID CAP EQUITY FUND PERFORM?
An investor preference for mid-cap stocks helped the fund post impressive
returns for the six months ended June 30, 2000. Excluding sales charges,
cumulative total returns for Class A, Class B and Class C shares were 11.84%,
11.48% and 11.45%, respectively. The fund outperformed the Lipper Mid-Cap Core
Fund Index and the Russell Midcap Index, which recorded gains of 10.66% and
5.12%, respectively, over the same period.
Over the reporting period, total net assets in the fund increased from
$333.7 million to $404.7 million.
WHAT WERE THE KEY TRENDS IN THE STOCK MARKET?
Markets soared, then declined before staging a comeback as the reporting period
drew to a close. During the first three months of 2000, several key market
indexes rose to new heights, with the Dow setting a record in January and the
technology-dominated Nasdaq following suit in March. High-flying technology
stocks helped propel these advances. Toward the end of March, however, investors
became concerned that tech stocks might be overvalued, sparking a sharp sell-off
in this sector. In April, a federal court ruling against software giant
Microsoft (not a fund holding) helped perpetuate the sell-off. The stocks of
Internet companies with no earnings were particularly hard hit.
Investors were also concerned that the Federal Reserve Board (the Fed) might
continue to raise interest rates to slow torrid economic growth and to contain
inflation. On May 16, the Fed, which launched a monetary tightening policy in
June 1999, raised the key federal funds rate--the rate banks charge one another
for overnight loans--from 6.0% to 6.5%. Interest-rate concerns before and after
the Fed's action prompted a sell-off that affected nearly every stock-market
sector in April and May, causing markets to be extremely volatile.
Markets rallied in June as key economic data, such as housing starts and
retail sales, indicated that the economy might be slowing, diminishing the
possibility of further Fed rate hikes. At its June 28 meeting, the Fed left
interest rates unchanged. The June rally enabled the Nasdaq, which lost 37.30%
of its value between March 10 and May 23, to end the reporting period down only
2.54%.
While the Dow was down 8.44% for the six months ended June 30, the S&P 400
was up 9.06%. Small-cap stocks eked out more
------------------------------------
MARKETS SOARED,
THEN DECLINED BEFORE STAGING A
COMEBACK AS THE REPORTING
PERIOD DREW TO A CLOSE.
------------------------------------
FUND PERFORMANCE
TOTAL RETURNS OF CLASS A, B & C SHARES VS. INDEXES
12/31/99-6/30/00, excluding sales charges
================================================================================
Fund Class A Shares 11.84%
Fund Class B Shares 11.48%
Fund Class C Shares 11.45%
Russell Midcap Index 5.12%
Lipper Mid-Cap Core Fund Index 10.66%
================================================================================
GROWTH OF TOTAL NET ASSETS
12/31/99-6/30/00
================================================================================
12/31/99 $333.7 million
6/30/00 $404.7 million
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/00, including sales charges
================================================================================
CLASS A SHARES
Inception (6/9/87) 14.75%
10 years 13.49
5 years 12.61
1 year 27.44*
*34.88% excluding sales charges
CLASS B SHARES
Inception (4/1/93) 16.67%
5 years 12.88
1 year 29.03*
*34.03% excluding CDSC
CLASS C SHARES
Inception (5/3/99) 37.68%
1 year 32.88*
*33.88% excluding CDSC
================================================================================
Your fund's total return includes sales charges, expenses and management fees.
The performance of the fund's Class B and Class C shares will differ from that
of its Class A shares 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. Past performance cannot guarantee comparable future results.
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN
INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE
SHOWN.
See important fund and index disclosures inside front cover.
AIM MID CAP EQUITY FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
modest gains for the period. Investors generally favored the stocks of companies
with tangible earnings. And while there was some renewed interest in value
stocks, growth stocks posted better returns.
WAS THE FUND ABLE TO TAKE ADVANTAGE OF THESE MARKET TRENDS?
Yes, because mid-cap stocks, the market leaders for the reporting period, made
up 80% of the fund's stock portfolio. Investors gravitated to mid-cap stocks
because of their favorable valuations compared to large-cap stocks and the
attractive earnings prospects of many mid-sized companies. The fund also
benefited from its significant exposure to capital-goods and energy stocks.
HOW WAS THE FUND POSITIONED?
At the end of the reporting period, the fund had 87 equity holdings.
Capital-goods stocks made up 15% of the portfolio; tech stocks, 14%; and energy
stocks, 12%. We believe that earnings drive stock prices. The fund's sector
allocations were the result of our stock-selection process, which is based on
earnings projections and not macroeconomic predictions. We found
many companies with excellent earnings prospects in these three sectors.
Tech companies continued to get a boost from global economic expansion,
mergers and acquisitions and the growth of wireless communications and the
Internet. Capital-goods firms that manufacture products for tech companies also
benefited from the technology boom, while energy corporations got a boost from
rising oil prices.
We also looked for quality company stocks that are favorably priced. We
found a number of attractively priced stocks, especially in the capital goods
sector, which includes such industries as electrical equipment and
manufacturing.
WHAT WERE SOME OF THE FUND'S TOP HOLDINGS AT THE END OF THE REPORTING PERIOD?
o Concord EFS, a financial-services firm and the fund's top holding, processes
credit and debit card transactions mainly for supermarkets and convenience
stores. The firm has a nationwide network of ATMs designed for the use of
the trucking industry.
o Coors, the fund's second-largest holding, is one of the nation's leading
brewers.
o Teva Pharmaceutical, an Israeli firm, makes generic versions of brand-name
drugs for heart conditions, pain and other maladies.
o Applied Power makes electronic enclosures and systems, tools and equipment
for the defense, automotive and construction industries.
o Millipore makes products such as specialized pumps and filters used to
analyze and purify fluids. It sells its products primarily to biotechnology
and drug companies.
o Burr-Brown makes a variety of items, including integrated circuits that
convert analog signals into digital information.
o Vishay Intertechnology makes components for electronic systems used in cars,
satellites and other products.
o Harman International makes stereo and audio equipment for both the consumer
and the professional markets.
WHAT IS YOUR OUTLOOK FOR THE NEAR TERM?
The near-term outlook for stocks could depend to a large extent on the Fed's
ability to bring the economy to a "soft landing." With increasing evidence that
economic growth could be slowing, the Fed may refrain from further interest-rate
increases. Moreover, a presidential election is looming in the fall. To appear
unbiased, the Fed has tended to leave interest rates unchanged in the months
immediately preceding a presidential election. If Fed policy ultimately succeeds
in slowing economic growth to a more sustainable rate and in keeping inflation
at bay, it could prolong the current record economic expansion. Such an
environment could help sustain corporate earnings growth and prove favorable
for stocks, particularly mid-cap issues because of their attractive valuations.
However, uncertainty over the Fed's actions and other factors could
perpetuate the volatility that has characterized markets in recent months. In
such an environment, investors would be well advised to take a long-term
perspective on their investment.
PORTFOLIO COMPOSITION
As of 6/30/00, based on total net assets
<TABLE>
<CAPTION>
===============================================================================================================
<S> <C>
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
---------------------------------------------------------------------------------------------------------------
1. Concord EFS, Inc. 2.41% 1. Electrical Equipment 8.38%
2. Adolph Coors Co. 2.24 2. Electronics (Semiconductors) 7.46
3. Teva Pharmaceutical Industries Ltd.-ADR (Israel) 2.00 3. Oil & Gas (Drilling & Equipment) 5.41
4. Applied Power Inc.-Class A 1.78 4. Oil & Gas (Exploration & Production) 4.99
5. Millipore Corp. 1.68 5. Health Care (Drugs-Generic & Other) 4.60
6. Burr-Brown Corp. 1.61 6. Foods 4.25
7. Vishay Intertechnology, Inc. 1.55 7. Services (Data Processing) 3.89
8. Harman International Industries, Inc. 1.51 8. Manufacturing (Specialized) 3.17
9. Profit Recovery Group International, Inc. (The) 1.48 9. Electronics (Component Distributors) 2.72
10. Earthgrains Co. (The) 1.44 10. Equipment (Semiconductor) 2.67
The fund's portfolio composition is subject to change, and there is no assurance that the fund will continue to
hold any particular security.
===============================================================================================================
</TABLE>
See important fund and index disclosures inside front cover.
AIM MID CAP EQUITY FUND
3
<PAGE> 6
SEMIANNUAL REPORT / FOR CONSIDERATION
CHASING PERFORMANCE MAY HURT MORE THAN IT HELPS
In the wake of some of last year's eye-popping mutual fund returns of more than
100%, it may be hard to look at your own returns and not feel disappointed.
According to Lipper, Inc.(1), the average large-cap core mutual fund finished
1999 up 22.35%--a return that would be considered terrific in most other
years--while the average science and technology fund had an astounding return of
134.77% for the year. Industry trends point to the fact that some investors have
looked at such performance and said, "My investments haven't had that kind of
return. I need to change my portfolio." What's an investor to do?
LOOK AT THE BIG PICTURE
It's very tempting to look only at returns when you invest in a mutual fund. But
there are other factors to consider:
o HOW WELL DOES THE FUND MATCH MY FINANCIAL GOALS?
Different kinds of mutual funds are appropriate for different people at
different stages. Are you a young adult early in your work life, or are you
approaching retirement? Are you investing to buy a house, car or other large
item soon, or are you investing for your later years?
If your investment plan has a rather long time horizon, you may be able to
invest more aggressively because you could have time to recoup should you
experience losses. If your needs are more immediate, you should assess how
aggressive you can afford to be--you may need to be more conservative than you
thought to meet your goal.
o HOW WELL DOES THE FUND MATCH MY TOLERANCE FOR RISK?
Many of the mutual funds that had such high-flying returns for 1999 are pretty
aggressive, investing in smaller, less-established companies, some of which have
not even realized a profit. So while these mutual funds have the potential to
make your money grow, they may also entail more risk than you may be prepared to
take.
Of course, investing in any mutual fund brings with it a certain amount of
risk, but this risk can vary widely depending on the types of holdings in which
a fund invests. It's important that you take a hard look at your risk tolerance
before investing in any fund, particularly if you are ratcheting up to a more
aggressive fund.
o HOW WELL DOES THE FUND FIT INTO MY PORTFOLIO?
When a market sector or mutual fund is doing well, you may be tempted to
overload your portfolio with the "winner of the moment." It seems to make
sense--you're making money with that investment so you should allocate more
money to it, right?
Be careful. A narrowly invested portfolio could be especially vulnerable to
market volatility. Spreading your investment over several types of funds or
investing in one diversified fund can help you spread out your risk--the more
diversified your portfolio, the less overlap it should have. Less overlap can
mean less risk.
PAST PERFORMANCE IS NO GUARANTEE
Last year's phenomenal returns were the result of a number of unique factors--
the strong U.S. economy, the proliferation of new technology companies and
record amounts of cash being poured into the stock market, to name a few. Even
so, it may seem that everyone came out a winner in 1999.
In reality, just a few large companies accounted for many of the markets'
records in 1999. More than half the stocks in the S&P 500(2) declined during the
year. The technology sector was clearly dominant--the tech component of the S&P
500 finished 1999 with a return of 75.11%, while the capital goods component of
the index, which came in second for the year, had a return of 28.76%.(3) So if
you didn't invest in technology in 1999, you probably didn't enjoy the same
performance as people who did.
As we've seen thus far in 2000, financial markets can be quite fickle,
revolving around investors' perceptions as much as hard facts. Because of the
ever-changing nature of the market environment, many high-performing mutual
funds don't repeat their gains from year to year. This doesn't necessarily mean
a fund had a "bad" year or that fund managers chose
================================================================================
SEC SPEAKS OUT
In the wake of 1999's extraordinary fund performances, the Securities and
Exchange Commission (SEC), which regulates the mutual fund industry, says that
investors should temper their expectations and not make investment decisions
based only on past performance. The SEC also suggests that investors consider
the following factors when looking at a mutual fund:
Age
Risk
Size
Volatility
Management
Expenses
Tax Efficiency
Source: The Wall Street Journal, 1/25/00
================================================================================
AIM MID CAP EQUITY FUND
4
<PAGE> 7
SEMIANNUAL REPORT / FOR CONSIDERATION
holdings poorly. It may just mean that the environment for a particular fund was
not as ideal as it had been in the past. This can be true for any mutual fund.
KEEP EXPECTATIONS REALISTIC
Along with recognizing how quickly the market environment can change, it's
important to keep your expectations realistic. Of course you would like your
investments to do well every year, but chances are they won't. It's the nature
of the beast. So what you should be shooting for is good performance over the
long term. While your investment may not have a stellar year every year, over
time its average returns may prove to be just what you hoped for.
Sometimes it's hard to be patient when it seems like everyone else's
investments are doing better than yours. You may be tempted to chase winning
performance by trying to time the market, switching in and out of funds as
markets or sectors go in and out of favor. But this strategy can greatly
increase your risk and it rarely works--you may end up with significantly lower
returns than if you'd just stayed put. (There can also be adverse tax
consequences.)
ASSET ALLOCATION: THE OLD STANDBY
The truth is, no one knows for sure what is going to perform well in the market,
which is why mutual fund investors should diversify using asset
allocation--spreading investments over several fund types (e.g., core, growth,
international and income). Unfortunately, some investors seem less interested in
asset allocation these days because they want to chase performance instead.
And when the market is roaring ahead, who can blame them?
But as Isaac Newton proved, what goes up must come down. A diversified
portfolio can offer some protection in a market downturn because when your
assets are spread over several different types of funds, chances are at least
one of them is keeping its head above water. And while a diversified fund
portfolio probably won't perform as well as the flashiest stock fund, it
probably won't do as badly as the worst of them either.
Your financial advisor can help you determine what kinds of mutual funds best
fit your investment goals and risk tolerance. Talk to your financial advisor for
more information.
(1) Lipper, Inc. is an independent mutual fund performance monitor.
(2) The unmanaged Standard & Poor's Composite Index of 500 Stocks (the S&P 500)
is generally considered representative of the stock market.
(3) Source: Bloomberg.
DOLLAR-COST AVERAGING CAN LOWER THE COST OF INVESTING
One useful way to buy shares of a mutual fund is through dollar-cost averaging.
In such a plan, you invest a certain amount at regular intervals--say $200 per
month--which allows you to buy more shares when mutual fund prices go down and
fewer shares when prices go up. This gives you the benefit of your average cost
per share actually being less than the average price per share.
Please keep in mind that this example is hypothetical and is not indicative of
the performance of any investment, IRA or AIM fund. Dollar-cost averaging does
not assure a profit and does not protect against loss in declining markets.
Since dollar-cost averaging involves continuous investing regardless of
fluctuating securities prices, investors should consider their ability to
continue purchases over an extended period of time.
================================================================================
MONTH AMOUNT INVESTED SHARE PRICE SHARES PURCHASED
--------------------------------------------------------------------------------
JANUARY $ 200 $ 24 8.333
FEBRUARY 200 20 10.000
MARCH 200 14 14.286
APRIL 200 18 11.111
MAY 200 22 9.091
JUNE 200 24 8.333
6-MONTH TOTAL $1200 $122 61.154
Average price per share: $122 divided by 6 = $20.33
Average cost per share: $1200 divided by 61.154 = $19.62
================================================================================
AIM MID CAP EQUITY FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY
INTERESTS-83.10%
BANKS (REGIONAL)-1.05%
Bank United Corp.-Class A 92,000 $ 3,237,250
--------------------------------------------------------------
UnionBanCal Corp. 55,000 1,020,937
--------------------------------------------------------------
4,258,187
--------------------------------------------------------------
BEVERAGES (ALCOHOLIC)-2.24%
Adolph Coors Co.-Class B 150,000 9,075,000
--------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.23%
Ackerley Group, Inc. (The) 80,000 940,000
--------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.90%
Rohm & Haas Co. 105,000 3,622,500
--------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-2.30%
Novell, Inc.(a) 240,700 2,226,475
--------------------------------------------------------------
PeopleSoft, Inc.(a) 300,000 5,025,000
--------------------------------------------------------------
Synopsys, Inc.(a) 60,000 2,073,750
--------------------------------------------------------------
9,325,225
--------------------------------------------------------------
CONSTRUCTION (CEMENT &
AGGREGATES)-1.23%
Martin Marietta Materials, Inc. 70,000 2,830,625
--------------------------------------------------------------
Southdown, Inc. 37,000 2,136,750
--------------------------------------------------------------
4,967,375
--------------------------------------------------------------
ELECTRICAL EQUIPMENT-8.38%
American Power Conversion Corp.(a) 100,000 4,081,250
--------------------------------------------------------------
Amphenol Corp.-Class A(a) 80,000 5,295,000
--------------------------------------------------------------
Harman International Industries,
Inc. 100,000 6,100,000
--------------------------------------------------------------
Molex, Inc.-Class A 140,875 4,930,625
--------------------------------------------------------------
Rayovac Corp.(a) 150,000 3,356,250
--------------------------------------------------------------
Viasystems Group, Inc.(a) 240,000 3,885,000
--------------------------------------------------------------
Vishay Intertechnology, Inc.(a) 165,000 6,259,687
--------------------------------------------------------------
33,907,812
--------------------------------------------------------------
ELECTRONICS (COMPONENT
DISTRIBUTORS)-2.72%
Avnet, Inc. 90,000 5,332,500
--------------------------------------------------------------
CTS Corp. 75,000 3,375,000
--------------------------------------------------------------
W.W. Grainger, Inc. 75,000 2,310,937
--------------------------------------------------------------
11,018,437
--------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-7.46%
Amkor Technology, Inc.(a) 60,000 2,118,750
--------------------------------------------------------------
Burr-Brown Corp.(a) 75,000 6,501,562
--------------------------------------------------------------
Cirrus Logic, Inc.(a) 230,000 3,680,000
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)
Cypress Semiconductor Corp.(a) 75,000 $ 3,168,750
--------------------------------------------------------------
Dallas Semiconductor Corp. 98,000 3,993,500
--------------------------------------------------------------
Integrated Device Technology,
Inc.(a) 50,000 2,993,750
--------------------------------------------------------------
Lattice Semiconductor Corp.(a) 75,000 5,184,375
--------------------------------------------------------------
National Semiconductor Corp.(a) 45,000 2,553,750
--------------------------------------------------------------
30,194,437
--------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-2.67%
PSi Technologies Holdings, Inc.-ADR
(Philippines)(a) 122,000 2,531,500
--------------------------------------------------------------
Rudolph Technologies, Inc.(a) 98,000 3,797,500
--------------------------------------------------------------
ST Assembly Test Services Ltd.-ADR
(Singapore)(a) 45,000 1,158,750
--------------------------------------------------------------
Teradyne, Inc.(a) 45,000 3,307,500
--------------------------------------------------------------
10,795,250
--------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-0.47%
Ambac Financial Group, Inc. 35,000 1,918,438
--------------------------------------------------------------
FOODS-4.25%
Earthgrains Co. (The) 300,000 5,831,250
--------------------------------------------------------------
International Home Foods, Inc.(a) 150,000 3,140,625
--------------------------------------------------------------
Keebler Foods Co. 110,000 4,083,750
--------------------------------------------------------------
Suiza Foods Corp.(a) 85,000 4,154,375
--------------------------------------------------------------
17,210,000
--------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-4.60%
Biovail Corp. (Canada)(a) 100,000 5,543,750
--------------------------------------------------------------
Jones Pharma Inc. 124,650 4,978,209
--------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd.-ADR (Israel) 146,000 8,093,875
--------------------------------------------------------------
18,615,834
--------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-2.39%
Edwards Lifesciences Corp.(a) 250,000 4,625,000
--------------------------------------------------------------
Sybron International Corp.(a) 255,000 5,052,188
--------------------------------------------------------------
9,677,188
--------------------------------------------------------------
HEALTH CARE (SPECIALIZED
SERVICES)-0.56%
Charles River Laboratories
International, Inc.(a) 102,200 2,267,563
--------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON- DURABLES)-1.31%
Dial Corp. (The) 510,000 5,291,250
--------------------------------------------------------------
HOUSEWARES-0.57%
Fortune Brands, Inc. 100,000 2,306,250
--------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
INSURANCE (PROPERTY &
CASUALTY)-0.87%
XL Capital Ltd.-Class A (Bermuda) 65,000 $ 3,518,125
--------------------------------------------------------------
INSURANCE BROKERS-0.88%
Aon Corp. 115,000 3,572,188
--------------------------------------------------------------
LEISURE TIME (PRODUCTS)-0.25%
Mattel, Inc. 76,000 1,002,250
--------------------------------------------------------------
MACHINERY (DIVERSIFIED)-1.78%
Applied Power Inc.-Class A 215,000 7,202,500
--------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-1.40%
Pentair, Inc. 160,000 5,680,000
--------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-3.17%
Mettler-Toledo International
Inc.(a) 65,000 2,600,000
--------------------------------------------------------------
Millipore Corp. 90,000 6,783,750
--------------------------------------------------------------
Parker-Hannifin Corp. 100,000 3,425,000
--------------------------------------------------------------
12,808,750
--------------------------------------------------------------
NATURAL GAS-1.20%
Kinder Morgan, Inc. 140,000 4,838,750
--------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-0.56%
Reynolds & Reynolds Co. (The)-Class
A 125,000 2,281,250
--------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-5.41%
BJ Services Co.(a) 55,000 3,437,500
--------------------------------------------------------------
Cooper Cameron Corp.(a) 55,000 3,630,000
--------------------------------------------------------------
Rowan Cos., Inc.(a) 135,000 4,100,625
--------------------------------------------------------------
Santa Fe International Corp. 105,000 3,668,438
--------------------------------------------------------------
Transocean Sedco Forex Inc. 80,000 4,275,000
--------------------------------------------------------------
Weatherford International, Inc.(a) 70,000 2,786,875
--------------------------------------------------------------
21,898,438
--------------------------------------------------------------
OIL & GAS (EXPLORATION &
PRODUCTION)-4.99%
Anadarko Petroleum Corp. 80,000 3,945,000
--------------------------------------------------------------
Apache Corp. 50,000 2,940,625
--------------------------------------------------------------
Burlington Resources Inc. 63,000 2,409,750
--------------------------------------------------------------
Devon Energy Corp. 50,000 2,809,375
--------------------------------------------------------------
EOG Resources, Inc. 125,000 4,187,500
--------------------------------------------------------------
Noble Affiliates, Inc. 105,000 3,911,250
--------------------------------------------------------------
20,203,500
--------------------------------------------------------------
OIL & GAS (REFINING &
MARKETING)-1.14%
Valero Energy Corp. 145,000 4,603,750
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
PAPER & FOREST PRODUCTS-1.59%
Bowater Inc. 80,000 $ 3,530,000
--------------------------------------------------------------
Mead Corp. (The) 115,000 2,903,750
--------------------------------------------------------------
6,433,750
--------------------------------------------------------------
PUBLISHING-2.01%
Meredith Corp. 105,000 3,543,750
--------------------------------------------------------------
Reader's Digest Association Inc.
(The)-Class A 115,000 4,571,250
--------------------------------------------------------------
8,115,000
--------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-0.24%
New York Times Co. (The)-Class A 25,000 987,500
--------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS-1.13%
Starwood Hotels & Resorts
Worldwide, Inc. 140,000 4,558,750
--------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.57%
Ames Department Stores, Inc.(a) 300,000 2,325,000
--------------------------------------------------------------
RETAIL (DRUG STORES)-1.09%
CVS Corp. 110,000 4,400,000
--------------------------------------------------------------
RETAIL (SPECIALTY)-0.96%
Williams-Sonoma, Inc.(a) 120,000 3,892,500
--------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.78%
Dime Bancorp, Inc. 200,000 3,150,000
--------------------------------------------------------------
SERVICES (COMMERCIAL &
CONSUMER)-2.39%
Convergys Corp.(a) 105,000 5,446,875
--------------------------------------------------------------
H&R Block, Inc. 130,000 4,208,750
--------------------------------------------------------------
9,655,625
--------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-0.31%
MarchFirst, Inc.(a) 69,200 1,262,900
--------------------------------------------------------------
SERVICES (DATA PROCESSING)-3.89%
Concord EFS, Inc.(a) 375,000 9,750,000
--------------------------------------------------------------
Profit Recovery Group
International, Inc. (The)(a) 360,000 5,985,000
--------------------------------------------------------------
15,735,000
--------------------------------------------------------------
TELEPHONE-1.43%
Broadwing Inc.(a) 134,875 3,498,320
--------------------------------------------------------------
CenturyTel, Inc. 80,000 2,300,000
--------------------------------------------------------------
5,798,320
--------------------------------------------------------------
TEXTILES (APPAREL)-0.41%
Jones Apparel Group, Inc.(a) 70,000 1,645,000
--------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
WASTE MANAGEMENT-1.32%
Republic Services, Inc.(a) 335,000 $ 5,360,000
--------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$280,074,407) 336,319,592
--------------------------------------------------------------
MONEY MARKET FUNDS-16.90%
STIC Liquid Assets Portfolio(b) 34,211,158 34,211,158
--------------------------------------------------------------
STIC Prime Portfolio(b) 34,211,158 34,211,158
--------------------------------------------------------------
Total Money Market Funds (Cost
$68,422,316) 68,422,316
--------------------------------------------------------------
TOTAL INVESTMENTS-100.00%
(Cost $348,496,723) 404,741,908
--------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(0.00%) (11,050)
--------------------------------------------------------------
NET ASSETS-100.00% $404,730,858
==============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
8
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$348,496,723) $404,741,908
---------------------------------------------------------
Receivables for:
Collateral for securities loaned 12,403,995
---------------------------------------------------------
Fund shares sold 1,260,883
---------------------------------------------------------
Dividends 631,205
---------------------------------------------------------
Total assets 419,037,991
---------------------------------------------------------
LIABILITIES:
Payables for:
Collateral upon return of securities
loaned 12,403,995
---------------------------------------------------------
Fund shares reacquired 1,105,291
---------------------------------------------------------
Accrued advisory fees 242,656
---------------------------------------------------------
Accrued administrative services fees 8,315
---------------------------------------------------------
Accrued distribution fees 402,187
---------------------------------------------------------
Accrued transfer agent fees 73,389
---------------------------------------------------------
Accrued trustees' fees 3,071
---------------------------------------------------------
Accrued operating expenses 68,229
---------------------------------------------------------
Total liabilities 14,307,133
---------------------------------------------------------
Net assets applicable to shares outstanding $404,730,858
=========================================================
NET ASSETS:
Class A $216,414,109
=========================================================
Class B $181,399,739
=========================================================
Class C $ 6,917,010
=========================================================
Shares outstanding, $0.001 par value per
share:
Class A 8,242,220
=========================================================
Class B 7,326,785
=========================================================
Class C 279,666
=========================================================
Class A:
Net asset value and redemption price per
share $ 26.26
---------------------------------------------------------
Offering price per share:
(Net asset value of $26.26 divided
by 94.50%) $ 27.79
---------------------------------------------------------
Class B:
Net asset value and offering price per
share $ 24.76
---------------------------------------------------------
Class C:
Net asset value and offering price per
share $ 24.73
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 2000
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax
$3,971) $ 3,039,355
---------------------------------------------------------
Security lending income 17,891
---------------------------------------------------------
Total investment income 3,057,246
---------------------------------------------------------
EXPENSES:
Advisory and administrative fees 1,340,842
---------------------------------------------------------
Accounting services fee 47,202
---------------------------------------------------------
Custodian fees 15,983
---------------------------------------------------------
Distribution fees -- Class A 346,346
---------------------------------------------------------
Distribution fees -- Class B 835,156
---------------------------------------------------------
Distribution fees -- Class C 20,023
---------------------------------------------------------
Transfer agent fees 364,747
---------------------------------------------------------
Trustees' fees 7,523
---------------------------------------------------------
Other 97,809
---------------------------------------------------------
Total expenses 3,075,631
---------------------------------------------------------
Less: Expenses paid indirectly (3,270)
---------------------------------------------------------
Net expenses 3,072,361
---------------------------------------------------------
Net investment income (loss) (15,115)
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES
Net realized gain from investment
securities 62,399,252
---------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities (23,336,622)
---------------------------------------------------------
Net gain on investment securities 39,062,630
---------------------------------------------------------
Net increase in net assets resulting from
operations $39,047,515
=========================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 2000 and the year ended December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
------------ ------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (15,115) $ (1,077,771)
-------------------------------------------------------------------------------------------------
Net realized gain from investment securities 62,399,252 72,527,338
-------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (23,336,622) 19,996,181
-------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 39,047,515 91,445,748
-------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A -- (16,323,689)
-------------------------------------------------------------------------------------------------
Class B -- (14,494,421)
-------------------------------------------------------------------------------------------------
Class C -- (129,452)
-------------------------------------------------------------------------------------------------
Advisor Class* -- (193,799)
-------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 16,569,964 (34,855,409)
-------------------------------------------------------------------------------------------------
Class B 12,603,298 (40,751,032)
-------------------------------------------------------------------------------------------------
Class C 5,059,824 1,442,045
-------------------------------------------------------------------------------------------------
Advisor Class* (2,218,024) 909,831
-------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets 71,062,577 (12,950,178)
-------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 333,668,281 346,618,459
-------------------------------------------------------------------------------------------------
End of period $404,730,858 $333,668,281
=================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $254,909,388 $222,894,326
-------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (15,115) --
-------------------------------------------------------------------------------------------------
Undistributed net realized gain from investment securities 93,591,400 31,192,148
-------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 56,245,185 79,581,807
-------------------------------------------------------------------------------------------------
$404,730,858 $333,668,281
=================================================================================================
</TABLE>
* Advisor Class shares were converted to Class A shares effective as of the
close of business on February 11, 2000.
See Notes to Financial Statements.
10
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Mid Cap Equity Fund (the "Fund") is a separate series of AIM Growth Series
(the "Trust"). The Trust is organized as a Delaware business trust and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of five
separate series portfolios, each having an unlimited number of shares of
beneficial interest. The Fund consists of three different classes of shares:
Class A shares, Class B shares and Class C shares. The Fund formerly offered
Advisor Class shares; however, as of the close of business on February 11, 2000,
the Advisor Class shares were converted to Class A 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. Matters affecting each portfolio or
class will be voted on exclusively by the shareholders of such portfolio or
class. The assets, liabilities and operations of each portfolio are accounted
for separately. Information presented in these financial statements pertains
only to the Fund. The Fund's investment objective is long-term growth of
capital.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities 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 in the preparation of its financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price as of the close of the
customary trading session 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 as of the close of
the customary trading session 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
officers in a manner specifically authorized by the Board 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 the customary trading session 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 customary
trading session 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 Board 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 on the accrual basis from settlement date.
Dividend income is recorded on the ex-dividend date.
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 from 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.
E. 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 investment manager and administrator.
The Fund pays AIM investment management and administration fees at an annual
rate of 0.725% on the first $500 million of the Fund's average daily net assets,
plus 0.70% on the next $500 million of the Fund's average daily net assets, plus
0.675% on the next $500 million of the Fund's average daily net
11
<PAGE> 14
assets, plus 0.65% on the Fund's average daily net assets exceeding $1.5
billion. AIM has contractually agreed to limit the Fund's expenses (exclusive of
brokerage commissions, taxes, interest, extraordinary items and increases in
expenses due to offset arrangements, if any) to the maximum annual rate of
1.75%, 2.40% and 2.40% of the average daily net assets of the Fund's Class A,
Class B and Class C shares, respectively.
The Fund, pursuant to a master administrative services agreement with AIM,
has agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the six months ended June 30, 2000, AIM was
paid $47,202 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 six months ended June 30, 2000, AFS
was paid $234,587 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C 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 six months ended June 30,
2000, the Class A, Class B and Class C shares paid AIM Distributors $346,346,
$835,156 and $20,023, respectively, as compensation under the Plans.
AIM Distributors received commissions of $79,830 from sales of the Class A
shares of the Fund during the six months ended June 30, 2000. Such commissions
are not an expense of the Fund. They are deducted from, and are not included in,
the proceeds from sales of Class A shares. During the six months ended June 30,
2000, AIM Distributors received $300 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
For the six months ended June 30, 2000, the Fund received reductions in
custodian fees and in transfer agency fees from AFS (an affiliate of AIM) of
$1,306 and $1,964, respectively, under expense offset arrangements which
resulted in a reduction of the Fund's total expenses of $3,270.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by Citibank, N.A. 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 six months ended June 30,
2000, the Fund did not borrow under the line of credit agreement. The funds
which are party to the line of credit are charged a commitment fee of 0.09% on
the unused balance of the committed line. The commitment fee is allocated among
the funds based on their respective average net assets for the period.
NOTE 5-PORTFOLIO SECURITIES LOANED
The Fund may lend portfolio securities to the extent of one-third of the
Fund's total assets. Such loans are secured by collateral equal to no less than
the market value, determined daily, of the loaned securities. Such collateral
will be cash or debt securities issued or guaranteed by the U.S. Government or
any of its agencies. Cash collateral pursuant to these loans is invested in
short-term money market instruments or affiliated money market funds. Lending
securities entails a risk of loss to the Fund if and to the extent that the
market value of the securities loaned were to increase and the lender did not
increase the collateral accordingly.
At June 30, 2000, securities with an aggregate value of $12,163,281 were on loan
to brokers. The loans were secured by cash collateral of $12,403,995 received by
the Fund. For the six months ended June 30, 2000, the Fund received fees of
$17,891 for securities lending.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 2000 was
$171,160,731 and $131,182,478, respectively.
The amount of unrealized appreciation of investment securities, for tax
purposes, as of June 30, 2000 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 83,688,656
---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (28,439,919)
---------------------------------------------------------
Net unrealized appreciation of investment
securities $ 55,248,737
=========================================================
Cost of investments for tax purposes is
$349,493,171.
</TABLE>
12
<PAGE> 15
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the six months ended June 30, 2000 and the
year ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
JUNE 30, 2000 DECEMBER 31, 1999
------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 1,530,080 $ 39,055,686 2,331,884 $ 45,474,921
------------------------------------------------------------------------------------------------------------------
Class B 1,189,954 28,706,542 743,118 14,758,662
------------------------------------------------------------------------------------------------------------------
Class C* 224,165 5,424,665 67,678 1,380,504
------------------------------------------------------------------------------------------------------------------
Advisor Class** 1,493 35,592 49,583 1,032,846
------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A -- -- 685,215 14,958,133
------------------------------------------------------------------------------------------------------------------
Class B -- -- 648,821 13,404,549
------------------------------------------------------------------------------------------------------------------
Class C* -- -- 5,521 114,003
------------------------------------------------------------------------------------------------------------------
Advisor Class** -- -- 8,785 193,799
------------------------------------------------------------------------------------------------------------------
Conversion of Advisor Class Shares to Class A Shares***:
Class A 93,124 2,242,422 -- --
------------------------------------------------------------------------------------------------------------------
Advisor Class (92,129) (2,242,422) -- --
------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (985,852) (24,728,144) (4,913,896) (95,288,463)
------------------------------------------------------------------------------------------------------------------
Class B (678,875) (16,103,244) (3,686,690) (68,914,243)
------------------------------------------------------------------------------------------------------------------
Class C* (14,987) (364,841) (2,711) (52,462)
------------------------------------------------------------------------------------------------------------------
Advisor Class** (500) (11,194) (15,098) (316,814)
------------------------------------------------------------------------------------------------------------------
1,266,473 $ 32,015,062 (4,077,790) $(73,254,565)
==================================================================================================================
</TABLE>
* Class C shares commenced sales on May 3, 1999.
** Advisor Class share activity for the period January 1, 2000 through February
11, 2000 (date of conversion).
*** Effective as of the close of business February 11, 2000, pursuant to
approval by the Board of Trustees on November 3, 1999, all outstanding
shares of Advisor Class shares were converted to Class A shares of the fund.
13
<PAGE> 16
NOTE 8-FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997 1996 1995
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 23.48 $ 18.97 $ 21.01 $ 20.77 $ 19.07 $ 17.69
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) 0.04 (0.01) (0.24) (0.20) 0.03 0.24
---------------------------------------------------------------------------------------------------------------------------------
Net gains (losses) on securities (both realized and
unrealized) 2.74 6.88 (0.81) 3.00 2.96 3.93
---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.78 6.87 (1.05) 2.80 2.99 4.17
---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- -- -- -- -- (0.21)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (2.36) (0.99) (2.56) (1.29) (2.58)
---------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (2.36) (0.99) (2.56) (1.29) (2.79)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 26.26 $ 23.48 $ 18.97 $ 21.01 $ 20.77 $ 19.07
=================================================================================================================================
Total return(b) 11.84% 37.13% (4.71)% 14.05% 15.65% 23.23%
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $216,414 $178,550 $180,258 $255,674 $343,427 $396,291
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 1.36%(c) 1.46% 1.56% 1.37% 1.36% 1.46%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 1.36%(c) 1.46% 1.57% 1.48% 1.41% 1.46%
=================================================================================================================================
Ratio of net investment income (loss) to average net
assets 0.29%(c) (0.07)% (1.09)% (0.90)% 0.12% 1.24%
=================================================================================================================================
Portfolio turnover rate 44% 90% 168% 190% 253% 71%
=================================================================================================================================
</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 annualized and based on average net assets of $198,999,149.
<TABLE>
<CAPTION>
CLASS B
----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------------
2000(a) 1999(a) 1998(a) 1997 1996 1995
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.21 $ 18.16 $ 20.31 $ 20.28 $ 18.77 $ 17.50
---------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.14) (0.38) (0.34) (0.11) 0.10
---------------------------------------------------------------------------------------------------------------------------------
Net gains on securities (both realized and
unrealized) 2.59 6.55 (0.78) 2.93 2.91 3.87
---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.55 6.41 (1.16) 2.59 2.80 3.97
---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income -- -- -- -- -- (0.12)
---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gains -- (2.36) (0.99) (2.56) (1.29) (2.58)
---------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (2.36) (0.99) (2.56) (1.29) (2.70)
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.76 $ 22.21 $ 18.16 $ 20.31 $ 20.28 $ 18.77
=================================================================================================================================
Total return(b) 11.48% 36.25% (5.41)% 13.35% 14.82% 22.42%
=================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $181,400 $151,392 $165,447 $255,468 $334,590 $348,435
=================================================================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.01%(c) 2.11% 2.21% 2.02% 2.01% 2.11%
---------------------------------------------------------------------------------------------------------------------------------
Without fee waivers 2.01%(c) 2.11% 2.22% 2.13% 2.06% 2.11%
=================================================================================================================================
Ratio of net investment income (loss) to average net
assets (0.36)%(c) (0.72)% (1.74)% (1.55)% (0.53)% 0.59%
=================================================================================================================================
Portfolio turnover rate 44% 90% 168% 190% 253% 71%
=================================================================================================================================
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $167,948,904.
14
<PAGE> 17
NOTE 8-FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CLASS C
--------------------------
MAY 3, 1999
(DATE SALES
SIX MONTHS COMMENCED)
ENDED TO
JUNE 30, DECEMBER 31,
2000(a) 1999
---------- ------------
<S> <C> <C>
Net asset value, beginning of period $22.19 $19.02
------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (0.04) (0.10)
------------------------------------------------------------------------------------------
Net gains on securities (both realized and unrealized) 2.58 5.63
------------------------------------------------------------------------------------------
Total from investment operations 2.54 5.53
------------------------------------------------------------------------------------------
Less distributions from net realized gains -- (2.36)
------------------------------------------------------------------------------------------
Net asset value, end of period $24.73 $22.19
==========================================================================================
Total return(b) 11.45% 29.98%
==========================================================================================
Ratios/supplemental data:
Net assets, end of period (000s omitted) $6,917 $1,564
==========================================================================================
Ratio of expenses to average net assets:
With fee waivers 2.01%(c) 2.11%(d)
------------------------------------------------------------------------------------------
Without fee waivers 2.01%(c) 2.11%(d)
==========================================================================================
Ratio of net investment income (loss) to average net assets (0.36)%(c) (0.72)%(d)
==========================================================================================
Portfolio turnover rate 44% 90%
==========================================================================================
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(c) Ratios are annualized and based on average net assets of $4,026,619.
(d) Annualized.
15
<PAGE> 18
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
Senior Managing Partner, Chairman and President Suite 100
Plantagenet Capital Houston, TX 77046
Management, LLC (an investment Dana R. Sutton
partnership); Chief Executive Officer, Vice President and Treasurer INVESTMENT MANAGER
Plantagenet Holdings, Ltd.
(an investment banking firm) Samuel D. Sirko A I M Advisors, Inc.
Vice President and Secretary 11 Greenway Plaza
Frank S. Bayley Suite 100
Partner, law firm of Melville B. Cox Houston, TX 77046
Baker & McKenzie Vice President
TRANSFER AGENT
Robert H. Graham Gary T. Crum
Director, President and Vice President A I M Fund Services, Inc.
Chief Executive Officer, P.O. Box 4739
A I M Management Group Inc. Carol F. Relihan Houston, TX 77210-4739
Vice President
Ruth H. Quigley CUSTODIAN
Private Investor 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
</TABLE>
16
<PAGE> 19
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<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
EQUITY FUNDS
<TABLE>
<S> <C> <C>
DOMESTIC EQUITY FUNDS INTERNATIONAL/GLOBAL EQUITY FUNDS A I M Management Group Inc. has provided
More Aggressive More Aggressive leadership in the mutual fund industry
AIM Small Cap Opportunities(1) AIM Latin American Growth since 1976 and managed approximately $176
AIM Mid Cap Opportunities(2) AIM Developing Markets billion in assets for more than 8 million
AIM Large Cap Opportunities AIM Asian Growth shareholders, including individual
AIM Emerging Growth AIM Japan Growth investors, corporate clients and financial
AIM Small Cap Growth(3) AIM European Development institutions, as of June 30, 2000.
AIM Aggressive Growth AIM Euroland Growth(5) The AIM Family of Funds--Registered
AIM Mid Cap Growth AIM Global Aggressive Growth Trademark-- is distributed nationwide, and
AIM Capital Development AIM International Equity AIM today is the eighth-largest mutual fund
AIM Constellation(4) AIM Advisor International Value complex in the United States in assets under
AIM Dent Demographic Trends AIM Global Trends(6) management, according to Strategic Insight,
AIM Select Growth AIM Global Growth an independent mutual fund monitor.
AIM Large Cap Growth AIM is a subsidiary of AMVESCAP PLC, one
AIM Weingarten More Conservative of the world's largest independent financial
AIM Mid Cap Equity services companies with $389 billion in
AIM Charter SECTOR EQUITY FUNDS assets under management as of June 30, 2000.
AIM Value
AIM Blue Chip More Aggressive
AIM Basic Value
AIM Large Cap Basic Value AIM Global Telecommunications and Technology
AIM Balanced AIM Global Resources
AIM Advisor Flex AIM Global Financial Services
AIM Global Health Care
More Conservative AIM Global Consumer Products and Services
AIM Global Infrastructure
AIM Advisor Real Estate
AIM Global Utilities
More Conservative
</TABLE>
FIXED-INCOME FUNDS
<TABLE>
<S> <C>
TAXABLE FIXED-INCOME FUNDS TAX-FREE FIXED-INCOME FUNDS
More Aggressive More Aggressive
AIM Strategic Income AIM High Income Municipal [AIM LOGO APPEARS HERE]
AIM High Yield II AIM Tax-Exempt Bond of Connecticut --Registered Trademark--
AIM High Yield AIM Municipal Bond
AIM Income AIM Tax-Free Intermediate INVEST WITH DISCIPLINE
AIM Global Income AIM Tax-Exempt Cash --Registered Trademark--
AIM Floating Rate(7)
AIM Intermediate Government More Conservative
AIM Limited Maturity Treasury
AIM Money Market
More Conservative
</TABLE>
The AIM Risk Spectrum illustrates equity and fixed-income funds from more
aggressive to more conservative. When assessing the degree of risk, three
factors were considered: the funds' portfolio holdings, volatility patterns over
time and diversification permitted within the fund. Fund rankings are relative
to one another within The AIM Family of Funds--Registered Trademark-- and should
not be compared with other investments. There is no guarantee that any one AIM
fund will be less volatile than any other. (1) AIM Small Cap Opportunities Fund
closed to new investors Nov. 4, 1999. (2) AIM Mid Cap Opportunities Fund closed
to new investors March 21, 2000. (3) AIM Small Cap Growth Fund closed to new
investors Nov. 8, 1999. (4) AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations Dec. 1, 1999.
(5) AIM Europe Growth Fund was renamed AIM Euroland Growth Fund Sept. 1, 1999.
(6) AIM Global Trends Fund was restructured to operate as a traditional mutual
fund Aug. 27, 1999. Previously, the fund operated as a fund of funds. (7) AIM
Floating Rate Fund was restructured to offer multiple share classes April 3,
2000. Existing shares were converted to Class B shares, and Class C shares
commenced offering.
FOR MORE COMPLETE INFORMATION ABOUT ANY AIM FUND, INCLUDING SALES CHARGES
AND EXPENSES, OBTAIN THE APPROPRIATE PROSPECTUS(ES) FROM YOUR FINANCIAL ADVISOR.
PLEASE READ THE PROSPECTUS(ES) CAREFULLY BEFORE YOU INVEST OR SEND MONEY. This
report is not authorized for distribution to prospective investors unless
preceded or accompanied by a currently effective fund prospectus. If used as
sales material after Oct. 20, 2000, this report must be accompanied by a fund
Performance & Commentary or by an AIM Quarterly Review of Performance for the
most recent quarter end.
[DALBAR LOGO APPEARS HERE]
A I M Distributors, Inc. MCE-SAR-1
