<PAGE> 1
ANNUAL REPORT / DECEMBER 31 1999
AIM SMALL CAP GROWTH FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-------------------------------------
REALITY BY G.G. KOPILAK
REALITY IS OFTEN NOT WHAT IS SEEN WITH THE EYES, BUT RATHER WHAT IS
PERCEIVED WITH THE SPIRIT. AIM SMALL CAP GROWTH FUND SEEKS TO OWN THE
STOCKS OF SMALL COMPANIES THAT WE BELIEVE WILL FLOURISH IN THE MONTHS
AND YEARS AHEAD, LIKE ROSES ABOUT TO BLOOM.
-------------------------------------
AIM Small Cap Growth Fund is for shareholders who seek long-term growth of
capital. The fund invests in small companies with the potential for
above-average earnings growth.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Small Cap Growth Fund's performance figures are historical, and they
reflect changes in net asset value and 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, and Class C and Advisor Class shares
will differ from that of Class A shares due to differences in sales charge
structure and class expenses.
o Because Class C shares have been offered for less than one year (since
5/3/99), all total return figures for Class C Shares reflect a cumulative
total return that has not been annualized.
o The fund was closed to new investors on 11/8/99.
o Advisor Class shares were converted to Class A shares on 2/11/2000. Advisor
Class shares are no longer offered for sale or exchange.
o The fund participates in the initial public offering ("IPO") market, and a
significant portion of the fund's returns is attributable to its investment
in IPOs, which have a magnified impact due to the fund's relatively small
asset base. There is no guarantee that as the fund's assets grow, it will
continue to experience substantially similar performance by investing in
IPOs.
o Investing in smaller 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 that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lipper Small Cap Funds Index represents an average of the
performance of the 30 largest small-capitalization growth funds tracked by
Lipper, Inc., an independent mutual fund performance monitor.
o The unmanaged Russell 2000 Index is generally considered representative of
the performance of stocks of small-capitalization companies.
o The Dow Jones Industrial Average (the Dow) is a price-weighted average of 30
actively traded primarily industrial stocks.
o The unmanaged National Association of Securities Dealers Automated Quotation
System (Nasdaq) Composite Index is a group of more than 5,000
over-the-counter generally considered representative of the small and
medium-sized company universe.
o The unmanaged Standard & Poor's Composite Index of 500 stocks (S&P 500) is
considered to be 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 SMALL CAP GROWTH 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 SMALL CAP GROWTH FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND RECORDS OUTSTANDING RETURNS
AS SMALL-CAP STOCKS REBOUND
1999 WITNESSED A STRONG RESURGENCE IN SMALL-AND MICRO-CAP STOCKS. HOW DID AIM
SMALL CAP GROWTH FUND PERFORM?
The fund's performance was excellent. Excluding sales charges, total returns
were 90.64%, 89.40% and 91.32% for Class A, Class B and Advisor Class shares,
respectively, for the year ended December 31, 1999. The fund significantly
outperformed its benchmark, the Russell 2000 Index, and its peer group, the
Lipper Small Cap Funds Index, which posted gains of 21.26% and 41.54%,
respectively, for the same period.
Class C shares, which began sales on May 3, 1999, posted a cumulative total
return of 65.56%. During the fiscal year, the fund's net assets soared from $52
million to $716 million. The fund was closed to new investors on November 8,
1999.
CAN YOU DESCRIBE SOME OF THE MAJOR TRENDS IN THE STOCK MARKET?
If the 1998 market witnessed a flight to quality, the 1999 market saw a stampede
to growth. The bull market in technology stocks sent major indexes to new
heights in 1999, but not all stocks benefited from this trend. While the S&P
500, the Dow and the Nasdaq soared to new levels, many stocks suffered down or
flat years. Among the S&P 500 stocks, 256 declined, 241 rose and three were
unchanged.
The best-performing stocks were those with the most perceived growth
potential: technology, telecommunications and broadcasting stocks. Computers,
e-commerce and the Internet are changing the way the world conducts business and
communicates, and investors sought to capitalize on this revolution. Technology
stocks dominated the market, with the technology sector of the S&P 500 returning
75.21% in 1999.
Stocks endured a volatile year. Investors were concerned about interest
rates throughout 1999. In three separate moves, the Federal Reserve Board (the
Fed) raised the key federal funds rate from 4.75% to 5.50%. In December, a Fed
decision to leave rates unchanged sparked a market rally.
Large-, mid- and small-cap stock indexes all posted impressive gains for
the year. Indeed, the benchmark Russell 2000 Index ended the fiscal year at a
record level. Value stocks, which rallied earlier in the year, recorded more
modest gains for the year as investors focused on growth stocks.
WHAT WAS BEHIND THE STRONG PERFORMANCE OF SMALL- AND MICRO-CAP STOCKS?
The underperformance of small- and micro-cap stocks in recent years left them
favorably priced in comparison to large-cap stocks. That made smaller-company
issues more attractive to investors. Additionally, smaller companies are
experiencing more dramatic earnings growth than large firms. Unlike many large,
multinational corporations, smaller companies conduct most of their business in
the United States, where economic growth has been robust. Consequently, the
profits of smaller firms are usually less affected by economic downturns abroad.
WHY WAS THE FUND'S PERFORMANCE SO STRONG?
The fund's heavy weighting in technology stocks allowed it to take advantage of
the strong rally in that sector. During 1999, we increased the fund's technology
holdings from 29% to 41% of the portfolio. Simultaneously, we reduced the
consumer-cyclical weighting from 27% to about 9% of the fund's holdings.
Please keep in mind, our sector weightings were the result of our
stock-selection process, which is based on company earnings and not
macro-economic predictions. We are finding more companies with excellent growth
prospects in the technology sector.
The fund participates in the initial public offering ("IPO") market, and a
significant portion of the fund's returns is attributable to its investment in
IPOs, which have a magnified impact due to the fund's relatively small asset
base. There is no guarantee that as the fund's assets grow, it will
FUND VS. PEER GROUP
One-year average annual returns
As of 12/31/99, excluding sales charges
================================================================================
[Bar Chart]
Class A 90.64%
Class B 89.40%
Advisor Class 91.32%
Russell 2000 Index 21.26%
Lipper Small Cap Funds 41.54%
================================================================================
GROWTH OF NET ASSETS
In millions
================================================================================
[Bar Chart]
12/31/98 $ 52
12/31/99 $716
================================================================================
See important fund and index disclosures inside front cover.
AIM SMALL CAP GROWTH FUND
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
continue to experience substantially similar performance by investing in IPOs.
HOW WAS THE FUND POSITIONED?
At the end of the fiscal year, the fund had 237 holdings. Small- and micro-cap
stocks made up the majority of the fund's equity holdings. Micro-cap stocks are
defined as the stocks of companies that comprise the bottom 20% in market
capitalization while small-cap stocks comprise the next 30%, according to
Ibbotson Associates.
WHAT TECHNOLOGY STOCKS DID YOU LIKE?
Emulex, the fund's top holding, designs computer network products; Ortel makes
laser and fiber-optic devices that transmit cable television channels; and Art
Technology Group provides software that enables companies to construct Web sites
for the delivery of targeted information, advertising and e-mail.
Other technology stocks in the portfolio included C-COR.net, which
manufactures network distribution products, mainly for cable-television
operators; Optical Coating Laboratory, which provides optical thin-film-coated
components to control and enhance light in photocopiers and computer monitors;
and Three-Five Systems, which provides liquid crystal displays and
light-emitting diodes used in medical equipment, televisions and other products.
We remain optimistic about the growth prospects for tech companies.
Technology is assuming an increasingly important position in the U.S. and world
economies. Just recently, adjustments were made to the Dow to reflect this
development.
WHAT OTHER STOCKS HAVE PERFORMED WELL FOR THE FUND?
Radio One operates more than 24 radio stations, featuring rap, hip-hop and other
urban music genres, in several major U.S. cities. Tweeter Home Entertainment
sells audio and video equipment including televisions, camcorders and other
products.
WHAT IS YOUR OUTLOOK?
The last few years' unprecedented economic expansion has helped push
stock-market indexes to record heights. Over the near term, we expect healthy
economic growth to continue. While such a trend would seemingly bode well for
stocks, it could contribute to volatility in the market, especially if the Fed
deems that the economy is growing too rapidly. On February 2, after the close of
the fiscal year, the Fed raised the federal funds rate to 5.75%. Although by no
means a certainty, it appears that the Fed is poised to raise interest rates
again in the months ahead to slow economic growth and forestall inflation.
Uncertainty about the Fed's direction could have an unsettling effect on the
stock market.
However, we remain optimistic about the long-term prospects for small- and
micro-cap stocks because of their attractive prices and the encouraging
earnings-growth projections for many smaller companies.
PORTFOLIO COMPOSITION
As of 12/31/99, based on total net assets
<TABLE>
<CAPTION>
====================================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Emulex Corp. 1.57% 1. Computers (Software & Services) 16.88%
2. Ortel Corp. 1.51 2. Communications Equipment 6.76
3. Art Technology Group, Inc. 1.48 3. Electrical Equipment 5.36
4. C-COR.net Corp. 1.07 4. Electronics (Semiconductors) 3.83
5. Optical Coating Laboratory, Inc. 1.03 5. Computers (Peripherals) 3.65
6. Three-Five Systems, Inc. 0.95 6. Services (Commercial & Consumer) 2.96
7. Polycom, Inc. 0.93 7. Oil & Gas (Drilling & Equipment) 2.90
8. Sawtek, Inc. 0.93 8. Health Care (Drugs-Generic & Other) 2.50
9. Asyst Technologies, Inc. 0.92 9. Electronics (Instrumentation) 2.45
10. Radio One, Inc. 0.90 10. Computers (Networking) 2.27
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 SMALL CAP GROWTH FUND
[ART WORK HERE]
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
[MOUNTAIN CHART]
RESULTS OF A $10,000 INVESTMENT
AIM SMALL CAP GROWTH FUND VS. BENCHMARK INDEX
10/18/95-12/31/99
In thousands
================================================================================
AIM Advisor Class AIM Class A AIM Class B Russell 2000 Index
- --------------------------------------------------------------------------------
10/95 9750 9750 9750 10000
12/95 9752 10306 10332 10695
6/96 11512 12135 12213 11803
12/96 11098 11661 11801 12459
6/97 11249 11783 11979 13730
12/97 12899 13465 13763 15245
6/98 15276 15888 16307 15996
12/98 15886 16457 16981 14587
6/99 21007 21699 22497 16236
12/99 30285 30970 32490 18015
Past performance cannot guarantee comparable future results.
Source: Lipper, Inc.
================================================================================
ABOUT THIS CHART
The chart compares the performance of your fund's Class A, Class B and Advisor
Class shares to a benchmark index over the period 10/18/95-12/31/99. (The data
for the index are for the period 10/31/95- 12/31/99.) It is important to
understand the difference between your fund and an index. Your fund's total
return is shown with a sales charge and it includes expenses and management
fees. An index measures the performance of a hypothetical portfolio. Market
indexes are 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.
AVERAGE ANNUAL TOTAL RETURNS
As of 12/31/99, including sales charges
================================================================================
CLASS A SHARES
Inception (10/18/95) 30.17%
1 year 80.17*
*90.64%, excluding sales charges
CLASS B SHARES
Inception (10/18/95) 30.86%
1 year 84.40*
*89.40%, excluding CDSC
CLASS C SHARES
Inception (5/3/99) 64.56%*
*65.56, excluding CDSC
Advisor Class Shares
Inception (10/18/95) 32.36%
1 year 91.32
================================================================================
Your fund's total return includes sales charges, expenses and management fees.
The performance of the fund's Class A shares will differ from that of its Class
B, Class C and Advisor Class shares due to differing fees and expenses. For fund
performance calculations and descriptions of the index 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 SMALL CAP GROWTH FUND
<PAGE> 7
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY
INTERESTS-87.26%
AEROSPACE/DEFENSE-0.22%
Primex Technologies, Inc. 75,000 $ 1,556,250
- --------------------------------------------------------------
AIRLINES-0.28%
Frontier Airlines, Inc.(a) 125,000 1,421,875
- --------------------------------------------------------------
Mesaba Holdings, Inc.(a) 50,000 571,875
- --------------------------------------------------------------
1,993,750
- --------------------------------------------------------------
AUTO PARTS & EQUIPMENT-0.11%
Tower Automotive, Inc.(a) 50,000 771,875
- --------------------------------------------------------------
BANKS (REGIONAL)-1.02%
Bank of the Ozarks, Inc. 30,000 585,000
- --------------------------------------------------------------
Columbia Bancorp 30,000 213,750
- --------------------------------------------------------------
Prosperity Bancshares, Inc. 40,000 640,000
- --------------------------------------------------------------
Silicon Valley Bancshares(a) 60,000 2,970,000
- --------------------------------------------------------------
Southwest Bancorp. of Texas, Inc.(a) 100,250 1,986,203
- --------------------------------------------------------------
Whitney Holding Corp. 25,000 926,562
- --------------------------------------------------------------
7,321,515
- --------------------------------------------------------------
BIOTECHNOLOGY-0.89%
Caliper Technologies Corp.(a) 95,400 6,367,950
- --------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-1.57%
Cox Radio, Inc.-Class A(a) 15,000 1,496,250
- --------------------------------------------------------------
Entercom Communications Corp.(a) 50,000 3,300,000
- --------------------------------------------------------------
Radio One, Inc.(a) 70,000 6,440,000
- --------------------------------------------------------------
11,236,250
- --------------------------------------------------------------
BUILDING MATERIALS-0.15%
Simpson Manufacturing Co., Inc.(a) 25,000 1,093,750
- --------------------------------------------------------------
CHEMICALS (SPECIALTY)-1.51%
Cambrex Corp. 40,000 1,377,500
- --------------------------------------------------------------
OM Group, Inc. 60,000 2,066,250
- --------------------------------------------------------------
Optical Coating Laboratory, Inc. 25,000 7,400,000
- --------------------------------------------------------------
10,843,750
- --------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-6.76%
Aether Systems, Inc.(a) 35,000 2,506,875
- --------------------------------------------------------------
Aspect Communications Corp.(a) 100,000 3,912,500
- --------------------------------------------------------------
Copper Mountain Networks, Inc.(a) 10,000 487,500
- --------------------------------------------------------------
Davox Corp.(a) 140,000 2,747,500
- --------------------------------------------------------------
Digital Lightwave, Inc.(a) 90,000 5,760,000
- --------------------------------------------------------------
Finisar Corp.(a) 34,900 3,136,637
- --------------------------------------------------------------
Harmonic, Inc.(a) 40,000 3,797,500
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMUNICATIONS EQUIPMENT-(CONTINUED)
Ortel Corp.(a) 90,000 $ 10,800,000
- --------------------------------------------------------------
Paradyne Networks, Inc.(a) 15,000 408,750
- --------------------------------------------------------------
Polycom, Inc.(a) 105,000 6,687,187
- --------------------------------------------------------------
Proxim, Inc.(a) 50,000 5,500,000
- --------------------------------------------------------------
Tut Systems, Inc.(a) 50,000 2,681,250
- --------------------------------------------------------------
48,425,699
- --------------------------------------------------------------
COMPUTERS (HARDWARE)-0.39%
Visual Networks, Inc.(a) 35,000 2,773,750
- --------------------------------------------------------------
COMPUTERS (NETWORKING)-2.27%
Computer Network Technology Corp.(a) 75,000 1,720,312
- --------------------------------------------------------------
Emulex Corp.(a) 100,000 11,250,000
- --------------------------------------------------------------
Gadzoox Networks, Inc.(a) 75,000 3,267,187
- --------------------------------------------------------------
16,237,499
- --------------------------------------------------------------
COMPUTERS (PERIPHERALS)-3.65%
Actel Corp.(a) 140,000 3,360,000
- --------------------------------------------------------------
Cybex Computer Products Corp.(a) 65,000 2,632,500
- --------------------------------------------------------------
Key Tronic Corp.(a) 200,000 750,000
- --------------------------------------------------------------
Media 100 Inc.(a) 150,000 3,965,625
- --------------------------------------------------------------
SanDisk Corp.(a) 60,000 5,775,000
- --------------------------------------------------------------
Silicon Storage Technology, Inc.(a) 125,000 5,156,250
- --------------------------------------------------------------
SmartDisk Corp.(a) 23,700 776,175
- --------------------------------------------------------------
Xircom, Inc.(a) 50,000 3,750,000
- --------------------------------------------------------------
26,165,550
- --------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-16.88%
Active Voice Corp.(a) 100,000 2,906,250
- --------------------------------------------------------------
Activision, Inc.(a) 115,000 1,760,937
- --------------------------------------------------------------
Allaire Corp.(a) 30,000 4,350,000
- --------------------------------------------------------------
Allscripts, Inc.(a) 30,000 1,320,000
- --------------------------------------------------------------
Alteon Websystems, Inc.(a) 20,000 1,755,000
- --------------------------------------------------------------
Art Technology Group, Inc.(a) 82,900 10,621,562
- --------------------------------------------------------------
Banyan Systems Inc.(a) 75,000 1,500,000
- --------------------------------------------------------------
Best Software, Inc.(a) 85,000 2,507,500
- --------------------------------------------------------------
Brio Technology, Inc.(a) 40,000 1,680,000
- --------------------------------------------------------------
BSQUARE Corp.(a) 30,500 1,279,094
- --------------------------------------------------------------
Business Objects S.A.-ADR
(France)(a) 35,000 4,676,875
- --------------------------------------------------------------
CacheFlow Inc.(a) 19,000 2,483,062
- --------------------------------------------------------------
Concord Communications, Inc.(a) 30,000 1,331,250
- --------------------------------------------------------------
Documentum, Inc.(a) 50,000 2,993,750
- --------------------------------------------------------------
Entrust Technologies, Inc. 90,000 5,394,375
- --------------------------------------------------------------
Great Plains Software, Inc.(a) 30,000 2,242,500
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
InfoCure Corp.(a) 75,000 $ 2,339,062
- --------------------------------------------------------------
Integrated Measurement Systems, Inc.(a) 125,000 1,765,625
- --------------------------------------------------------------
ISS Group, Inc.(a) 35,000 2,489,375
- --------------------------------------------------------------
Kronos, Inc.(a) 40,000 2,400,000
- --------------------------------------------------------------
Macromedia, Inc.(a) 10,000 731,250
- --------------------------------------------------------------
Mediaplex, Inc.(a) 100,000 6,275,000
- --------------------------------------------------------------
Micromuse, Inc.(a) 10,000 1,700,000
- --------------------------------------------------------------
MTI Technology Corp.(a) 75,000 2,765,625
- --------------------------------------------------------------
Natural MicroSystems Corp.(a) 100,000 4,681,250
- --------------------------------------------------------------
NEON Systems, Inc.(a) 60,000 2,355,000
- --------------------------------------------------------------
Netegrity, Inc.(a) 50,000 2,846,875
- --------------------------------------------------------------
nFront, Inc.(a) 50,000 1,000,000
- --------------------------------------------------------------
Open TV Corp.(a) 70,000 5,617,500
- --------------------------------------------------------------
pcOrder.com, Inc.(a) 40,000 2,040,000
- --------------------------------------------------------------
QRS Corp.(a) 30,000 3,150,000
- --------------------------------------------------------------
Radiant Systems, Inc.(a) 155,000 6,229,062
- --------------------------------------------------------------
RadiSys Corp.(a) 75,000 3,825,000
- --------------------------------------------------------------
Rare Medium Group, Inc.(a) 150,000 5,118,750
- --------------------------------------------------------------
ScanSource, Inc.(a) 85,000 3,447,812
- --------------------------------------------------------------
Scientific Learning Corp.(a) 23,100 843,150
- --------------------------------------------------------------
Spyglass, Inc.(a) 35,000 1,327,266
- --------------------------------------------------------------
Talk City, Inc.(a) 150,000 3,918,750
- --------------------------------------------------------------
Transaction Systems Architects,
Inc.-Class A(a) 85,000 2,380,000
- --------------------------------------------------------------
TSI International Software Ltd.(a) 25,000 1,415,625
- --------------------------------------------------------------
Xpedior Inc.(a) 49,000 1,408,750
- --------------------------------------------------------------
120,872,882
- --------------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES & GIFTS)-0.19%
Fossil, Inc.(a) 60,000 1,387,500
- --------------------------------------------------------------
CONSUMER FINANCE-0.24%
AmeriCredit Corp.(a) 30,000 555,000
- --------------------------------------------------------------
Federal Agricultural Mortgage
Corp.-Class C(a) 57,000 1,150,687
- --------------------------------------------------------------
1,705,687
- --------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-0.32%
Accredo Health, Inc.(a) 75,000 2,306,250
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-5.36%
Cree Research, Inc.(a) 70,000 5,976,250
- --------------------------------------------------------------
Crossroads Systems, Inc.(a) 15,000 1,267,500
- --------------------------------------------------------------
Helix Technology Corp. 80,000 3,585,000
- --------------------------------------------------------------
Kemet Corp.(a) 85,000 3,830,312
- --------------------------------------------------------------
LaserSight, Inc.(a) 75,000 750,000
- --------------------------------------------------------------
Optimal Robotics Corp.(a) 85,000 3,166,250
- --------------------------------------------------------------
Pinnacle Systems, Inc.(a) 100,000 4,068,750
- --------------------------------------------------------------
Rayovac Corp.(a) 45,000 849,375
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-(CONTINUED)
Sawtek, Inc.(a) 100,000 $ 6,656,250
- --------------------------------------------------------------
Three-Five Systems, Inc.(a) 166,666 6,833,306
- --------------------------------------------------------------
Veeco Instruments Inc.(a) 30,000 1,404,375
- --------------------------------------------------------------
38,387,368
- --------------------------------------------------------------
ELECTRONICS (COMPONENT DISTRIBUTORS)-2.19%
C-COR.net Corp.(a) 100,000 7,662,500
- --------------------------------------------------------------
Kent Electronics Corp.(a) 70,000 1,592,500
- --------------------------------------------------------------
Power-One, Inc.(a) 140,000 6,413,750
- --------------------------------------------------------------
15,668,750
- --------------------------------------------------------------
ELECTRONICS (DEFENSE)-0.71%
Aeroflex, Inc.(a) 100,000 1,037,500
- --------------------------------------------------------------
Anaren Microwave, Inc.(a) 75,000 4,059,375
- --------------------------------------------------------------
5,096,875
- --------------------------------------------------------------
ELECTRONICS (INSTRUMENTATION)-2.45%
Alpha Industries, Inc.(a) 80,000 4,585,000
- --------------------------------------------------------------
Methode Electronics, Inc.-Class A 100,000 3,212,500
- --------------------------------------------------------------
Photon Dynamics, Inc.(a) 65,000 2,518,750
- --------------------------------------------------------------
Tektronix, Inc. 65,000 2,526,875
- --------------------------------------------------------------
Varian Inc.(a) 210,000 4,725,000
- --------------------------------------------------------------
17,568,125
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-3.83%
ANADIGICS, Inc.(a) 100,000 4,718,750
- --------------------------------------------------------------
Applied Micro Circuits Corp.(a) 20,000 2,545,000
- --------------------------------------------------------------
Elantec Semiconductor, Inc.(a) 150,000 4,950,000
- --------------------------------------------------------------
GlobeSpan, Inc.(a) 50,000 3,256,250
- --------------------------------------------------------------
MIPS Technologies, Inc.(a) 50,000 2,600,000
- --------------------------------------------------------------
PLX Technology, Inc.(a) 40,000 757,500
- --------------------------------------------------------------
S3, Inc.(a) 75,000 867,187
- --------------------------------------------------------------
TranSwitch Corp.(a) 30,050 2,180,503
- --------------------------------------------------------------
Zoran Corp.(a) 100,000 5,575,000
- --------------------------------------------------------------
27,450,190
- --------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-2.20%
Advanced Energy Industries, Inc.(a) 50,000 2,462,500
- --------------------------------------------------------------
Asyst Technologies, Inc.(a) 100,000 6,556,250
- --------------------------------------------------------------
Brooks Automation, Inc.(a) 75,000 2,442,188
- --------------------------------------------------------------
Credence Systems Corp.(a) 25,000 2,162,500
- --------------------------------------------------------------
Kulicke & Soffa Industries, Inc.(a) 50,000 2,128,125
- --------------------------------------------------------------
15,751,563
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-0.18%
Advanta Corp.-Class B 90,000 1,265,625
- --------------------------------------------------------------
FOODS-0.70%
Ben & Jerry's Homemade, Inc.-Class
A(a) 45,000 1,119,375
- --------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOODS-(CONTINUED)
Hain Food Group, Inc. (The)(a) 75,000 $ 1,678,125
- --------------------------------------------------------------
Horizon Organic Holding Corp.(a) 100,000 750,000
- --------------------------------------------------------------
United Natural Foods, Inc.(a) 120,000 1,440,000
- --------------------------------------------------------------
4,987,500
- --------------------------------------------------------------
FOOTWEAR-0.15%
Saucony, Inc.(a) 75,000 1,106,250
- --------------------------------------------------------------
GAMING, LOTTERY & PARIMUTUEL COMPANIES-0.71%
Hollywood Park, Inc.(a) 150,000 3,365,625
- --------------------------------------------------------------
Station Casinos, Inc.(a) 75,000 1,682,813
- --------------------------------------------------------------
5,048,438
- --------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC & OTHER)-2.50%
Anesta Corp.(a) 215,000 3,695,313
- --------------------------------------------------------------
Barr Laboratories, Inc.(a) 11,800 370,225
- --------------------------------------------------------------
Jones Pharma, Inc. 28,200 1,224,938
- --------------------------------------------------------------
Maxygen Inc.(a) 50,000 3,550,000
- --------------------------------------------------------------
Medicis Pharmaceutical Corp.-Class
A(a) 75,000 3,192,188
- --------------------------------------------------------------
Metricom, Inc.(a) 50,000 3,931,250
- --------------------------------------------------------------
Penwest Pharmaceuticals Co.(a) 125,000 1,906,250
- --------------------------------------------------------------
17,870,164
- --------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-0.82%
LifePoint Hospitals, Inc.(a) 275,000 3,248,438
- --------------------------------------------------------------
Triad Hospitals Holdings Inc.(a) 175,000 2,646,875
- --------------------------------------------------------------
5,895,313
- --------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-1.67%
Biosite Diagnostics, Inc.(a) 100,000 1,600,000
- --------------------------------------------------------------
EndoSonics Corp.(a) 300,000 1,350,000
- --------------------------------------------------------------
Mentor Corp. 65,000 1,677,813
- --------------------------------------------------------------
PolyMedica Corp.(a) 90,000 2,081,250
- --------------------------------------------------------------
ResMed, Inc.(a) 35,000 1,461,250
- --------------------------------------------------------------
Zoll Medical Corp.(a) 100,000 3,818,750
- --------------------------------------------------------------
11,989,063
- --------------------------------------------------------------
HEALTH CARE (SPECIALIZED
SERVICES)-1.76%
Advance Paradigm, Inc.(a) 40,000 862,500
- --------------------------------------------------------------
Capital Senior Living Corp.(a) 150,000 759,375
- --------------------------------------------------------------
CareInsite, Inc.(a) 35,000 2,817,500
- --------------------------------------------------------------
Hooper Holmes, Inc. 24,400 628,300
- --------------------------------------------------------------
Orthodontic Centers of America,
Inc.(a) 50,000 596,875
- --------------------------------------------------------------
Priority Healthcare Corp.(a) 50,000 1,446,875
- --------------------------------------------------------------
Techne Corp.(a) 100,000 5,506,250
- --------------------------------------------------------------
12,617,675
- --------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.05%
Annuity and Life Reassurance, Ltd.
(Bermuda) 13,000 339,625
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
INSURANCE
(PROPERTY-CASUALTY)-0.14%
Medical Assurance, Inc. 48,350 $ 1,024,416
- --------------------------------------------------------------
INVESTMENT MANAGEMENT-0.35%
Charles River Associates, Inc.(a) 75,000 2,512,500
- --------------------------------------------------------------
IRON & STEEL-0.21%
Gibraltar Steel Corp. 65,000 1,519,375
- --------------------------------------------------------------
LEISURE TIME (PRODUCTS)-2.16%
JAKKS Pacific, Inc.(a) 90,000 1,681,875
- --------------------------------------------------------------
Meade Instruments Corp.(a) 120,000 3,420,000
- --------------------------------------------------------------
Monaco Coach Corp.(a) 75,000 1,917,188
- --------------------------------------------------------------
National R.V. Holdings, Inc.(a) 85,000 1,636,250
- --------------------------------------------------------------
THQ Inc.(a) 97,500 2,260,781
- --------------------------------------------------------------
Zomax Optical Media, Inc.(a) 100,000 4,525,000
- --------------------------------------------------------------
15,441,094
- --------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.29%
Terex Corp.(a) 75,000 2,081,250
- --------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-1.14%
Kopin Corp.(a) 140,000 5,880,000
- --------------------------------------------------------------
Spartech Corp. 70,000 2,257,500
- --------------------------------------------------------------
8,137,500
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-0.91%
Applied Science and Technology,
Inc.(a) 125,000 4,154,297
- --------------------------------------------------------------
Dril-Quip, Inc.(a) 40,000 1,215,000
- --------------------------------------------------------------
Summa Industries(a) 100,000 1,156,250
- --------------------------------------------------------------
6,525,547
- --------------------------------------------------------------
METAL FABRICATORS-0.27%
Shaw Group, Inc.(a) 75,000 1,898,438
- --------------------------------------------------------------
NATURAL GAS-0.25%
Kinder Morgan, Inc. 90,000 1,816,875
- --------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-0.32%
Miami Computer Supply Corp.(a)(b) 60,800 2,257,200
- --------------------------------------------------------------
OIL & GAS (DRILLING &
EQUIPMENT)-2.90%
Cal Dive International, Inc.(a) 50,000 1,656,250
- --------------------------------------------------------------
CARBO Ceramics, Inc. 55,000 1,203,125
- --------------------------------------------------------------
Core Laboratories N.V.
(Netherlands)(a) 60,000 1,203,750
- --------------------------------------------------------------
Gulfmark Offshore, Inc.(a) 50,000 731,250
- --------------------------------------------------------------
Hanover Compressor Co.(a) 50,000 1,887,500
- --------------------------------------------------------------
Key Energy Group, Inc.(a) 250,000 1,296,875
- --------------------------------------------------------------
Marine Drilling Companies, Inc.(a) 150,000 3,365,625
- --------------------------------------------------------------
Maverick Tube Corp.(a) 100,000 2,468,750
- --------------------------------------------------------------
Pride International, Inc.(a) 200,000 2,925,000
- --------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL & GAS (DRILLING & EQUIPMENT)-(CONTINUED)
UTI Energy Corp.(a) 175,000 $ 4,035,938
- --------------------------------------------------------------
20,774,063
- --------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-1.21%
Cabot Oil & Gas Corp.-Class A 55,000 883,438
- --------------------------------------------------------------
Evergreen Resources, Inc.(a) 95,000 1,876,250
- --------------------------------------------------------------
Louis Dreyfus Natural Gas Corp.(a) 110,000 1,993,750
- --------------------------------------------------------------
Newfield Exploration Co.(a) 125,000 3,343,750
- --------------------------------------------------------------
Stone Energy Corp.(a) 15,000 534,375
- --------------------------------------------------------------
8,631,563
- --------------------------------------------------------------
PERSONAL CARE-0.07%
Steiner Leisure Ltd.(a) 28,400 473,925
- --------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS-0.03%
Correctional Properties Trust 20,000 245,000
- --------------------------------------------------------------
RESTAURANTS-1.72%
P.F. Chang's China Bistro, Inc.(a) 125,000 3,109,375
- --------------------------------------------------------------
PJ America, Inc.(a) 100,000 1,550,000
- --------------------------------------------------------------
Rare Hospitality International,
Inc.(a) 110,000 2,380,469
- --------------------------------------------------------------
Rubio's Restaurants, Inc.(a) 125,000 1,000,000
- --------------------------------------------------------------
Sonic Corp.(a) 115,000 3,277,500
- --------------------------------------------------------------
Taco Cabana-Class A(a) 125,000 1,015,625
- --------------------------------------------------------------
12,332,969
- --------------------------------------------------------------
RETAIL (COMPUTERS & ELECTRONICS)-1.31%
Tweeter Home Entertainment Group,
Inc.(a) 170,000 6,035,000
- --------------------------------------------------------------
Ultimate Electronics, Inc.(a) 135,000 3,341,250
- --------------------------------------------------------------
9,376,250
- --------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.24%
99 Cents Only Stores(a) 45,000 1,721,250
- --------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.26%
Wild Oats Markets, Inc.(a) 82,500 1,830,469
- --------------------------------------------------------------
RETAIL (SPECIALTY)-1.45%
BOWLIN Outdoor Advertising &
Travel Centers Inc.(a) 50,000 262,500
- --------------------------------------------------------------
Coldwater Creek, Inc.(a) 100,000 2,050,000
- --------------------------------------------------------------
CSK Auto Corp.(a) 80,000 1,400,000
- --------------------------------------------------------------
Hollywood Entertainment Corp.(a) 220,000 3,190,000
- --------------------------------------------------------------
Rent-Way, Inc.(a) 65,000 1,214,688
- --------------------------------------------------------------
Sunglass Hut International, Inc.(a) 200,000 2,250,000
- --------------------------------------------------------------
10,367,188
- --------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-2.20%
Braun's Fashions Corp.(a) 127,500 2,677,500
- --------------------------------------------------------------
Chico's Fas, Inc.(a) 70,000 2,633,750
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (SPECIALTY-APPAREL)-(CONTINUED)
Children's Place Retail Stores,
Inc. (The)(a) 90,000 $ 1,479,375
- --------------------------------------------------------------
Deb Shops, Inc. 112,500 2,081,250
- --------------------------------------------------------------
Factory 2-U Stores, Inc.(a) 75,000 2,128,125
- --------------------------------------------------------------
Too Inc.(a) 275,000 4,743,750
- --------------------------------------------------------------
15,743,750
- --------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.23%
Bay View Capital Corp. 70,000 993,125
- --------------------------------------------------------------
Queens County Bancorp, Inc. 25,000 678,125
- --------------------------------------------------------------
1,671,250
- --------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-0.24%
Lamar Advertising Co.(a) 8,600 520,838
- --------------------------------------------------------------
Professional Detailing, Inc.(a) 40,000 1,197,500
- --------------------------------------------------------------
1,718,338
- --------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.96%
Avis Rent A Car, Inc.(a) 100,000 2,556,250
- --------------------------------------------------------------
Cerner Corp.(a) 30,000 590,625
- --------------------------------------------------------------
Championship Auto Racing Teams, Inc.(a) 70,000 1,610,000
- --------------------------------------------------------------
Copart, Inc.(a) 80,000 3,480,000
- --------------------------------------------------------------
F.Y.I., Inc.(a) 80,000 2,720,000
- --------------------------------------------------------------
Iron Mountain Inc.(a) 59,150 2,325,334
- --------------------------------------------------------------
Provant, Inc.(a) 150,000 3,787,500
- --------------------------------------------------------------
Vialink Co. (The)(a) 100,000 3,637,500
- --------------------------------------------------------------
Wilmar Industries, Inc.(a) 30,000 521,250
- --------------------------------------------------------------
21,228,459
- --------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-1.25%
Brocade Communications Systems,
Inc.(a) 30,000 5,310,000
- --------------------------------------------------------------
Insight Enterprises, Inc.(a) 89,875 3,651,172
- --------------------------------------------------------------
8,961,172
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.44%
CheckFree Holdings Corp.(a) 20,000 2,090,000
- --------------------------------------------------------------
Mecon, Inc.(a) 100,000 1,081,250
- --------------------------------------------------------------
3,171,250
- --------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-1.56%
AirGate PCS Inc.(a) 50,000 2,637,500
- --------------------------------------------------------------
Phone.com, Inc.(a) 18,000 2,086,875
- --------------------------------------------------------------
Powerwave Technologies, Inc.(a) 110,000 6,421,250
- --------------------------------------------------------------
11,145,625
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.67%
Primus Telecommunications Group,
Inc.(a) 125,000 4,781,250
- --------------------------------------------------------------
TEXTILES (APPAREL)-0.31%
Cutter & Buck, Inc.(a) 45,000 680,625
- --------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TEXTILES (APPAREL)-(CONTINUED)
Quicksilver, Inc.(a) 100,000 $ 1,550,000
- --------------------------------------------------------------
2,230,625
- --------------------------------------------------------------
TRUCKS & PARTS-0.44%
Mobile Mini, Inc.(a) 145,000 3,117,500
- --------------------------------------------------------------
Total Common Stocks & Other
Equity Interests (Cost
$392,751,939) 624,838,522
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. TREASURY SECURITIES-0.09%
U.S. TREASURY BILLS-0.09%(C)
5.37%, 03/23/00 (Cost $632,318) $ 640,000(d) 632,896
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MONEY MARKET FUNDS-11.68%
STIC Liquid Assets Portfolio(e) 41,838,104 $ 41,838,104
- --------------------------------------------------------------
STIC Prime Portfolio(e) 41,838,104 41,838,104
- --------------------------------------------------------------
Total Money Market Funds (Cost
$83,676,208) 83,676,208
- --------------------------------------------------------------
TOTAL INVESTMENTS-99.03%
(Cost $477,060,465) 709,147,626
- --------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.97% 6,913,197
- --------------------------------------------------------------
NET ASSETS-100.00% $716,060,823
==============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Security fair valued in accordance with procedures established by the Board
of Trustees.
(c) Interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(d) Principal balance was pledged as collateral to cover margin requirements for
open futures contracts. See Note 7.
(e) The money market fund has the same investment advisor as the Fund.
See Notes to Financial Statements.
9
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$477,060,465) $709,147,626
- ---------------------------------------------------------
Receivables for:
Investments sold 299,618
- ---------------------------------------------------------
Fund shares sold 8,630,278
- ---------------------------------------------------------
Dividends and interest 443,497
- ---------------------------------------------------------
Due from Advisor 14,220
- ---------------------------------------------------------
Variation margin 240,000
- ---------------------------------------------------------
Other assets 67,487
- ---------------------------------------------------------
Total assets 718,842,726
- ---------------------------------------------------------
LIABILITIES:
Payable for Fund shares reacquired 1,293,978
- ---------------------------------------------------------
Accrued advisory fees 410,194
- ---------------------------------------------------------
Accrued distribution fees 577,916
- ---------------------------------------------------------
Accrued accounting service fees 13,775
- ---------------------------------------------------------
Accrued transfer agent fees 155,808
- ---------------------------------------------------------
Accrued operating expenses 330,232
- ---------------------------------------------------------
Total liabilities 2,781,903
- ---------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $716,060,823
=========================================================
NET ASSETS:
Class A $428,378,374
=========================================================
Class B $240,149,578
=========================================================
Class C $ 40,530,279
=========================================================
Advisor Class $ 7,002,592
- ---------------------------------------------------------
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 13,440,458
=========================================================
Class B 7,766,450
=========================================================
Class C 1,311,422
=========================================================
Advisor Class 216,588
=========================================================
Class A:
Net asset value and redemption price per
share $ 31.87
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $31.87 / 94.50%) $ 33.72
=========================================================
Class B:
Net asset value and offering price per
share $ 30.92
=========================================================
Class C:
Net asset value and offering price per
share $ 30.91
=========================================================
Advisor Class:
Net asset value, redemption and offering
price per share $ 32.33
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends $ 1,254,596
- ---------------------------------------------------------
Interest 1,456,258
- ---------------------------------------------------------
Securities lending income 279,432
- ---------------------------------------------------------
Total investment income 2,990,286
- ---------------------------------------------------------
EXPENSES:
Advisory and administrative fees 1,875,802
- ---------------------------------------------------------
Accounting service fees 71,480
- ---------------------------------------------------------
Custodian fees 76,751
- ---------------------------------------------------------
Distribution fees -- Class A 539,031
- ---------------------------------------------------------
Distribution fees -- Class B 917,864
- ---------------------------------------------------------
Distribution fees -- Class C 102,966
- ---------------------------------------------------------
Transfer agent fees 618,873
- ---------------------------------------------------------
Trustees' fees 5,133
- ---------------------------------------------------------
Other 446,018
- ---------------------------------------------------------
Total expenses 4,653,918
- ---------------------------------------------------------
Less: Expenses paid indirectly (6,951)
- ---------------------------------------------------------
Fees reimbursed by advisor (14,220)
- ---------------------------------------------------------
Net expenses 4,632,747
- ---------------------------------------------------------
Net investment income (loss) (1,642,461)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM
INVESTMENT SECURITIES AND FUTURES
CONTRACTS:
Net realized gain from:
Investment securities 12,628,738
- ---------------------------------------------------------
Futures contracts 494,525
- ---------------------------------------------------------
13,123,263
- ---------------------------------------------------------
Change in net unrealized appreciation of:
Investment securities 222,453,296
- ---------------------------------------------------------
Futures contracts 818,250
- ---------------------------------------------------------
223,271,546
- ---------------------------------------------------------
Net gain from investment securities and
futures contracts 236,394,809
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $234,752,348
=========================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 13
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) $ (1,642,461) $ (555,353)
- --------------------------------------------------------------------------------------------
Net realized gain from investment securities and futures
contracts 13,123,263 988,423
- --------------------------------------------------------------------------------------------
Change in net unrealized appreciation of investment
securities and futures contracts 223,271,546 8,890,666
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 234,752,348 9,323,736
- --------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS ON
INVESTMENT SECURITIES:
Class A (6,938,952) (576,954)
- --------------------------------------------------------------------------------------------
Class B (4,091,568) (733,412)
- --------------------------------------------------------------------------------------------
Class C (691,265) --
- --------------------------------------------------------------------------------------------
Advisor Class (114,504) (30,675)
- --------------------------------------------------------------------------------------------
SHARE TRANSACTIONS-NET:
Class A 270,390,201 9,846,073
- --------------------------------------------------------------------------------------------
Class B 136,647,909 1,291,586
- --------------------------------------------------------------------------------------------
Class C 30,105,480 --
- --------------------------------------------------------------------------------------------
Advisor Class 3,770,311 (600,234)
- --------------------------------------------------------------------------------------------
Net increase in net assets 663,829,960 18,520,120
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 52,230,863 33,710,743
- --------------------------------------------------------------------------------------------
End of period $716,060,823 $52,230,863
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $483,809,241 $42,095,396
- --------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (1,324) --
- --------------------------------------------------------------------------------------------
Undistributed net realized gain (losses) from investment
securities and futures contracts (805,505) 348,602
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
futures contracts 233,058,411 9,786,865
- --------------------------------------------------------------------------------------------
$716,060,823 $52,230,863
============================================================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Small Cap Growth Fund (the "Fund") is a separate series of AIM Growth Series
(the "Trust"). The Trust is organized as a Delaware business trust and is
registered under the Investment Company Act of 1940, as amended (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 November 8, 1999, the Fund discontinued sales
of its shares to new investors. Matters affecting each portfolio or class will
be voted on exclusively by the shareholders of such portfolio or class. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund.
The Fund's investment objective is long-term growth of capital. The Fund
invests substantially all of its investable assets in Small Cap 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
$1,641,137, undistributed net realized gains decreased by $2,441,081 and
paid-in capital increased by $799,944 as a result of differing book/tax
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
12
<PAGE> 15
shareholders. Therefore, no provision for federal income taxes is recorded
in the financial statements.
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 of $14,220.
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 was
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 $71,480 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 $376,880 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 $539,031, $917,864 and
$102,966, respectively, as compensation under the Plans.
AIM Distributors received commissions of $445,188 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 $6,567 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 $6,951 an under expense offset arrangement. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of $6,951
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
13
<PAGE> 16
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 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. The Fund was limited to borrowing up to 33 1/3% of the
Fund's total assets.
NOTE 5-PORTFOLIO SECURITIES LOANED
At December 31, 1999, securities with an aggregate value of $45,086,775 were on
loan to brokers. The loans were secured by cash collateral of $45,988,734
received by the Portfolio. For the year ended December 31, 1999, the Portfolio
received fees of $279,432 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-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
$469,445,449 and $122,073,002, 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 $246,144,254
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (14,348,086)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $231,796,168
=========================================================
Cost of investments for tax purposes is $477,351,458.
</TABLE>
NOTE 7-FUTURES CONTRACTS
On December 31, 1999, $640,000 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>
Russell 2000 Index 50 Mar-00/Buy $12,748,750 $971,250
===========================================================================
</TABLE>
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 15,474,167 $344,003,621 2,808,949 $ 42,444,424
- -------------------------------------------------------------------------------------------------------------------
Class B 7,141,182 155,840,300 1,807,272 26,359,785
- -------------------------------------------------------------------------------------------------------------------
Class C* 1,410,849 32,179,389 -- --
- -------------------------------------------------------------------------------------------------------------------
Advisor Class 212,227 5,059,330 63,569 992,118
- -------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 228,165 6,579,456 35,278 549,813
- -------------------------------------------------------------------------------------------------------------------
Class B 140,437 3,930,835 45,364 690,497
- -------------------------------------------------------------------------------------------------------------------
Class C* 22,964 642,307 -- --
- -------------------------------------------------------------------------------------------------------------------
Advisor Class 3,551 103,864 1,482 23,320
- -------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (3,714,103) (80,192,876) (2,155,365) (33,148,164)
- -------------------------------------------------------------------------------------------------------------------
Class B (1,104,856) (23,123,226) (1,772,161) (25,758,696)
- -------------------------------------------------------------------------------------------------------------------
Class C* (122,391) (2,716,216) -- --
- -------------------------------------------------------------------------------------------------------------------
Advisor Class (59,938) (1,392,883) (114,990) (1,615,672)
- -------------------------------------------------------------------------------------------------------------------
19,632,254 $440,913,901 719,398 $ 10,537,425
===================================================================================================================
</TABLE>
* Class C Shares commenced sales on May 3, 1999.
14
<PAGE> 17
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 the
period May 3, 1999 (date sales commenced) through December 31, 1999.
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------
1999(a) 1998(a) 1997(a) 1996(a) 1995(a)
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.03 $ 14.27 $ 12.52 $11.80 $11.43
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Income from investment operations:
Net investment income (loss) (0.09) (0.19) (0.18) (0.05) 0.04
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Net gains on securities (both realized and unrealized) 15.47 3.45 2.20 1.69 0.33
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Total from investment operations 15.38 3.26 2.02 1.64 0.37
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Less distributions from net realized gains (0.54) (0.50) (0.27) (0.92) --
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Net asset value, end of period $ 31.87 $ 17.03 $ 14.27 $12.52 $11.80
============================================================ ======== ======= ======= ======= =======
Total return(b) 90.64% 23.15% 16.23% 13.81% 3.24%
============================================================ ======== ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $428,378 $24,737 $10,896 $8,448 $1,931
============================================================ ======== ======= ======= ======= =======
Ratio of expenses to average net assets:
With fee waivers and/or reimbursements 1.54%(c) 1.76% 1.92% 2.00% 2.00%(d)
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Without fee waivers and/or reimbursements 1.54%(c) 2.20% 2.52% 3.09% 24.20%(d)
============================================================ ======== ======= ======= ======= =======
Ratio of net investment income (loss) to average net assets:
With fee waivers and/or reimbursements (0.38)%(c) (1.29)% (1.40)% (0.38)% 1.68%(d)
- ------------------------------------------------------------ -------- ------- ------- ------ ------
Without fee waivers and/or reimbursements (0.38)%(c) (1.73)% (2.00)% (1.47)% (20.52)%(d)
============================================================ ======== ======= ======= ======= =======
Portfolio turnover rate 56% 190% 233% 150% --
============================================================ ======== ======= ======= ======= =======
</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 $154,008,731.
(d) Annualized.
<TABLE>
<CAPTION>
CLASS B CLASS C
------------------------------------------------ --------------------
MAY 3, 1999
THROUGH
1999(a) 1998(a) 1997(a) 1996(a) 1995(a) DECEMBER 31, 1999(a)
-------- ------- ------- ------- ------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.64 $14.06 $12.42 $11.78 $11.43 $ 19.03
- ---------------------------------------- -------- ------- ------- ------- ------ -------
Income from investment operations:
Net investment income (loss) (0.24) (0.29) (0.26) (0.14) 0.02 (0.17)
- ---------------------------------------- -------- ------- ------- ------- ------ -------
Net gains on securities (both realized
and unrealized) 15.06 3.37 2.17 1.70 0.33 12.59
- ---------------------------------------- -------- ------- ------- ------- ------ -------
Total from investment operations 14.82 3.08 1.91 1.56 0.35 12.42
- ---------------------------------------- -------- ------- ------- ------- ------ -------
Less distributions from net realized
gains (0.54) (0.50) (0.27) (0.92) -- (0.54)
- ---------------------------------------- -------- ------- ------- ------- ------ -------
Net asset value, end of period $ 30.92 $16.64 $14.06 $12.42 $11.78 $ 30.91
======================================== ======== ======= ======= ======= ====== =======
Total return(b) 89.40% 22.22% 15.47% 13.14% 3.06% 65.56%
======================================== ======== ======= ======= ======= ====== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $240,150 $26,448 $21,222 $10,694 $2,024 $40,530
======================================== ======== ======= ======= ======= ====== =======
Ratio of expenses to average net assets:
With fee waivers and/or reimbursements 2.19%(c) 2.40% 2.57% 2.65% 2.65%(e) 2.19%(d)
======================================== ======== ======= ======= ======= ====== =======
Without fee waivers and/or
reimbursements 2.19%(c) 2.85% 3.17% 3.74% 24.85%(e) 2.19%(d)
======================================== ======== ======= ======= ======= ====== =======
Ratio of net investment income (loss) to
average net assets:
With fee waivers and/or reimbursements (1.03)%(c)(1.96)% (2.05)% (1.03)% 1.03%(e) (1.03)%(d)
======================================== ======== ======= ======= ======= ====== =======
Without fee waivers and/or
reimbursements (1.03)%(c)(2.40)% (2.65)% (2.12)% (21.17)%(e) (1.03)%(d)
======================================== ======== ======= ======= ======= ====== =======
Portfolio turnover rate 56% 190% 233% 150% -- 56%
======================================== ======== ======= ======= ======= ====== =======
<CAPTION>
ADVISOR CLASS
-----------------------------------------------
1999(a) 1998(a) 1997(a) 1996 1995(a)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.21 $14.39 $12.58 $11.81 $ 11.43
- ---------------------------------------- ------ ------ ------ ------ -------
Income from investment operations:
Net investment income (loss) (0.01) (0.14) (0.14) 0.00 0.05
- ---------------------------------------- ------ ------ ------ ------ -------
Net gains on securities (both realized
and unrealized) 15.67 3.46 2.22 1.69 0.33
- ---------------------------------------- ------ ------ ------ ------ -------
Total from investment operations 15.66 3.32 2.08 1.69 0.38
- ---------------------------------------- ------ ------ ------ ------ -------
Less distributions from net realized
gains (0.54) (0.50) (0.27) (0.92) --
- ---------------------------------------- ------ ------ ------ ------ -------
Net asset value, end of period $32.33 $17.21 $14.39 $12.58 $ 11.81
======================================== ====== ====== ====== ====== =======
Total return(b) 91.32% 23.38% 16.63% 14.22% 3.32%
======================================== ====== ====== ====== ====== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $7,003 $1,045 $1,592 $ 435 $ 52
======================================== ====== ====== ====== ====== =======
Ratio of expenses to average net assets:
With fee waivers and/or reimbursements 1.19%(c) 1.40% 1.57% 1.65% 1.65%(e)
======================================== ====== ====== ====== ====== =======
Without fee waivers and/or
reimbursements 1.19%(c) 1.84% 2.17% 2.74% 23.85%(e)
======================================== ====== ====== ====== ====== =======
Ratio of net investment income (loss) to
average net assets:
With fee waivers and/or reimbursements (0.03)%(c) (0.95)% (1.05)% (0.03)% 2.03%(e)
======================================== ====== ====== ====== ====== =======
Without fee waivers and/or
reimbursements (0.03)%(c) (1.39)% (1.65)% (1.12)% (20.17)%(e)
======================================== ====== ====== ====== ====== =======
Portfolio turnover rate 56% 190% 233% 150% --
======================================== ====== ====== ====== ====== =======
</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 based on average net assets of $91,786,448 for Class B and
$2,639,553 for Advisor Class.
(d) Ratios are annualized and based on average net assets of $15,466,094.
(e) Annualized.
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.
15
<PAGE> 18
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of AIM Growth Series and Shareholders
of AIM Small Cap Growth 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
Small Cap Growth 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
16
<PAGE> 19
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
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 LLP
160 Federal St.
Boston, MA 02110
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION (UNAUDITED)
AIM Small Cap Growth Fund paid ordinary dividends in the amount of $0.5397 per
share to shareholders during its tax year ended December 31, 1999. Of these
amounts 9.24% is eligible for the dividends received deduction for corporations.
<PAGE> 20
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<CAPTION>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has provided
AIM Money Market Fund leadership in the mutual fund industry
AIM Aggressive Growth Fund AIM Tax-Exempt Cash Fund since 1976 and managed approximately $160
AIM Blue Chip Fund billion in assets for more than 6.6
AIM Capital Development Fund INTERNATIONAL GROWTH FUNDS million shareholders, including individual
AIM Constellation Fund(1) AIM Advisor International Value Fund investors, corporate clients and Financial
AIM Dent Demographic Trends Fund AIM Asian Growth Fund institutions, as of December 31, 1999.
AIM Large Cap Growth Fund AIM Developing Markets Fund The AIM Family of Funds--Registered
AIM Mid Cap Equity Fund AIM Euroland Growth Fund(4) Trademark-- is distributed nationwide, and
AIM Mid Cap Growth Fund AIM European Development Fund AIM today is the eighth-largest mutual
AIM Mid Cap Opportunities Fund AIM International Equity Fund fund complex in the United States in
AIM Select Growth Fund AIM Japan Growth Fund assets under management, according to
AIM Small Cap Growth Fund(2) AIM Latin American Growth Fund Strategic Insight, an independent mutual
AIM Small Cap Opportunities Fund(3) AIM New Pacific Growth Fund fund monitor.
AIM Value Fund AIM Weingarten Fund
GLOBAL GROWTH FUNDS
GROWTH & INCOME FUNDS AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund GLOBAL GROWTH & INCOME FUNDS
AIM Advisor Real Estate Fund AIM Global Growth & Income Fund
AIM Balanced Fund AIM Global Utilities Fund
AIM Basic Value Fund
AIM Charter Fund GLOBAL INCOME FUNDS
AIM Emerging Markets Debt Fund
INCOME FUNDS AIM Global Government Income Fund
AIM Floating Rate Fund AIM Global Income Fund
AIM High Yield Fund AIM Strategic Income Fund
AIM High Yield Fund II
AIM Income Fund THEME FUNDS
AIM Intermediate Government Fund AIM Global Consumer Products and Services Fund
AIM Limited Maturity Treasury Fund AIM Global Financial Services Fund
AIM Global Health Care Fund
TAX-FREE INCOME FUNDS AIM Global Infrastructure Fund
AIM High Income Municipal Fund AIM Global Resources Fund
AIM Municipal Bond Fund AIM Global Telecommunications and Technology Fund(5)
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Trends Fund(6)
AIM Tax-Free Intermediate Fund
</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--
[DALBAR LOGO APPEARS HERE]
AIM DISTRIBUTORS, INC. SCG AR-1
