<PAGE> 1
ANNUAL REPORT/OCTOBER 31, 1998
AIM SUMMIT FUND, INC.
[AIM LOGO APPEARS HERE] [COVER IMAGE]
INVEST WITH DISCIPLINE--Registered Trademark--
<PAGE> 2
[COVER IMAGE]
-------------------------------------
THE PIONEER CABIN OF THE YOSEMITE VALLEY
BY CURRIER AND IVES (1857-1907, AMERICAN)
THE LITHOGRAPHY FIRM OF CURRIER AND IVES IMMORTALIZED LIFE IN 19TH
CENTURY AMERICA THROUGH ITS SERIES OF POPULAR PRINTS. THESE
NATIONAL TREASURES SHAPED A WHOLE ERA'S UNDERSTANDING OF WHAT IT
MEANS TO BE "AMERICAN." THIS CLASSIC PIECE PAYS TRIBUTE TO THE
PERSEVERANCE AND DEDICATION OF PIONEERS IN THE AMERICAN WEST-
QUALITIES THAT, TODAY, CHARACTERIZE THE DISCIPLINED INVESTOR.
-------------------------------------
AIM Summit Fund, Inc. is for shareholders who seek capital growth through
systematic investments.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Summit Fund, Inc. 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.
o 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 creation and sales charges applicable
to a completed 15-year investment plan total 8.50% for the smallest plan
size, $50 per month. Larger plans carry lower sales charges as outlined in
the prospectus.
o Dollar-cost averaging does not assure a profit and does not protect against
loss in declining markets. Since dollar-cost averaging involves continuous
investing regardless of fluctuating securities prices, investors should
consider their ability to continue purchases during market downturns.
o During the fiscal year ended October 31, 1998, the Fund paid distributions
of $1.44 per share.
o The Fund's investment return and principal value will fluctuate so that an
Investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Dow Jones Industrial Average (the Dow) is a price-weighted average of 30
actively traded primarily industrial stocks.
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 fund performance monitor. Results
shown reflect reinvestment of dividends.
o The Russell 2000 Stock Index is an unmanaged index generally considered
representative of small-capitalization stocks.
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 Standard & Poor's 400 Mid-Cap Index (S&P 400) is an unmanaged index
comprising common stocks of approximately 400 mid-capitalization companies.
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.
AIM SUMMIT FUND, INC.
<PAGE> 3
ANNUAL REPORT/CHAIRMAN'S LETTER
Dear Fellow Shareholder:
Throughout the fiscal year covered by this report, markets
[PHOTO OF vacillated between optimism that Asia's woes would be
Charles T. contained and worry that they would become a major drag on
Bauer, the U.S. and other economies. Changes in investor sentiment
Chairman of affected various financial markets differently. The stock
the Board of market was especially volatile. Uncertainty in stocks
THE FUND bolstered U.S. Treasury issues, whose safety attracts
APPEARS HERE] investors in doubtful times.
We understand how unnerving this year's level of
volatility can be. Undoubtedly, many of you were tempted to
simply exit the stock market. Our reaction, of course, is
that you should not. The abrupt reversals of sentiment this
fiscal year reinforce our conviction that markets are
unpredictable in the short term. Since even the best money
managers cannot know when to enter and exit a market, we
think the wisest strategy is to stay fully invested despite
volatility and short-term disappointment.
MARKET RECAP
Financial crises overseas and widespread decline in the rate of U.S. corporate
earnings growth helped foster uncertainty. During the summer of 1998, a
worldwide loss of confidence led to a major market correction for equities,
including the blue chips that had led the market. In August, the Dow Jones
Industrial Average (the Dow) had its worst- performing month in a decade.
Fortunately, the U.S. Federal Reserve Board (the Fed) intervened, cutting
interest rates twice, on September 29 and October 15, to pump liquidity and
confidence into the markets. As investors responded favorably, the fiscal year
closed with domestic equities rallying again and bonds in retreat-a complete
about-face from just a few weeks earlier. October 1998 ended up being the Dow's
best month in 11 years. (After the fiscal year closed, as this report was being
written, the Fed cut rates a third time.)
Some major stock indexes produced excellent total results for the fiscal
year, with the S&P 500 up more than 20%. But focusing on one market benchmark
may give you an incomplete view. The divergence between the S&P 500 and other
market segments was quite dramatic this fiscal year: the midcap S&P 400 rose
only 6.71%, while the Russell 2000 Index of small-company stocks declined
11.84%. Even within the S&P 500 itself, the bigger the company, the better the
performance.
However unsettling markets have been, the fundamental principles of
investing remain unchanged: long-term thinking, broad portfolio diversification,
and realistic expectations, recognizing the potential for downturns. Your
financial consultant is your best resource for helping you construct a
diversified portfolio and weather turbulent markets.
YOUR FUND MANAGERS' COMMENTS
We are pleased to send you this report on your Fund's fiscal year. On the pages
that follow, your Fund's management team offers more detailed discussion of how
markets behaved, how they managed the portfolio, and what they foresee for
markets and your Fund. We hope you find their discussion informative. 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
------------------------
THE ABRUPT
REVERSALS OF SENTIMENT
THIS FISCAL YEAR REINFORCE
OUR CONVICTION THAT
MARKETS ARE UNPREDICTABLE
IN THE SHORT TERM.
------------------------
AIM SUMMIT FUND, INC.
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND PERFORMANCE REMAINS STRONG
IN VOLATILE MARKET
THE MARKET EXPERIENCED ALL-TIME HIGHS AND ONE OF ITS MOST VICIOUS CORRECTIONS
DURING 1998. HOW DID THE FUND PERFORM IN THIS ENVIRONMENT?
The Fund continued to deliver solid performance despite extreme market
conditions during the year. Total return for the fiscal year was 9.49%. That
closely matched the performance of other growth funds tracked by Lipper
Analytical Services, Inc., which produced total returns averaging 9.61%.
Long-term performance for the Fund remains excellent, as shown in the
Performance History section of this report. The Fund's net assets grew another
$180 million during the last 12 months, for a total of $1.83 billion at the
close of the fiscal year.
WHAT WERE THE MAJOR TRENDS IN THE STOCK MARKET SINCE YOUR APRIL REPORT TO
SHAREHOLDERS?
Stock performance was greatly affected by the second wave of "Asian contagion"
in July when currency troubles in Asia made their way to the U.S. market. A
month later, Russia's bond default and the downturn that ensued involved even
the very large, very liquid stocks that were chiefly responsible for the U.S.
market's earlier rise. The market also was hit by the collapse of several hedge
funds. The ensuing "flight to quality and liquidity" gave bond markets their 15
minutes in the spotlight as investors rushed out of the equity market.
The Federal Reserve Board (the Fed) cut interest rates beginning in
September, hoping to shelter the U.S. from a potential global recession. Boosted
by the Fed easing, the U.S. market halted its downturn and rebounded in October.
Many stocks that had experienced losses earlier in the year were able to recover
and post slight gains due to the upswing. At the close of the fiscal year, the
U.S. market continued to rebound as investors welcomed reassuring news about the
outlook of the global economy. The change of heart came after the Group of
Seven, composed of the world's seven richest industrialized nations, agreed on
measures to rescue flailing economies with a three-year, $90 billion financial
aid package.
HOW DID DOMESTIC STOCKS FARE IN THIS UNCERTAIN MARKET?
Large-cap stocks, which represented 70% of the Fund, continued to outperform in
this changing environment, as they have for the past couple of years. Mid-sized
and small-company stocks were much harder hit by the market's summer correction
as investors sought refuge from market volatility in the large, well-established
companies.
----------------------------
LARGE-CAP STOCKS, WHICH REPRESENTED
70% OF THE FUND, CONTINUED TO
OUTPERFORM IN CHANGING ENVIRON-
MENT, AS THEY HAVE FOR THE PAST COU-
PLE OF YEARS.
----------------------------
HOW DID YOU MANAGE THE FUND DURING THE FISCAL YEAR?
As usual, we continued to manage the Fund with our disciplined, earnings-driven
stock selection process, looking at the underlying fundamentals of individual
companies, not the overall market. At the close of the fiscal year, the Fund's
top sector holdings included: technology, 33.9%; consumer cyclical, 17.6%;
health care, 12.5%. We believe these three sectors have excellent long-term
growth potential.
Several changes to the Fund's portfolio took place during the fiscal year.
Most notably, oil and gas (drilling and equipment) holdings, which represented
9.23% of total net assets 12 months ago, were significantly reduced to 0.49% due
to the steep decline in oil prices as well as to a major sell-off in oil stocks.
For growth, we have focused on computer-related holdings, which were 14.12% of
total net assets a year ago and represented the Fund's top sector weighting at
26.30% at the close of the fiscal year.
WHAT MAKES THE COMPUTER INDUSTRY SO ATTRACTIVE?
Despite their international exposure, most computer hardware and software stocks
remain profitable. Strong sales of personal computers in the U.S. and western
Europe have helped to offset the economic weakness in other regions. Sales of
personal computers were up 15% for the third quarter of 1998. Dell Computer, the
Fund's largest holding, has benefited from the surge in PC demand boosted by
lower prices.
As the end of the millennium nears, we also expect the computer software and
services industry to profit from the so-called Y2K problem-the need to reprogram
older computers to recognize the year 2000. In addition, Internet growth is
expected to be explosive for the next 10 years. Taking full advantage of this
trend, we currently have top holdings
----------------------------
AS USUAL, WE CONTINUED TO MANAGE THE
FUND WITH OUR DISCIPLINED, EARNINGS-DRI-
VEN STOCK SELECTION PROCESS, LOOKING AT
THE UNDERLYING FUNDAMENTALS OF INDIVID-
UAL COMPANIES, NOT THE OVERALL MARKET.
----------------------------
See important Fund and index disclosures inside front cover.
AIM SUMMIT FUND, INC.
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
in companies that build and maintain the Internet, as well as in those companies
that create content and sell merchandise, such as America Online and software
developer Compuware.
THE FUND ALSO INVESTS IN THE SMALL- AND MID-CAP SECTORS. ANY NEW DEVELOPMENTS IN
THESE AREAS?
AIM Summit Fund, Inc. is a truly diversified growth-oriented mutual fund with
226 holdings in small-, medium-, and large-sized firms. Although large-cap
stocks have led performance in the past several years, many analysts believe
that growth may be returning to the small- and midcap markets.
Historically, smaller-company stocks do better than large-company stocks
when the Fed eases monetary policy. We were encouraged to note that this was
true after the Fed began lowering interest rates in September. From the Fed's
first interest-rate cut on September 29 through the October 31 close of the
fiscal year, midcaps outperformed large caps, with the S&P 400 advancing 6.85%
while the large-cap S&P 500 rose 4.84%.
Secondly, the relative valuations of mid-cap stocks are attractive compared
to their large-cap counterparts, as market analysts predict a higher earnings
growth rate for mid-caps than for large caps. Finally, recent turmoil in foreign
markets and its possible negative impact on big multinational companies may
prompt investors to put their assets into smaller, more domestically oriented
companies.
We believe that, ultimately, these advantages should translate into strong
market performance for these sectors. Accordingly, the Fund may soon feature
more small- and mid-cap stocks due to their strong growth rate and compelling
valuations.
WHAT IS YOUR OUTLOOK FOR THE FUTURE?
By and large, we are optimistic that the U.S. market has performed a turnaround,
coming back from the steep declines in the summer. Market analysts are
optimistic that the U.S. will avoid a recession in 1999. Economic growth seems
to be decelerating, so low inflation and low interest rates should continue.
Given the Fund's time-tested, disciplined approach to investing and our
shareholders' commitment to stay fully invested for the long term, we believe
that AIM Summit Fund, Inc. is well-positioned to take advantage of any market
environment.
PORTFOLIO COMPOSITION
As of 10/31/98, based on total net assets
<TABLE>
<CAPTION>
====================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Dell Computer Corp. 3.01% 1. Computers (Software & Services) 13.77%
2. Microsoft Corp. 2.60 2. Computers (Hardware) 5.50
3. America Online, Inc. 1.53 3. Computers (Networking) 4.09
4. EMC Corp. 1.41 4. Financial (Diversified) 3.93
5. Compuware Corp. 1.36 5. Health Care (Medical Products & Supplies) 3.45
6. Guidant Corp. 1.30 6. Telephone 3.25
7. Cisco Systems, Inc. 1.29 7. Computers (Peripherals) 2.94
8. MCI WorldCom, Inc. 1.28 8. Broadcasting (Television, Radio & Cable) 2.90
9. Lucent Technologies, Inc. 1.23 9. Health Care (Diversified) 2.41
10. Ascend Communications, Inc. 1.18 10. Retail (General Merchandise) 2.31
====================================================================================================
</TABLE>
Please keep in mind the Fund's portfolio is subject to change and there is
no assurance the Fund will continue to hold any particular security.
----------------------------
THE FUND MAY SOON FEATURE MORE
SMALL-AND MID-CAP STOCKS DUE TO
THEIR STRONG RATE AND COM-
PELLING VALUATIONS.
----------------------------
See important Fund and index disclosures inside front cover.
AIM SUMMIT FUND, INC.
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM SUMMIT FUND, INC. VS. BENCHMARK INDEX
10/31/88-10/31/98
- -----------------------------------------------------------------------
AIM SUMMIT S&P 500 LIPPER GROWTH
FUND STOCK INDEX FUND INDEX
- -----------------------------------------------------------------------
10/31/88 10,000 10,000 10,000
10/31/89 12,497 12,628 12,526
10/31/90 11,990 11,686 10,919
10/31/91 16,998 15,596 15,444
10/31/92 18,444 17,147 16,650
10/31/93 21,445 19,703 19,810
10/31/94 21,567 20,462 20,215
10/31/95 28,271 25,861 25,062
10/31/96 32,684 32,082 29,321
10/31/97 42,009 42,376 37,640
10/31/98 45,997 51,701 42,864
=======================================================================
Past performance cannot guarantee comparable future results.
MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE. RESULTS OF AN
INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE
SHOWN.
=======================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 10/31/98, including sales charges
10 Years 15.46%
5 Years 14.44
1 Year 0.18*
*9.49%, excluding sales charges
=======================================================================
Sources: Towers Data Systems HYPO--Registered Trademark--, Lipper Analytical
Services, Inc.
Your Fund's total return includes applicable sales charges, expenses, and
management fees. For Fund performance calculations, and descriptions of indexes
cited on this page, please refer to the inside front cover.
ABOUT THIS CHART
The chart compares your Fund's shares to benchmark indexes. It is intended to
give you a general idea of how your Fund performed compared to these benchmarks.
It is important to understand differences between your Fund and these indexes.
An index measures performance of a hypothetical portfolio. A market index such
as the Standard & Poor's 500 is not managed, incurring no sales charges,
expenses, or fees. If you could buy all the securities that make up a market
index, you would incur expenses that would affect your investment's return. An
index of funds such as the Lipper Growth Fund Index includes a number of mutual
funds grouped by investment objective. Each of those funds interprets that
objective differently, and each employs a different management style and
investment strategy.
AIM SUMMIT FUND, INC.
4
<PAGE> 7
YEAR 2000 READINESS DISCLOSURE
[GRAPHIC IMAGE]
AIM PREPARES FOR THE YEAR 2000
THE YEAR 2000. THE WORDS STIR THE IMAGINATION, MAKING US WONDER WHAT THE NEXT
MILLENNIUM WILL BRING. BUT THE WORDS ARE ALSO STARTING TO MAKE SOME PEOPLE
WORRY, SINCE THERE'S BEEN SO MUCH TALK LATELY ABOUT A COMPUTER GLITCH CALLED
"THE YEAR 2000 PROBLEM." BECAUSE THIS IS A PROBLEM THAT COULD AFFECT MOST
AMERICAN INDUSTRIES, INCLUDING THE MUTUAL FUND INDUSTRY, WE WANT TO BRING YOU
THIS UPDATE TO LET YOU KNOW HOW AIM IS GETTING READY.
WHAT IS THE YEAR 2000 PROBLEM?
It has to do with the way that computers understand dates. Most computers were
programmed to recognize only the last two digits of a four-digit date ("98" for
1998). When the year 2000 hits, the computer will read "00"--but it may
interpret that as the year 1900. So, if the computer makes a calculation
involving a date of January 1, 2000, or later, it could be processed
incorrectly. Date-sensitive calculations are found in all kinds of places--from
elevators to air traffic control systems--but they are especially prevalent in
the financial services industry.
AIM'S YEAR 2000 COMPLIANCE
AIM's technology team has been addressing Year 2000 issues for some time now.
Our internal team, together with an independent technology consultant, are
implementing a comprehensive Year 2000 Compliance Project for A I M Management
Group Inc. and its subsidiaries.
So far, we've inventoried all software applications that we rely on, and
we've identified the applications that might need adjustments to function
properly when the year 2000 arrives. We are now in the final phase of the
project, making corrections and testing applications that need adjustment. We
plan to complete this phase during the fourth quarter of 1998.
AN INDUSTRY-WIDE TEST
In the spring of 1999, AIM intends to participate in industry-wide testing that
should simulate the arrival of the year 2000. This should allow mutual fund
companies, banks, exchanges, and other players in the financial community to
test various kinds of transactions and to determine if any further adjustments
need to be made before the end of the year.
We believe our plans are quite comprehensive, and we're committed to
monitoring all software applications through the critical period, extending as
far as needed into the 21st century.
AIM SUMMIT FUND, INC.
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
October 31, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-95.13%
AEROSPACE/DEFENSE-1.59%
General Dynamics Corp. 270,000 $ 15,980,625
- ---------------------------------------------------------------
Gulfstream Aerospace Corp.(a) 100,000 4,425,000
- ---------------------------------------------------------------
Sundstrand Corp. 185,000 8,683,438
- ---------------------------------------------------------------
29,089,063
- ---------------------------------------------------------------
AIRLINES-0.68%
Southwest Airlines Co. 60,000 1,271,250
- ---------------------------------------------------------------
UAL Corp. 173,000 11,234,188
- ---------------------------------------------------------------
12,505,438
- ---------------------------------------------------------------
AUTOMOBILES-0.67%
Ford Motor Co. 225,000 12,206,250
- ---------------------------------------------------------------
BANKS (MAJOR REGIONAL)-0.15%
Northern Trust Corp. 36,000 2,655,000
- ---------------------------------------------------------------
BANKS (REGIONAL)-0.51%
AmSouth Bancorporation 52,500 2,103,281
- ---------------------------------------------------------------
First Tennessee National Corp. 29,100 922,106
- ---------------------------------------------------------------
Hibernia Corp.-Class A 85,000 1,418,438
- ---------------------------------------------------------------
North Fork Bancorporation, Inc. 100,000 1,987,500
- ---------------------------------------------------------------
Star Banc Corp. 37,000 2,798,125
- ---------------------------------------------------------------
9,229,450
- ---------------------------------------------------------------
BIOTECHNOLOGY-1.15%
Amgen, Inc.(a) 112,000 8,799,000
- ---------------------------------------------------------------
Biogen, Inc.(a) 175,000 12,162,500
- ---------------------------------------------------------------
20,961,500
- ---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-2.90%
Chancellor Media Corp.(a) 300,000 11,512,500
- ---------------------------------------------------------------
Clear Channel Communications,
Inc.(a) 80,000 3,645,000
- ---------------------------------------------------------------
Comcast Corp.-Class A 400,000 19,750,000
- ---------------------------------------------------------------
Liberty Media Group(a) 125,000 4,757,813
- ---------------------------------------------------------------
Tele-Communications, Inc.-Class
A(a) 300,000 12,637,500
- ---------------------------------------------------------------
Univision Communications, Inc.(a) 25,600 755,200
- ---------------------------------------------------------------
53,058,013
- ---------------------------------------------------------------
BUILDING MATERIALS-0.47%
USG Corp. 180,000 8,583,750
- ---------------------------------------------------------------
CHEMICALS-0.43%
Rohm & Haas Co. 231,600 7,816,500
- ---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-1.49%
Andrew Corp.(a) 19,300 316,037
- ---------------------------------------------------------------
General Instrument Corp.(a) 175,000 4,495,313
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMUNICATIONS EQUIPMENT-(CONTINUED)
Lucent Technologies, Inc. 280,000 $ 22,452,500
- ---------------------------------------------------------------
27,263,850
- ---------------------------------------------------------------
COMPUTERS (HARDWARE)-5.50%
Apple Computer, Inc.(a) 150,000 5,568,750
- ---------------------------------------------------------------
Comdisco, Inc. 262,600 4,053,887
- ---------------------------------------------------------------
Dell Computer Corp.(a) 840,000 55,125,000
- ---------------------------------------------------------------
Gateway 2000, Inc.(a) 200,000 11,162,500
- ---------------------------------------------------------------
IDX Systems Corp.(a) 150,000 6,356,250
- ---------------------------------------------------------------
International Business Machines
Corp. 123,600 18,346,875
- ---------------------------------------------------------------
100,613,262
- ---------------------------------------------------------------
COMPUTERS (NETWORKING)-4.09%
3Com Corp.(a) 500,000 18,031,250
- ---------------------------------------------------------------
Ascend Communications, Inc.(a) 448,750 21,652,187
- ---------------------------------------------------------------
Broadcom Corp.(a) 140,000 11,611,250
- ---------------------------------------------------------------
Cisco Systems, Inc.(a) 375,000 23,625,000
- ---------------------------------------------------------------
74,919,687
- ---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-2.71%
EMC Corp.(a) 400,000 25,750,000
- ---------------------------------------------------------------
Jabil Circuit, Inc.(a) 200,000 9,262,500
- ---------------------------------------------------------------
Lexmark International Group,
Inc.(a) 160,000 11,190,000
- ---------------------------------------------------------------
Storage Technology Corp.(a) 100,000 3,343,750
- ---------------------------------------------------------------
49,546,250
- ---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-13.77%
America Online, Inc. 220,000 27,953,750
- ---------------------------------------------------------------
Aspect Development, Inc.(a) 100,000 3,159,375
- ---------------------------------------------------------------
AT Home Corporation(a) 100,000 4,425,000
- ---------------------------------------------------------------
BMC Software, Inc.(a) 330,000 15,860,625
- ---------------------------------------------------------------
Cadence Design Systems, Inc.(a) 150,000 3,206,250
- ---------------------------------------------------------------
Citrix Systems, Inc.(a) 80,000 5,670,000
- ---------------------------------------------------------------
Computer Sciences Corp.(a) 130,000 6,857,500
- ---------------------------------------------------------------
Compuware Corp.(a) 460,000 24,926,250
- ---------------------------------------------------------------
Concord EFS, Inc.(a) 407,650 11,618,025
- ---------------------------------------------------------------
Electronic Arts, Inc.(a) 50,000 2,056,250
- ---------------------------------------------------------------
Electronics for Imaging, Inc.(a) 200,000 4,812,500
- ---------------------------------------------------------------
Engineering Animation, Inc.(a) 200,000 8,762,500
- ---------------------------------------------------------------
GeoCities(a) 67,800 1,995,862
- ---------------------------------------------------------------
HBO & Co. 300,000 7,875,000
- ---------------------------------------------------------------
Inktomi Corp.(a) 60,000 5,058,750
- ---------------------------------------------------------------
Intuit, Inc.(a) 150,000 7,575,000
- ---------------------------------------------------------------
J.D. Edwards & Co.(a) 60,000 1,965,000
- ---------------------------------------------------------------
Jack Henry & Associates, Inc. 220,000 10,037,500
- ---------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (SOFTWARE & SERVICES)-(CONTINUED)
Lycos, Inc.(a) 250,000 $ 10,156,250
- ---------------------------------------------------------------
Microsoft Corp.(a) 450,000 47,643,750
- ---------------------------------------------------------------
Network Associates, Inc.(a) 42,300 1,797,750
- ---------------------------------------------------------------
Sterling Commerce, Inc.(a) 109,211 3,849,687
- ---------------------------------------------------------------
Sterling Software, Inc.(a) 78,000 2,042,625
- ---------------------------------------------------------------
Unisys Corp.(a) 450,000 11,981,250
- ---------------------------------------------------------------
Wind River Systems(a) 100,000 4,381,250
- ---------------------------------------------------------------
Yahoo! Inc.(a) 125,000 16,355,468
- ---------------------------------------------------------------
252,023,167
- ---------------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES & GIFTS)-0.15%
Blyth Industries, Inc.(a) 100,000 2,762,500
- ---------------------------------------------------------------
CONSUMER FINANCE-0.31%
Capital One Financial Corp. 54,900 5,586,075
- ---------------------------------------------------------------
DISTRIBUTORS (FOOD &
HEALTH)-0.79%
Cardinal Health, Inc. 124,800 11,801,400
- ---------------------------------------------------------------
SUPERVALU, INC 79,200 1,900,800
- ---------------------------------------------------------------
Sysco Corp. 27,000 727,312
- ---------------------------------------------------------------
14,429,512
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT-1.90%
American Power Conversion
Corp.(a) 100,000 4,243,750
- ---------------------------------------------------------------
General Electric Co. 140,000 12,250,000
- ---------------------------------------------------------------
Sanmina Corp.(a) 23,300 955,300
- ---------------------------------------------------------------
Solectron Corp.(a) 200,000 11,450,000
- ---------------------------------------------------------------
Symbol Technologies, Inc. 130,000 5,817,500
- ---------------------------------------------------------------
34,716,550
- ---------------------------------------------------------------
ELECTRONIC COMPANIES-0.70%
DTE Energy Co. 300,000 12,787,500
- ---------------------------------------------------------------
ELECTRONICS
(INSTRUMENTATION)-0.19%
Perkin-Elmer Corp. 11,900 1,003,319
- ---------------------------------------------------------------
Waters Corp.(a) 32,600 2,396,100
- ---------------------------------------------------------------
3,399,419
- ---------------------------------------------------------------
ELECTRONICS
(SEMICONDUCTORS)-1.29%
Intel Corp. 125,000 11,148,437
- ---------------------------------------------------------------
Maxim Integrated Products,
Inc.(a) 157,000 5,602,937
- ---------------------------------------------------------------
Microchip Technology, Inc.(a) 175,500 4,749,469
- ---------------------------------------------------------------
PMC-Sierra, Inc.(a) 50,000 2,243,750
- ---------------------------------------------------------------
23,744,593
- ---------------------------------------------------------------
ENTERTAINMENT-0.84%
Pixar, Inc.(a) 50,000 2,375,000
- ---------------------------------------------------------------
Time Warner, Inc. 115,000 10,673,437
- ---------------------------------------------------------------
Viacom, Inc.-Class B(a) 40,500 2,424,937
- ---------------------------------------------------------------
15,473,374
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FINANCIAL (DIVERSIFIED)-3.93%
American Express Co. 50,000 $ 4,418,750
- ---------------------------------------------------------------
Associates First Capital
Corp.-Class A 58,969 4,157,314
- ---------------------------------------------------------------
Fannie Mae 104,600 7,406,987
- ---------------------------------------------------------------
FINOVA Group, Inc. 51,600 2,515,500
- ---------------------------------------------------------------
Freddie Mac 280,000 16,100,000
- ---------------------------------------------------------------
MGIC Investment Corp. 260,000 10,140,000
- ---------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 154,000 9,971,500
- ---------------------------------------------------------------
SunAmerica, Inc. 245,000 17,272,500
- ---------------------------------------------------------------
71,982,551
- ---------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-2.41%
Abbott Laboratories 127,000 5,961,063
- ---------------------------------------------------------------
Allergan, Inc. 260,000 16,233,750
- ---------------------------------------------------------------
American Home Products Corp. 80,000 3,900,000
- ---------------------------------------------------------------
Johnson & Johnson 64,000 5,216,000
- ---------------------------------------------------------------
Warner-Lambert Co. 164,100 12,861,337
- ---------------------------------------------------------------
44,172,150
- ---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC & OTHER)-1.44%
Mylan Laboratories, Inc. 440,000 15,152,500
- ---------------------------------------------------------------
Watson Pharmaceuticals, Inc.(a) 200,000 11,125,000
- ---------------------------------------------------------------
26,277,500
- ---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-2.21%
Lilly (Eli) & Co. 76,800 6,216,000
- ---------------------------------------------------------------
Merck & Co., Inc. 67,500 9,129,375
- ---------------------------------------------------------------
Pfizer, Inc. 160,000 17,170,000
- ---------------------------------------------------------------
Schering-Plough Corp. 77,600 7,983,100
- ---------------------------------------------------------------
40,498,475
- ---------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-0.49%
Health Management Associates,
Inc.-Class A(a) 285,000 5,076,562
- ---------------------------------------------------------------
Universal Health Services,
Inc.-Class B(a) 77,100 3,956,194
- ---------------------------------------------------------------
9,032,756
- ---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-3.45%
Allegiance Corp. 142,600 5,302,938
- ---------------------------------------------------------------
Arterial Vascular Engineering,
Inc.(a) 139,400 4,286,550
- ---------------------------------------------------------------
Becton, Dickinson & Co. 490,000 20,641,250
- ---------------------------------------------------------------
Boston Scientific Corp.(a) 50,000 2,721,875
- ---------------------------------------------------------------
Guidant Corp. 310,000 23,715,000
- ---------------------------------------------------------------
Sofamor Danek Group, Inc.(a) 13,000 1,321,125
- ---------------------------------------------------------------
Stryker Corp. 91,100 3,820,506
- ---------------------------------------------------------------
Sybron International Corp.(a) 53,500 1,324,125
- ---------------------------------------------------------------
63,133,369
- ---------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.60%
Alza Corp.(a) 68,000 3,255,500
- ---------------------------------------------------------------
Omnicare, Inc. 100,900 3,487,356
- ---------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (SPECIALIZED SERVICES)-(CONTINUED)
Orthodontic Centers of America,
Inc.(a) 100,000 $ 1,893,750
- ---------------------------------------------------------------
Quintiles Transnational Corp.(a) 53,400 2,416,350
- ---------------------------------------------------------------
11,052,956
- ---------------------------------------------------------------
HOMEBUILDING-0.17%
Clayton Homes, Inc. 196,300 3,030,381
- ---------------------------------------------------------------
HOUSEHOLD FURNISHINGS & APPLIANCES-0.72%
Maytag Corp. 265,000 13,100,938
- ---------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.42%
Clorox Co. 21,700 2,370,725
- ---------------------------------------------------------------
Procter & Gamble Co. (The) 60,000 5,332,500
- ---------------------------------------------------------------
7,703,225
- ---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-1.10%
Equitable Companies, Inc. 254,000 12,446,000
- ---------------------------------------------------------------
Nationwide Financial Services,
Inc.-Class A 50,500 2,095,750
- ---------------------------------------------------------------
Provident Companies, Inc. 100,000 2,906,250
- ---------------------------------------------------------------
ReliaStar Financial Corp. 62,000 2,716,375
- ---------------------------------------------------------------
20,164,375
- ---------------------------------------------------------------
INSURANCE (MULTI-LINE)-0.70%
American International Group,
Inc. 30,000 2,557,500
- ---------------------------------------------------------------
Lincoln National Corp. 135,000 10,243,125
- ---------------------------------------------------------------
12,800,625
- ---------------------------------------------------------------
INSURANCE (PROPERTY-CASUALTY)-0.61%
Allstate Corp. (The) 240,000 10,335,000
- ---------------------------------------------------------------
Progressive Corp. 6,200 912,950
- ---------------------------------------------------------------
11,247,950
- ---------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-1.01%
Paine Webber Group, Inc. 267,000 8,927,812
- ---------------------------------------------------------------
Schwab (Charles) Corp. 200,000 9,587,500
- ---------------------------------------------------------------
18,515,312
- ---------------------------------------------------------------
INVESTMENT MANAGEMENT-0.71%
Franklin Resources, Inc. 88,000 3,327,500
- ---------------------------------------------------------------
T. Rowe Price Associates, Inc. 272,200 9,680,112
- ---------------------------------------------------------------
13,007,612
- ---------------------------------------------------------------
LODGING-HOTELS-0.48%
Carnival Corp. 272,000 8,806,000
- ---------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.93%
Caterpillar, Inc. 185,000 8,325,000
- ---------------------------------------------------------------
Ingersoll-Rand Co. 172,500 8,711,250
- ---------------------------------------------------------------
17,036,250
- ---------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-1.81%
Hillenbrand Industries, Inc. 34,800 2,059,725
- ---------------------------------------------------------------
Pentair, Inc. 19,200 722,400
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MANUFACTURING (DIVERSIFIED)-(CONTINUED)
Premark International, Inc. 285,000 $ 9,030,937
- ---------------------------------------------------------------
Tyco International Ltd. 100,000 6,193,750
- ---------------------------------------------------------------
United Technologies Corp. 158,000 15,049,500
- ---------------------------------------------------------------
33,056,312
- ---------------------------------------------------------------
NATURAL GAS-1.35%
Coastal Corp. (The) 420,000 14,805,000
- ---------------------------------------------------------------
Columbia Energy Group 171,900 9,948,713
- ---------------------------------------------------------------
24,753,713
- ---------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-0.49%
Cooper Cameron Corp.(a) 100,000 3,475,000
- ---------------------------------------------------------------
Varco International, Inc.(a) 500,000 5,406,250
- ---------------------------------------------------------------
8,881,250
- ---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.15%
Apache Corp. 97,000 2,746,313
- ---------------------------------------------------------------
OIL & GAS (REFINING & MARKETING)-1.03%
Ashland, Inc. 200,000 9,625,000
- ---------------------------------------------------------------
Sun Company, Inc. 270,000 9,264,375
- ---------------------------------------------------------------
18,889,375
- ---------------------------------------------------------------
PERSONAL CARE-0.09%
Rexall Sundown, Inc.(a) 96,200 1,725,588
- ---------------------------------------------------------------
PHOTOGRAPHY/IMAGING-0.59%
Eastman Kodak Co. 139,000 10,772,500
- ---------------------------------------------------------------
PUBLISHING-0.15%
McGraw-Hill Companies, Inc. (The) 30,000 2,698,125
- ---------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-0.58%
Knight-Ridder, Inc. 210,000 10,696,875
- ---------------------------------------------------------------
RAILROADS-0.25%
Kansas City Southern Industries,
Inc. 120,000 4,635,000
- ---------------------------------------------------------------
RESTAURANTS-0.26%
Starbucks Corp.(a) 45,000 1,951,875
- ---------------------------------------------------------------
Tricon Global Restaurants,
Inc.(a) 65,000 2,827,500
- ---------------------------------------------------------------
4,779,375
- ---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-1.29%
Home Depot, Inc. 278,800 12,127,800
- ---------------------------------------------------------------
Lowe's Companies, Inc. 340,000 11,453,750
- ---------------------------------------------------------------
23,581,550
- ---------------------------------------------------------------
RETAIL (COMPUTERS & ELECTRONICS)-1.65%
Best Buy Co., Inc.(a) 317,400 15,235,200
- ---------------------------------------------------------------
CDW Computer Centers, Inc.(a) 90,000 6,744,375
- ---------------------------------------------------------------
Ingram Micro, Inc.-Class A(a) 121,300 5,519,150
- ---------------------------------------------------------------
Tandy Corp. 55,000 2,725,938
- ---------------------------------------------------------------
30,224,663
- ---------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (DEPARTMENT STORES)-0.82%
Federated Department Stores,
Inc.(a) 265,000 $ 10,185,938
- ---------------------------------------------------------------
Kohl's Corp.(a) 100,000 4,781,250
- ---------------------------------------------------------------
14,967,188
- ---------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.44%
Dollar General Corp. 91,656 2,188,287
- ---------------------------------------------------------------
Dollar Tree Stores, Inc.(a) 150,000 5,784,375
- ---------------------------------------------------------------
7,972,662
- ---------------------------------------------------------------
RETAIL (DRUG STORES)-0.74%
CVS Corp. 102,160 4,667,435
- ---------------------------------------------------------------
Rite Aid Corp. 223,000 8,850,313
- ---------------------------------------------------------------
13,517,748
- ---------------------------------------------------------------
RETAIL (FOOD CHAINS)-1.84%
Albertson's, Inc. 27,400 1,522,413
- ---------------------------------------------------------------
Kroger Co.(a) 275,500 15,290,250
- ---------------------------------------------------------------
Safeway, Inc.(a) 351,314 16,797,200
- ---------------------------------------------------------------
33,609,863
- ---------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-2.31%
Costco Companies, Inc.(a) 250,000 14,187,500
- ---------------------------------------------------------------
Dayton Hudson Corp. 289,000 12,246,375
- ---------------------------------------------------------------
Fred Meyer, Inc.(a) 135,700 7,234,506
- ---------------------------------------------------------------
Wal-Mart Stores, Inc. 125,000 8,625,000
- ---------------------------------------------------------------
42,293,381
- ---------------------------------------------------------------
RETAIL (SPECIALTY)-1.80%
Bed Bath & Beyond, Inc.(a) 225,000 6,201,563
- ---------------------------------------------------------------
Linens 'N Things, Inc.(a) 100,000 3,093,750
- ---------------------------------------------------------------
Office Depot, Inc.(a) 380,000 9,500,000
- ---------------------------------------------------------------
Staples, Inc.(a) 372,900 12,165,862
- ---------------------------------------------------------------
Williams-Sonoma, Inc.(a) 70,000 1,907,500
- ---------------------------------------------------------------
32,868,675
- ---------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-1.33%
Abercrombie & Fitch Co.-Class
A(a) 43,000 1,706,563
- ---------------------------------------------------------------
Gap, Inc. 135,000 8,116,875
- ---------------------------------------------------------------
Men's Wearhouse, Inc. (The)(a) 157,500 3,819,375
- ---------------------------------------------------------------
TJX Companies, Inc. 568,000 10,756,500
- ---------------------------------------------------------------
24,399,313
- ---------------------------------------------------------------
SAVINGS & LOAN COMPANIES-1.72%
Dime Bancorp, Inc. 185,000 4,405,313
- ---------------------------------------------------------------
GreenPoint Financial Corp. 200,000 6,562,500
- ---------------------------------------------------------------
Washington Mutual, Inc. 546,000 20,440,875
- ---------------------------------------------------------------
31,408,688
- ---------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-0.85%
Omnicom Group, Inc. 150,000 7,415,625
- ---------------------------------------------------------------
Outdoor Systems, Inc.(a) 300,000 6,618,750
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SERVICES (ADVERTISING/MARKETING)-(CONTINUED)
Snyder Communications, Inc.(a) 45,000 $ 1,605,938
- ---------------------------------------------------------------
15,640,313
- ---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-1.46%
Cintas Corp. 101,900 5,451,650
- ---------------------------------------------------------------
G & K Services, Inc.-Class A 20,000 915,000
- ---------------------------------------------------------------
IMS Health, Inc. 30,000 1,995,000
- ---------------------------------------------------------------
Service Corp. International 334,700 11,923,687
- ---------------------------------------------------------------
Stewart Enterprises, Inc.-Class A 176,000 4,059,000
- ---------------------------------------------------------------
Viad Corp. 84,400 2,315,725
- ---------------------------------------------------------------
26,660,062
- ---------------------------------------------------------------
SERVICES (COMPUTER SYSTEMS)-0.33%
Gartner Group, Inc.-Class A(a) 65,000 1,291,875
- ---------------------------------------------------------------
Policy Management Systems
Corp.(a) 31,700 1,440,369
- ---------------------------------------------------------------
SunGard Data Systems, Inc.(a) 99,000 3,341,250
- ---------------------------------------------------------------
6,073,494
- ---------------------------------------------------------------
SERVICES (DATA PROCESSING)-1.68%
Ceridian Corp.(a) 54,900 3,149,888
- ---------------------------------------------------------------
CSG Systems International,
Inc.(a) 65,500 3,569,750
- ---------------------------------------------------------------
DST Systems, Inc.(a) 49,700 2,485,000
- ---------------------------------------------------------------
Equifax, Inc. 120,600 4,665,713
- ---------------------------------------------------------------
Fiserv, Inc.(a) 124,650 5,796,224
- ---------------------------------------------------------------
National Data Corp. 80,000 2,710,000
- ---------------------------------------------------------------
NOVA Corp.(a) 71,500 2,064,563
- ---------------------------------------------------------------
Paychex, Inc. 128,025 6,369,243
- ---------------------------------------------------------------
30,810,381
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.13%
Level 3 Communications, Inc.(a) 75,000 2,442,188
- ---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-1.86%
AT&T Corp. 170,000 10,582,500
- ---------------------------------------------------------------
MCI WorldCom, Inc.(a) 422,926 23,366,662
- ---------------------------------------------------------------
33,949,162
- ---------------------------------------------------------------
TELEPHONE-3.25%
BellSouth Corp. 215,000 17,159,688
- ---------------------------------------------------------------
Century Telephone Enterprises,
Inc. 260,000 14,771,250
- ---------------------------------------------------------------
Qwest Communications
International, Inc.(a) 350,000 13,693,750
- ---------------------------------------------------------------
US West, Inc. 240,000 13,770,000
- ---------------------------------------------------------------
59,394,688
- ---------------------------------------------------------------
TEXTILES (APPAREL)-0.48%
VF Corp. 210,000 8,780,625
- ---------------------------------------------------------------
TEXTILES (HOME FURNISHINGS)-0.09%
Shaw Industries, Inc. 100,000 1,737,500
- ---------------------------------------------------------------
WASTE MANAGEMENT-0.65%
Allied Waste Industries, Inc.(a) 190,500 4,119,563
- ---------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
WASTE MANAGEMENT-(CONTINUED)
Waste Management, Inc. 172,825 $ 7,798,728
- ---------------------------------------------------------------
11,918,291
- ---------------------------------------------------------------
Total Domestic Common Stocks
(Cost $1,199,747,436) 1,740,817,989
- ---------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-2.18%
FINLAND-0.58%
Nokia Oyj A.B.-Class A-ADR
(Communications Equipment) 115,000 10,702,188
- ---------------------------------------------------------------
FRANCE-0.23%
Renault S.A.
(Automobiles) 100,000 4,276,428
- ---------------------------------------------------------------
GERMANY-0.97%
Daimler-Benz A.G.-ADR
(Automobiles) 110,000 8,669,375
- ---------------------------------------------------------------
Porsche A.G.
(Automobiles) 5,000 8,851,429
- ---------------------------------------------------------------
17,520,804
- ---------------------------------------------------------------
IRELAND-0.40%
Elan Corp. PLC-ADR(a)(Health
Care-Drugs-Generic & Other) 105,000 7,356,562
- ---------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$32,977,810) 39,855,982
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS-0.23%
COMPUTERS (PERIPHERALS)-0.23%
EMC Corp., Conv. Sub. Notes,
3.25%, 03/15/02 (Cost
$1,963,721) $ 1,450,000 $ 4,188,688
- ---------------------------------------------------------------
RIGHTS & WARRANTS-0.01%
BANKS (REGIONAL)-0.01%
Golden State Bancorp, Litigation
Wts., expiring 01/01/01(a)
(Cost $281,640) 50,000 243,750
- ---------------------------------------------------------------
REPURCHASE AGREEMENT-2.40%(b)
Dean Witter Reynolds, Inc.,
5.55%, 11/02/98(c) (Cost
$43,998,698) 43,998,698 43,998,698
- ---------------------------------------------------------------
TOTAL INVESTMENTS-99.95% 1,829,105,107
- ---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.05% 927,121
- ---------------------------------------------------------------
NET ASSETS-100.00% $1,830,032,228
===============================================================
</TABLE>
Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Sub. - Subordinated
Wts. - Warrants
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 is at least 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
investment advisor or its affiliates.
(c) Joint repurchase agreement entered into 10/30/98 with a maturing value of
$300,138,750. Collateralized by $307,841,000 U.S. Government obligations, 0%
to 10.35% due 11/06/98 to 01/21/28 with an aggregate market value at
10/31/98 of $306,000,942.
See Notes to Financial Statements.
10
<PAGE> 13
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1998
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$1,278,969,305) $1,829,105,107
- -------------------------------------------------------------
Receivables for:
Investments sold 3,181,065
- -------------------------------------------------------------
Capital stock sold 671,854
- -------------------------------------------------------------
Dividends and interest 974,357
- -------------------------------------------------------------
Investment for deferred compensation plan 37,349
- -------------------------------------------------------------
Other assets 14,821
- -------------------------------------------------------------
Total assets 1,833,984,553
- -------------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 1,635,755
- -------------------------------------------------------------
Capital stock reacquired 1,160,787
- -------------------------------------------------------------
Deferred compensation 37,349
- -------------------------------------------------------------
Accrued advisory fees 912,099
- -------------------------------------------------------------
Accrued administrative services fees 6,377
- -------------------------------------------------------------
Accrued directors' fees 1,450
- -------------------------------------------------------------
Accrued operating expenses 198,508
- -------------------------------------------------------------
Total liabilities 3,952,325
- -------------------------------------------------------------
Net assets applicable to shares outstanding $1,830,032,228
=============================================================
Capital stock, $0.01 par value per share:
Authorized 1,000,000,000
- -------------------------------------------------------------
Outstanding 122,336,309
- -------------------------------------------------------------
Net asset value and redemption price per
share $ 14.96
=============================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended October 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $280,834 foreign withholding
tax) $ 11,487,830
- ------------------------------------------------------------
Interest 4,521,585
- ------------------------------------------------------------
Total investment income 16,009,415
- ------------------------------------------------------------
EXPENSES:
Advisory fees 11,372,220
- ------------------------------------------------------------
Administrative services fees 72,766
- ------------------------------------------------------------
Custodian fees 178,755
- ------------------------------------------------------------
Directors' fees 18,269
- ------------------------------------------------------------
Transfer agent fees 39,271
- ------------------------------------------------------------
Other 271,355
- ------------------------------------------------------------
Total expenses 11,952,636
- ------------------------------------------------------------
Less: Expenses paid indirectly (26,905)
- ------------------------------------------------------------
Net expenses 11,925,731
- ------------------------------------------------------------
Net investment income 4,083,684
- ------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES,
FUTURES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 125,907,818
- ------------------------------------------------------------
Foreign currencies 265,909
- ------------------------------------------------------------
Futures contracts (2,274,503)
- ------------------------------------------------------------
Option contracts written (531,869)
- ------------------------------------------------------------
123,367,355
- ------------------------------------------------------------
NET UNREALIZED APPRECIATION OF:
Investment securities 30,375,403
- ------------------------------------------------------------
Foreign currencies 3,322
- ------------------------------------------------------------
30,378,725
- ------------------------------------------------------------
Net gain from investment securities,
foreign currencies, futures and option
contracts 153,746,080
- ------------------------------------------------------------
Net increase in net assets resulting from
operations $157,829,764
============================================================
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 14
STATEMENT OF CHANGES IN NET ASSETS
For the years ended October 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 4,083,684 $ 1,608,756
- ----------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures and option contracts 123,367,355 151,798,786
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 30,378,725 212,044,735
- ----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 157,829,764 365,452,277
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income (1,659,397) (3,131,614)
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains (156,547,424) (114,611,563)
- ----------------------------------------------------------------------------------------------
Net equalization credits (See Note 1) -- 2,437,968
- ----------------------------------------------------------------------------------------------
Share transactions-net 180,175,249 139,078,724
- ----------------------------------------------------------------------------------------------
Net increase in net assets 179,798,192 389,225,792
==============================================================================================
NET ASSETS:
Beginning of period 1,650,234,036 1,261,008,244
- ----------------------------------------------------------------------------------------------
End of period $1,830,032,228 $1,650,234,036
- ----------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $1,158,384,602 $ 956,102,084
- ----------------------------------------------------------------------------------------------
Undistributed net investment income 4,164,155 23,591,883
- ----------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies, futures and option
contracts 117,344,347 150,779,670
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 550,139,124 519,760,399
- ----------------------------------------------------------------------------------------------
$1,830,032,228 $1,650,234,036
==============================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
October 31, 1998
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 rates 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 the times
at which they are determined and the close of the New York Stock Exchange
which would not be reflected in the
12
<PAGE> 15
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. On October 31, 1998,
undistributed net investment income was increased by $255,254 and
undistributed net realized gains decreased by $255,254 in order to comply
with the requirements of the American Institute of Certified Public
Accountants Statement of Position 93-2. Net assets of the Fund were
unaffected by the reclassifications discussed above.
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
13
<PAGE> 16
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.
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 year ended October 31, 1998, the Fund
reimbursed AIM $72,766 for such services.
During the year ended October 31, 1998, the Fund paid legal fees of $6,861 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 year ended October 31, 1998, the Fund received reductions in
custodian fees of $26,905 under an expense offset arrangement. The effect of the
above arrangement resulted in a reduction of the Fund's total expenses of
$26,905 during the year ended October 31, 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) $1,000,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on May 1, 1998, the Fund was limited
to borrowing up to the lesser of (i) $500,000,000 or (ii) the limits set by its
prospectus for borrowings. During the year ended October 31, 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.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended October 31, 1998 was
$1,469,938,551 and $1,409,377,755, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
as of October 31, 1998, on a tax basis, is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $576,816,675
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (27,900,704)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $548,915,971
=========================================================
* Cost of investments for tax purposes is $1,280,189,136.
</TABLE>
NOTE 7-CAPITAL STOCK
Changes in capital stock outstanding during the years ended October 31, 1998 and
1997 were as follows:
<TABLE>
<CAPTION>
1998 1997
--------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Sold 13,962,660 $ 208,683,626 8,716,348 $114,553,393
- ------------------------------------------------------------------------------
Issued as reinvest-
ment of dividends 11,672,671 154,897,796 9,816,281 113,770,753
- ------------------------------------------------------------------------------
Reacquired (12,194,909) (183,406,173) (6,706,799) (89,245,422)
- ------------------------------------------------------------------------------
13,440,422 $ 180,175,249 11,825,830 $139,078,724
==============================================================================
</TABLE>
NOTE 8-OPTION CONTRACTS WRITTEN
Transactions in call options written during the year ended October 31, 1998 are
summarized as follows:
<TABLE>
<CAPTION>
OPTION CONTRACTS
-----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
------ ----------
<S> <C> <C>
Beginning of period -- $ --
- --------------------------------------- ------ ----------
Written 3,452 1,420,661
- --------------------------------------- ------ ----------
Closed (1,752) (458,918)
- --------------------------------------- ------ ----------
Exercised (1,700) (961,743)
- --------------------------------------- ------ ----------
End of period -- $ --
======================================= ====== ==========
</TABLE>
14
<PAGE> 17
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of capital stock
outstanding during each of the years in the five-year period ended October 31,
1998.
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.15 $ 12.99 $ 12.14 $ 9.78 $ 10.46
- --------------------------------------------- ---------- ---------- ---------- ---------- --------
Income from investment operations:
Net investment income 0.03 0.02 0.04 0.04 0.10
- --------------------------------------------- ---------- ---------- ---------- ---------- --------
Net gains (losses) on securities (both
realized and unrealized) 1.23 3.34 1.69 2.81 (0.04)
- --------------------------------------------- ---------- ---------- ---------- ---------- --------
Total from investment operations 1.26 3.36 1.73 2.85 0.06
- --------------------------------------------- ---------- ---------- ---------- ---------- --------
Less distributions:
Dividends from net investment income (0.02) (0.03) (0.03) (0.10) (0.10)
- --------------------------------------------- ---------- ---------- ---------- ---------- --------
Distributions from net realized gains (1.43) (1.17) (0.85) (0.39) (0.64)
- --------------------------------------------- ---------- ---------- ---------- ---------- --------
Total distributions (1.45) (1.20) (0.88) (0.49) (0.74)
- --------------------------------------------- ---------- ---------- ---------- ---------- --------
Net asset value, end of period $ 14.96 $ 15.15 $ 12.99 $ 12.14 $ 9.78
============================================= ========== ========== ========== ========== ========
Total return(a) 9.49% 28.53% 15.61% 31.03% 0.61%
============================================= ========== ========== ========== ========== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,830,032 $1,650,234 $1,261,008 $1,050,011 $765,073
============================================= ========== ========== ========== ========== ========
Ratio of expenses to average net assets 0.67%(b) 0.68% 0.70% 0.71% 0.72%
============================================= ========== ========== ========== ========== ========
Ratio of net investment income to average net
assets 0.23%(b) 0.11% 0.29% 0.33% 1.04%
============================================= ========== ========== ========== ========== ========
Portfolio turnover rate 83% 88% 118% 126% 122%
============================================= ========== ========== ========== ========== ========
</TABLE>
(a) Does not deduct sales charges.
(b) Ratios are based on average net assets of $1,785,555,221.
15
<PAGE> 18
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
AIM Summit Fund, Inc:
We have audited the accompanying statement of assets and
liabilities of the AIM Summit Fund, Inc., including the
schedule of investments, as of October 31, 1998, the
related statement of operations for the year then ended,
the statement of changes in net assets for each of the
years in the two-year period then ended, and financial
highlights for each of the years in the five-year period
then ended. These financial statements and financial
highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion
on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of October 31, 1998, by
correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Summit
Fund, Inc. as of October 31, 1998, and the results of its
operations for the year then ended, the changes in its
net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the
years in the five-year period then ended, in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Houston, Texas
December 4, 1998
16
<PAGE> 19
<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 TradeStreet Investment Associates, Inc.
Cortland Trust Inc. Senior Vice President 101 South Tryon Street
Suite 100
Edward K. Dunn Jr. Dana R. Sutton Charlotte, NC 28255
Chairman, Mercantile Mortgage Corp.; Vice President and Assistant Treasurer
Formerly Vice Chairman and President, TRANSFER AGENT
Mercantile-Safe Deposit & Trust Co.; and Melville B. Cox
President, Mercantile Bankshares Vice President Boston Financial Data Services, Inc.
P.O. Box 8300
Jack Fields Jonathan C. Schoolar Boston, MA 02266-8300
Chief Executive Officer Senior Vice President
Texana Global, Inc.; CUSTODIAN
Formerly Member Renee A. Friedli
of the U.S. House of Representatives Assistant Secretary State Street Bank and Trust Company
225 Franklin Street
Carl Frischling P. Michelle Grace Boston, MA 02110
Partner Assistant Secretary
Kramer, Levin, Naftalis & Frankel COUNSEL TO THE FUND
Jeffrey H. Kupor
Robert H. Graham Assistant Secretary Ballard Spahr
President and Chief Executive Officer Andrews & Ingersoll, LLP
A I M Management Group Inc. Nancy L. Martin 1735 Market Street
Assistant Secretary Philadelphia, PA 19103
Prema Mathai-Davis
Chief Executive Officer, YWCA of the U.S.A. Ofelia M. Mayo COUNSEL TO THE DIRECTORS
Commissioner, New York City Dept. for the Assistant Secretary
Aging; and member of the Board of Directors Kramer, Levin, Naftalis & Frankel
Metropolitan Transportation Authority of Lisa A. Moss 919 Third Avenue
New York State Assistant Secretary New York, NY 10022
Lewis F. Pennock Kathleen J. Pflueger DISTRIBUTOR
Attorney Assistant Secretary
A I M Distributors, Inc.
Ian W. Robinson Samuel D. Sirko 11 Greenway Plaza
Consultant; Formerly Executive Assistant Secretary Suite 100
Vice President and Houston, TX 77046
Chief Financial Officer Stephen I. Winer
Bell Atlantic Management Assistant Secretary AUDITORS
Services, Inc.
Mary J. Benson KPMG Peat Marwick LLP
Louis S. Sklar Assistant Treasurer 700 Louisiana
Executive Vice President Houston, TX 77002
Hines Interests
Limited Partnership
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION
AIM Summit Fund paid ordinary dividends in the amount of $0.3050 per share to
shareholders during its tax year ended October 31, 1998. Of this amount, 27.42%
is eligible for the dividends received deduction for corporations. The Fund also
distributed long-term capital gains of $1.1909 per share during its tax year
ended October 31, 1998.
<PAGE> 20
[BACK COVER]
BULK RATE
U.S. POSTAGE
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HOUSTON, TX
PERMIT NO. 1919
SUM-AR-1
