<PAGE> 1
AIM EUROLAND GROWTH FUND
CLASS A, B AND C SHARES
Supplement dated February 11, 2000
to the Prospectus dated May 3, 1999,
as revised November 24, 1999 and as supplemented January 24, 2000
This supplement supersedes and replaces in its entirety the supplement dated
January 24, 2000.
Advisor Class shares of AIM Euroland Growth Fund converted to Class A shares of
the fund effective the close of business on February 11, 2000. Advisor Class
shares of the fund are no longer offered for sale or exchange.
The fourth paragraph appearing under the heading entitled "PRINCIPAL RISKS OF
INVESTING IN THE FUND" on page 1 of the prospectus is deleted in its entirety.
The first paragraph appearing under the heading entitled "PERFORMANCE
INFORMATION" on page 2 of the prospectus is deleted in its entirety and
replaced with the following:
"The bar chart and table shown below provide an indication of the
risks of investing in the fund. The fund's past performance is not
necessarily an indication of its future performance."
The fourth paragraph appearing under the heading entitled "FINANCIAL
HIGHLIGHTS" on page 5 of the prospectus is deleted in its entirety.
<PAGE> 2
AIM JAPAN GROWTH FUND
CLASS A, B AND C SHARES
Supplement dated February 11, 2000
to the Prospectus dated May 3, 1999,
as revised October 26, 1999 and as supplemented January 24, 2000
This supplement supersedes and replaces in its entirety the supplement dated
January 24, 2000.
Advisor Class shares of AIM Japan Growth Fund converted to Class A shares of
the fund effective the close of business on February 11, 2000. Advisor Class
shares of the fund are no longer offered for sale or exchange.
The fifth paragraph appearing under the heading entitled "PRINCIPAL RISKS OF
INVESTING IN THE FUND" on page 1 of the prospectus is deleted in its entirety.
The first paragraph appearing under the heading entitled "PERFORMANCE
INFORMATION" on page 2 of the prospectus is deleted in its entirety and
replaced with the following:
"The bar chart and table shown below provide an indication of the
risks of investing in the fund. The fund's past performance is not
necessarily an indication of its future performance."
The fourth paragraph appearing under the heading entitled "FINANCIAL
HIGHLIGHTS" on page 5 of the prospectus is deleted in its entirety.
<PAGE> 3
AIM MID CAP EQUITY FUND
CLASS A, B AND C SHARES
Supplement dated February 11, 2000
to the Prospectus dated May 3, 1999
Advisor Class shares of AIM Mid Cap Equity Fund converted to Class A shares of
the fund effective the close of business on February 11, 2000. Advisor Class
shares of the fund are no longer offered for sale or exchange.
<PAGE> 4
AIM NEW PACIFIC GROWTH FUND
CLASS A, B AND C SHARES
Supplement dated February 11, 2000
to the Prospectus dated May 3, 1999
Advisor Class shares of AIM New Pacific Growth Fund converted to Class A shares
of the fund effective the close of business on February 11, 2000. Advisor Class
shares of the fund are no longer offered for sale or exchange.
<PAGE> 5
CLASS A, CLASS B AND CLASS C SHARES OF
AIM EUROLAND GROWTH FUND
AIM JAPAN GROWTH FUND
AIM MID CAP EQUITY FUND
AIM NEW PACIFIC GROWTH FUND
(SERIES PORTFOLIOS OF AIM GROWTH SERIES)
Supplement dated February 11, 2000
to the Statement of Additional Information dated May 3, 1999,
as supplemented June 30, 1999, August 5, 1999, October 1, 1999,
January 3, 2000 and January 24, 2000
This supplement supersedes and replaces in its entirety the supplements
dated January 24, 2000, January 3, 2000, October 1, 1999, August 5, 1999 and
June 30, 1999.
Advisor Class shares of the Funds converted to Class A shares of the Funds
effective the close of business on February 11, 2000. Advisor Class shares of
the Funds are no longer offered for sale or exchange.
Effective September 1, 1999, the name of AIM Europe Growth Fund was
changed to AIM Euroland Growth Fund ("Euroland Fund").
Effective September 1, 1999, the following replaced in their entirety the
second and third paragraphs under the heading "INVESTMENT POLICIES" on page 5
of the Statement of Additional Information:
"Pacific Fund's primary investment area includes: Australia, Hong
Kong, India, Indonesia, Malaysia, New Zealand, Pakistan, the Philippines,
Singapore, South Korea, Taiwan and Thailand. Euroland Fund's primary
investment area includes countries that are members of the European
Economic and Monetary Union (the "EMU"). As of June 30, 1999, the members
of the EMU were Austria, Belgium, Finland, France, Germany, Ireland,
Italy, Luxembourg, The Netherlands, Portugal and Spain.
Each of Pacific Fund and Japan Fund may invest up to 35% of its
total assets in the equity securities of issuers domiciled outside of its
primary investment area. Such investments may include: (a) securities of
issuers in countries that are not located in the primary investment area
but are linked by tradition, economic markets, cultural similarities or
geography to the countries in such primary investment area; and (b)
securities of issuers located elsewhere in the world that have operations
in the primary investment area or that stand to benefit from political or
economic events in the primary investment area. Euroland Fund may invest
up to 35% of its total assets in the equity securities of issuers
domiciled in developed countries outside of its primary investment area.
Accordingly, the Funds are regional funds for investors interested in more
geographically concentrated investments but, in the case of Pacific Fund
and Euroland Fund, still desiring to diversify across multiple markets."
The following paragraph replaces in its entirety the sixth paragraph under
the heading "SELECTION OF INVESTMENTS" on page 6 of the Statement of Additional
Information:
"Mid Cap Fund. The Fund may invest up to 35% of its total assets in
the equity securities of issuers domiciled in the United States that, at
the time of purchase, have market capitalizations outside the range of
market capitalizations of companies that are included in the Russell Midcap
Index(tm). In addition, the Fund may invest up to 35% of its total assets in
investment grade debt securities of United States issuers including U.S.
government and corporate debt securities.
The Fund may invest up to 25% of its total assets in the securities
of issuers domiciled outside the United States, including (i) issuers
linked by tradition, economic markets, cultural similarities or geography
to the United States; and (ii) issuers located elsewhere in the world that
have operations in the United States or that stand to benefit from
political or economic events in the United States. Foreign securities may
include foreign government securities and corporate debt securities,
Samurai and Yankee bonds, Euro bonds and Depositary Receipts."
<PAGE> 6
The following is added as a new section after the information appearing
under the heading "INVESTMENT POLICIES - SELECTION OF INVESTMENTS" on page 6 of
the Statement of Additional Information:
"EQUITY-LINKED DERIVATIVES
The Funds may invest in equity-linked derivative products designed
to replicate the composition and performance of particular indices.
Examples of such products include S&P Depositary Receipts ("SPDRs"), World
Equity Benchmark Series (WEBs"), NASDAQ 100 tracking shares ("QQQs"), Dow
Jones Industrial Average Instruments ("DIAMONDS") and Optomised Portfolios
as Listed Securities ("OPALS"). Investments in equity-linked derivatives
involve the same risks associated with a direct investment in the types of
securities included in the indices such products are designed to track.
There can be no assurance that the trading price of the equity-linked
derivatives will equal the underlying value of the basket of securities
purchased to replicate a particular index or that such basket will
replicate the index. Investments in equity-linked derivatives may
constitute investment in other investment companies. See "INVESTMENTS IN
OTHER INVESTMENT COMPANIES."
The following paragraphs replace in its entirety the paragraph under the
heading "INVESTMENT POLICIES - INVESTMENTS IN OTHER INVESTMENT COMPANIES" on
page 6 of the Statement of Additional Information:
"With respect to certain countries, investments by a Fund presently
may be made only by acquiring shares of other investment companies
(including investment vehicles or companies advised by AIM or its
affiliates) with local governmental approval to invest in those countries.
At such time as direct investment in these countries is allowed, the Funds
anticipate investing directly in these markets.
Each Fund may invest in other investment companies to the extent
permitted by the 1940 Act, and the rules and regulations thereunder, and
if applicable, exemptive orders granted by the SEC. The following
restrictions apply to investments in other investment companies other than
Affiliated Money Market Funds (defined below): (1) a Fund may not purchase
more than 3% of the total outstanding voting stock of another investment
company; (ii) a Fund may not invest more than 5% of its total assets in
securities issued by another investment company; and (iii) a Fund may not
invest more than 10% of its total assets in securities issued by other
investment companies other than Affiliated Money Market Funds. With
respect to a Fund's purchase of shares of another investment company,
including Affiliated Money Market Funds, the Fund will indirectly bear its
proportionate share of the advisory fees and other operating expenses of
such investment company. The Funds have obtained an exemptive order from
the SEC allowing them to invest in money market funds that have AIM or an
affiliate of AIM as an investment adviser (the "Affiliated Money Market
Funds"), provided that investments in Affiliated Money Market Funds do not
exceed 25% of the total assets of such Fund."
The following replaces in its entirety the first paragraph under the
heading "INVESTMENT POLICIES - BORROWING, REVERSE REPURCHASE AGREEMENTS AND
"ROLL" TRANSACTIONS" on page 9 of the Statement of Additional Information:
"Each Fund's borrowings will not exceed 33 1/3% of its total assets,
i.e., each Fund's total assets will equal at least 300% of the amount of
outstanding borrowings. If market fluctuations in the value of a Fund's
portfolio holdings or other factors cause the ratio of the Fund's total
assets to outstanding borrowings to fall below 300%, within three days
(excluding Sundays and holidays) of such event the Fund may be required to
sell portfolio securities to restore the 300% asset coverage, even though
from an investment standpoint such sales might be disadvantageous. Each
Fund also may borrow up to 5% of its total assets for temporary or
emergency purposes other than to meet redemptions. Each Fund may not make
additional investments if borrowings exceed 5% of its total assets. A Fund
may borrow in connection with meeting requests for the redemption of a
Fund's shares. Any borrowing by a Fund may cause greater fluctuation in
the value of its shares than would be the case if the Fund did not
borrow."
2
<PAGE> 7
The following is added as the new first paragraph under the heading
"INVESTMENT POLICIES - TEMPORARY DEFENSIVE STRATEGIES" on page 10 of the
Statement of Additional Information:
"In anticipation of or in response to adverse market conditions, for
cash management purposes, or for defensive purposes, each of the Funds may
temporarily hold all or a portion of its assets in cash (U.S. dollars,
foreign currencies or multinational currency units), money market
instruments, or high-quality debt securities. Each of the Funds may also
invest up to 25% of its total assets in Affiliated Money Market Funds for
these purposes."
The following is added as a new section before the heading "EXECUTION OF
PORTFOLIO TRANSACTIONS - PORTFOLIO TRADING AND TURNOVER" on page 27 of the
Statement of Additional Information:
"ALLOCATION OF INITIAL PUBLIC OFFERING ("IPO") SECURITIES TRANSACTIONS
From time to time, certain of the mutual funds managed by AIM or
A I M Capital Management, Inc. (collectively, "AIM Funds") may become
interested in participating in security distributions that are available in
an IPO, and occasions may arise when purchases of such securities by one
AIM Fund may also be considered for purchase by one or more other AIM
Funds. In such cases, it shall be AIM's practice to specifically combine or
otherwise bunch indications of interest for IPO securities for all AIM
Funds participating in purchase transactions for that security, and to
allocate such transactions in accordance with the following procedures:
AIM will determine the eligibility of each AIM Fund that seeks to
participate in a particular IPO by reviewing a number of factors,
including suitability of the investment with the AIM Fund's investment
objective, policies and strategies, the liquidity of the AIM Fund if such
investment is purchased, and whether the portfolio manager intends to hold
the security as a long-term investment. The allocation of limited supply
securities issued in IPOs will be made to eligible AIM Funds in a manner
designed to be fair and equitable for the eligible AIM Funds, and so that
there is equal allocation of IPOs over the longer term. Where multiple
funds are eligible, rotational participation may occur, based on the
extent to which an AIM Fund has participated in previous IPOs as well as
the size of the AIM Fund. Each eligible AIM Fund with an asset level of
less than $500 million will be placed in one of three tiers, depending
upon its asset level. The AIM Funds in the tier containing funds with the
smallest asset levels will participate first, each receiving a 40 basis
point allocation (rounded to the nearest share round lot that approximates
40 basis points) (the "Allocation"), based on that AIM Fund's net assets.
This process continues until all of the AIM Funds in the three tiers
receive their Allocations, or until the shares are all allocated. Should
securities remain after this process, eligible AIM Funds will receive
their Allocations on a straight pro rata basis. For the tier of AIM Funds
not receiving a full Allocation, the Allocation may be made only to
certain AIM Funds so that each may receive close to or exactly 40 basis
points.
Any AIM Funds with substantially identical investment objectives and
policies will participate in syndicates in amounts that are substantially
proportionate to each other. In these cases, the net assets of the largest
AIM Fund will be used to determine in which tier, as described in the
paragraph above, such group of AIM Funds will be placed. The price per
share of securities purchased in such syndicate transactions will be the
same for each AIM Fund."
The following is added as a new category of purchaser who will not
pay initial sales charges on purchases of Class A shares, under the heading THE
DISTRIBUTOR - PURCHASES AT NET ASSET VALUE on page 40 of the Statement of
Additional Information.
"o Shareholders of record of Advisor Class shares of an AIM Fund on
February 11, 2000 who have continuously owned shares of that AIM Fund, and
who purchase additional shares of that AIM Fund."
3
<PAGE> 8
The following replaces in its entirety the table appearing under the
heading "MANAGEMENT-TRUSTEES AND EXECUTIVE OFFICERS" on page 27 of the
Statement of Additional Information:
<TABLE>
<CAPTION>
========================== ======================== ===========================================================
POSITIONS HELD PRINCIPAL OCCUPATION DURING AT LEAST THE
"NAME, ADDRESS AND AGE WITH REGISTRANT PAST 5 YEARS
========================== ======================== ===========================================================
<S> <C> <C>
*ROBERT H. GRAHAM (53) Trustee, Chairman and Director, President and Chief Executive Officer, A I M
President Management Group Inc.; Director and President, A I M
Advisors, Inc.; Director and Senior Vice President, A I M
Capital Management, Inc., A I M Distributors, Inc., A I M
Fund Services, Inc. and Fund Management Company; and
Director and Chief Executive Officer, Managed Products,
AMVESCAP PLC.
- -------------------------- ------------------------ -----------------------------------------------------------
C. DEREK ANDERSON (58) Trustee Senior Managing Partner, Plantagenet Capital Management,
220 Sansome Street LLC (an investment partnership); Chief Executive Officer,
Suite 400 Plantagenet Holdings, Ltd. (an investment banking firm);
San Francisco, CA 94104 and Director, Premium Wear, Inc. (formerly Munsingwear,
Inc.) (a casual apparel company), 'R' Homes, Inc., Big
Online, Inc., Champagne Albert Le Brun and various other
privately owned companies.
- -------------------------- ------------------------ -----------------------------------------------------------
FRANK S. BAYLEY (60) Trustee Partner, law firm of Baker & McKenzie; Trustee, The
Two Embarcadero Center Badgley Funds; and Director and Chairman, C. D. Stimson
Suite 2400 Company (a private investment company) and Stimson Marina,
San Francisco, CA 94111 Inc. (a subsidiary of C. D. Stimson Co.)
- -------------------------- ------------------------ -----------------------------------------------------------
RUTH H. QUIGLEY (64) Trustee Private investor; and President, Quigley Friedlander &
1055 California Street Co., Inc.(a financial advisory services firm) from 1984
San Francisco, CA 94108 to 1986.
- -------------------------- ------------------------ -----------------------------------------------------------
MELVILLE B. COX (56) Vice President Vice President and Chief Compliance Officer, A I M
Advisors, Inc., A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc. and Fund
Management Company.
- -------------------------- ------------------------ -----------------------------------------------------------
GARY T. CRUM (52) Vice President Director and President, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M Management
Group Inc.; Director and Senior Vice President, A I M
Advisors, Inc.; and Director, A I M Distributors, Inc.
and AMVESCAP PLC.
========================== ======================== ===========================================================
</TABLE>
- --------
* A trustee who is an "interested person" of the Trust and AIM as defined in
the 1940 Act.
4
<PAGE> 9
<TABLE>
<CAPTION>
========================== ======================== ===========================================================
POSITIONS HELD PRINCIPAL OCCUPATION DURING AT LEAST THE
NAME, ADDRESS AND AGE WITH REGISTRANT PAST 5 YEARS
========================== ======================== ===========================================================
<S> <C> <C>
CAROL F. RELIHAN (45) Vice President Director, Senior Vice President, General Counsel and
Secretary, A I M Advisors, Inc.; Senior Vice President,
General Counsel and Secretary, A I M Management Group
Inc.; Director, Vice President and General Counsel, Fund
Management Company; Vice President and General Counsel,
A I M Fund Services, Inc.; and Vice President, A I M
Capital Management, Inc. and A I M Distributors, Inc.
- -------------------------- ------------------------ -----------------------------------------------------------
SAMUEL D. SIRKO (40) Vice President and Assistant General Counsel and Assistant Secretary of
Secretary A I M Management Group, Inc., A I M Capital Management,
Inc., A I M Distributors, Inc., A I M Fund Services, Inc.,
and Fund Management Company; and Vice President, Assistant
General Counsel and Assistant Secretary of A I M
Advisors, Inc.
- -------------------------- ------------------------ -----------------------------------------------------------
DANA R. SUTTON (41) Vice President and Vice President and Fund Controller, A I M Advisors, Inc.;
Treasurer and Assistant Vice President and Assistant Treasurer,
Fund Management Company."
========================== ======================== ===========================================================
</TABLE>
The sixth paragraph appearing under the heading "PERFORMANCE INFORMATION" on
page 57 of the Statement of Additional Information is deleted and replaced with
the following:
"The Mid Cap Fund may participate in the IPO market, and a
significant portion of the Fund's returns may be attributable to its
investment in IPOs, which have a magnified impact due to the Fund's small
asset base. There is no guarantee that as the Fund's assets grow, it will
continue to invest to the same degree in IPOs or that it will experience
substantially similar performance."
5
<PAGE> 10
AIM BASIC VALUE FUND
CLASS A, B AND C SHARES
Supplement dated February 11, 2000
to the Prospectus dated May 3, 1999,
as revised October 25, 1999
Advisor Class shares of AIM Basic Value Fund converted to Class A shares of the
fund effective the close of business on February 11, 2000. Advisor Class shares
of the fund are no longer offered for sale or exchange.
<PAGE> 11
AIM SMALL CAP GROWTH FUND
CLASS A, B AND C SHARES
Supplement dated February 11, 2000
to the Prospectus dated May 3, 1999,
as revised November 5, 1999
and as supplemented November 5, 1999 and January 24, 2000
This supplement supersedes and replaces in its entirety the supplement dated
January 24, 2000 and November 5, 1999.
Advisor Class shares of AIM Small Cap Growth Fund converted to Class A shares
of the fund effective the close of business on February 11, 2000. Advisor Class
shares of the fund are no longer offered for sale or exchange.
AIM Small Cap Growth Fund has reached a size in assets under management where,
due to the limited size of the market for common stocks of small capitalized
companies, it has become increasingly difficult to satisfy the fund's
investment objective and guidelines. For this reason, effective at the close of
business on November 8, 1999, the fund will be closed to new investors.
Existing shareholders of the fund who maintain open accounts will be permitted
to continue to make additional investments in the fund.
The fund will accept properly completed Account Applications postmarked by the
close of business on November 8, 1999. IRA transfers or rollovers will be
accepted if a properly completed IRA Application or transfer form is postmarked
by the close of business on November 8, 1999. Account applications, IRA
applications and IRA transfer forms received by fax will not be accepted.
During the period the fund is closed to new investors, the distribution and
service (12b-1) fee for Class A shares will be reduced from 0.35% to 0.25% of
the fund's average daily net assets attributable to the Class A shares. The
12b-1 fees for Class B and Class C shares will not be reduced during this
closed period.
The fund may resume sales of shares to new investors at some future date if the
Board of Trustees determines that it would be in the best interest of the
fund's shareholders.
The fourth paragraph appearing under the heading "PRINCIPAL RISKS OF INVESTING
IN THE FUND" on page 1 of the prospectus is deleted in its entirety.
<PAGE> 12
CLASS A, CLASS B AND CLASS C SHARES OF
AIM BASIC VALUE FUND
AIM SMALL CAP GROWTH FUND
(SERIES PORTFOLIOS OF AIM GROWTH SERIES)
Supplement dated February 11, 2000
to the Statement of Additional Information dated May 3, 1999
as supplemented September 13, 1999 and October 6, 1999
This supplement supersedes and replaces in its entirety the
supplements dated October 6, 1999 and September 13, 1999.
Advisor Class shares of the Funds converted to Class A shares of the
Funds effective the close of business on February 11, 2000. Advisor Class
shares of the Funds are no longer offered for sale or exchange.
The following is added as a new section after the information appearing
under the heading "INVESTMENT POLICIES- SELECTION OF INVESTMENTS" on page 6 of
the Statement of Additional Information:
"EQUITY-LINKED DERIVATIVES
The Portfolios may invest in equity-linked derivative products
designed to replicate the composition and performance of particular
indices. Examples of such products include S&P Depositary Receipts
("SPDRs"), World Equity Benchmark Series ("WEBs"), NASDAQ 100 tracking
shares ("QQQs"), Dow Jones Industrial Average Instruments ("DIAMONDS") and
Optomised Portfolios as Listed Securities ("OPALS"). Investments in
equity-linked derivatives involve the same risks associated with a direct
investment in the types of securities included in the indices such
products are designed to track. There can be no assurance that the trading
price of the equity-linked derivatives will equal the underlying value of
the basket of securities purchased to replicate a particular index or that
such basket will replicate the index. Investments in equity-linked
derivatives may constitute investment in other investment companies. See
"INVESTMENTS IN OTHER INVESTMENT COMPANIES."
The following paragraph replaces in its entirety the paragraph
appearing under the heading "INVESTMENT POLICIES- INVESTMENTS IN OTHER
INVESTMENT COMPANIES" on page 6 of the Statement of Additional Information:
"Each Portfolio may invest in other investment companies to the
extent permitted by the 1940 Act, and the rules and regulations
thereunder, and if applicable, exemptive orders granted by the SEC. The
following restrictions apply to investments in other investment companies
other than Affiliated Money Market Funds (defined below): (i) a Portfolio
may not purchase more than 3% of the total outstanding voting stock of
another investment company; (ii) a Portfolio may not invest more than 5%
of its total assets in securities issued by another investment company;
and (iii) a Portfolio may not invest more than 10% of its total assets in
securities issued by other investment companies other than Affiliated
Money Market Funds. With respect to a Portfolio's purchase of shares of
another investment company, including Affiliated Money Market Funds, the
Portfolio will indirectly bear its proportionate share of the advisory
fees and other operating expenses of such investment company. The
Portfolios have obtained an exemptive order from the SEC allowing them to
invest in money market funds that have AIM or an affiliate of AIM as an
investment adviser (the "Affiliated Money Market Funds"), provided that
investments in Affiliated Money Market Funds do not exceed 25% of the
total assets of such Portfolio."
The following replaces in its entirety the section "INVESTMENT POLICIES -
DEPOSITARY RECEIPTS" on page 6 of the Statement of Additional Information:
<PAGE> 13
"FOREIGN SECURITIES
To the extent consistent with their respective investment
objectives, each of the Portfolios may invest up to 25% of its total assets
in foreign securities. For purposes of computing such limitation American
Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs") and
other securities representing underlying securities of foreign issuers are
treated as foreign securities. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or
trust company which evidence ownership of underlying securities issued by a
foreign corporation. EDRs are receipts issued in Europe which evidence a
similar ownership arrangement. Generally, ADRs, in registered form, are
designed for use in the United States securities markets, and EDRs, in
bearer form, are designed for use in European securities markets. ADRs and
EDRs may be listed on stock exchanges, or traded in OTC markets in the
United States or Europe, as the case may be. ADRs, like other securities
traded in the United States, will be subject to negotiated commission
rates.
To the extent a Portfolio invests in securities denominated in
foreign currencies, each Portfolio bears the risk of changes in the
exchange rates between U.S. currency and the foreign currency, as well as
the availability and status of foreign securities markets. These securities
will be marketable equity securities (including common and preferred stock,
depositary receipts for stock and fixed income or equity securities
exchangeable for or convertible into stock) of foreign companies which
generally are listed on a recognized foreign securities exchange or traded
in a foreign over-the-counter market. Each of the Portfolios may also
invest in foreign securities listed on recognized U.S. securities exchanges
or traded in the U.S. over-the-counter market. Such foreign securities may
be issued by foreign companies located in developing countries in various
regions of the world. A "developing country" is a country in the initial
stages of its industrial cycle. As compared to investment in the securities
markets of developed countries, investment in the securities markets of
developing countries involves exposure to markets that may have
substantially less trading volume and greater price volatility, economic
structures that are less diverse and mature, and political systems that may
be less stable.
Investments by a Portfolio in foreign securities, whether
denominated in U.S. currencies or foreign currencies, may entail all of the
risks set forth below. Investments by a Portfolio in ADRs, EDRs or similar
securities also may entail some or all of the risks as set forth below.
Currency Risk. The value of each Portfolio's foreign investments
will be affected by changes in currency exchange rates. The U.S. dollar
value of a foreign security decreases when the value of the U.S. dollar
rises against the foreign currency in which the security is denominated
and increases when the value of the U.S. dollar falls against such currency.
On January 1, 1999, certain members of the European Economic and
Monetary Union ("EMU"), namely Austria, Belgium, Finland, France, Germany,
Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain
established a common European currency known as the "euro" and each
member's local currency became a denomination of the euro. It is
anticipated that each participating country will replace its local currency
with the euro on July 1, 2002. Any other European country that is a member
of the European Union and satisfies the criteria for participation in the
EMU may elect to participate in the EMU and may supplement its existing
currency with euro. The anticipated replacement of existing currencies with
the euro on July 1, 2002 could cause market disruptions before or after
July 1, 2002 and could adversely affect the value of securities held by a
Portfolio.
Political and Economic Risk. The economies of many of the countries
in which the Portfolios may invest are not as developed as the United
States economy and may be subject to significantly different forces.
Political or social instability, expropriation or confiscatory taxation,
and limitations on the removal of funds or other assets could also
adversely affect the value of each Portfolio's investments.
Regulatory Risk. Foreign companies are not registered with the SEC
and are generally not subject to the regulatory controls imposed on United
States issuers and, as a consequence, there is generally less publicly
available information about foreign securities than is available about
domestic securities. Foreign companies are not subject to uniform
accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic companies. Income
from foreign securities owned by the Portfolios
2
<PAGE> 14
may be reduced by a withholding tax at the source, which tax would reduce
dividend income payable to the Portfolios' shareholders.
Market Risk. The securities markets in many of the countries in
which the Portfolios invest will have substantially less trading volume
than the major United States markets. As a result, the securities of some
foreign companies may be less liquid and experience more price volatility
than comparable domestic securities. Increased custodian costs as well as
administrative costs (such as the need to use foreign custodians) may be
associated with the maintenance of assets in foreign jurisdictions. There
is generally less government regulation and supervision of foreign stock
exchanges, brokers and issuers which may make it difficult to enforce
contractual obligations. In addition, transaction costs in foreign
securities markets are likely to be higher, since brokerage commission
rates in foreign countries are likely to be higher than in the United
States."
The following replaces in its entirety the first paragraph under the
heading "heading "INVESTMENT POLICIES- BORROWING, REVERSE REPURCHASE AGREEMENTS
AND "ROLL" TRANSACTIONS" on page 8 of the Statement of Additional Information:
"Each Portfolio's borrowings will not exceed 33 1/3% of its total
assets, i.e., each Portfolio's total assets will equal at least 300% of the
amount of outstanding borrowings. If market fluctuations in the value of a
Portfolio's holdings or other factors cause the ratio of the Portfolio's
total assets to outstanding borrowings to fall below 300%, within three
days (excluding Sundays and holidays) of such event the Portfolio may be
required to sell portfolio securities to restore the 300% asset coverage,
even though from an investment standpoint such sales might be
disadvantageous. Each Portfolio also may borrow up to 5% of its total
assets for temporary or emergency purposes other than to meet redemptions.
Each Portfolio may not make additional investments if borrowings exceed 5%
of its total assets. A Portfolio may borrow in connection with meeting
requests for the redemption of a Portfolio's shares. Any borrowing by a
Portfolio may cause greater fluctuation in the value of its shares than
would be the case if the Portfolio did not borrow."
The following replaces in its entirety the information appearing
under the heading "INVESTMENT POLICIES - TEMPORARY DEFENSIVE STRATEGIES" on
page 9 of the Statement of Additional Information.
"In anticipation of or in response to adverse market conditions, for
cash management purposes, or for defensive purposes, each of the
Portfolios may temporarily hold all or a portion of its assets in cash
(U.S. dollars, foreign currencies or multinational currency units), money
market instruments, or high-quality debt securities. Each of the
Portfolios may also invest up to 25% of its total assets in Affiliated
Money Market Funds for these purposes. To the extent a Portfolio employs a
temporary defensive strategy, it will not be invested so as to achieve
directly its investment objectives.
Money market instruments in which the Portfolios may invest include
the following: government securities; high grade commercial paper; bank
certificates of deposit; bankers' acceptances; and repurchase agreements
related to any of the foregoing. High grade commercial paper refers to
commercial paper rated P-1 by Moody's or A-1 by S&P, at the time of
investment or, if unrated, deemed by AIM to be of comparable quality."
The following new section is added after the seventh paragraph
appearing under the heading "EXECUTION OF PORTFOLIO TRANSACTIONS" on page 20 of
the Statement of Additional Information:
"ALLOCATION OF INITIAL PUBLIC OFFERING ("IPO") SECURITIES TRANSACTIONS
From time to time, certain of the mutual funds managed by AIM or
A I M Capital Management, Inc. (collectively, the "AIM Funds") may become
interested in participating in security distributions that are available
in an IPO, and occasions may arise when purchases of such securities by
one AIM Fund may also be considered for purchase by one or more other AIM
Funds. In such cases, it shall be AIM's practice to specifically combine
or otherwise bunch indications of interest for IPO securities for all AIM
Funds participating in purchase transactions for that security, and to
allocate such transactions in accordance with the following procedures:
3
<PAGE> 15
AIM will determine the eligibility of each AIM Fund that seeks to
participate in a particular IPO by reviewing a number of factors,
including suitability of the investment with the AIM Fund's investment
objective, policies and strategies, the liquidity of the AIM Fund if such
investment is purchased, and whether the portfolio manager intends to hold
the security as a long-term investment. The allocation of limited supply
securities issued in IPOs will be made to eligible AIM Funds in a manner
designed to be fair and equitable for the eligible AIM Funds, and so that
there is equal allocation of IPOs over the longer term. Where multiple
funds are eligible, rotational participation may occur, based on the
extent to which an AIM Fund has participated in previous IPOs as well as
the size of the AIM Fund. Each eligible AIM Fund with an asset level of
less than $500 million, will be placed in one of three tiers, depending
upon its asset level. The AIM Funds in the tier containing funds with the
smallest asset levels will participate first, each receiving a 40 basis
point allocation (rounded to the nearest share round lot that approximates
40 basis points) (the "Allocation"), based on that AIM Fund's net assets.
This process continues until all of the AIM Funds in the three tiers
receive their Allocations, or until the shares are all allocated. Should
securities remain after this process, eligible AIM Funds will receive
their Allocations on a straight pro rata basis. For the tier of AIM Funds
not receiving a full Allocation, the Allocation may be made only to
certain AIM Funds so that each may receive close to or exactly 40 basis
points.
Any AIM Funds with substantially identical investment objectives and
policies will participate in syndicates in amounts that are substantially
proportionate to each other. In these cases, the net assets of the largest
AIM Fund will be used to determine in which tier, as described in the
paragraph above, such group of AIM Funds will be placed. The price per
share of securities purchased in such syndicate transactions will be the
same for each AIM Fund."
The following is added as a new category of purchaser who will not pay
initial sales charges on purchases of Class A shares, under the heading "THE
DISTRIBUTOR - PURCHASES AT NET ASSET VALUE" on page 33 of the Statement of
Additional Information:
"o Shareholders of record of Advisor Class shares of an AIM Fund on
February 11, 2000 who have continuously owned shares of that AIM Fund,
and who purchase additional shares of that AIM Fund."
The following new paragraph is added after the fifth paragraph
appearing under the heading "INVESTMENT RESULTS- PERFORMANCE INFORMATION" on
page 46 of the Statement of Additional Information:
"Each of the Portfolios may participate in the IPO market, and a
significant portion of those Portfolios' returns may be attributable to
their investment in IPOs, which have a magnified impact due to the
Portfolios' small asset bases. There is no guarantee that as the
Portfolios' assets grow, they will continue to invest to the same degree
in IPOs or that they will experience substantially similar performance."
The following replaces in its entirety the table appearing under the
heading "MANAGEMENT-TRUSTEES AND EXECUTIVE OFFICERS" on page 21 of the
Statement of Additional Information:
4
<PAGE> 16
<TABLE>
<CAPTION>
========================== ======================== ===========================================================
POSITIONS HELD PRINCIPAL OCCUPATION DURING AT LEAST THE
"NAME, ADDRESS AND AGE WITH REGISTRANT PAST 5 YEARS
========================== ======================== ===========================================================
<S> <C> <C>
*ROBERT H. GRAHAM (53) Trustee, Chairman and Director, President and Chief Executive Officer, A I M
President Management Group Inc.; Director and President, A I M
Advisors, Inc.; Director and Senior Vice President, A I M
Capital Management, Inc., A I M Distributors, Inc., A I M
Fund Services, Inc. and Fund Management Company; and
Director and Chief Executive Officer, Managed Products,
AMVESCAP PLC.
- -------------------------- ------------------------ -----------------------------------------------------------
C. DEREK ANDERSON (58) Trustee Senior Managing Partner, Plantagenet Capital Management,
220 Sansome Street LLC (an investment partnership); Chief Executive Officer,
Suite 400 Plantagenet Holdings, Ltd. (an investment banking firm);
San Francisco, CA 94104 and Director, Premium Wear, Inc. (formerly Munsingwear,
Inc.) (a casual apparel company), 'R' Homes, Inc., Big
Online, Inc., Champagne Albert Le Brun and various other
privately owned companies.
- -------------------------- ------------------------ -----------------------------------------------------------
FRANK S. BAYLEY (60) Trustee Partner, law firm of Baker & McKenzie; Trustee, The
Two Embarcadero Center Badgley Funds; and Director and Chairman, C. D. Stimson
Suite 2400 Company (a private investment company) and Stimson Marina,
San Francisco, CA 94111 Inc. (a subsidiary of C. D. Stimson Co.).
- -------------------------- ------------------------ -----------------------------------------------------------
RUTH H. QUIGLEY (64) Trustee Private investor; and President, Quigley Friedlander &
1055 California Street Co., Inc.(a financial advisory services firm) from 1984
San Francisco, CA 94108 to 1986.
- -------------------------- ------------------------ -----------------------------------------------------------
MELVILLE B. COX (56) Vice President Vice President and Chief Compliance Officer, A I M
Advisors, Inc., A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc. and Fund
Management Company.
- -------------------------- ------------------------ -----------------------------------------------------------
GARY T. CRUM (52) Vice President Director and President, A I M Capital Management, Inc.;
Director and Executive Vice President, A I M Management
Group Inc.; Director and Senior Vice President, A I M
Advisors, Inc.; and Director, A I M Distributors, Inc.
and AMVESCAP PLC.
========================== ======================== ===========================================================
</TABLE>
- --------
* A trustee who is an "interested person" of the Trust and AIM as defined in
the 1940 Act.
5
<PAGE> 17
<TABLE>
<CAPTION>
========================== ======================== ===========================================================
POSITIONS HELD PRINCIPAL OCCUPATION DURING AT LEAST THE
NAME, ADDRESS AND AGE WITH REGISTRANT PAST 5 YEARS
========================== ======================== ===========================================================
<S> <C> <C>
CAROL F. RELIHAN (45) Vice President Director, Senior Vice President, General Counsel and
Secretary, A I M Advisors, Inc.; Senior Vice President,
General Counsel and Secretary, A I M Management Group
Inc.; Director, Vice President and General Counsel, Fund
Management Company; Vice President and General Counsel,
A I M Fund Services, Inc.; and Vice President, A I M
Capital Management, Inc. and A I M Distributors, Inc.
- -------------------------- ------------------------ -----------------------------------------------------------
SAMUEL D. SIRKO (40) Vice President and Assistant General Counsel and Assistant Secretary of
Secretary A I M Management Group, Inc., A I M Capital Management, Inc.,
A I M Distributors, Inc., A I M Fund Services, Inc., and
Fund Management Company; and Vice President, Assistant
General Counsel and Assistant Secretary of A I M
Advisors, Inc.
- -------------------------- ------------------------ -----------------------------------------------------------
DANA R. SUTTON (41) Vice President and Vice President and Fund Controller, A I M Advisors, Inc.;
Treasurer and Assistant Vice President and Assistant Treasurer,
Fund Management Company."
========================== ======================== ===========================================================
</TABLE>
6
