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AIM ADVISOR FUNDS, INC.
Supplement dated September 23, 1997,
to the Prospectus dated August 4, 1997
On September 19, 1997, the Board of Directors approved a proposal to
merge AIM Advisor Cash Management Fund ("Cash Management") into AIM Money Market
Fund ("Money Market"), a portfolio of AIM Funds Group ("AFG"), and to merge AIM
Advisor Income Fund ("Income Fund") into AIM Intermediate Government Fund
("Intermediate Government"), another portfolio of AFG. Shareholders of Cash
Management and Income Fund will receive solicitation material in the mail and
will be asked to vote on this proposal at Special Meetings of Shareholders on or
about February 17, 1998. If the merger proposal is approved by the shareholders
of a fund, the shareholders of that fund will receive shares of the appropriate
AFG portfolio with a net asset value equal to that of their current shares. No
sales charges will be assessed, nor will any federal income taxes be due, as a
result of these transactions. Shareholders of Cash Management will receive Cash
Reserve shares of Money Market, Class A shareholders of Income Fund will receive
Class A shares of Intermediate Government and Class C shareholders of Income
Fund will receive Class C shares of Intermediate Government.
The first and second sentences in the first paragraph under the caption
"Additional Risk Factors and Policies Relevant to the Funds - Foreign
Securities" on page 16 are deleted and replaced in their entirety by the
following:
"The MULTIFLEX FUND, INTERNATIONAL VALUE FUND and REAL ESTATE
FUND may invest directly in foreign equity securities and the REAL
ESTATE FUND, LARGE CAP VALUE FUND, FLEX FUND, MULTIFLEX FUND and
INTERNATIONAL VALUE FUND may invest in foreign securities represented
by ADRs, as described below. The MULTIFLEX FUND, INTERNATIONAL VALUE
FUND and REAL ESTATE FUND may also invest in foreign
currency-denominated fixed income securities."
The first paragraph under the caption "Additional Risk Factors and
Policies Relevant to the Funds - Mortgage-Related Securities" on page 18 is
deleted and replaced in its entirety by the following:
"As described under "Investment Objectives and Policies," the
INCOME FUND may invest in mortgage pass-through securities and CMOs,
and the MULTIFLEX FUND and REAL ESTATE FUND may invest in
mortgage-related securities, including CMOs and mortgage-backed bonds,
and asset-backed securities."
The following information replaces in its entirety the discussion
appearing under the heading "Portfolio Managers - MultiFlex Fund" on page 23 of
the Prospectus.
"Robert S. Slotpole Senior Vice President, Director of
Portfolio Manager Equities and Portfolio Manager,
IMR (June 1993 to present); Portfolio
Manager, Hamilton Partners
(February 1992 to June 1993); Vice
President and Portfolio Manager, The
First Boston Corporation (May 1985 to
February 1992). Mr. Slotpole is
responsible for the asset allocation
decisions regarding the Fund's
investments in its five asset classes.
Mr. Slotpole is assisted by a team of
portfolio managers, each of whom
specializes in one of the asset classes
in which the Fund may invest. Each
portfolio manager is also responsible
for the security selection in his asset
class within the overall asset
allocation parameters and security
selection methodologies established by
IMR. Mr. Slotpole has managed the
MULTIFLEX FUND since July 1, 1994.
Daniel A. Kostyk Portfolio Manager and Quantitative
Assistant Portfolio Manager Analyst, IMR (June 1995 to present);
Engineering Economic Analyst, Fluor
Daniel Inc. (October 1984 to May 1995).
Mr. Kostyk has assisted in managing the
MULTIFLEX FUND since June 1995."
