<PAGE> 1
AIM SUMMIT
FUND, INC.
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT
APRIL 30, 1998
<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. Maximum sales
and creation charges total 8.50% for the smallest plan size, $50 per month.
Larger plans carry lower sales charges as outlined in the prospectus.
o The Fund's average annual total returns were 32.19%, 16.49%, and 16.46% for
the one-, five-, and 10-year periods ended 3/31/98, 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. Past performance cannot guarantee comparable future results.
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.
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. Results shown assume the reinvestment of
dividends.
o The unmanaged Lipper Growth Fund Index represents an average of the
performance of the 30 largest growth funds charted by Lipper Analytical
Services, Inc., an independent mutual funds performance monitor.
o The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30
actively traded primarily industrial 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:
When we last reported to you, for the fiscal year ended
[PHOTO OF October 31, 1997, equity markets worldwide had just been
Charles T. shaken by the currency crisis in Southeast Asia. By the April
Bauer, 30, 1998, end of this six-month reporting period, most
Chairman of markets had recovered nicely, with domestic equities reaching
the Board of new highs and European markets outdoing even the U.S.'s heady
THE FUND pace. Only Asian markets remained in the doldrums. Bonds have
APPEARS HERE] turned in a solid performance with generous real returns,
though not as spectacular as some had predicted when the
Asian crisis first broke.
Good economic news has been arriving almost daily early
in 1998. Inflation and joblessness in the U.S. have been at
their lowest levels in decades, consumer confidence at its
highest. All in all, the economic fundamentals in the U.S.
appear sound, and we at AIM remain cautiously optimistic that
the current economic expansion, and the buoyant financial
markets that accompany it, will continue for the foreseeable future.
Nevertheless, by the close of this reporting period, many market
participants were uneasy. Some worried that economic growth was so robust and
labor markets so tight that the Federal Reserve Board would raise interest rates
to keep inflation at bay. Historically, it has been events such as a rise in
interest rates--or more ominous occurrences such as wars--that have ended bull
markets as experienced in this decade. Other participants fretted about signs of
speculative fever, particularly in U.S. stock markets, where equity prices
continued to rise despite evidence that earnings growth, especially for larger
companies, had slowed considerably. All were aware that the Asian story was not
yet completed, and no one was certain how serious its ultimate impact would be.
Of course, this bull market will end one day, and markets became less
ebullient shortly after this reporting period closed. In the face of
uncertainty, the best course for investors is to remain realistic and ready. The
market advances of the past three years have been unprecedented and may have
fostered unrealistic expectations among investors. We have never experienced two
years in a row of market returns above 30%, let alone three. Investors would do
well to remember that the long-term average return for equities is closer to 10%
per year.
A well-diversified portfolio is still one of the most effective tools for
coping with shifts in a market's direction because different asset classes and
different national markets tend to move independently of one another. Of course,
your financial consultant remains your best source of information about how to
allocate your investments based on your particular goals and situation.
YOUR FUND MANAGERS COMMENT
On the pages that follow, the managers of your AIM Fund discuss how the Fund
performed during the six months covered by this report and give their near-term
market outlook. We hope you will find their discussion informative.
We are pleased to send you this report on your Fund. If you have any
questions or comments, please contact our Client Services department at
800-995-4246.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE> 4
The Managers' Overview
IN AFTERMATH OF ASIAN TURMOIL,
FUND RESULTS REMAIN SOLID
A roundtable discussion with the Fund management team for AIM Summit Fund, Inc.
for the six months ended April 30, 1998.
- --------------------------------------------------------------------------------
Q. HOW DID AIM SUMMIT FUND, INC. PERFORM DURING THE SIX-MONTH PERIOD COVERED BY
THIS REPORT?
A. The Fund achieved good performance figures for the period, bringing in a
solid total return of 15.11%. The Fund's results were right on track with
its long-term performance results, as shown in the chart on page 4.
Q. HOW HAS THE MARKET CHANGED DURING THE REPORTING PERIOD?
A. Currency devaluations in Southeast Asia caused a dramatic decline in the Dow
Jones Industrial Average at the end of October of 1997. The Asian crisis
kept a damper on stock performance during the fourth quarter of 1997, but as
the new year unfolded, the markets shrugged off these difficulties. Worries
about Asia were not completely erased, but investors' confidence returned,
and the markets continued to rise. In April, the Dow closed above the 9200
mark for the first time.
A much-anticipated slowdown in the U.S. economy, predicted to result
from Asia's troubles, never materialized. U.S. gross domestic output rose at
a 4.2% annual rate during the first quarter of 1998. Such robust economic
expansion usually creates inflation, but contrary to that typical pattern,
inflation remained low during the reporting period.
Q. YOU'VE FAVORED TECHNOLOGY STOCKS IN THE FUND FOR SOME TIME NOW. DID THE
AFTERMATH OF THE ASIAN CRISIS CHANGE YOUR FEELINGS ABOUT THIS SECTOR?
A. This sector was not generally in favor during much of the reporting period
be cause of the Asian situation and because a few leading companies reported
disappointing earnings. Nevertheless, technology is still a major part of
the Fund's portfolio. We have held the technology weighting steady at about
25% of total net assets, but the particular industry weightings have
shifted. We've reduced our exposure to the hardware and semiconductor
industries, favoring software and internet-related holdings such as
Compuware Corp. instead. Holdings in the computers (software & services)
industry constituted 8.75% of total net assets of the Fund as of 4/30/98.
Some computer hardware manufacturers did well, so we continued to hold
them in the portfolio. Personal computer sales were up 16% in the U.S.
during the first quarter of 1998. Dell Computer Corp., the largest holding
in the portfolio at the end of the reporting period, benefited from this
trend and reported a string of earnings increases. Lucent Technologies,
Inc., a leading provider of network communications, also reported strong
earnings for the first quarter of 1998.
Q. FINANCIAL STOCKS HAVE CAUGHT YOUR ATTENTION RECENTLY. WHY?
A. Traditionally, financial stocks--companies like banks, brokerage houses, and
savings and loans--have not been thought of as growth stocks. But lately
they've behaved very much like growth stocks. Financial stocks have
benefited from an energetic market and the trends toward globalization and
consolidation. Most importantly, lower interest rates have translated into
increased profit margins for financial services companies. An example of a
company benefiting from this environment is savings and loan company
Ahmanson (H.F.) & Co., one of our top holdings as of 4/30/98.
Q. HEALTH CARE HAS REMAINED A STRONG THEME FOR THE FUND. WHAT IS HAPPENING IN
THAT SECTOR?
A. The FDA's streamlining of the approval process for new drugs and medical
devices is making a major difference in this area. Companies like Merck &
Co., Inc., a solid holding in the portfolio during the reporting period,
stand to
-----------------------------------
Worries about Asia
were not completely erased,
but investors' confidence
returned, and the markets
continued to rise.
-----------------------------------
See important fund and index disclosures inside front cover.
2
<PAGE> 5
PORTFOLIO COMPOSITION
As of 4/30/98, based on total net assets
<TABLE>
<CAPTION>
===============================================================================================
Top 10 Equity Holdings Top 10 Industries
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Dell Computer Corp. 1.99% 1. Computers (Software & Services) 8.75%
2. Compuware Corp. 1.43 2. Oil & Gas (Drilling & Equipment) 5.93
3. Ahmanson (H.F.) & Co. 1.30 3. Financial (Diversified) 4.34
4. Microsoft Corp. 1.23 4. Communications Equipment 3.50
5. Safeway, Inc. 1.20 5. Computers (Hardware) 3.14
6. Guidant Corp. 1.19 6. Health Care (Medical Products & Supplies) 3.11
7. Lucent Technologies, Inc. 1.12 7. Manufacturing (Diversified) 2.63
8. Dayton Hudson Corp. 0.98 8. Retail (General Merchandise) 2.29
9. EMC Corp. 0.97 9. Consumer Finance 2.15
10.Intel Corp. 0.94 10.Electronics (Semiconductors) 2.12
Please keep in mind that the portfolio composition is subject to change and
there is no assurance the Fund will continue to hold any particular security.
===============================================================================================
</TABLE>
benefit from the shortened approval process. Merck has developed products
such as the anti-cholesterol drug Zocor, and currently has an anti-migraine
drug under review.
Another beneficiary of the new process is Guidant Corp, one of our top
holdings as of April 30, 1998 and an excellent example of entrepreneurship
in the industry. Guidant creates innovative devices and instruments for the
treatment of heart disease. The company recently launched two new pacemaker
systems, and they've developed new medical instruments for heart surgeries
that allow doctors to perform less invasive procedures.
Q. WHY HAVE YOU REDUCED YOUR WEIGHTING IN OIL AND GAS?
A. Oil and gas (drilling and equipment) was our top industry at the end of the
previous reporting period in October of 1997. The energy sector is still an
important part of the Fund, but we've reduced our exposure, mainly due to a
major sell-off in oil stocks. El Nino brought a mild winter to much of the
United States, reducing demand for heating and fuel oil. Demand for oil from
Asia was also greatly reduced. Together, these factors contributed to a
significant dip in oil prices. Without the need for new supplies, stocks of
drillers underperformed. Although our exposure to these companies is lower,
the Fund held on to good performers such as Transocean Offshore Inc. This
company focuses its business in deep water, where demand continues to be
strong despite lower energy prices.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND IN THE NEXT SIX MONTHS?
A. Toward the close of the reporting period, there were some cautionary signs
for a few of our major holdings, especially the antitrust campaign brought
by the U.S. government against Microsoft Corp. Overall, though, the
environment looks promising. Although we may see slower profit growth for
domestic companies, we still feel confident about the Fund and our
management strategies. The Fund follows an earnings growth discipline, so we
have special expertise in finding growth stocks. That may actually give us
an edge during times when the overall market is experiencing slower earnings
growth.
Other good news for the future is the stock market's increasing
breadth-- large-cap stocks are no longer dominant. By the end of the
reporting period, there was evidence that mid-cap stocks were starting to
slightly outperform large-cap issues. Though AIM Summit Fund was most
heavily weighted in large-caps at the end of the reporting period, it
invests in firms of every size, allowing us to take an advantageous position
in a broadening market.
Q. WHERE DO YOU THINK THE MARKET IS HEADED IN THE NEAR TERM?
A. Most market observers don't foresee any dramatic changes. They expect stable
interest rates, healthy economic growth, and low inflation. Of course, there
are any number of factors that could put a damper on the market's recent
energy.
Regardless of the vicissitudes of the marketplace, we will adhere to our
time-tested investment discipline. We don't rely on "big-picture" forecasts;
we look for companies whose earnings are growing. Because the Fund's
investors are disciplined, systematic investors, we have a predictable cash
flow, which gives us the flexibility to look for opportunities whether the
market is up or down.
See important fund and index disclosures inside front cover.
3
<PAGE> 6
Long-Term Performance
EARNINGS-BASED APPROACH PRODUCES IMPRESSIVE LONG-TERM RESULTS
GROWTH OF A $10,000 INVESTMENT
4/30/88 - 4/30/98, based on net asset value
- ------------------------------------------------------------------------------
STANDARD & POOR'S
AIM SUMMIT FUND 500-STOCK INDEX LIPPER GROWTH FUND INDEX
- ------------------------------------------------------------------------------
4/88 10,000 10,000 10,000
4/89 11,987 12,278 12,018
4/90 13,059 13,560 12,778
4/91 16,191 15,942 15,002
4/92 18,623 18,182 17,087
4/93 20,261 19,857 18,748
4/94 21,871 20,915 20,491
4/95 24,330 24,558 22,743
4/96 32,718 31,958 29,310
4/97 35,475 39,983 33,442
4/98 50,697 56,429 46,758
==============================================================================
AVERAGE ANNUAL TOTAL RETURNS
For periods ended 4/30/98, including sales charges.
10 Years 16.58%
5 Years 18.01
1 Year 30.69
==============================================================================
Source: Lipper Analytical Services, Inc. and Towers Data Systems
HYPO--Registered Trademark--
Average annual total returns reflect 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.
<PAGE> 7
For Consideration
THE ROTH IRA: THE POWER TO KEEP MORE
Contribute After-Tax Dollars Now . . . So You Can Get Federally Tax-Free Savings
Later
A new and potentially more powerful type of IRA--the Roth IRA--became available
on January 1, 1998. What makes it more powerful? The Roth IRA gives you the
opportunity to keep more of what you earn.
Are you eligible to open a Roth IRA? The answer is yes if you or your spouse
has earned income for the tax year for which you want to make the contribution,
and your adjusted gross income is below $110,000 if you are a single tax filer,
$160,000 if you file jointly.
TWO KEY ROTH IRA BENEFITS:
TAX-FREE AND PENALTY-FREE WITHDRAWALS
o Of earnings after five years. Earnings on your Roth IRA are federally
tax-free if your Roth IRA account has been open for five years and you are at
least 59 1/2 years old, or in the case of death or disability. You may also use
up to $10,000 of your earnings to buy a first home (after five years).
o Of contributions at any time. For instance, if you make annual contributions
of $2,000 for the next three years, you may take out up to $6,000 and use that
money for any purpose.
HOW YOU MIGHT PUT BOTH BENEFITS TO WORK FOR YOU
Here's an example of how you may take full advantage of a Roth IRA. You are 39
1/2 years old. You contribute $2,000 after-tax annually in your Roth IRA every
year for 20 years, earning an average annual return of 10%. After 20 years, your
account has grown to $126,005. Now at age 59 1/2 you can begin taking
withdrawals and pay no federal income tax or penalty on any of your $126,005. Or
you can keep your money invested and take it out whenever you need it.
THE ROTH IRA: TO CONVERT OR NOT TO CONVERT
Can you convert your Traditional IRA to a Roth IRA? The answer is yes if you
meet these requirements:
You must pay taxes on the amount you convert. If you convert in 1998, you
can spread your tax payments over the next four years. This four-year allowance
will not be available after December 31, 1998.
You cannot convert to a Roth IRA if you are married and file your tax return
separately, or if your annual gross income is over $100,000.
SOME ROTH IRA CONVERSION GUIDELINES
If you can check most of these boxes, converting your Traditional IRA to a Roth
IRA may make sense for you.
o You have assets outside your retirement savings with which you can easily
afford to pay the taxes due when you convert.
o You have 10 years or more before you retire. The longer you invest tax-free,
the more you benefit.
o Your tax rate will probably be higher in retirement than it is now. If so,
you'll pay less taxes now to convert than you would pay at retirement if you
withdrew from a traditional IRA.
o You plan to convert in 1998. On January 1, 1999, the ability to spread tax
payments over four years disappears.
o You want to keep making contributions after age 70 1/2 and may wish to pass
your IRA assets on to your heirs after your death.
ROTH IRA CALCULATOR & ANALYZER
The Roth IRA Analyzer & Calculator at AIM's Internet Web site--
www.aimfunds.com-- can help you determine your IRA eligibility status and
whether it makes sense for you to convert an existing IRA into a Roth IRA.
MAKE YOUR IRA CONVERSION DECISION A TRULY INFORMED ONE
Talk to your financial consultant, who knows your specific needs and goals. You
may also wish to talk with a tax adviser.
This discussion does not constitute tax advice. Your tax adviser can provide
guidance concerning your particular situation.
<PAGE> 8
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-93.48%
AEROSPACE/DEFENSE-0.89%
AAR Corp. 50,000 $ 1,309,375
- ---------------------------------------------------------------
Gulfstream Aerospace Corp.(a) 50,000 2,096,875
- ---------------------------------------------------------------
Precision Castparts Corp. 13,000 807,625
- ---------------------------------------------------------------
Sundstrand Corp. 185,000 12,776,562
- ---------------------------------------------------------------
16,990,437
- ---------------------------------------------------------------
AIR FREIGHT-0.49%
FDX Corp.(a) 137,000 9,316,000
- ---------------------------------------------------------------
AIRLINES-0.85%
Southwest Airlines Co. 40,000 1,097,500
- ---------------------------------------------------------------
UAL Corp.(a) 173,000 15,083,437
- ---------------------------------------------------------------
16,180,937
- ---------------------------------------------------------------
AUTO PARTS & EQUIPMENT-0.02%
Danaher Corp. 4,200 301,875
- ---------------------------------------------------------------
AUTOMOBILES-0.54%
Ford Motor Co. 225,000 10,307,812
- ---------------------------------------------------------------
BANKS (MAJOR REGIONAL)-0.22%
Northern Trust Corp. 36,000 2,628,000
- ---------------------------------------------------------------
Summit Bancorp 30,000 1,503,750
- ---------------------------------------------------------------
4,131,750
- ---------------------------------------------------------------
BANKS (MONEY CENTER)-1.13%
BankAmerica Corp. 140,000 11,900,000
- ---------------------------------------------------------------
Chase Manhattan Corp. (The) 70,152 9,720,437
- ---------------------------------------------------------------
21,620,437
- ---------------------------------------------------------------
BANKS (REGIONAL)-0.64%
AmSouth Bancorporation 35,000 2,183,125
- ---------------------------------------------------------------
Crestar Financial Corp. 31,800 1,902,038
- ---------------------------------------------------------------
Golden State Bancorp, Inc.(a) 50,000 1,950,000
- ---------------------------------------------------------------
Mercantile Bankshares Corp. 36,100 1,385,338
- ---------------------------------------------------------------
National Commerce Bancorporation 3,400 152,150
- ---------------------------------------------------------------
North Fork Bancorporation, Inc. 60,000 2,227,500
- ---------------------------------------------------------------
Star Banc Corp. 37,000 2,337,938
- ---------------------------------------------------------------
12,138,089
- ---------------------------------------------------------------
BEVERAGES (NON-ALCOHOLIC)-0.10%
Coca-Cola Enterprises Inc. 50,000 1,887,500
- ---------------------------------------------------------------
BIOTECHNOLOGY-0.09%
Biogen, Inc.(a) 40,000 1,775,000
- ---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-1.64%
Clear Channel Communications,
Inc.(a) 27,400 2,582,450
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
BROADCASTING (TELEVISION, RADIO &
CABLE)-(CONTINUED)
Comcast Corp.-Class A 400,000 $ 14,325,000
- ---------------------------------------------------------------
Jacor Communications, Inc.(a) 55,000 3,128,125
- ---------------------------------------------------------------
Liberty Media Group(a) 50,000 1,659,375
- ---------------------------------------------------------------
Tele-Communications, Inc.(a) 300,000 9,675,000
- ---------------------------------------------------------------
31,369,950
- ---------------------------------------------------------------
BUILDING MATERIALS-0.48%
USG Corp.(a) 180,000 9,247,500
- ---------------------------------------------------------------
CHEMICALS-0.53%
IMC Global, Inc. 50,000 1,800,000
- ---------------------------------------------------------------
Rohm & Haas Co. 77,200 8,323,124
- ---------------------------------------------------------------
10,123,124
- ---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-2.55%
ADC Telecommunications, Inc.(a) 114,100 3,415,869
- ---------------------------------------------------------------
Andrew Corp.(a) 42,000 960,750
- ---------------------------------------------------------------
Aspect Telecommunications
Corp.(a) 65,000 1,868,750
- ---------------------------------------------------------------
Brightpoint, Inc.(a) 100,000 1,950,000
- ---------------------------------------------------------------
General Instrument Corp.(a) 85,000 1,907,188
- ---------------------------------------------------------------
Lucent Technologies, Inc. 280,000 21,315,000
- ---------------------------------------------------------------
PairGain Technologies, Inc.(a) 200,000 3,687,500
- ---------------------------------------------------------------
Qwest Communications
International Inc.(a) 50,000 1,928,125
- ---------------------------------------------------------------
Tellabs, Inc.(a) 165,800 11,751,074
- ---------------------------------------------------------------
48,784,256
- ---------------------------------------------------------------
COMPUTERS (HARDWARE)-3.14%
Comdisco, Inc. 72,500 3,208,125
- ---------------------------------------------------------------
Dell Computer Corp.(a) 470,000 37,952,500
- ---------------------------------------------------------------
Gateway 2000, Inc.(a) 119,500 7,013,156
- ---------------------------------------------------------------
Hewlett-Packard Co. 70,000 5,271,874
- ---------------------------------------------------------------
International Business Machines
Corp. 57,000 6,604,874
- ---------------------------------------------------------------
60,050,529
- ---------------------------------------------------------------
COMPUTERS (NETWORKING)-1.37%
Ascend Communications, Inc.(a) 373,000 16,248,812
- ---------------------------------------------------------------
Cisco Systems, Inc.(a) 80,100 5,867,324
- ---------------------------------------------------------------
FORE Systems, Inc.(a) 175,000 4,003,124
- ---------------------------------------------------------------
26,119,260
- ---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.49%
EMC Corp.(a) 400,000 18,450,000
- ---------------------------------------------------------------
Lexmark International Group,
Inc.(a) 100,000 5,787,500
- ---------------------------------------------------------------
Storage Technology Corp.(a) 50,000 4,221,875
- ---------------------------------------------------------------
28,459,375
- ---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)-8.72%
America Online, Inc.(a) 200,000 $ 16,000,000
- ---------------------------------------------------------------
BMC Software, Inc.(a) 140,000 13,098,750
- ---------------------------------------------------------------
Broderbund Software, Inc.(a) 51,200 915,200
- ---------------------------------------------------------------
Cadence Design Systems, Inc.(a) 250,000 9,078,124
- ---------------------------------------------------------------
Computer Associates
International, Inc. 125,000 7,320,312
- ---------------------------------------------------------------
Computer Sciences Corp.(a) 90,000 4,747,500
- ---------------------------------------------------------------
Compuware Corp.(a) 560,000 27,370,000
- ---------------------------------------------------------------
Concord EFS, Inc.(a) 277,700 8,747,550
- ---------------------------------------------------------------
Electronic Arts, Inc.(a) 50,000 2,312,500
- ---------------------------------------------------------------
HBO & Co. 294,200 17,596,837
- ---------------------------------------------------------------
Intuit, Inc.(a) 106,000 5,637,875
- ---------------------------------------------------------------
Microsoft Corp.(a) 260,000 23,432,500
- ---------------------------------------------------------------
Oracle Corp.(a) 84,000 2,173,500
- ---------------------------------------------------------------
Parametric Technology Co.(a) 200,000 6,393,750
- ---------------------------------------------------------------
Platinum Technology, Inc.(a) 73,900 1,884,450
- ---------------------------------------------------------------
Sterling Commerce, Inc.(a) 109,211 4,648,292
- ---------------------------------------------------------------
Sterling Software, Inc.(a) 78,000 2,062,125
- ---------------------------------------------------------------
Symantec Corp.(a) 380,000 11,020,000
- ---------------------------------------------------------------
Wind River Systems(a) 60,000 2,077,500
- ---------------------------------------------------------------
166,516,765
- ---------------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES & GIFTS)-0.11%
Blyth Industries, Inc.(a) 59,000 2,164,563
- ---------------------------------------------------------------
CONSUMER FINANCE-2.15%
Capital One Financial Corp. 54,900 5,273,830
- ---------------------------------------------------------------
FIRSTPLUS Financial Group,
Inc.(a) 65,000 3,152,500
- ---------------------------------------------------------------
Household International, Inc. 50,000 6,571,874
- ---------------------------------------------------------------
IMC Mortgage Co.(a) 82,500 1,314,844
- ---------------------------------------------------------------
MBNA Corp. 200,000 6,775,000
- ---------------------------------------------------------------
SLM Holding Corp. 420,700 17,958,630
- ---------------------------------------------------------------
41,046,678
- ---------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-0.82%
AmeriSource Health Corp.-Class
A(a) 53,000 2,888,500
- ---------------------------------------------------------------
Cardinal Health, Inc. 81,000 7,796,250
- ---------------------------------------------------------------
McKesson Corp. 60,000 4,241,250
- ---------------------------------------------------------------
Sysco Corp. 27,000 642,938
- ---------------------------------------------------------------
15,568,938
- ---------------------------------------------------------------
ELECTRIC COMPANIES-0.62%
DTE Energy Co. 300,000 11,756,250
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT-1.83%
American Power Conversion
Corp.(a) 200,000 6,437,500
- ---------------------------------------------------------------
Berg Electronics Corp.(a) 62,800 1,495,425
- ---------------------------------------------------------------
General Electric Co. 120,000 10,215,000
- ---------------------------------------------------------------
Sanmina Corp.(a) 30,000 2,700,000
- ---------------------------------------------------------------
SCI Systems, Inc.(a) 258,800 10,659,324
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-(CONTINUED)
Symbol Technologies, Inc. 88,200 $ 3,395,700
- ---------------------------------------------------------------
34,902,949
- ---------------------------------------------------------------
ELECTRONICS (DEFENSE)-0.10%
General Motors Corp.-Class H(a) 35,700 1,972,425
- ---------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-2.12%
Analog Devices, Inc.(a) 107,800 4,197,463
- ---------------------------------------------------------------
Intel Corp. 222,900 18,013,105
- ---------------------------------------------------------------
Linear Technology Corp. 61,000 4,910,500
- ---------------------------------------------------------------
Maxim Integrated Products,
Inc.(a) 157,000 6,338,875
- ---------------------------------------------------------------
Microchip Technology, Inc.(a) 100,000 2,837,500
- ---------------------------------------------------------------
PMC-Sierra, Inc.(a) 50,000 2,275,000
- ---------------------------------------------------------------
Xilinx, Inc.(a) 43,900 2,008,425
- ---------------------------------------------------------------
40,580,868
- ---------------------------------------------------------------
ENTERTAINMENT-0.21%
Viacom, Inc.-Class B(a) 69,600 4,036,800
- ---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-1.20%
Applied Materials, Inc.(a) 165,000 5,960,625
- ---------------------------------------------------------------
KLA-Tencor Corp.(a) 210,000 8,465,624
- ---------------------------------------------------------------
Lam Research Corp.(a) 160,000 4,960,000
- ---------------------------------------------------------------
Teradyne, Inc.(a) 100,000 3,650,000
- ---------------------------------------------------------------
23,036,249
- ---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-3.88%
American Express Co. 50,000 5,100,000
- ---------------------------------------------------------------
Associates First Capital Corp.-
Class A 58,969 4,407,933
- ---------------------------------------------------------------
Fannie Mae 104,600 6,262,925
- ---------------------------------------------------------------
FINOVA Group, Inc. 60,000 3,513,750
- ---------------------------------------------------------------
Freddie Mac 280,000 12,967,500
- ---------------------------------------------------------------
MBIA, Inc. 14,000 1,044,750
- ---------------------------------------------------------------
MGIC Investment Corp. 260,000 16,380,000
- ---------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 154,000 12,146,750
- ---------------------------------------------------------------
SunAmerica, Inc. 245,000 12,234,687
- ---------------------------------------------------------------
74,058,295
- ---------------------------------------------------------------
FOODS-0.52%
Dean Foods Co. 160,000 7,500,000
- ---------------------------------------------------------------
Suiza Foods Corp.(a) 40,000 2,370,000
- ---------------------------------------------------------------
9,870,000
- ---------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.22%
Abbott Laboratories 63,500 4,643,438
- ---------------------------------------------------------------
American Home Products Corp. 40,900 3,808,813
- ---------------------------------------------------------------
Johnson & Johnson 64,000 4,568,000
- ---------------------------------------------------------------
Warner-Lambert Co. 54,700 10,348,555
- ---------------------------------------------------------------
23,368,806
- ---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (DRUGS-GENERIC & OTHER)-0.94%
Mylan Laboratories, Inc. 145,000 $ 3,933,125
- ---------------------------------------------------------------
Parexel International Corp.(a) 19,800 663,300
- ---------------------------------------------------------------
R.P. Scherer Corp.(a) 9,100 664,300
- ---------------------------------------------------------------
Watson Pharmaceuticals, Inc.(a) 295,000 12,685,000
- ---------------------------------------------------------------
17,945,725
- ---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-2.12%
Lilly (Eli) & Co. 50,000 3,478,125
- ---------------------------------------------------------------
Merck & Co., Inc. 128,700 15,508,350
- ---------------------------------------------------------------
Pfizer Inc. 134,000 15,250,875
- ---------------------------------------------------------------
Schering-Plough Corp. 77,600 6,217,700
- ---------------------------------------------------------------
40,455,050
- ---------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-1.22%
Health Management Associates,
Inc.-Class A(a) 300,000 9,450,000
- ---------------------------------------------------------------
Tenet Healthcare Corp.(a) 249,700 9,348,144
- ---------------------------------------------------------------
Universal Health Services,
Inc.-Class B(a) 77,100 4,438,069
- ---------------------------------------------------------------
23,236,213
- ---------------------------------------------------------------
HEALTH CARE (LONG TERM CARE)-0.96%
Beverly Enterprises, Inc.(a) 150,000 2,362,500
- ---------------------------------------------------------------
Health Care and Retirement
Corp.(a) 95,000 3,871,250
- ---------------------------------------------------------------
HEALTHSOUTH Corp.(a) 400,000 12,075,000
- ---------------------------------------------------------------
18,308,750
- ---------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-0.16%
Concentra Managed Care, Inc.(a) 100,000 3,112,500
- ---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-3.11%
Allegiance Corp. 46,300 2,112,438
- ---------------------------------------------------------------
Arterial Vascular Engineering,
Inc.(a) 205,600 7,273,100
- ---------------------------------------------------------------
Becton, Dickinson & Co. 170,000 11,836,250
- ---------------------------------------------------------------
DENTSPLY International Inc. 47,200 1,551,700
- ---------------------------------------------------------------
Guidant Corp. 340,000 22,737,500
- ---------------------------------------------------------------
PSS World Medical, Inc.(a) 75,000 1,682,813
- ---------------------------------------------------------------
Sofamor Danek Group, Inc.(a) 13,000 1,140,750
- ---------------------------------------------------------------
St. Jude Medical, Inc.(a) 50,000 1,771,875
- ---------------------------------------------------------------
Stryker Corp. 91,100 4,099,500
- ---------------------------------------------------------------
Sybron International Corp.(a) 200,000 5,300,000
- ---------------------------------------------------------------
59,505,926
- ---------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.72%
FPA Medical Management, Inc.(a) 70,500 881,250
- ---------------------------------------------------------------
Omnicare, Inc. 159,900 5,476,575
- ---------------------------------------------------------------
Orthodontic Centers of America,
Inc.(a) 52,400 1,120,050
- ---------------------------------------------------------------
Quintiles Transnational Corp.(a) 53,400 2,643,300
- ---------------------------------------------------------------
Total Renal Care Holdings,
Inc.(a) 112,666 3,732,061
- ---------------------------------------------------------------
13,853,236
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HOMEBUILDING-0.27%
Clayton Homes, Inc. 196,300 $ 3,938,269
- ---------------------------------------------------------------
Fleetwood Enterprises, Inc. 26,300 1,214,731
- ---------------------------------------------------------------
5,153,000
- ---------------------------------------------------------------
HOUSEHOLD FURNITURE & APPLIANCES-0.71%
Maytag Corp. 265,000 13,647,500
- ---------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.96%
Fort James Corp. 197,225 9,787,291
- ---------------------------------------------------------------
Procter & Gamble Co. (The) 105,000 8,629,688
- ---------------------------------------------------------------
18,416,979
- ---------------------------------------------------------------
HOUSEWARES-0.10%
Central Garden and Pet Co.(a) 55,000 1,883,750
- ---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-1.43%
Equitable Companies, Inc. 254,000 15,589,250
- ---------------------------------------------------------------
Nationwide Financial Services,
Inc.-Class A 80,000 3,470,000
- ---------------------------------------------------------------
Provident Companies, Inc. 100,000 3,906,250
- ---------------------------------------------------------------
Torchmark Corp. 100,000 4,456,250
- ---------------------------------------------------------------
27,421,750
- ---------------------------------------------------------------
INSURANCE (MULTI-LINE)-1.00%
American International Group,
Inc. 20,000 2,631,250
- ---------------------------------------------------------------
Travelers Group, Inc. 270,900 16,575,694
- ---------------------------------------------------------------
19,206,944
- ---------------------------------------------------------------
INSURANCE (PROPERTY-CASUALTY)-0.82%
Allstate Corp. (The) 120,000 11,550,000
- ---------------------------------------------------------------
Everest Reinsurance Holdings,
Inc. 47,400 1,955,250
- ---------------------------------------------------------------
Executive Risk Inc. 25,000 1,667,188
- ---------------------------------------------------------------
Mercury General Corp. 8,600 556,850
- ---------------------------------------------------------------
15,729,288
- ---------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-1.09%
Edwards (A.G.), Inc. 40,000 1,800,000
- ---------------------------------------------------------------
Merrill Lynch & Co., Inc. 80,000 7,020,000
- ---------------------------------------------------------------
Paine Webber Group Inc. 267,000 11,964,938
- ---------------------------------------------------------------
20,784,938
- ---------------------------------------------------------------
INVESTMENT MANAGEMENT-0.87%
Franklin Resources, Inc. 100,000 5,350,000
- ---------------------------------------------------------------
T. Rowe Price Associates, Inc. 149,300 11,272,150
- ---------------------------------------------------------------
16,622,150
- ---------------------------------------------------------------
IRON & STEEL-0.50%
USX-US Steel Group, Inc. 244,000 9,546,500
- ---------------------------------------------------------------
LEISURE TIME (PRODUCTS)-0.38%
Harley-Davidson, Inc. 150,000 5,400,000
- ---------------------------------------------------------------
North Face, Inc. (The)(a) 80,000 1,795,000
- ---------------------------------------------------------------
7,195,000
- ---------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
LODGING-HOTELS-0.72%
Carnival Corp.-Class A 152,000 $ 10,573,500
- ---------------------------------------------------------------
Host Marriott Corp.(a) 82,100 1,595,819
- ---------------------------------------------------------------
Promus Hotel Corp.(a) 32,375 1,462,945
- ---------------------------------------------------------------
Sunburst Hospitality Corp.(a) 16,200 130,613
- ---------------------------------------------------------------
13,762,877
- ---------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.97%
Caterpillar Inc. 185,000 10,533,438
- ---------------------------------------------------------------
Ingersoll-Rand Co. 172,500 7,945,781
- ---------------------------------------------------------------
18,479,219
- ---------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-2.63%
Eaton Corp. 95,000 8,775,625
- ---------------------------------------------------------------
Hillenbrand Industries, Inc. 34,800 2,170,650
- ---------------------------------------------------------------
Pentair, Inc. 19,200 830,400
- ---------------------------------------------------------------
Premark International, Inc. 285,000 9,511,875
- ---------------------------------------------------------------
Thermo Electron Corp.(a) 200,000 7,962,500
- ---------------------------------------------------------------
Tyco International Ltd. 100,000 5,450,000
- ---------------------------------------------------------------
United Technologies Corp. 158,000 15,553,125
- ---------------------------------------------------------------
50,254,175
- ---------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-0.57%
Cognex Corp.(a) 55,000 1,330,313
- ---------------------------------------------------------------
Parker-Hannifin Corp. 215,000 9,594,375
- ---------------------------------------------------------------
10,924,688
- ---------------------------------------------------------------
METAL FABRICATORS-0.10%
Kennametal, Inc. 35,000 1,865,938
- ---------------------------------------------------------------
NATURAL GAS-0.86%
Columbia Energy Group 114,600 9,311,250
- ---------------------------------------------------------------
El Paso Natural Gas Co. 50,000 1,846,875
- ---------------------------------------------------------------
Equitable Resources, Inc. 45,000 1,462,500
- ---------------------------------------------------------------
KN Energy, Inc. 65,000 3,814,688
- ---------------------------------------------------------------
16,435,313
- ---------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-0.08%
Herman Miller, Inc. 50,000 1,509,375
- ---------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-5.83%
BJ Services Co.(a) 325,000 12,187,500
- ---------------------------------------------------------------
Camco International, Inc. 80,000 5,430,000
- ---------------------------------------------------------------
Cooper Cameron Corp.(a) 100,000 6,643,750
- ---------------------------------------------------------------
EVI, Inc.(a) 99,700 5,309,025
- ---------------------------------------------------------------
Global Industries Ltd.(a) 200,000 4,537,500
- ---------------------------------------------------------------
Halliburton Co. 65,000 3,575,000
- ---------------------------------------------------------------
Input/Output, Inc.(a) 200,000 4,975,000
- ---------------------------------------------------------------
Noble Drilling Corp.(a) 225,000 7,270,313
- ---------------------------------------------------------------
Pride International, Inc.(a) 200,000 4,862,500
- ---------------------------------------------------------------
R&B Falcon Corporation(a) 125,000 4,007,813
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL & GAS (DRILLING & EQUIPMENT)-(CONTINUED)
Rowan Companies, Inc.(a) 132,300 $ 3,894,581
- ---------------------------------------------------------------
Santa Fe International Corp. 80,000 3,135,000
- ---------------------------------------------------------------
Smith International, Inc.(a) 140,800 8,272,000
- ---------------------------------------------------------------
Transocean Offshore Inc. 80,000 4,470,000
- ---------------------------------------------------------------
Varco International, Inc.(a) 550,000 16,912,500
- ---------------------------------------------------------------
Western Atlas Inc.(a) 200,000 15,800,000
- ---------------------------------------------------------------
111,282,482
- ---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.36%
Burlington Resources, Inc. 41,100 1,931,700
- ---------------------------------------------------------------
Ocean Energy, Inc.(a) 117,000 2,866,500
- ---------------------------------------------------------------
Santa Fe Energy Resources,
Inc.(a) 200,000 2,062,500
- ---------------------------------------------------------------
6,860,700
- ---------------------------------------------------------------
OIL & GAS (REFINING & MARKETING)-1.13%
Ashland, Inc. 200,000 10,575,000
- ---------------------------------------------------------------
Sun Company, Inc. 270,000 10,918,125
- ---------------------------------------------------------------
21,493,125
- ---------------------------------------------------------------
PERSONAL CARE-0.83%
Avon Products, Inc. 77,400 6,361,313
- ---------------------------------------------------------------
Gillette Co. 55,000 6,349,063
- ---------------------------------------------------------------
Rexall Sundown, Inc.(a) 96,200 3,072,388
- ---------------------------------------------------------------
15,782,764
- ---------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.40%
AES Corp.(a) 139,300 7,687,619
- ---------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-0.08%
A.H. Belo Corp. 30,000 1,588,125
- ---------------------------------------------------------------
RAILROADS-0.28%
Kansas City Southern Industries,
Inc. 120,000 5,422,500
- ---------------------------------------------------------------
RESTAURANTS-0.74%
CKE Restaurants, Inc. 82,500 2,856,563
- ---------------------------------------------------------------
Cracker Barrel Old Country Store,
Inc. 46,300 1,701,525
- ---------------------------------------------------------------
Starbucks Corp.(a) 200,000 9,625,000
- ---------------------------------------------------------------
14,183,088
- ---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-0.84%
Home Depot, Inc. 59,200 4,121,800
- ---------------------------------------------------------------
Lowe's Companies, Inc. 170,000 11,889,375
- ---------------------------------------------------------------
16,011,175
- ---------------------------------------------------------------
RETAIL (COMPUTERS & ELECTRONICS)-1.34%
Best Buy Co., Inc.(a) 158,700 11,148,675
- ---------------------------------------------------------------
CDW Computer Centers, Inc.(a) 84,100 4,078,850
- ---------------------------------------------------------------
Circuit City Stores-Circuit City
Group 116,800 4,745,000
- ---------------------------------------------------------------
Ingram Micro, Inc.-Class A(a) 121,300 5,534,313
- ---------------------------------------------------------------
25,506,838
- ---------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (DEPARTMENT STORES)-0.41%
Federated Department Stores,
Inc.(a) 73,500 $ 3,615,281
- ---------------------------------------------------------------
Kohl's Corp.(a) 100,000 4,131,250
- ---------------------------------------------------------------
7,746,531
- ---------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.40%
Dollar General Corp. 59,325 2,246,934
- ---------------------------------------------------------------
Dollar Tree Stores, Inc.(a) 100,000 5,425,000
- ---------------------------------------------------------------
7,671,934
- ---------------------------------------------------------------
RETAIL (DRUG STORES)-0.67%
CVS Corp. 65,580 4,836,525
- ---------------------------------------------------------------
Rite Aid Corp. 248,000 7,967,000
- ---------------------------------------------------------------
12,803,525
- ---------------------------------------------------------------
RETAIL (FOOD CHAINS)-2.05%
Albertson's, Inc. 94,000 4,700,000
- ---------------------------------------------------------------
Kroger Co.(a) 275,500 11,536,563
- ---------------------------------------------------------------
Safeway, Inc.(a) 601,314 23,000,261
- ---------------------------------------------------------------
39,236,824
- ---------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-2.29%
Costco Companies, Inc.(a) 250,000 13,968,750
- ---------------------------------------------------------------
Dayton Hudson Corp. 214,500 18,728,531
- ---------------------------------------------------------------
Fred Meyer, Inc.(a) 135,700 6,089,538
- ---------------------------------------------------------------
Kmart Corp.(a) 281,900 4,915,631
- ---------------------------------------------------------------
43,702,450
- ---------------------------------------------------------------
RETAIL (SPECIALTY)-1.65%
AutoZone, Inc.(a) 95,000 2,867,813
- ---------------------------------------------------------------
Linens 'N Things, Inc.(a) 50,000 3,012,500
- ---------------------------------------------------------------
Michaels Stores, Inc.(a) 80,000 2,420,000
- ---------------------------------------------------------------
Office Depot, Inc.(a) 297,400 9,851,375
- ---------------------------------------------------------------
Staples, Inc.(a) 372,900 9,205,969
- ---------------------------------------------------------------
Tiffany & Co. 1,600 72,800
- ---------------------------------------------------------------
Viking Office Products, Inc.(a) 90,000 2,176,875
- ---------------------------------------------------------------
Williams-Sonoma, Inc.(a) 35,000 1,922,813
- ---------------------------------------------------------------
31,530,145
- ---------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-1.19%
Gap, Inc. 111,600 5,740,425
- ---------------------------------------------------------------
Men's Wearhouse, Inc. (The)(a) 105,000 4,423,125
- ---------------------------------------------------------------
TJX Companies, Inc. 284,000 12,567,000
- ---------------------------------------------------------------
22,730,550
- ---------------------------------------------------------------
SAVINGS & LOAN COMPANIES-1.83%
Ahmanson (H.F.) & Co. 325,000 24,781,250
- ---------------------------------------------------------------
Dime Bancorp, Inc. 75,000 2,301,563
- ---------------------------------------------------------------
GreenPoint Financial Corp. 200,000 7,937,500
- ---------------------------------------------------------------
35,020,313
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SERVICES (ADVERTISING/MARKETING)-0.56%
Omnicom Group, Inc. 50,000 $ 2,368,750
- ---------------------------------------------------------------
Outdoor Systems, Inc.(a) 200,000 6,350,000
- ---------------------------------------------------------------
Snyder Communications, Inc.(a) 45,000 1,912,500
- ---------------------------------------------------------------
10,631,250
- ---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-1.25%
Choice Hotels International,
Inc.(a) 23,100 395,588
- ---------------------------------------------------------------
Cintas Corp. 35,000 1,666,875
- ---------------------------------------------------------------
Service Corp. International 419,700 17,312,625
- ---------------------------------------------------------------
Stewart Enterprises, Inc.-Class A 176,000 4,532,000
- ---------------------------------------------------------------
23,907,088
- ---------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-0.36%
Gartner Group, Inc.-Class A(a) 100,000 3,312,500
- ---------------------------------------------------------------
SunGard Data Systems Inc.(a) 99,000 3,526,875
- ---------------------------------------------------------------
6,839,375
- ---------------------------------------------------------------
SERVICES (DATA PROCESSING)-1.38%
Ceridian Corp.(a) 54,900 3,105,281
- ---------------------------------------------------------------
CSG Systems International,
Inc.(a) 65,500 2,980,250
- ---------------------------------------------------------------
DST Systems, Inc.(a) 63,900 3,522,488
- ---------------------------------------------------------------
Equifax, Inc. 120,600 4,665,713
- ---------------------------------------------------------------
Fiserv, Inc.(a) 83,100 5,432,663
- ---------------------------------------------------------------
Paychex, Inc. 85,350 4,635,572
- ---------------------------------------------------------------
PMT Services, Inc.(a) 100,000 1,950,000
- ---------------------------------------------------------------
26,291,967
- ---------------------------------------------------------------
SERVICES (EMPLOYMENT)-0.18%
AccuStaff, Inc.(a) 98,540 3,535,123
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-.10%
Nextel Communications, Inc.(a) 65,000 1,864,688
- ---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-1.43%
AT&T Corp. 170,000 10,210,625
- ---------------------------------------------------------------
MCI Communications Corp. 340,000 17,106,250
- ---------------------------------------------------------------
27,316,875
- ---------------------------------------------------------------
TEXTILES (APPAREL)-1.96%
Columbia Sportswear Co.(a) 220,400 4,683,500
- ---------------------------------------------------------------
Liz Claiborne, Inc. 245,000 12,050,938
- ---------------------------------------------------------------
Tommy Hilfiger Corp.(a) 160,000 9,760,000
- ---------------------------------------------------------------
VF Corp. 210,000 10,920,000
- ---------------------------------------------------------------
37,414,438
- ---------------------------------------------------------------
TEXTILES (SPECIALTY)-0.09%
Unifi, Inc. 46,300 1,773,869
- ---------------------------------------------------------------
WASTE MANAGEMENT-0.89%
American Disposal Services,
Inc.(a) 50,100 2,008,697
- ---------------------------------------------------------------
USA Waste Services, Inc.(a) 159,125 7,807,070
- ---------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
WASTE MANAGEMENT-(CONTINUED)
Waste Management, Inc. 212,000 $ 7,102,000
- ---------------------------------------------------------------
16,917,767
- ---------------------------------------------------------------
Total Domestic Common Stocks
(Cost $1,152,855,880) 1,785,693,329
- ---------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-2.83%
CANADA-0.67%
Newcourt Credit Group, Inc.
(Financial-Diversified) 180,000 8,842,500
- ---------------------------------------------------------------
Potash Corp. of Saskatchewan Inc.
(Chemicals) 20,000 1,786,250
- ---------------------------------------------------------------
Precision Drilling Corp.(a) (Oil
& Gas-Drilling & Equipment) 85,000 2,029,375
- ---------------------------------------------------------------
12,658,125
- ---------------------------------------------------------------
FINLAND-0.63%
Nokia Oyj A.B.-Class A-ADR
(Communications Equipment) 180,000 12,037,500
- ---------------------------------------------------------------
GERMANY-0.50%
Volkswagen A.G. (Automobiles) 12,000 9,557,996
- ---------------------------------------------------------------
IRELAND-0.26%
Elan Corp. PLC-ADR(a) (Health
Care-Drugs-Generic & Other) 80,000 4,970,000
- ---------------------------------------------------------------
ISRAEL-0.03%
Tecnomatix Technologies Ltd.(a)
(Computers-Software & Services) 25,000 634,375
- ---------------------------------------------------------------
NETHERLANDS-0.37%
Philips Electronics N.V.
(Household Furniture &
Appliances) 80,000 7,049,156
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SWEDEN-0.32%
Telefonaktiebolaget LM
Ericsson-ADR (Communications
Equipment) 92,000 $ 4,732,250
- ---------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson-Class B
(Communications Equipment) 26,300 1,385,998
- ---------------------------------------------------------------
6,118,248
- ---------------------------------------------------------------
UNITED KINGDOM-0.05%
Stolt Comex Seaway, S.A.(a) (Oil
& Gas-Exploration & Production) 30,000 975,000
- ---------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$41,499,836) 54,000,400
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS-0.16%
COMPUTERS (PERIPHERALS)-0.16%
EMC Corp., Conv. Sub. Notes,
3.25%
03/15/02 $ 1,450,000 3,100,825
- ---------------------------------------------------------------
REPURCHASE AGREEMENTS-3.86%(b)
Dean Witter Reynolds, Inc.,
5.55%, 05/01/98(c) 759,279 759,279
- ---------------------------------------------------------------
Lehman Brothers Inc., 5.30%,
05/01/98(d) 73,000,000 73,000,000
- ---------------------------------------------------------------
Total Repurchase Agreements
(Cost $73,759,279) 73,759,279
- ---------------------------------------------------------------
TOTAL INVESTMENTS-100.33% 1,916,553,833
- ---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-(0.33)% (6,341,982)
- ---------------------------------------------------------------
NET ASSETS-100.00% $1,910,211,851
===============================================================
</TABLE>
Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Sub. - Subordinated
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) 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 investment companies managed by the
investments advisor or its affiliates.
(c) Joint repurchase agreement entered into 04/30/98 with a maturing value of
$300,046,250. Collateralized by $307,111,000 U.S. Government agency
obligations, 0% to 9.40% due 06/10/98 to 09/26/19 with an aggregate market
value at 04/30/98 of $306,000,308.
(d) Joint repurchase agreement entered into 04/30/98 with a maturing value of
$450,066,250. Collateralized by $522,302,000 U.S. Government agency
obligations, 0% to 7.445% due 08/14/98 to 10/08/27 with an aggregate market
value at 04/30/98 of $459,005,491.
See Notes to Financial Statements.
11
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$1,270,078,716) $1,916,553,833
- -------------------------------------------------------------
Foreign currencies, at value (cost $676,038) 679,577
- -------------------------------------------------------------
Receivables for:
Investments sold 11,103,470
- -------------------------------------------------------------
Capital stock sold 579,639
- -------------------------------------------------------------
Dividends and interest 691,641
- -------------------------------------------------------------
Investment for deferred compensation plan 31,451
- -------------------------------------------------------------
Other assets 18,794
- -------------------------------------------------------------
Total assets 1,929,658,405
- -------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 17,416,182
- -------------------------------------------------------------
Capital stock reacquired 769,146
- -------------------------------------------------------------
Deferred compensation 31,451
- -------------------------------------------------------------
Accrued advisory fees 993,914
- -------------------------------------------------------------
Accrued administrative services fees 5,741
- -------------------------------------------------------------
Accrued directors' fees 1,250
- -------------------------------------------------------------
Accrued operating expenses 228,870
- -------------------------------------------------------------
Total liabilities 19,446,554
- -------------------------------------------------------------
Net assets applicable to shares outstanding $1,910,211,851
=============================================================
CAPITAL STOCK, $0.01 PAR VALUE PER SHARE:
Authorized 1,000,000,000
- -------------------------------------------------------------
Outstanding 121,311,267
=============================================================
Net asset value and redemption price per
share $ 15.75
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended April 30, 1998
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $82,622 foreign withholding
tax) $ 5,511,319
- ------------------------------------------------------------
Interest 2,374,387
- ------------------------------------------------------------
Total investment income 7,885,706
- ------------------------------------------------------------
EXPENSES:
Advisory fees 5,467,169
- ------------------------------------------------------------
Administrative services fees 33,640
- ------------------------------------------------------------
Custodian fees 124,038
- ------------------------------------------------------------
Directors' fees 7,827
- ------------------------------------------------------------
Transfer agent fees 20,494
- ------------------------------------------------------------
Other 122,187
- ------------------------------------------------------------
Total expenses 5,775,355
- ------------------------------------------------------------
Less: Expenses paid indirectly (8,909)
- ------------------------------------------------------------
Net expenses 5,766,446
- ------------------------------------------------------------
Net investment income 2,119,260
- ------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FUTURES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 121,933,963
- ------------------------------------------------------------
Foreign currencies 41,683
- ------------------------------------------------------------
Futures contracts (348,258)
- ------------------------------------------------------------
Option contracts (531,869)
- ------------------------------------------------------------
121,095,519
- ------------------------------------------------------------
NET UNREALIZED APPRECIATION OF:
Investment securities 126,714,718
- ------------------------------------------------------------
Foreign currencies 17,940
- ------------------------------------------------------------
126,732,658
- ------------------------------------------------------------
Net gain from investment securities,
foreign currencies, futures and option
contracts 247,828,177
- ------------------------------------------------------------
Net increase in net assets resulting from
operations $249,947,437
============================================================
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 15
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended April 30, 1998 and the year ended October 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1998 1997
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,119,260 $ 1,608,756
- ----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures and option contracts 121,095,519 151,798,786
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities,
foreign currencies and option contracts 126,732,658 212,044,735
- ----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 249,947,437 365,452,277
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (1,659,353) (3,131,614)
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains (154,163,711) (114,611,563)
- ----------------------------------------------------------------------------------------------
Net equalization credits (See Note 1) -- 2,437,968
- ----------------------------------------------------------------------------------------------
Share transactions-net 165,853,442 139,078,724
- ----------------------------------------------------------------------------------------------
Net increase in net assets 259,977,815 389,225,792
- ----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,650,234,036 1,261,008,244
- ----------------------------------------------------------------------------------------------
End of period $1,910,211,851 $1,650,234,036
==============================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $1,144,062,795 $ 956,102,084
- ----------------------------------------------------------------------------------------------
Undistributed net investment income 1,944,521 23,591,883
- ----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, futures and option
contracts 117,711,478 150,779,670
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities,
foreign currencies and option contracts 646,493,057 519,760,399
- ----------------------------------------------------------------------------------------------
$1,910,211,851 $1,650,234,036
==============================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
(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 preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations-A security listed or traded on an exchange (except
convertible bonds) is valued at 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, coupon rate 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. Generally, trading in foreign
securities is substantially completed each day at various times prior to the
close of the New York Stock Exchange. The values of such securities used in
computing the net asset value of the Fund's shares are determined as of such
times. Foreign currency exchange notes are also generally determined prior to
the close of the New York Stock Exchange. Occasionally, events affecting the
values of such securities and such exchange rates may occur between
13
<PAGE> 16
the times at which they are determined and the close of the New York Stock
Exchange which would not be reflected in the computation of the Fund's net
asset value. If events materially affecting the value of such securities
occur during such period, then these securities will be valued at their fair
value as determined in good faith by or under the supervision of the Board of
Directors.
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. Foreign Currency Translations-Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at the date of valuation. Purchases and sales of portfolio securities
and income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions.
D. Foreign Currency Contracts-A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
E. Federal Income Taxes-The Fund intends to comply with the requirements of the
Internal Revenue Code necessary to qualify as a regulated investment company
and, as such, will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is distributed to
shareholders. Therefore, no provision for federal income taxes is recorded in
the financial statements.
F. Equalization-The Fund previously followed 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
net income when the transaction is recorded so that the undistributed net
investment income per share is unaffected by sales or redemptions of Fund
shares. Effective November 1, 1997, the Fund discontinued equalization
accounting and reclassified the cumulative equalization credits of
$22,107,269 from undistributed net investment income to paid-in capital. This
change has no effect on the net assets, the results of operations or the net
asset value per share of the Fund.
G. 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.
H. Covered Call Options-The Fund may write call options, but only on a covered
basis; that is, the Fund will own the underlying security. Options written by
the Fund normally will have expiration dates between three and nine months
from the date written. The exercise price of a call option may be below,
equal to, or above the current market value of the underlying security at the
time the option is written. When the Fund writes a covered call option, an
amount equal to the premium received by the Fund is recorded as an asset and
an equivalent liability. The amount of the liability is subsequently
"marked-to-market" to reflect the current market value of the option written.
The current market value of a written option is the mean between the last bid
and asked prices on that day. If a written call option expires on the
stipulated expiration date, or if the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or a loss if the closing purchase
transaction exceeds the premium received when the option was written) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. If a written option is
exercised, the Fund realizes a gain or a loss from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the call
option at any time during the option period. During the option period, in
return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has retained
the risk of loss should the price of the underlying security decline. During
the option period, the Fund may be required at any time to deliver the
underlying security against payment of the exercise price. This obligation is
terminated upon the expiration of the option period or at such earlier time
at which the Fund effects a closing purchase transaction by purchasing (at a
price which may be higher than that received when the call option was
written) a call option identical to the one originally written.
14
<PAGE> 17
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 master investment 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 TradeStreet 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, 1998, the Fund
reimbursed AIM $33,640 for such services.
During the six months ended April 30, 1998, the Fund paid legal fees of $2,432
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-INDIRECT EXPENSES
During the six months ended April 30, 1998, the Fund received reductions in
custodian fees of $8,909 under an expense offset arrangement. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of $8,909
during the six months ended April 30, 1998.
NOTE 4-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 5-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) $500,000,000 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, 1998, 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 0.05% 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.
Pursuant to an amendment to the line of credit agreement effective May 1,
1998, the Fund may borrow up to the lesser of (i) $1,000,000,000 or (ii) the
limits set by the prospectus for borrowings.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended April 30, 1998 was
$710,182,725 and $684,312,469, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of April 30, 1998, on a tax basis, is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $659,396,198
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (14,366,318)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $645,029,880
=========================================================
</TABLE>
* Cost of investments for tax purposes is $1,271,523,953.
NOTE 7-CAPITAL STOCK
Changes in capital stock outstanding during the six months ended April 30, 1998
and the year ended October 31, 1997 were as follows:
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1998 1997
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold 5,886,624 $ 87,327,243 8,716,348 $114,553,393
- -----------------------------------------------------------------------------
Issued as
reinvestment of
dividends 11,513,956 152,559,904 9,816,281 113,770,753
- -----------------------------------------------------------------------------
Reacquired (4,985,200) (74,033,705) (6,706,799) (89,245,422)
- -----------------------------------------------------------------------------
12,415,380 $165,853,442 11,825,830 $139,078,724
=============================================================================
</TABLE>
NOTE 8-OPTION CONTRACTS WRITTEN
Transactions in call options written during the six months ended April 30, 1998
are summarized as follows:
<TABLE>
<CAPTION>
OPTION CONTRACTS
---------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
------ --------
<S> <C> <C>
Beginning of period 0 0
- ---------------------------------------- ------ --------
Written 1,700 449,371
- ---------------------------------------- ------ --------
Closed (1,700) (449,371)
- ---------------------------------------- ------ --------
End of period 0 $ 0
======================================== ====== ========
</TABLE>
15
<PAGE> 18
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock
outstanding during the six months ended April 30, 1998, each of the years in the
four-year period ended October 31, 1997, the ten months ended October 31, 1993
and the year ended December 31, 1992.
<TABLE>
<CAPTION>
OCTOBER 31,
APRIL 30, ---------------------------------------------------------- DECEMBER 31,
1998 1997 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.15 $ 12.99 $ 12.14 $ 9.78 $ 10.46 $ 9.64 $ 10.09
- --------------------------------------- ---------- ---------- ---------- ---------- -------- -------- --------
Income from investment operations:
Net investment income 0.02 0.02 0.04 0.04 0.10 0.09 0.11
- --------------------------------------- ---------- ---------- ---------- ---------- -------- -------- --------
Net gains (losses) on securities
(both realized and unrealized) 2.00 3.34 1.69 2.81 (0.04) 0.73 0.35
- --------------------------------------- ---------- ---------- ---------- ---------- -------- -------- --------
Total from investment operations 2.02 3.36 1.73 2.85 0.06 0.82 0.46
- --------------------------------------- ---------- ---------- ---------- ---------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.01) (0.03) (0.03) (0.10) (0.10) -- (0.11)
- --------------------------------------- ---------- ---------- ---------- ---------- -------- -------- --------
Distributions from net realized gains (1.41) (1.17) (0.85) (0.39) (0.64) -- (0.80)
- --------------------------------------- ---------- ---------- ---------- ---------- -------- -------- --------
Total distributions (1.42) (1.20) (0.88) (0.49) (0.74) -- (0.91)
- --------------------------------------- ---------- ---------- ---------- ---------- -------- -------- --------
Net asset value, end of period $ 15.75 $ 15.15 $ 12.99 $ 12.14 $ 9.78 $ 10.46 $ 9.64
======================================= ========== ========== ========== ========== ======== ======== ========
Total return(a) 15.11% 28.53% 15.61% 31.03% 0.61% 8.51% 4.50%
======================================= ========== ========== ========== ========== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $1,910,212 $1,650,234 $1,261,008 $1,050,011 $765,073 $705,580 $604,329
======================================= ========== ========== ========== ========== ======== ======== ========
Ratio of expenses to average net assets 0.67%(b)(c) 0.68% 0.70% 0.71% 0.72% 0.79%(d) 0.76%
======================================= ========== ========== ========== ========== ======== ======== ========
Ratio of net investment income to
average net assets 0.25%(b) 0.11% 0.29% 0.33% 1.04% 1.13%(d) 1.09%
======================================= ========== ========== ========== ========== ======== ======== ========
Portfolio turnover rate 41% 88% 118% 126% 122% 116% 97%
======================================= ========== ========== ========== ========== ======== ======== ========
Average brokerage commission rate
paid(e) $ 0.0601 $ 0.0608 $ 0.0643 N/A N/A N/A N/A
======================================= ========== ========== ========== ========== ======== ======== ========
</TABLE>
(a) Does not deduct sales charges and are not annualized for periods less than
one year.
(b) Ratios are annualized and based on average net assets of $1,729,992,737.
(c) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average net assets would have been the same.
(d) Annualized.
(e) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
16
<PAGE> 19
Directors & Officers
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
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
Director
ACE Limited; John J. Arthur A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Treasurer 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Carol F. Relihan Houston, TX 77046
Senior Vice President and Secretary
Owen Daly II SUB-ADVISOR
Director Gary T. Crum
Cortland Trust Inc. Senior Vice President TradeStreet Investment Associates, Inc.
101 South Tryon Street
Edward K. Dunn Jr. Dana R. Sutton Suite 1000
Chairman, Mercantile Mortgage Corp.; Vice President and Assistant Treasurer Charlotte, NC 28255
Formerly Vice Chairman and President,
Mercantile-Safe Deposit & Trust Co.; and Melville B. Cox TRANSFER AGENT
President, Mercantile Bankshares Vice President
Boston Financial Data Services, Inc.
Jack Fields Jonathan C. Schoolar P.O. Box 8300
Chief Executive Officer Vice President Boston, MA 02266-8300
Texana Global, Inc.;
Formerly Member Renee A. Bamford CUSTODIAN
of the U.S. House of Representatives Assistant Secretary
State Street Bank and Trust Company
Carl Frischling P. Michelle Grace 225 Franklin Street
Partner Assistant Secretary Boston MA 02110
Kramer, Levin, Naftalis & Frankel
Jeffrey H. Kupor COUNSEL TO THE FUND
Robert H. Graham Assistant Secretary
President and Chief Executive Officer Ballard Spahr
A I M Management Group Inc. Nancy L. Martin Andrews & Ingersoll, LLP
Assistant Secretary 1735 Market Street
John F. Kroeger Philadelphia, PA 19103
Formerly Consultant Ofelia M. Mayo
Wendell & Stockel Associates, Inc. Assistant Secretary COUNSEL TO THE DIRECTORS
Lewis F. Pennock Lisa A. Moss Kramer, Levin, Naftalis & Frankel
Attorney Assistant Secretary 919 Third Avenue
New York, NY 10022
Ian W. Robinson Kathleen J. Pflueger
Consultant; Formerly Executive Assistant Secretary DISTRIBUTOR
Vice President and
Chief Financial Officer Samuel D. Sirko A I M Distributors, Inc.
Bell Atlantic Management Assistant Secretary 11 Greenway Plaza
Services, Inc. Suite 100
Stephen I. Winer Houston, TX 77046
Louis S. Sklar Assistant Secretary
Executive Vice President
Hines Interests Mary J. Benson
Limited Partnership Assistant Treasurer
</TABLE>
<PAGE> 20
[AIM LOGO APPEARS HERE]
SUM-SAR-1
