<PAGE> 1
[AIM LOGO APPEARS HERE]
AIM
SUMMIT
FUND, INC.
SEMIANNUAL REPORT
APRIL 30,1997
<PAGE> 2
--------------------------
AIM SUMMIT FUND, INC.
For shareholders who seek
capital growth through
systematic investments.
--------------------------
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Summit Fund, Inc.'s performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value. Unless
otherwise indicated, the Fund's performance is computed at net asset value
without a sales charge. When sales charges are included in performance
figures, performance reflects the maximum 8.50% sales charge. The 8.50%
sales charge is attributable to the 15-year investment plan.
o The Fund's average annual total returns were 0.16%, 11.05%, and 10.41% for
the one-, five-, and 10- year periods ended 3/31/97, the most recent
calendar quarter, including sales charges.
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.
o The Fund's portfolio composition is subject to change and there is no
assurance the Fund will continue to hold any particular security.
o Dollar-cost averaging does not assure a profit and does not protect
against loss in declining markets. And since dollar-cost averaging
involves continuous investments regardless of fluctuating securities
prices, investors should consider their ability to continue purchases over
an extended period of time.
o Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Standard & Poor's Composite Index of 500 Stocks (S&P 500) is a group
of unmanaged securities widely regarded by investors to be representative
of the stock market in general.
o The Dow Jones Industrial Average (DJIA) is an unmanaged composite of the
performance of 30 large-company stocks.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
Mutual funds, annuities, and other investments are not insured by the
FDIC or any other government agency; are not deposits or other
obligations of, or guaranteed by, any bank or any affiliate;
and are subject to investment risks, including possible loss
of principal amount invested.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the Fund.
<PAGE> 3
The Chairman's Letter
Dear Fellow Shareholder:
We have seen a great deal of change in the markets during
the past few months, change that has been unsettling even
for experienced market watchers.
In many instances the change has occurred suddenly as the
[Photo of markets have fluctuated widely during the past six months.
Charles T. The popular Dow Jones Industrial Average of 30 large
Bauer, companies ranged from just over 7000 to just below 6400
Chairman of before strengthening once again and regaining its lost
the Board of ground. Both the Russell 2000 Index, judged to be the
THE FUND, benchmark for small-cap stocks, and the Dow recently have
APPEARS HERE] set records.
The point we want to emphasize is that such volatility
seems to be the norm rather than the exception in the
current market. Although most attention has been on the
large stocks in the S&P 500 index, the broad-based index
generally considered "the market," small- and mid-cap
companies have been even more volatile. Indexes for smaller companies were down
as much as 20% before their recent rebound. Similarly, bonds fluctuated widely
as concerns mounted over the possibility of rising interest rates.
What does all of this mean? In past reports, we suggested that the 20%-30%
returns of 1995 and 1996 were unlikely to continue uninterrupted, and we have
seen that to be true so far in 1997. However, we are still experiencing the
longest bull market in history, now in its seventh year. For hundreds of
thousands of investors, this bull market is the only investment climate they
have ever known. If you have been invested in stocks only since 1990, your
experience has truly been extraordinary: the S&P 500 had an annual return of
30% in 1991, 38% in 1995, and 23% in 1996. And not one down year.
Of course, returns such as those we've enjoyed in this bull market are well
above the averages for stocks. That has led mutual fund managers, financial
consultants, and market experts to voice concern that some investors may not be
prepared for more modest returns that are in line with historical averages.
And, although we've seen nothing but advances in the S&P 500 since 1990, it is
important to remember that the market has averaged a down year one out of every
three years since 1928.
KEEP REALISTIC EXPECTATIONS
What many investors may not realize is that periodic declines are inevitable.
In every market, there is always some segment, and some investment strategies,
that occasionally fall out of favor. Declines similar to what we have seen in
the small-cap and mid-cap sectors during the past six months often are more
severe than warranted; that is, they take good stocks down with the bad. Of
course, that lets us pick stocks just as prices for many attractive companies
are near their lowest for the year.
Not that we expect severe declines ahead. But it is important to maintain
realistic expectations about investment performance. Indeed, indications are
that stock performance may be returning to historic norms closer to 10% return
per year than 20%.
It's also a good idea to reassess your financial goals periodically with
your financial consultant. Managing your investments in changing markets can be
challenging. But your financial consultant knows a few timetested investment
strategies that can help. Diversification can help you cushion the effects of
volatility.
On the following pages, your Fund's portfolio management team offers a
complete discussion of recent market conditions and how the Fund was affected.
They also discuss
---------------------------------
In every market, there is
always some segment,
and some investment strategies,
that occasionally fall
out of favor.
---------------------------------
Continued on next page
<PAGE> 4
------------------------------------
It's also a good idea
to reassess
your financial goals periodically
with your financial consultant.
------------------------------------
the Fund's portfolio strategy: why they believe the portfolio is
well-positioned for growth, and why they are confident that the reasons for
investing in the Fund are as compelling as ever. These discussions will help
you better understand the relative performance of your Fund.
AIM/INVESCO MERGER FINALIZED
We are pleased to announce that the merger of A I M Management Group Inc. and
INVESCO plc was concluded on February 28, 1997. AIM is now part of one of the
world's largest independent investment management groups with approximately
$170 billion in assets under management. The combined company, AMVESCAP plc,
has the financial strength necessary to meet your needs in an increasingly
competitive financial services environment, both in the United States and
worldwide. And, we will not change the portfolio management, investment style,
or name of any of the AIM funds you own. We have begun a new and promising era
for AIM, one we believe will yield exciting opportunities.
We appreciate the trust you have placed in us and we look forward to our
continued close association. If you have any questions or comments about this
report, we invite you to call Client Services at 800-959-4246 during normal
business hours. For automated account information 24 hours a day, call the AIM
Investor Line at 800-246-5463. We also invite you to visit AIM's Internet Web
site at www.aimfunds.com.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
2
<PAGE> 5
The Managers' Overview
NARROW MARKET CREATES CHALLENGING PERIOD FOR AIM SUMMIT FUND, INC.
A roundtable discussion with the Fund management team for AIM Summit Fund, Inc.
for the six-month period ended April 30, 1997.
- ------------------------------------------------------------------------------
Q. HOW DID AIM SUMMIT FUND, INC. PERFORM DURING THE SIX-MONTH PERIOD COVERED
BY THIS REPORT?
A. Unusual market conditions made it a difficult period for AIM Summit Fund,
and that was reflected in its total return of 3.59%. However, six months
is an extremely short measurement period for stocks. The Fund's
respectable long-term record remained intact as shown by the chart below.
===============================================================================
AVERAGE ANNUAL TOTAL RETURNS
- -------------------------------------------------------------------------------
As of 4/30/97, based on net asset value
10 YEARS 11.94%
5 YEARS 13.76
1 YEAR 8.43
===============================================================================
Q. WHAT MARKET CONDITIONS CREATED DIFFICULTY FOR THE FUND?
A. Volatility dominated the stock markets throughout the reporting period.
The Dow Jones Industrial Average (DJIA) continued to set records, but its
performance was marked by two significant downturns, one in December 1996
and the second from mid-March to mid-April. During the second decline, the
DJIA lost 9.8% of its value-just short of the 10% correction many market
observers had predicted, given the prolonged length of the current bull
market. However, by the end of the period, the DJIA had recouped most of
its losses.
The primary cause of market volatility was continuing uncertainty
regarding interest rates, the strength of the economy, and the outlook for
corporate earnings. In such an environment, investors are drawn to the
relative safety and liquidity of stocks in large,predictable companies.
It's a phenomenon often termed a "flight to quality" and during the
reporting period, it resulted in what is known as a "narrow" market.
Q. HOW WOULD YOU DESCRIBE A "NARROW" MARKET?
A. In a narrow market, the performance of a market index is generated by a
comparatively few stocks. For example, if the stocks of the 100 largest
companies in the Standard and Poor's Composite Index of 500 Stocks (S&P
500) are subtracted from that index, its performance for 1996 drops from
22.95% to about 5.4%. In other words, 20% of the stocks in that index
accounted for more than 75% of its total return.
This unusual environment puts a highly diversified mutual fund such
as AIM Summit Fund at a disadvantage because of its relatively small
holdings of several hundred stocks. AIM Summit Fund had 318 holdings at
the end of the reporting period. Although diversification means that the
Fund may not realize all the gains in a narrow market rally, it may not
suffer as significant losses in a market downturn.
Q. HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD?
A. The Fund's top equity holdings were in the following sectors: technology,
28%; health-care, 15%; and financial, 14%. These are broad categories that
include a wide variety of industries. The health-care sector, for example,
includes drugs, patient services, and medical instruments/products.
Q. GIVEN THE VOLATILITY IN THAT SECTOR, WHY DOES THE FUND HAVE SO MUCH
INVESTED IN TECHNOLOGY?
A. The Fund invests only in the stocks of technology companies that meet our
earnings criteria. Many technology companies reported excellent earnings
for the first quarter of 1997, and our stock-selection process found a
number of technology firms we consider very promising. Moreover, we
shifted our emphasis within this sector, which continues to show
high-growth potential.
During the reporting period, we reduced our holdings in computer
networking stocks, when earnings fell short of expectations, from more
than 5% to less than 1% of the portfolio. At the same time, we increased
our holdings in semiconductor makers, whose stocks were up significantly,
from about 2.5% to nearly 7% of the portfolio. We increased our stake in
Texas Instruments, whose operating profit rose substantially this year.
Texas Instruments' revenue and profit growth came mainly from
differentiated products used for data communications, a flourishing
industry.
Q. WHERE WAS YOUR FOCUS IN HEALTH-CARE STOCKS?
A. Our primary emphasis was on the stocks of pharmaceutical companies and
---------------------------
The Fund's
respectable
long-term record
remained intact ...
---------------------------
See important Fund & index disclosures inside front cover.
3
<PAGE> 6
PORTFOLIO COMPOSITION
As of 4/30/97, based on total net assets
<TABLE>
<CAPTION>
=====================================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
=====================================================================================================================
<S> <C> <C> <C>
1 Dell Computer Corp. 1.28% 1 Retail (Stores) 7.05%
2 Conseco Inc. 1.18 2 Computer Software/Services 6.95
3 Student Loan Marketing Association 1.08 3 Semiconductors 6.88
4 Safeway Inc. 1.02 4 Medical (Drugs) 5.14
5 Applied Materials, Inc. 0.98 5 Medical (Patient Services) 4.82
6 UAL Corp. 0.97 6 Oil Equipment & Supplies 4.43
7 H. F. Ahmanson & Co. 0.94 7 Telecommunications 4.33
8 Microsoft Corp. 0.92 8 Finance (Consumer Credit) 3.83
9. Compaq Computer Corp. 0.90 9 Computer Mini/PCs 3.69
10. United Technologies Corp. 0.90 10 Oil & Gas (Services) 3.50
</TABLE>
Please keep in mind that the Fund's portfolio is subject to change
and there is no assurance the Fund will continue to hold any particular
security.
===============================================================================
patient-care providers. Pharmaceutical manufacturers in the portfolio
include such recognizable names as SmithKline Beecham and Bristol-Myers
Squibb. Both companies are bringing a steady stream of new products to the
market and are reporting substantial earnings growth.
In the patient-care area, health maintenance organizations continue
to lead the efficiency drive in the U.S. health-care industry and have
recently improved their pricing structure. United HealthCare, a managed
health-care provider, was among the Fund's holdings in this area. The Fund
also benefited from holding Oxford Health Plans, a Connecticut-based
health benefit plan provider whose revenues increased 50% during the first
quarter of 1997.
Considering the aging of the baby boomer population, we believe
health care will remain a promising area for investment for a long time.
Q. WHAT DID YOU FIND ATTRACTIVE ABOUT FINANCIAL COMPANY STOCKS?
A. The relatively long period of stable interest rates and low inflation has
created a favorable environment for financial companies. We expect this
sector to remain vibrant as long as inflation is held in check. Another
attraction is the consolidating and restructuring that is going on in the
banking and savings and loan industries. For example, we owned stock in
Chase Manhattan, which was involved in a merger with Chemical Banking in
1996, and reported a significant rise in income for the first quarter of
1997.
In the consumer-credit field, our holdings included the Student Loan
Marketing Association, the nation's leading provider of financial funding
for college education loans, and the Federal National Mortgage Association
and the Federal Home Mortgage Association, the most important players in
the home mortgage market.
Q. WHAT IS YOUR MARKET OUTLOOK?
A. After two extraordinary years of unusually high returns on stocks, many
professionals were warning about the potential for a significant market
decline, with some making forecasts of a 20% correction. Nevertheless,
after the near correction of early spring, the markets recovered swiftly
and completely. The Fund benefited from the rally, posting a total return
of 8.85% for the one-month period from April 30, 1997 to May 31, 1997. And
the optimism seems well-grounded.
In the U.S., the economic fundamentals are encouraging: there is
minimal inflation,which caused the Federal Reserve Board to leave monetary
policy unchanged at its May meeting and dampens expectations for rising
interest rates; the economy is growing at a healthy clip; and for a record
17 quarters in a row, corporate earnings have outstripped analysts'
forecasts.
Nonetheless, it is important that investors maintain realistic
expectations about investment performance. We have enjoyed record-breaking
returns from stocks in recent years, but indications are that stock
performance may be returning to historic norms that bear closer to 10% per
year than 20%.
-----------------
In the U.S.,
the economic
fundamentals are
encouraging ...
-----------------
See important Fund & index disclosures inside front cover.
4
<PAGE> 7
Long-Term Performance
EARNINGS-BASED APPROACH PRODUCES IMPRESSIVE LONG-TERM RESULTS
===============================================================================
Growth of a $200 Monthly Investment
11/30/82 - 4/30/97
- -------------------------------------------------------------------------------
AIM Summit Fund
- -------------------------------------------------------------------------------
(In thousands)
4/30/83 1,333
4/30/84 3,249
4/30/85 6,383
4/30/86 11,448
4/30/87 16,742
4/30/88 16,914
4/30/89 22,975
4/30/90 27,431
4/30/91 36,739
4/30/92 44,752
4/30/93 51,165
4/30/94 57,602
4/30/95 66,716
4/30/96 92,391
4/30/97 102,671
Past performance cannot guarantee comparable future results.
Source: Lipper Analytical Services, Inc.
===============================================================================
AVERAGE ANNUAL TOTAL RETURNS
For periods ended 3/31/97, the most recent calendar quarter, including sales
charges.
1 YEAR 0.16%
3 YEARS 12.92
5 YEARS 11.05
10 YEARS 10.41
INCEPTION 11.90
Performance reflects reinvestment of all distributions and effect of all sales
charges. A mutual 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. Summit Investors Plans employ dollar-cost averaging which
does not assure a profit and does not protect against loss in declining
markets. Since dollar-cost averaging involves continuous investing regardless
of fluctuating securities prices, investors should consider their ability to
continue purchases over an extended period of time.
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
April 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-96.74%
ADVERTISING/BROADCASTING-0.63%
American Radio Systems Corp.(a) 20,000 $ 585,000
- ---------------------------------------------------------------
Clear Channel Communications,
Inc.(a) 80,800 3,918,800
- ---------------------------------------------------------------
Interpublic Group of Companies,
Inc. 39,000 2,208,375
- ---------------------------------------------------------------
Jacor Communications, Inc.(a) 55,000 1,546,875
- ---------------------------------------------------------------
8,259,050
- ---------------------------------------------------------------
AEROSPACE/DEFENSE-1.01%
Gulfstream Aerospace Corp.(a) 54,300 1,384,650
- ---------------------------------------------------------------
United Technologies Corp. 158,000 11,948,750
- ---------------------------------------------------------------
13,333,400
- ---------------------------------------------------------------
AIRLINES-1.08%
Southwest Airlines Co. 49,000 1,347,500
- ---------------------------------------------------------------
UAL Corp.(a) 173,000 12,866,875
- ---------------------------------------------------------------
14,214,375
- ---------------------------------------------------------------
APPLIANCES-0.02%
Philips Electronics N.V.-ADR-New
York shares (Netherlands) 6,100 326,350
- ---------------------------------------------------------------
AUTOMOBILE (MANUFACTURERS)-0.45%
Chrysler Corp. 200,000 6,000,000
- ---------------------------------------------------------------
AUTOMOBILE/TRUCK PARTS &
TIRES-0.56%
Cummins Engine Co., Inc. 131,500 7,380,438
- ---------------------------------------------------------------
BANKING (MONEY CENTER)-1.05%
BankAmerica Corp. 50,000 5,843,750
- ---------------------------------------------------------------
Chase Manhattan Corp. 87,152 8,072,454
- ---------------------------------------------------------------
13,916,204
- ---------------------------------------------------------------
BEVERAGES (ALCOHOLIC)-0.12%
Cerner Corp.(a) 100,000 1,612,500
- ---------------------------------------------------------------
BEVERAGES (SOFT DRINKS)-0.05%
PepsiCo, Inc. 17,900 624,262
- ---------------------------------------------------------------
BIOTECHNOLOGY-1.64%
Amgen, Inc.(a) 110,000 6,476,250
- ---------------------------------------------------------------
Biogen, Inc.(a) 111,500 3,568,000
- ---------------------------------------------------------------
Guidant Corp. 170,000 11,602,500
- ---------------------------------------------------------------
21,646,750
- ---------------------------------------------------------------
BUSINESS SERVICES-1.53%
AccuStaff, Inc.(a) 147,540 2,692,605
- ---------------------------------------------------------------
Cognizant Corp. 152,200 4,965,525
- ---------------------------------------------------------------
Corrections Corp. of America(a) 23,800 776,475
- ---------------------------------------------------------------
CUC International, Inc.(a) 56,400 1,191,450
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
BUSINESS SERVICES-(CONTINUED)
Diebold, Inc. 75,850 $ 2,540,975
- ---------------------------------------------------------------
Equifax, Inc. 125,400 3,605,250
- ---------------------------------------------------------------
Ingram Micro, Inc.-Class A(a) 121,300 2,759,575
- ---------------------------------------------------------------
Paychex, Inc. 36,900 1,727,380
- ---------------------------------------------------------------
20,259,235
- ---------------------------------------------------------------
CHEMICALS-0.73%
Monsanto Co. 75,300 3,219,075
- ---------------------------------------------------------------
Rohm & Haas Co. 77,200 6,426,900
- ---------------------------------------------------------------
9,645,975
- ---------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.50%
Cytec Industries Inc.(a) 175,000 6,584,375
- ---------------------------------------------------------------
COMPUTER MAINFRAMES-0.28%
International Business Machines
Corp. 23,000 3,697,250
- ---------------------------------------------------------------
COMPUTER MINI/PCS-3.69%
Compaq Computer Corp.(a) 140,000 11,952,500
- ---------------------------------------------------------------
Dell Computer Corp.(a) 202,400 16,938,350
- ---------------------------------------------------------------
Gateway 2000, Inc.(a) 63,500 3,484,562
- ---------------------------------------------------------------
Hewlett-Packard Co. 120,000 6,300,000
- ---------------------------------------------------------------
Sun Microsystems, Inc.(a) 351,600 10,130,475
- ---------------------------------------------------------------
48,805,887
- ---------------------------------------------------------------
COMPUTER NETWORKING-0.93%
Ascend Communications, Inc.(a) 69,800 3,193,350
- ---------------------------------------------------------------
Cabletron Systems, Inc.(a) 100,000 3,450,000
- ---------------------------------------------------------------
Newbridge Networks Corp.(a)
(Canada) 179,000 5,683,250
- ---------------------------------------------------------------
12,326,600
- ---------------------------------------------------------------
COMPUTER PERIPHERALS-1.55%
Adaptec, Inc.(a) 109,000 4,033,000
- ---------------------------------------------------------------
EMC Corp.(a) 165,000 6,001,875
- ---------------------------------------------------------------
Microchip Technology, Inc.(a) 100,200 3,131,250
- ---------------------------------------------------------------
Seagate Technology, Inc.(a) 75,000 3,440,625
- ---------------------------------------------------------------
Storage Technology Corp.(a) 110,000 3,863,750
- ---------------------------------------------------------------
20,470,500
- ---------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES-6.95%
Adobe Systems, Inc. 75,000 2,934,375
- ---------------------------------------------------------------
Affiliated Computer Services,
Inc.(a) 26,200 681,200
- ---------------------------------------------------------------
Baan Co., N.V.(a) (Netherlands) 31,900 1,714,625
- ---------------------------------------------------------------
BISYS Group, Inc. (The)(a) 30,000 960,000
- ---------------------------------------------------------------
BMC Software, Inc.(a) 140,000 6,055,000
- ---------------------------------------------------------------
Cadence Design Systems, Inc.(a) 145,075 4,642,400
- ---------------------------------------------------------------
Computer Associates
International, Inc. 100,000 5,200,000
- ---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTER SOFTWARE/SERVICES-(CONTINUED)
Compuware Corp.(a) 280,000 $ 10,570,000
- ---------------------------------------------------------------
CSG Systems International,
Inc.(a) 35,300 626,575
- ---------------------------------------------------------------
DST Systems, Inc.(a) 67,500 1,915,312
- ---------------------------------------------------------------
Electronic Arts, Inc.(a) 47,600 1,148,350
- ---------------------------------------------------------------
First Data Corp. 46,000 1,587,000
- ---------------------------------------------------------------
Fiserv, Inc.(a) 70,000 2,642,500
- ---------------------------------------------------------------
HBO & Co. 107,900 5,772,650
- ---------------------------------------------------------------
HPR, Inc.(a) 33,000 466,125
- ---------------------------------------------------------------
McAfee Associates, Inc.(a) 75,000 4,181,250
- ---------------------------------------------------------------
Microsoft Corp.(a) 100,000 12,150,000
- ---------------------------------------------------------------
National Data Corp. 82,000 3,075,000
- ---------------------------------------------------------------
Network General Corp.(a) 119,200 1,639,000
- ---------------------------------------------------------------
Oracle Corp.(a) 100,000 3,975,000
- ---------------------------------------------------------------
Parametric Technology Co.(a) 161,100 7,289,775
- ---------------------------------------------------------------
Sterling Commerce, Inc.(a) 181,211 4,688,835
- ---------------------------------------------------------------
Sterling Software, Inc.(a) 39,000 1,189,500
- ---------------------------------------------------------------
SunGard Data Systems Inc.(a) 33,900 1,504,312
- ---------------------------------------------------------------
Sybase, Inc.(a) 56,400 831,900
- ---------------------------------------------------------------
Synopsys, Inc.(a) 115,000 3,665,625
- ---------------------------------------------------------------
Transition Systems, Inc.(a) 1,400 16,800
- ---------------------------------------------------------------
Wind River Systems(a) 30,000 690,000
- ---------------------------------------------------------------
91,813,109
- ---------------------------------------------------------------
CONGLOMERATES-1.52%
AlliedSignal Inc. 38,900 2,810,525
- ---------------------------------------------------------------
Corning Inc. 108,000 5,211,000
- ---------------------------------------------------------------
Johnson Controls, Inc. 110,000 4,221,250
- ---------------------------------------------------------------
Tyco International Ltd. 80,000 4,880,000
- ---------------------------------------------------------------
U.S. Industries, Inc.(a) 83,700 3,023,662
- ---------------------------------------------------------------
20,146,437
- ---------------------------------------------------------------
CONSUMER NON-DURABLES-0.08%
Central Garden and Pet Co.(a) 55,000 1,096,562
- ---------------------------------------------------------------
COSMETICS & TOILETRIES-1.20%
Gillette Co. 40,000 3,400,000
- ---------------------------------------------------------------
McKesson Corp. 20,100 1,454,737
- ---------------------------------------------------------------
Procter & Gamble Co. (The) 60,000 7,545,000
- ---------------------------------------------------------------
Rexall Sundown, Inc.(a) 48,100 955,988
- ---------------------------------------------------------------
Warner-Lambert Co. 25,000 2,450,000
- ---------------------------------------------------------------
15,805,725
- ---------------------------------------------------------------
ELECTRIC POWER-0.35%
AES Corp.(a) 20,000 1,305,000
- ---------------------------------------------------------------
Texas Utilities Co. 100,000 3,375,000
- ---------------------------------------------------------------
4,680,000
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRONIC COMPONENTS/MISCELLANEOUS-1.52%
Berg Electronics Corp.(a) 31,400 $ 942,000
- ---------------------------------------------------------------
BMC Industries, Inc. 29,800 864,200
- ---------------------------------------------------------------
General Electric Co. 19,300 2,139,887
- ---------------------------------------------------------------
Honeywell, Inc. 24,600 1,737,375
- ---------------------------------------------------------------
Micron Electronics, Inc.(a) 85,000 1,731,875
- ---------------------------------------------------------------
Raychem Corp. 9,900 638,550
- ---------------------------------------------------------------
Symbol Technologies, Inc.(a) 58,800 1,903,650
- ---------------------------------------------------------------
Teradyne, Inc.(a) 240,300 7,869,825
- ---------------------------------------------------------------
Thermo Instrument Systems,
Inc.(a) 71,900 2,255,862
- ---------------------------------------------------------------
20,083,224
- ---------------------------------------------------------------
ELECTRONIC/PC DISTRIBUTORS-0.15%
Arrow Electronics, Inc.(a) 23,200 1,290,500
- ---------------------------------------------------------------
Avnet, Inc. 11,300 687,887
- ---------------------------------------------------------------
1,978,387
- ---------------------------------------------------------------
FINANCE (ASSET MANAGEMENT)-1.90%
Franklin Resources, Inc. 66,900 3,955,463
- ---------------------------------------------------------------
Imperial Credit Industries,
Inc.(a) 100,000 1,456,250
- ---------------------------------------------------------------
Merrill Lynch & Co., Inc. 70,000 6,667,500
- ---------------------------------------------------------------
Paine Webber Group Inc. 178,000 6,052,000
- ---------------------------------------------------------------
T. Rowe Price Associates 150,000 6,937,500
- ---------------------------------------------------------------
25,068,713
- ---------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-3.83%
Aames Financial Corp. 11,200 172,200
- ---------------------------------------------------------------
American Express Co. 31,200 2,055,300
- ---------------------------------------------------------------
Capital One Financial Corp. 94,500 3,413,812
- ---------------------------------------------------------------
Concord EFS, Inc.(a) 123,700 2,443,075
- ---------------------------------------------------------------
Credit Acceptance Corp.(a) 29,200 315,725
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp. 156,000 4,972,500
- ---------------------------------------------------------------
Federal National Mortgage
Association 137,900 5,671,138
- ---------------------------------------------------------------
Green Tree Financial Corp. 212,900 6,307,162
- ---------------------------------------------------------------
IMC Mortgage Co.(a) 75,000 843,750
- ---------------------------------------------------------------
MBNA Corp. 173,800 5,735,400
- ---------------------------------------------------------------
Money Store, Inc. (The) 75,000 1,621,875
- ---------------------------------------------------------------
PMT Services, Inc.(a) 50,000 593,750
- ---------------------------------------------------------------
Student Loan Marketing
Association 120,200 14,213,650
- ---------------------------------------------------------------
SunAmerica, Inc. 50,000 2,300,000
- ---------------------------------------------------------------
50,659,337
- ---------------------------------------------------------------
FINANCE (SAVINGS & LOAN)-1.54%
GreenPoint Financial Corp. 100,000 5,537,500
- ---------------------------------------------------------------
H.F. Ahmanson & Co. 325,000 12,390,625
- ---------------------------------------------------------------
Washington Mutual, Inc. 50,000 2,468,750
- ---------------------------------------------------------------
20,396,875
- ---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOOD/PROCESSING-0.57%
ConAgra, Inc. 66,000 $ 3,803,250
- ---------------------------------------------------------------
Dean Foods Co. 100,000 3,687,500
- ---------------------------------------------------------------
7,490,750
- ---------------------------------------------------------------
FUNERAL SERVICES-0.72%
Equity Corp. International(a) 25,300 543,950
- ---------------------------------------------------------------
Service Corp. International 260,000 8,905,000
- ---------------------------------------------------------------
9,448,950
- ---------------------------------------------------------------
GAS DISTRIBUTION-0.26%
NICOR, Inc. 100,000 3,387,500
- ---------------------------------------------------------------
HOTELS/MOTELS-0.71%
Choice Hotels International,
Inc.(a) 84,500 1,183,000
- ---------------------------------------------------------------
HFS, Inc.(a) 75,000 4,443,750
- ---------------------------------------------------------------
Marriot International, Inc. 45,000 2,486,250
- ---------------------------------------------------------------
Promus Hotel Corp.(a) 35,000 1,233,750
- ---------------------------------------------------------------
9,346,750
- ---------------------------------------------------------------
INSURANCE (LIFE & HEALTH)-1.75%
Conseco Inc. 378,300 15,652,162
- ---------------------------------------------------------------
Equitable Companies, Inc. 254,000 7,429,500
- ---------------------------------------------------------------
23,081,662
- ---------------------------------------------------------------
INSURANCE (MULTI-LINE PROPERTY)-3.40%
Allstate Corp. 72,900 4,774,950
- ---------------------------------------------------------------
American International Group,
Inc. 33,000 4,240,500
- ---------------------------------------------------------------
CapMAC Holdings, Inc. 48,100 1,250,600
- ---------------------------------------------------------------
CIGNA Corp. 50,000 7,518,750
- ---------------------------------------------------------------
Everest Reinsurance Holdings,
Inc. 106,800 3,070,500
- ---------------------------------------------------------------
ITT Hartford Group, Inc. 43,000 3,203,500
- ---------------------------------------------------------------
MGIC Investment Corp. 130,000 10,562,500
- ---------------------------------------------------------------
Progressive Corp. 3,200 243,600
- ---------------------------------------------------------------
Travelers Group, Inc. 180,600 10,000,725
- ---------------------------------------------------------------
44,865,625
- ---------------------------------------------------------------
LEISURE & RECREATION-0.76%
Carnival Corp.-Class A 80,000 2,950,000
- ---------------------------------------------------------------
Harley-Davidson, Inc. 82,100 3,242,950
- ---------------------------------------------------------------
Regal Cinemas, Inc.(a) 50,000 1,362,500
- ---------------------------------------------------------------
Speedway Motorsports, Inc.(a) 21,700 452,988
- ---------------------------------------------------------------
Walt Disney Co. (The) 25,000 2,050,000
- ---------------------------------------------------------------
10,058,438
- ---------------------------------------------------------------
MACHINE TOOLS-0.05%
Precision Castparts Corp. 13,000 695,500
- ---------------------------------------------------------------
MACHINERY (HEAVY)-1.30%
Caterpillar Inc. 55,000 4,895,000
- ---------------------------------------------------------------
Harnischfeger Industries, Inc. 160,000 6,660,000
- ---------------------------------------------------------------
Ingersoll-Rand Co. 115,000 5,649,375
- ---------------------------------------------------------------
17,204,375
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MACHINERY (MISCELLANEOUS)-0.80%
Pentair, Inc. 19,200 $ 573,600
- ---------------------------------------------------------------
Thermo Electron Corp.(a) 291,250 10,048,125
- ---------------------------------------------------------------
10,621,725
- ---------------------------------------------------------------
MEDICAL (DRUGS)-5.14%
Abbott Laboratories 61,500 3,751,500
- ---------------------------------------------------------------
American Home Products Corp. 110,000 7,287,500
- ---------------------------------------------------------------
AmeriSource Health Corp.-Class
A(a) 53,000 2,365,125
- ---------------------------------------------------------------
Bristol-Myers Squibb Co. 95,200 6,235,600
- ---------------------------------------------------------------
Cardinal Health, Inc. 157,500 8,386,875
- ---------------------------------------------------------------
Dura Pharmaceuticals, Inc.(a) 100,000 2,900,000
- ---------------------------------------------------------------
Elan Corp. PLC-ADR(a) (Ireland) 172,000 5,848,000
- ---------------------------------------------------------------
Johnson & Johnson 98,500 6,033,125
- ---------------------------------------------------------------
Jones Medical Industries, Inc. 42,000 1,480,500
- ---------------------------------------------------------------
Merck & Co., Inc. 50,000 4,525,000
- ---------------------------------------------------------------
Parexel International Corp.(a) 27,200 761,600
- ---------------------------------------------------------------
Pfizer, Inc. 35,000 3,360,000
- ---------------------------------------------------------------
Rhone-Poulenc Rorer, Inc. 26,000 1,875,250
- ---------------------------------------------------------------
SmithKline Beecham PLC-ADR
(United Kingdom) 101,000 8,143,125
- ---------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd.-ADR (Israel) 70,000 3,552,500
- ---------------------------------------------------------------
Watson Pharmaceuticals, Inc.(a) 37,300 1,333,475
- ---------------------------------------------------------------
67,839,175
- ---------------------------------------------------------------
MEDICAL (PATIENT SERVICES)-4.82%
Columbia/HCA Healthcare Corp. 201,200 7,042,000
- ---------------------------------------------------------------
Genesis Health Ventures, Inc.(a) 32,700 976,913
- ---------------------------------------------------------------
Health Management Associates,
Inc.-Class A(a) 200,000 5,350,000
- ---------------------------------------------------------------
Health Care and Retirement
Corp.(a) 100,000 3,162,500
- ---------------------------------------------------------------
HEALTHSOUTH Corp.(a) 510,000 10,072,500
- ---------------------------------------------------------------
Humana, Inc.(a) 65,000 1,413,750
- ---------------------------------------------------------------
Lincare Holdings, Inc.(a) 120,000 4,710,000
- ---------------------------------------------------------------
MedPartners, Inc.(a) 107,800 1,967,350
- ---------------------------------------------------------------
OccuSystems, Inc.(a) 25,000 515,625
- ---------------------------------------------------------------
Orthodontic Centers of America,
Inc.(a) 52,400 628,800
- ---------------------------------------------------------------
Oxford Health Plans, Inc.(a) 107,500 7,081,562
- ---------------------------------------------------------------
PacifiCare Health Systems,
Inc.-Class B(a) 15,000 1,203,750
- ---------------------------------------------------------------
Tenet Healthcare Corp.(a) 354,500 9,217,000
- ---------------------------------------------------------------
Total Renal Care Holdings,
Inc.(a) 34,300 1,101,887
- ---------------------------------------------------------------
United Healthcare Corp. 95,000 4,619,375
- ---------------------------------------------------------------
Universal Health Services,
Inc.-Class B(a) 77,100 2,920,162
- ---------------------------------------------------------------
Wellpoint Health Networks,
Inc.(a) 40,000 1,690,000
- ---------------------------------------------------------------
63,673,174
- ---------------------------------------------------------------
MEDICAL INSTRUMENTS/PRODUCTS-2.88%
Baxter International Inc. 125,000 5,984,375
- ---------------------------------------------------------------
Becton, Dickinson & Co. 82,000 3,772,000
- ---------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MEDICAL INSTRUMENTS/PRODUCTS-(CONTINUED)
Boston Scientific Corp.(a) 74,900 $ 3,613,925
- ---------------------------------------------------------------
Dentsply International, Inc. 35,500 1,757,250
- ---------------------------------------------------------------
Hillenbrand Industries, Inc. 36,500 1,569,500
- ---------------------------------------------------------------
Invacare Corp. 37,000 735,375
- ---------------------------------------------------------------
Omnicare, Inc. 159,900 3,897,562
- ---------------------------------------------------------------
Physician Sales & Service,
Inc.(a) 40,000 580,000
- ---------------------------------------------------------------
Quintiles Transnational Corp.(a) 36,200 1,841,675
- ---------------------------------------------------------------
Stryker Corp. 100,000 3,287,500
- ---------------------------------------------------------------
Sybron International Corp.(a) 206,900 6,879,425
- ---------------------------------------------------------------
US Surgical Corp. 120,000 4,110,000
- ---------------------------------------------------------------
38,028,587
- ---------------------------------------------------------------
METALS-0.52%
Cyprus Amax Minerals Co. 306,000 6,846,750
- ---------------------------------------------------------------
NATURAL GAS PIPELINE-0.54%
Columbia Gas System, Inc. 114,600 7,090,875
- ---------------------------------------------------------------
OFFICE AUTOMATION-0.59%
Danka Business Systems PLC-ADR
(United Kingdom) 115,300 3,523,856
- ---------------------------------------------------------------
Xerox Corp. 70,000 4,305,000
- ---------------------------------------------------------------
7,828,856
- ---------------------------------------------------------------
OFFICE PRODUCTS-0.46%
Avery Dennison Corp. 62,000 2,278,500
- ---------------------------------------------------------------
Reynolds & Reynolds Co.- Class A 185,000 3,838,750
- ---------------------------------------------------------------
6,117,250
- ---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.84%
Apache Corp. 32,000 1,088,000
- ---------------------------------------------------------------
Burlington Resources, Inc. 41,100 1,741,613
- ---------------------------------------------------------------
Santa Fe Energy Resources,
Inc.(a) 100,000 1,412,500
- ---------------------------------------------------------------
USX-Marathon Group 250,000 6,906,250
- ---------------------------------------------------------------
11,148,363
- ---------------------------------------------------------------
OIL & GAS (REFINING & MARKETING)-0.53%
Valero Energy Corp. 200,000 7,025,000
- ---------------------------------------------------------------
OIL & GAS (SERVICES)-3.50%
British Petroleum Co. PLC-ADR
(United Kingdom) 70,000 9,633,750
- ---------------------------------------------------------------
Camco International, Inc. 100,000 4,437,500
- ---------------------------------------------------------------
Energy Ventures, Inc.(a) 71,000 4,748,125
- ---------------------------------------------------------------
Exxon Corp. 122,000 6,908,250
- ---------------------------------------------------------------
Global Marine, Inc.(a) 150,000 3,018,750
- ---------------------------------------------------------------
Halliburton Co. 20,000 1,412,500
- ---------------------------------------------------------------
Pennzoil Co. 109,000 5,368,250
- ---------------------------------------------------------------
Phillips Petroleum Co. 50,000 1,968,750
- ---------------------------------------------------------------
Royal Dutch Petroleum Co.-ADR-New
York shares (Netherlands) 16,500 2,974,125
- ---------------------------------------------------------------
Texaco, Inc. 55,000 5,802,500
- ---------------------------------------------------------------
46,272,500
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL EQUIPMENT & SUPPLIES-4.43%
Baker Hughes, Inc. 270,000 $ 9,315,000
- ---------------------------------------------------------------
Coastal Corp. 42,000 1,995,000
- ---------------------------------------------------------------
Cooper Cameron Corp.(a) 110,000 7,837,500
- ---------------------------------------------------------------
Diamond Offshore Drilling,
Inc.(a) 105,000 6,759,375
- ---------------------------------------------------------------
ENSCO International, Inc.(a) 140,000 6,650,000
- ---------------------------------------------------------------
Falcon Drilling Co., Inc.(a) 50,000 1,912,500
- ---------------------------------------------------------------
Marine Drilling Companies,
Inc.(a) 196,300 3,091,725
- ---------------------------------------------------------------
Pride Petroleum Services, Inc.(a) 145,000 2,501,250
- ---------------------------------------------------------------
Rowan Companies, Inc.(a) 226,000 4,068,000
- ---------------------------------------------------------------
Schlumberger Ltd. 55,000 6,091,250
- ---------------------------------------------------------------
Smith International, Inc.(a) 85,000 4,026,875
- ---------------------------------------------------------------
Tidewater, Inc. 58,000 2,327,250
- ---------------------------------------------------------------
Varco International, Inc.(a) 85,800 1,973,400
- ---------------------------------------------------------------
58,549,125
- ---------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.29%
Kimberly-Clark Corp. 75,300 3,859,125
- ---------------------------------------------------------------
POLLUTION CONTROL-0.39%
United Waste Systems, Inc.(a) 55,000 1,856,250
- ---------------------------------------------------------------
USA Waste Services, Inc.(a) 100,000 3,275,000
- ---------------------------------------------------------------
5,131,250
- ---------------------------------------------------------------
RESTAURANTS-0.56%
Applebee's International, Inc. 109,900 2,568,913
- ---------------------------------------------------------------
Cracker Barrel Old Country Store,
Inc. 67,000 1,792,250
- ---------------------------------------------------------------
Lone Star Steakhouse & Saloon(a) 61,700 1,218,575
- ---------------------------------------------------------------
Starbucks Corp.(a) 60,000 1,792,500
- ---------------------------------------------------------------
7,372,238
- ---------------------------------------------------------------
RETAIL (FOOD & DRUG)-2.29%
American Stores Co. 129,500 5,892,250
- ---------------------------------------------------------------
Kroger Co.(a) 118,400 3,256,000
- ---------------------------------------------------------------
Revco D.S., Inc.(a) 45,200 1,966,200
- ---------------------------------------------------------------
Rite Aid Corp. 124,000 5,704,000
- ---------------------------------------------------------------
Safeway, Inc.(a) 300,657 13,416,819
- ---------------------------------------------------------------
30,235,269
- ---------------------------------------------------------------
RETAIL (STORES)-7.05%
Bed Bath & Beyond, Inc.(a) 30,000 821,250
- ---------------------------------------------------------------
Blyth Industries, Inc.(a) 9,400 371,300
- ---------------------------------------------------------------
CDW Computer Centers, Inc.(a) 47,250 2,268,000
- ---------------------------------------------------------------
CVS Corp. 75,000 3,721,875
- ---------------------------------------------------------------
CompUSA, Inc.(a) 208,000 4,004,000
- ---------------------------------------------------------------
Consolidated Stores Corp.(a) 224,750 8,990,000
- ---------------------------------------------------------------
Costco Companies, Inc.(a) 250,000 7,218,750
- ---------------------------------------------------------------
Dayton Hudson Corp. 214,500 9,652,500
- ---------------------------------------------------------------
Dollar General Corp. 52,968 1,675,113
- ---------------------------------------------------------------
Dollar Tree Stores, Inc.(a) 30,000 1,185,000
- ---------------------------------------------------------------
Finish Line, Inc. (The)-Class
A(a) 60,000 618,750
- ---------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (STORES)-(CONTINUED)
Global DirectMail Corp.(a) 2,900 $ 51,113
- ---------------------------------------------------------------
Hollywood Entertainment Corp.(a) 4,200 89,775
- ---------------------------------------------------------------
Jones Apparel Group, Inc.(a) 81,200 3,390,100
- ---------------------------------------------------------------
Kohl's Corp.(a) 50,000 2,443,750
- ---------------------------------------------------------------
Lowe's Companies, Inc. 170,000 6,460,000
- ---------------------------------------------------------------
Men's Wearhouse, Inc. (The)(a) 80,000 1,990,000
- ---------------------------------------------------------------
Meyer (Fred), Inc.(a) 38,000 1,562,750
- ---------------------------------------------------------------
Pep Boys-Manny, Moe & Jack 169,300 5,523,413
- ---------------------------------------------------------------
Petco Animal Supplies, Inc.(a) 55,000 1,175,625
- ---------------------------------------------------------------
PETsMART, Inc.(a) 109,300 1,837,606
- ---------------------------------------------------------------
Saks Holdings, Inc.(a) 4,800 91,800
- ---------------------------------------------------------------
Sports Authority, Inc. (The)(a) 130,650 2,319,038
- ---------------------------------------------------------------
Staples, Inc.(a) 248,600 4,474,800
- ---------------------------------------------------------------
Sysco Corp. 49,800 1,767,900
- ---------------------------------------------------------------
Tech Data Corp.(a) 89,200 2,185,400
- ---------------------------------------------------------------
Tiffany & Co. 40,000 1,585,000
- ---------------------------------------------------------------
TJX Companies, Inc. 142,000 6,709,500
- ---------------------------------------------------------------
Toys "R" Us, Inc.(a) 100,000 2,850,000
- ---------------------------------------------------------------
Viking Office Products, Inc.(a) 98,300 1,339,338
- ---------------------------------------------------------------
Williams-Sonoma, Inc.(a) 28,000 868,000
- ---------------------------------------------------------------
Woolworth Corp.(a) 180,000 3,870,000
- ---------------------------------------------------------------
93,111,446
- ---------------------------------------------------------------
SCIENTIFIC INSTRUMENTS-0.56%
Perkin-Elmer Corp. 102,400 7,436,800
- ---------------------------------------------------------------
SECURITY & SAFETY SERVICES-0.07%
Rural/Metro Corp.(a) 30,000 862,500
- ---------------------------------------------------------------
SEMICONDUCTORS-6.88%
Advanced Micro Devices, Inc.(a) 179,200 7,616,000
- ---------------------------------------------------------------
Altera Corp.(a) 186,800 9,258,275
- ---------------------------------------------------------------
Analog Devices, Inc.(a) 101,300 2,709,775
- ---------------------------------------------------------------
Applied Materials, Inc.(a) 235,000 12,895,625
- ---------------------------------------------------------------
Atmel Corp.(a) 42,000 1,044,750
- ---------------------------------------------------------------
Intel Corp. 19,000 2,909,375
- ---------------------------------------------------------------
Kemet Corp.(a) 30,200 588,900
- ---------------------------------------------------------------
KLA Instruments Corp.(a) 160,400 7,137,800
- ---------------------------------------------------------------
Linear Technology Corp. 112,200 5,638,050
- ---------------------------------------------------------------
LSI Logic Corp.(a) 172,400 6,594,300
- ---------------------------------------------------------------
Maxim Integrated Products,
Inc.(a) 100,000 5,287,500
- ---------------------------------------------------------------
Micron Technology, Inc.(a) 128,700 4,536,675
- ---------------------------------------------------------------
Motorola, Inc. 100,000 5,725,000
- ---------------------------------------------------------------
National Semiconductor Corp.(a) 204,600 5,115,000
- ---------------------------------------------------------------
SGS-Thomson Microelectronics
N.V.-New York shares(a)
(France) 7,900 619,163
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SEMICONDUCTORS-(CONTINUED)
Solectron Corp.(a) 16,500 $ 946,688
- ---------------------------------------------------------------
Tencor Instruments(a) 25,000 1,109,375
- ---------------------------------------------------------------
Texas Instruments, Inc. 76,200 6,800,850
- ---------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 22,500 708,750
- ---------------------------------------------------------------
Xilinx, Inc.(a) 75,000 3,675,000
- ---------------------------------------------------------------
90,916,851
- ---------------------------------------------------------------
SHOES & RELATED APPAREL-0.71%
Nike, Inc.-Class B 124,000 6,975,000
- ---------------------------------------------------------------
Nine West Group, Inc.(a) 61,500 2,436,938
- ---------------------------------------------------------------
9,411,938
- ---------------------------------------------------------------
STEEL-0.54%
USX-US Steel Group, Inc. 244,000 7,137,000
- ---------------------------------------------------------------
TELECOMMUNICATIONS-4.33%
ADC Telecommunications, Inc.(a) 200,000 5,225,000
- ---------------------------------------------------------------
Andrew Corp.(a) 109,325 2,705,794
- ---------------------------------------------------------------
DSC Communications Corp.(a) 166,000 3,382,250
- ---------------------------------------------------------------
Lucent Technologies, Inc. 140,000 8,277,500
- ---------------------------------------------------------------
Nokia Oy A.B.-Class A-ADR
(Finland) 85,500 5,525,438
- ---------------------------------------------------------------
Northern Telecom Ltd. (Canada) 60,000 4,357,500
- ---------------------------------------------------------------
PairGain Technologies, Inc.(a) 109,700 2,852,200
- ---------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson-ADR (Sweden) 270,000 9,078,750
- ---------------------------------------------------------------
Tellabs, Inc.(a) 264,000 10,527,000
- ---------------------------------------------------------------
WorldCom, Inc.(a) 220,000 5,280,000
- ---------------------------------------------------------------
57,211,432
- ---------------------------------------------------------------
TELEPHONE-1.27%
Cincinnati Bell, Inc. 161,600 9,049,600
- ---------------------------------------------------------------
SBC Communications, Inc. 140,000 7,770,000
- ---------------------------------------------------------------
16,819,600
- ---------------------------------------------------------------
TEXTILES-1.71%
Fruit of The Loom, Inc.-Class
A(a) 125,000 4,500,000
- ---------------------------------------------------------------
Liz Claiborne, Inc. 245,000 11,086,250
- ---------------------------------------------------------------
Nautica Enterprises, Inc.(a) 83,000 1,836,375
- ---------------------------------------------------------------
Tommy Hilfiger Corp.(a) 90,000 3,577,500
- ---------------------------------------------------------------
Unifi, Inc. 52,300 1,621,300
- ---------------------------------------------------------------
22,621,425
- ---------------------------------------------------------------
TRANSPORTATION-0.56%
Federal Express Corp.(a) 137,000 7,380,875
- ---------------------------------------------------------------
TRUCKING-0.10%
Consolidated Freightways, Inc. 45,800 1,362,550
- ---------------------------------------------------------------
Total Common Stocks 1,278,322,749
- ---------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS-0.21%
COMPUTER SOFTWARE/SERVICES-0.13%
Baan Co., N.V. (Netherlands),
Conv. Sub. Notes, 4.50%,
12/15/01
(Acquired 01/13/97-01/17/97;
Cost $1,473,000)(b) $ 1,280,000 $ 1,737,997
- ---------------------------------------------------------------
FINANCE (CONSUMER CREDIT)-0.08%
Aames Financial Corp.,
Conv. Sub. Deb., 5.50%,
03/15/06 770,000 684,261
- ---------------------------------------------------------------
Cityscape Financial Corp., Conv.
Sub. Deb.,
6.00%, 05/01/06
(Acquired 08/06/96-08/29/96;
Cost $645,939)(b) 475,000 315,063
- ---------------------------------------------------------------
999,324
- ---------------------------------------------------------------
Total Convertible Corporate
Bonds 2,737,321
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENTS-2.66%(C)
Greenwich Capital Markets, Inc.
5.55%, 05/01/97(d) $ 1,467,476 $ 1,467,476
- ---------------------------------------------------------------
HSBC Securities, Inc.
5.55%, 05/01/97(e) 33,746,447 33,746,447
- ---------------------------------------------------------------
Total Repurchase Agreements 35,213,923
- ---------------------------------------------------------------
TOTAL INVESTMENTS-99.61% 1,316,273,993
- ---------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-0.39% 5,142,795
- ---------------------------------------------------------------
NET ASSETS-100.00% $1,321,416,788
===============================================================
</TABLE>
Abbreviations:
ADR - American Depository Receipt
Conv. - Convertible
Deb. - Debentures
Sub. - Subordinated
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Directors. The market
value of these securities at April 30, 1997 was $2,053,060 which represented
0.16% of the Fund's net assets.
(c) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investments companies managed by the
investment advisor or its affiliates.
(d) Joint repurchase agreement entered into 04/30/97 with a maturing value of
$500,077,083. Collateralized by $1,057,237,408 U.S. Government agency
obligations, 0% to 14.00% due 06/01/97 to 10/01/30 with an aggregate market
value at April 30, 1997 of $510,000,397.
(e) Joint repurchase agreement entered into 04/30/97 with a maturing value of
$500,077,083. Collateralized by $285,655,288 U.S. Government agency
obligations, 0% to 8.00% due 04/01/19 to 12/01/35 and $321,339,000 U.S.
Treasury obligations, 4.75% to 9.25% due 09/30/97 to 10/31/99 with an
aggregate market value at April 30, 1997 of $510,003,616.
See Notes to Financial Statements.
11
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$1,030,497,636) $1,316,273,993
- -------------------------------------------------------------
Receivables for:
Investments sold 11,199,589
- -------------------------------------------------------------
Dividends and interest 698,575
- -------------------------------------------------------------
Investment for deferred compensation plan 21,828
- -------------------------------------------------------------
Other assets 19,377
- -------------------------------------------------------------
Total assets 1,328,213,362
- -------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 5,726,423
- -------------------------------------------------------------
Capital stock reacquired 130,901
- -------------------------------------------------------------
Deferred compensation 21,828
- -------------------------------------------------------------
Accrued advisory fees 674,934
- -------------------------------------------------------------
Accrued administrative service fees 5,670
- -------------------------------------------------------------
Accrued directors' fees 3,733
- -------------------------------------------------------------
Accrued operating expenses 233,085
- -------------------------------------------------------------
Total liabilities 6,796,574
- -------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $1,321,416,788
=============================================================
Capital stock, $.01 par value per share:
Authorized 1,000,000,000
- -------------------------------------------------------------
Outstanding 108,221,426
=============================================================
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE $ 12.21
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 1997
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $73,873 foreign withholding
tax) $ 4,672,097
- ------------------------------------------------------------
Interest 686,647
- ------------------------------------------------------------
Total investment income 5,358,744
- ------------------------------------------------------------
EXPENSES:
Advisory fees 4,222,468
- ------------------------------------------------------------
Custodian fees 65,314
- ------------------------------------------------------------
Transfer agent fees 26,733
- ------------------------------------------------------------
Administrative service fees 34,744
- ------------------------------------------------------------
Directors' fees 6,741
- ------------------------------------------------------------
Other 174,031
- ------------------------------------------------------------
Total expenses 4,530,031
- ------------------------------------------------------------
Less: Expenses paid indirectly (690)
- ------------------------------------------------------------
Net expenses 4,529,341
- ------------------------------------------------------------
Net investment income 829,403
- ------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT
SECURITIES:
Net realized gain on sales of investment
securities 66,611,930
- ------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investment securities (21,939,307)
- ------------------------------------------------------------
Net gain on investment securities 44,672,623
- ------------------------------------------------------------
Net increase in net assets resulting from
operations $ 45,502,026
=============================================================
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 15
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 1997 and the year ended October 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1997 1996
<S> <C> <C>
OPERATIONS:
Net investment income $ 829,403 $ 3,291,716
- ----------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities and
futures contracts 66,611,930 114,141,332
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment
securities (21,939,307) 50,514,049
- ----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 45,502,026 167,947,097
- ----------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (3,131,614) (2,276,042)
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains (114,611,563) (74,181,022)
- ----------------------------------------------------------------------------------------------
Net equalization credits 2,336,075 2,660,812
- ----------------------------------------------------------------------------------------------
Net increase from capital stock transactions 130,313,620 116,846,774
- ----------------------------------------------------------------------------------------------
Net increase in net assets 60,408,544 210,997,619
- ----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,261,008,244 1,050,010,625
- ----------------------------------------------------------------------------------------------
End of period $1,321,416,788 $1,261,008,244
==============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $ 947,336,980 $ 817,023,360
- ----------------------------------------------------------------------------------------------
Undistributed net investment income 22,710,637 22,676,773
- ----------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investment
securities and futures contracts 65,592,814 113,592,447
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 285,776,357 307,715,664
- ----------------------------------------------------------------------------------------------
$1,321,416,788 $1,261,008,244
==============================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1997
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Summit Fund, Inc. (the "Fund") is a Maryland corporation registered under
the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is capital
growth.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. 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.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at the last sales price on the exchange on which
the security is principally traded, or lacking any sales on a particular day,
the security is valued at the mean between the closing bid and asked prices
on that day. Each security traded in the over-the-counter market (but not
including securities reported on the NASDAQ National Market System) is valued
at the mean between the last bid and asked prices based upon quotes furnished
by market makers for such securities. 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 mean of the closing bid and asked
prices. Debt obligations (including convertible bonds) are valued on the
basis of prices provided by an independent pricing service. Prices provided
by an independent pricing service may be determined without exclusive
reliance on quoted prices, and may reflect appropriate factors such as yield,
type of issue, corporate and maturity date. 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 Fund's
officers in a manner specifically authorized by the Board of Directors of the
Fund. Short-term obligations having 60 days or less to maturity are valued at
amortized cost which approximates market value.
B. Securities Transactions, Investment Income and Distributions -- 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 and distributions to
shareholders are recorded on the ex-dividend date.
C. 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
13
<PAGE> 16
subject to federal income taxes on otherwise taxable income (including net
realized capital gains) which is distributed to shareholders. Therefore, no
provision for federal income taxes is recorded in the financial statements.
D. Equalization -- The Fund follows the accounting practice known as
equalization by which a portion of the proceeds from sales and costs of
repurchases of Fund shares, equivalent on a per share basis to the amount of
undistributed net investment income, is credited or charged to undistributed
income when the transaction is recorded so that the undistributed net
investment income per share is unaffected by sales or redemptions of Fund
shares.
E. Stock Index Futures Contracts -- The Fund may purchase or sell stock index
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 Fund'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 Fund recognizes a realized gain or loss equal to the difference
between the proceeds from, or cost of, the closing transaction and the Fund's
basis in the contract. Risks include the possibility of an illiquid market
and that a change in the value of contracts may not correlate with changes in
the value of the securities being hedged.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into an investment advisory agreement with A I M Advisors,
Inc. ("AIM"). Under the terms of the advisory agreement, the Fund pays AIM a fee
at the annual rate of 1.0% of the first $10 million of the Fund's average daily
net assets, 0.75% of the next $140 million of the Fund's average daily net
assets and 0.625% of the Fund's average daily net assets in excess of $150
million. Under the terms of a sub-advisory agreement between AIM and Trade
Street Investment Associates, Inc. ("TradeStreet"), AIM pays TradeStreet a fee
at an annual rate of 0.50% of the first $10 million of the Fund's average daily
net assets, 0.35% of the next $140 million of the Fund's average daily net
assets, 0.225% of the next $550 million of the Fund's average daily net assets
and 0.15% of the Fund's average daily net assets in excess of $700 million.
The Fund, pursuant to an administrative services agreement with AIM, has
agreed to reimburse AIM for certain costs incurred in providing accounting
services to the Fund. During the six months ended April 30, 1997, the Fund
reimbursed AIM $34,744 for such services.
The Fund incurred expenses of $690 for pricing services which are paid through
directed brokerage commissions. The effect of the above arrangement resulted in
a reduction in the Fund's total expenses of $690 during the six months ended
April 30, 1997.
During the six months ended April 30, 1997, the Fund paid legal fees of $4,337
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Directors. A member of that firm is a director of the Fund.
Substantially all shares of the Fund are held of record by State Street Bank &
Trust Company as custodian for Summit Investors Plans, a unit investment trust
that is sponsored by A I M Distributors, Inc. (an affiliated company of AIM).
Certain officers and directors of the Fund are officers of AIM and A I M
Distributors, Inc.
NOTE 3-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Fund may invest directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
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) $325,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
During the six months ended April 30, 1997, 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 0.08% on the unused balance of the committed line.
The commitment fee is allocated among the funds based on their respective
average net assets for the period.
NOTE 5-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended April 30, 1997 was
$607,924,911 and $591,277,492, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of April 30, 1997, on a tax basis, is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $308,277,236
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (22,780,399)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $285,496,837
=========================================================
</TABLE>
* Cost of investments for tax purposes is $1,030,777,156.
14
<PAGE> 17
NOTE 6-CAPITAL STOCK
Changes in capital stock outstanding for the six months ended April 30, 1997 and
year ended October 31, 1996 were as follows:
<TABLE>
<CAPTION>
APRIL 30, 1997 OCTOBER 31, 1996
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold 4,671,665 $ 57,636,919 9,230,433 $108,559,927
- ------------------------------------------------------------ ---------- ------------ ---------- ------------
Issued as reinvestment of dividends 9,816,281 113,770,753 6,936,341 74,080,187
- ------------------------------------------------------------ ---------- ------------ ---------- ------------
Reacquired (3,336,577) (41,094,052) (5,576,722) (65,793,340)
- ------------------------------------------------------------ ---------- ------------ ---------- ------------
11,151,369 $130,313,620 10,590,052 $116,846,774
========== ============ ========== ============
</TABLE>
NOTE 7-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock
outstanding during the six months ended April 30, 1997, each of the years in the
three-year period ended October 31, 1996, the ten months ended October 31, 1993
and each of the years in the five-year period ended December 31, 1992.
<TABLE>
<CAPTION>
October 31, December 31,
April 30, ------------------------------------------- -------------------
1997 1996 1995 1994 1993 1992 1991
---------- --------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.99 $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09 $ 7.56
- --------------------------------------------- ---------- --------- --------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.01 0.04 0.04 0.10 0.09 0.11 0.14
- --------------------------------------------- ---------- --------- --------- -------- -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) 0.41 1.69 2.81 (0.04) 0.73 0.35 3.16
- --------------------------------------------- ---------- --------- --------- -------- -------- -------- --------
Total from investment operations 0.42 1.73 2.85 0.06 0.82 0.46 3.30
- --------------------------------------------- ---------- --------- --------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.03) (0.03) (0.10) (0.10) -- (0.11) (0.13)
- --------------------------------------------- ---------- --------- --------- -------- -------- -------- --------
Distributions from capital gains (1.17) (0.85) (0.39) (0.64) -- (0.80) (0.64)
- --------------------------------------------- ---------- --------- --------- -------- -------- -------- --------
Total distributions (1.20) (0.88) (0.49) (0.74) -- (0.91) (0.77)
- --------------------------------------------- ---------- --------- --------- -------- -------- -------- --------
Net asset value, end of period $ 12.21 $ 12.99 $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09
============================================= ========== ========= ========= ======== ======== ======== ========
Total return(b) 3.59% 15.61% 31.03% 0.61% 8.51% 4.50% 43.64%
============================================= ========== ========= ========= ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,321,417 $1,261,008 $1,050,011 $ 765,073 $705,580 $604,329 $517,835
============================================= ========== ========== ========== ========= ======== ======== ========
Ratio of expenses to average net assets 0.69%(c)(d) 0.70% 0.71% 0.72% 0.79%(e) 0.76% 0.75%
============================================= ========== ========= ========= ======== ======== ======== ========
Ratio of net investment income to average net
assets 0.13%(c) 0.29% 0.33% 1.04% 1.13%(e) 1.09% 1.48%
============================================= ========== ========= ========= ======== ======== ======== ========
Portfolio turnover rate 45.70% 118.34% 126.00% 121.69% 115.76% 97.41% 109.04%
============================================= ========== ========= ========= ======== ======== ======== ========
Average brokerage commission rate paid(f) $ 0.0622 $ 0.0643 N/A N/A N/A N/A N/A
============================================= ========== ========= ========= ======== ======== ======== ========
<CAPTION>
December 31,
------------------------------
1990 1989 1988(a)
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period $ 7.79 $ 6.57 $ 5.70
- --------------------------------------------- -------- -------- --------
Income from investment operations:
Net investment income 0.15 0.16 0.16
- --------------------------------------------- -------- -------- --------
Net gains (losses) on securities (both
realized and unrealized) (0.08) 1.86 0.84
- --------------------------------------------- -------- -------- --------
Total from investment operations 0.07 2.02 1.00
- --------------------------------------------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.16) (0.16) (0.13)
- --------------------------------------------- -------- -------- --------
Distributions from capital gains (0.14) (0.64) --
- --------------------------------------------- -------- -------- --------
Total distributions (0.30) (0.80) (0.13)
- --------------------------------------------- -------- -------- --------
Net asset value, end of period $ 7.56 $ 7.79 $ 6.57
============================================= ======== ======== ========
Total return(b) 0.93% 30.92% 17.65%
============================================= ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $316,043 $262,655 $101,541
============================================= ======== ======== ========
Ratio of expenses to average net assets 0.80% 0.82% 1.04%
============================================= ======== ======== ========
Ratio of net investment income to average net
assets 2.02% 2.14% 2.57%
============================================= ======== ======== ========
Portfolio turnover rate 142.60% 97.26% 114.94%
============================================= ======== ======== ========
Average brokerage commission rate paid(f) N/A N/A N/A
============================================= ======== ======== ========
</TABLE>
(a) The Fund changed investment advisers on October 5, 1988.
(b) For periods less than one year, total return is not annualized.
(c) Ratios are annualized and based on average net assets of $1,328,387,346.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.
(e) Annualized.
(f) Disclosure requirement beginning with the Fund's fiscal year ending October
31, 1996.
15
<PAGE> 18
- --------------------------------------------------------------------------------
SUPPLEMENTAL PROXY INFORMATION AIM SUMMIT FUND, INC.
The Annual Meeting of Shareholders of the AIM Summit Fund, Inc. (the "Fund") was
held on February 7, 1997 at the offices of A I M Management Group Inc., 11
Greenway Plaza, Houston, Texas. The meeting was held for the following purposes:
(1) To elect Directors as follows: Charles T. Bauer, Bruce L. Crockett, Owen
Daly II, Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F.
Pennock, Ian W. Robinson, and Louis S. Sklar.
(2) To approve a new Master Investment Advisory Agreement between the Fund and
A I M Advisors, Inc. ("AIM Advisors").
(3) To approve a new Sub-Advisory Agreement between AIM Advisors and TradeStreet
Investment Associates, Inc.
(4) To approve the elimination of the fundamental investment policy prohibiting
or restricting investments in other investment companies.
(5) To ratify the selection of KPMG Peat Marwick LLP as independent accountants
for the Fund for the Fund's fiscal year ending October 31, 1997.
The results of proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
Votes
Director/Matter Votes for Against Abstentions
--------------- --------- ------- -----------
<S> <C> <C> <C> <C>
(1) Charles T. Bauer........................................... 70,528,895 0 2,501,145
Bruce L. Crockett.......................................... 70,665,829 0 2,364,211
Owen Daly II............................................... 70,455,617 0 2,574,423
Carl Frischling............................................ 70,528,507 0 2,501,533
Robert H. Graham........................................... 70,692,348 0 2,337,692
John F. Kroeger............................................ 70,446,208 0 2,583,832
Lewis F. Pennock........................................... 70,561,638 0 2,468,402
Ian W. Robinson............................................ 70,452,892 0 2,577,148
Louis S. Sklar............................................. 70,633,066 0 2,396,974
(2) Approval of Master Investment Advisory Agreement........... 67,927,052 1,843,418 3,259,570
(3) Approval of Sub-Advisory Agreement......................... 66,561,907 2,129,229 4,338,904
(4) Elimination of Fundamental Policy.......................... 63,661,478 6,015,069 3,353,493
(5) KPMG Peat Marwick LLP...................................... 69,037,714 841,603 3,150,723
</TABLE>
16
<PAGE> 19
Directors & Officers
<TABLE>
<S> <C> <C>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Formerly Director, President and
Chief Executive Officer John J. Arthur A I M Advisors, Inc.
COMSAT Corporation Senior Vice President & Treasurer 11 Greenway Plaza
Suite 100
Owen Daly II Carol F. Relihan Houston, TX 77046
Director Senior Vice President & Secretary
Cortland Trust Inc. SUB-ADVISOR
Gary T. Crum
Jack Fields Senior Vice President TradeStreet Investment Associates, Inc.
Formerly Member of the 101 South Tryon Street
U. S. House of Representatives Scott G. Lucas Suite 1000
Senior Vice President Charlotte, NC 28255
Carl Frischling
Partner Dana R. Sutton TRANSFER AGENT
Kramer, Levin, Naftalis & Frankel Vice President & Assistant Treasurer
Boston Financial Data Services, Inc.
Robert H. Graham Melville B. Cox P.O. Box 8300
President and Chief Executive Officer Vice President Boston, MA 02266-8300
A I M Management Group Inc.
Jonathan C. Schoolar CUSTODIAN
John F. Kroeger Vice President
Formerly Consultant State Street Bank and Trust Company
Wendell & Stockel Associates, Inc. P. Michelle Grace 225 Franklin Street
Assistant Secretary Boston, MA 02110
Lewis F. Pennock
Attorney David L. Kite COUNSEL TO THE FUND
Assistant Secretary
Ian W. Robinson Ballard Spahr Andrews & Ingersoll
Consultant; Formerly Executive Vice Nancy L. Martin 1735 Market Street, 51st Floor
President and Chief Financial Officer Assistant Secretary Philadelphia, PA 19103
Bell Atlantic Management Services, Inc.
Ofelia M. Mayo COUNSEL TO THE DIRECTORS
Louis S. Sklar Assistant Secretary
Executive Vice President Kramer, Levin, Naftalis & Frankel
Hines Interests Kathleen J. Pflueger 919 Third Avenue
Limited Partnership Assistant Secretary New York, NY 10022
Samuel D. Sirko DISTRIBUTOR
Assistant Secretary
A I M Distributors, Inc.
Stephen I. Winer 11 Greenway Plaza
Assistant Secretary Suite 100
Houston, TX 77046
Mary J. Benson
Assistant Treasurer
</TABLE>
<PAGE> 20
[AIM LOGO APPEARS HERE] ---------------
BULK RATE
U.S. POSTAGE
AIM DISTRIBUTORS, INC. PAID
11 GREENWAY PLAZA, SUITE 100 HOUSTON, TX
HOUSTON, TX 77046 PERMIT NO. 1919
---------------
