<PAGE> 1
AIM ADVISOR
LARGE CAP VALUE FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT JUNE 30, 1998
<PAGE> 2
--------------------------------------
AIM ADVISOR LARGE CAP VALUE FUND
For shareholders
who seek a high total return
on investment
through capital appreciation
and current income,
without regard to
federal income tax considerations.
--------------------------------------
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Advisor Large Cap Value Fund'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.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 5.50% sales charge, and Class B and Class C
share performance reflect the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the Fund's Class B and Class C shares will differ from
that of Class A shares due to differing fees and expenses.
o Because Class B shares have been offered for less than one year (since
3/3/98), all total return figures for Class B shares reflect cumulative
total return that has not been annualized.
o The Fund's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o Past performance cannot guarantee comparable future results.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Standard & Poor's Composite Index of 500 Stocks (S&P 500) is a group of
unmanaged securities widely regarded by investors to be representative of
the stock market in general.
o The Dow Jones Industrial Average (DJIA) is 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 December 31, 1997, equity markets worldwide were still shaken
Charles T. by the financial crisis in Asia. By June 30, 1998, the end of
Bauer, this six-month reporting period, most markets had recovered
Chairman of nicely, with domestic equities producing generous returns and
the Board of European markets outpacing the U.S. Only Asian markets
THE FUND remained in the doldrums. High-quality bonds have turned in a
APPEARS HERE] solid performance with generous real returns.
Good economic news has been arriving almost daily.
Inflation and joblessness in the U.S. have been at their
lowest levels in decades, consumer confidence at its highest.
The economic fundamentals in the U.S. appear sound, and we at
AIM remain cautiously optimistic that the current economic
expansion may continue for the foreseeable future although
market valuations are high compared to historical standards.
By the close of this reporting period, markets had become
less ebullient. Equities had declined slightly from the heights reached earlier
in the period. Many participants in the U.S. equity markets voiced concern about
prices that continued rising despite slowing earnings growth, especially for
larger companies. The performance of European markets had exceeded everyone's
expectations. Asia's economic woes, especially the continuing recession in
Japan, which markets had shrugged off for a while, seemed more troublesome as
the reporting period closed.
In the face of such uncertainty, the best course for investors is to remain
realistic. We are now in the fourth year of unprecedented market advances. Even
accounting for the steep drop in equities in early August, after the close of
this reporting period, equities still have the potential to produce returns
above 30% again for the full year. We have never experienced this before, and it
may have fostered unrealistic expectations among investors, who 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 market shifts because different asset classes and different national
markets tend to move independently of one another. Your financial consultant
remains your best source of information about how to allocate your investments
based on your goals and situation.
AIM FURTHER DIVERSIFIES ITS OFFERINGS
Shortly before the close of the reporting period, AIM broadened its offerings to
shareholders through the addition of the GT Global group of mutual funds. During
the next few months you will be receiving more details about this transaction
and the products it adds to The AIM Family of Funds(R).
This transaction gives you, our shareholders, access to a greater variety of
investment choices. A complete list of the funds now included in The AIM Family
of Funds(R) appears on the back cover of this report. We encourage you to
discuss with your financial consultant how these funds may fit into your
portfolio.
The transaction also helps strengthen AIM's position as a major participant
in the money-management industry worldwide. Such strength will enable us to
continue enlarging both the scope of our fund offerings and our menu of services
for our shareholders. AIM continuously reviews its products and services with a
view to enhancing our ability to help shareholders meet their investment goals.
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
800-959-4246 or visit our Web site at www.aimfunds.com. You can access
information about your account on our Web site and also on our automated AIM
Investor Line, 800-246-5463.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
-----------------------------------------------
A well-diversified portfolio
is still one of the most
effective tools for coping with
market shifts because
different asset classes and
different national markets tend
to move independently
of one another.
-----------------------------------------------
<PAGE> 4
The Managers' Overview
DESPITE DIFFICULT MARKET, FUND REGISTERS RESPECTABLE RETURNS
A roundtable discussion with the Fund management team for AIM Advisor Large Cap
Value Fund for the six months ended June 30, 1998.
- --------------------------------------------------------------------------------
Q. SOME SEGMENTS OF THE STOCK MARKET POSTED RECORD GAINS WHILE OTHER SEGMENTS
LAGGED. HOW DID THE FUND PERFORM?
A. Despite a challenging market environment, your Fund registered respectable
returns. For the six months ended June 30, 1998, cumulative total return was
10.29% for Class A shares and 9.84% for Class C shares. Class B shares
commenced sales on March 3, 1998, and had a cumulative total return of
3.40%.
For the reporting period, the Fund underperformed the broader market as
measured by the Standard & Poor's Composite Index of 500 stocks (S&P 500).
The Fund's performance relative to the S&P 500 was hurt by investor
preference for the stocks of companies that were expected to experience
rapid earnings growth. Your Fund invests primarily in equities that are
undervalued relative to the rest of the market, and these value stocks were
somewhat out of favor during the reporting period.
================================================================================
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
For periods ended 6/30/98, including sales charges
CLASS A SHARES
1 Year 15.58%*
Inception (12/31/96) 23.56
*22.32% excluding sales charges
CLASS C SHARES
1 Year 20.36**
5 Years 19.08
10 Years 15.22
**21.36% excluding sales charges
CLASS B SHARES commenced sales March 3, 1998. Their cumulative total return
from then through June 30, 1998 was -1,60% including the maximum applicable
sales charge, 3.40% excluding sales charges.
================================================================================
Q. WHAT WERE SOME OF THE MAJOR THEMES IN THE STOCK MARKET DURING THE REPORTING
PERIOD?
A. When the reporting period opened, the stock market was languishing over
concerns about the economic problems in Asia. However, in the U.S. and most
other developed countries, the economic fundamentals remained sound. While
the economy grew at a brisk pace, inflation and interest rates-two forces
that could potentially undermine corporate profits-continued to be low.
Consequently, the Dow Jones Industrial Average (DJIA) resumed its upward
climb in late January and set a record in May.
In the final weeks of the reporting period, however, concerns resurfaced
about the Asian crisis and its potential impact on corporate profits. Weak
Asian demand helped push the U.S. trade deficit to record levels. In this
environment, the stock market faltered, and the DJIA ended the reporting
period slightly below its record level.
Q. HOW DID LARGE-CAP STOCKS FARE?
A. Large-cap stocks were the undisputed market leaders throughout the reporting
period. And while large-cap stocks comprised 82% of the Fund's holdings, our
emphasis was on value stocks, which were generally less coveted than growth
stocks. In the uncertain market environment created by the Asian crisis,
investors gravitated to the stocks of large, well-known companies with more
predictable earnings-firms such as Merck & Co., Inc., International Business
Machines Corp., and Exxon Corp., which were represented in the Fund's
portfolio. Additionally, foreign investors, who began shifting more assets
into the U.S. stock market, were attracted to the equities of larger
companies with global reputations.
Within the spectrum of large-cap stocks, the top-performing industry
sectors included technology and consumer cyclicals-a broad category that
includes textiles, automobiles, and certain retailers. The Fund's
performance was enhanced by its overweighting in the consumer-cyclical
sector and hurt by its underweighting in the technology sector relative to
the S&P 500.
As of June 30, 1998, the Fund's top holdings included: financials, 19%;
consumer cyclicals, 18%; and technology, 11%.
Q. WHAT MADE FINANCIAL COMPANY STOCKS ATTRACTIVE?
A. The financial sector continued to benefit from declining interest rates, low
inflation, and a vibrant stock market as well as an ongoing series of
mergers and acquisitions. For example, Morgan Stanley, Dean Witter, Discover
& Co., the Fund's top holding, is a product of a 1997 merger between
investment bank Morgan Stanley and retail-brokerage firm Dean Witter,
Discover & Co. The stock of the combined company has performed very well for
the Fund.
Other financial stocks in the portfolio that have recorded solid gains
include Jefferson-Pilot Corp., First Union Corp., and National City Corp.
Q. WHAT PROMPTED THE SOLID PERFORMANCE OF CONSUMER-CYCLICAL STOCKS?
A. Declining unemployment, rising wages, and falling mortgage rates translated
into increased consumer spending. Retail sales rose every month during the
reporting period, and that was good news for consumer-cyclical sector.
Simulta-
See important fund and index disclosures inside front cover.
2
<PAGE> 5
PORTFOLIO HOLDINGS
As of 6/30/98, based on total net assets
<TABLE>
<CAPTION>
=========================================================================================================================
TOP 10 EQUITY HOLDINGS TOP 10 INDUSTRIES
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Morgan Stanley, Dean Witter, Discover & Co. 2.29% 1. Oil (International Integrated) 6.69%
2. Dun & Bradstreet Corp. 2.23 2. Financial (Diversified) 5.99
3. Chrysler Corp. 2.23 3. Banks (Money Center) 5.34
4. Merck & Co., Inc. 2.04 4. Electric Companies 4.31
5. Schering-Plough Corp. 2.00 5. Health Care (Drugs-Major Pharmaceuticals) 4.05
6. National City Corp. 1.97 6. Insurance (Property-Casualty) 4.00
7. UST, Inc. 1.96 7. Computers (Hardware) 3.55
8. Electronic Data Systems Corp. 1.95 8. Computers (Software & Services) 3.32
9. First Chicago N.B.D. Corp. 1.89 9. Health Care (Diversified) 3.12
10. Exxon Corp. 1.83 10. Tobacco 2.91
Please keep in mind that the Fund's portfolio is subject to change and there is
no assurance the Fund will continue to hold any particular security.
=========================================================================================================================
</TABLE>
neously, wholesale prices dropped-another positive development for
retailers.
One stock that we found particularly attractive was Lowe's Companies,
Inc., the world's second-largest marketer of home-improvement products. The
company reported a dramatic 21% increase in sales in June 1998. We purchased
the stock at a relatively low price, and it has soared since then.
The Fund also benefited from owning the stocks of Maytag Co., J.C.
Penney Co., Inc., and Chrysler Corp.
Q. WHY WAS THE PERFORMANCE OF TECHNOLOGY STOCKS SO STRONG?
A. Several factors contributed to the strong showing of technology stocks,
including the rapid growth of the Internet as a medium of commerce,
communication, and entertainment. That's giving a boost to companies that
are involved in creating technologies to make the Internet more accessible
and easier to use for a wider variety of functions. The solid performance of
Internet-company stocks, particularly toward the end of the reporting
period, gave a boost to the entire technology sector. Technology companies
also are continuing to benefit from the ongoing efforts to solve the
so-called millennium problem-the need to reprogram older computers to
recognize the Year 2000.
Technology stocks that we liked included Sun Microsystems, Inc., the
third-largest independent software company in the world. The company's Java
programming language is widely used for creating graphics on the Internet.
Other technology stocks that performed well for the Fund were Lockheed
Martin Corp., Compaq Computer Corp., and Hewlett-Packard Co.
Q. WHAT OTHER STOCKS POSTED IMPRESSIVE RETURNS FOR THE FUND?
A. Although oil-company stocks were generally hurt by falling petroleum prices,
we were pleased with the performance of our stock selections in this sector.
The Fund's oil-company holdings included Royal Dutch Petroleum Co., Amoco
Corp., and Repsol, S.A.
In the health-care sector, the Fund benefited from owning the stocks of
Abbott Laboratories, and Schering-Plough Corp.
Q. WHAT IS YOUR OUTLOOK?
A. In the U.S., the economic conditions are favorable for stocks. If inflation
remains low, the Federal Reserve Board (the Fed), which has left monetary
policy unchanged for more than a year, will be less likely to raise interest
rates. However, Fed Chairman Alan Greenspan, speaking to Congress in July,
warned that the tight labor market could eventually accelerate inflation.
That could cause the Fed to tighten monetary policy and adversely affect
stocks.
Investors have displayed a willingness to pay premium prices for the
highly liquid stocks of the very largest companies-the so-called
"mega-caps." At some point, investors could shift their focus to the more
reasonably priced stocks in the large- and mid-cap arenas. Such a
development could prove beneficial for the Fund and its value-oriented
approach to stock selection.
See important fund and index disclosures inside front cover.
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-95.54%
AEROSPACE/DEFENSE-2.03%
Lockheed Martin Corp. 24,360 $ 2,579,115
- ---------------------------------------------------------------
Precision Castparts Corp. 28,500 1,521,188
- ---------------------------------------------------------------
4,100,303
- ---------------------------------------------------------------
AGRICULTURAL PRODUCTS-0.14%
Archer-Daniels-Midland Co. 14,450 279,969
- ---------------------------------------------------------------
AIRLINES-1.28%
Southwest Airlines Co. 87,500 2,592,188
- ---------------------------------------------------------------
AUTO PARTS & EQUIPMENT-0.63%
Cooper Tire & Rubber Co. 62,000 1,278,750
- ---------------------------------------------------------------
AUTOMOBILES-2.23%
Chrysler Corp. 80,000 4,510,000
- ---------------------------------------------------------------
BANKS (MAJOR REGIONAL)-1.97%
National City Corp. 56,000 3,976,000
- ---------------------------------------------------------------
BANKS (MONEY CENTER)-5.34%
First Chicago N.B.D. Corp. 43,000 3,810,875
- ---------------------------------------------------------------
First Union Corp. 60,000 3,495,000
- ---------------------------------------------------------------
NationsBank Corp. 45,674 3,494,061
- ---------------------------------------------------------------
10,799,936
- ---------------------------------------------------------------
BEVERAGES (NON-ALCOHOLIC)-1.05%
PepsiCo, Inc. 51,600 2,125,275
- ---------------------------------------------------------------
CHEMICALS-1.54%
Air Products and Chemicals, Inc. 43,400 1,736,000
- ---------------------------------------------------------------
Dow Chemical Co. (The) 14,300 1,382,631
- ---------------------------------------------------------------
3,118,631
- ---------------------------------------------------------------
COMPUTERS (HARDWARE)-3.55%
Compaq Computer Corp. 67,900 1,926,663
- ---------------------------------------------------------------
Hewlett-Packard Co. 23,800 1,425,025
- ---------------------------------------------------------------
International Business Machines
Corp. 16,500 1,894,406
- ---------------------------------------------------------------
Sun Microsystems, Inc.(a) 44,300 1,924,281
- ---------------------------------------------------------------
7,170,375
- ---------------------------------------------------------------
COMPUTERS (SOFTWARE &
SERVICES)-3.32%
Computer Associates
International, Inc. 50,100 2,783,681
- ---------------------------------------------------------------
Electronic Data Systems Corp. 98,300 3,932,000
- ---------------------------------------------------------------
6,715,681
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
CONSTRUCTION (CEMENT & AGGREGATES)-1.37%
Vulcan Materials Co. 25,900 $ 2,763,206
- ---------------------------------------------------------------
DISTRIBUTORS (FOOD &
HEALTH)-1.67%
SUPERVALU, INC. 76,000 3,372,500
- ---------------------------------------------------------------
ELECTRIC COMPANIES-4.31%
Cinergy Corp. 61,000 2,135,000
- ---------------------------------------------------------------
Entergy Corp. 120,000 3,450,000
- ---------------------------------------------------------------
Texas Utilities Co 75,000 3,121,875
- ---------------------------------------------------------------
8,706,875
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT-2.35%
Emerson Electric Co. 30,000 1,811,250
- ---------------------------------------------------------------
General Electric Co. 32,200 2,930,200
- ---------------------------------------------------------------
4,741,450
- ---------------------------------------------------------------
ELECTRONICS (DEFENSE)-1.15%
Raytheon Co. 39,400 2,329,525
- ---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-5.99%
American General Corp. 48,600 3,459,713
- ---------------------------------------------------------------
Fannie Mae 40,000 2,430,000
- ---------------------------------------------------------------
MGIC Investment Corp. 27,700 1,580,631
- ---------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 50,750 4,637,281
- ---------------------------------------------------------------
12,107,625
- ---------------------------------------------------------------
FOODS-1.62%
H.J. Heinz Co. 58,350 3,274,894
- ---------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-3.12%
Abbott Laboratories 71,200 2,910,300
- ---------------------------------------------------------------
American Home Products Corp. 65,800 3,405,150
- ---------------------------------------------------------------
6,315,450
- ---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-4.05%
Merck & Co., Inc. 30,900 4,132,875
- ---------------------------------------------------------------
Schering-Plough Corp. 44,200 4,049,825
- ---------------------------------------------------------------
8,182,700
- ---------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-1.37%
Columbia/HCA Healthcare Corp. 95,200 2,772,700
- ---------------------------------------------------------------
HOUSEHOLD FURNITURE AND APPLIANCES-0.94%
Maytag Corp. 38,600 1,905,875
- ---------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HOUSEHOLD PRODUCTS (NON-DURABLE)-0.86%
Kimberly-Clark Corp. 37,900 $ 1,738,663
- ---------------------------------------------------------------
HOUSEWARES-0.95%
Fortune Brands, Inc. 50,000 1,921,875
- ---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-1.93%
Jefferson-Pilot Corp. 36,000 2,085,750
- ---------------------------------------------------------------
Torchmark Corp. 39,700 1,816,275
- ---------------------------------------------------------------
3,902,025
- ---------------------------------------------------------------
INSURANCE
(PROPERTY-CASUALTY)-4.00%
Chubb Corp. 25,000 2,009,375
- ---------------------------------------------------------------
General Re Corp. 13,500 3,422,250
- ---------------------------------------------------------------
Old Republic International Corp. 33,200 973,175
- ---------------------------------------------------------------
SAFECO Corp. 37,000 1,681,188
- ---------------------------------------------------------------
8,085,988
- ---------------------------------------------------------------
IRON & STEEL-0.43%
Nucor Corp. 19,000 874,000
- ---------------------------------------------------------------
MACHINERY (DIVERSIFIED)-1.69%
Caterpillar Inc. 33,600 1,776,600
- ---------------------------------------------------------------
Dover Corp. 48,000 1,644,000
- ---------------------------------------------------------------
3,420,600
- ---------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-1.77%
Hanson PLC-ADR (United Kingdom) 61,000 1,849,063
- ---------------------------------------------------------------
Textron, Inc. 24,000 1,720,500
- ---------------------------------------------------------------
3,569,563
- ---------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-1.78%
Federal Signal Corp. 82,000 1,993,625
- ---------------------------------------------------------------
York International Corp. 36,700 1,598,744
- ---------------------------------------------------------------
3,592,369
- ---------------------------------------------------------------
METALS MINING-0.79%
Phelps Dodge Corp. 27,800 1,589,813
- ---------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-0.99%
Pitney Bowes, Inc. 41,400 1,992,375
- ---------------------------------------------------------------
OIL (INTERNATIONAL INTEGRATED)-6.69%
Amoco Corp. 49,200 2,047,950
- ---------------------------------------------------------------
Exxon Corp. 52,000 3,708,250
- ---------------------------------------------------------------
Repsol S.A.-ADR (Spain) 60,000 3,300,000
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL (INTERNATIONAL INTEGRATED)-(CONTINUED)
Royal Dutch Petroleum Co.-New
York Shares-ADR (Netherlands) 59,600 $ 3,266,825
- ---------------------------------------------------------------
YPF Sociedad Anonima-ADR
(Argentina) 40,000 1,202,500
- ---------------------------------------------------------------
13,525,525
- ---------------------------------------------------------------
PAPER & FOREST PRODUCTS-0.70%
Westvaco Corp. 50,000 1,412,500
- ---------------------------------------------------------------
PHOTOGRAPHY/IMAGING-1.88%
IKON Office Solutions, Inc. 79,200 1,153,350
- ---------------------------------------------------------------
Xerox Corp. 26,000 2,642,250
- ---------------------------------------------------------------
3,795,600
- ---------------------------------------------------------------
RAILROADS-0.90%
Norfolk Southern Corp. 60,700 1,809,618
- ---------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-2.90%
Lowe's Companies, Inc. 79,000 3,204,438
- ---------------------------------------------------------------
Sherwin-Williams Co 80,000 2,650,000
- ---------------------------------------------------------------
5,854,438
- ---------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-1.43%
J.C. Penney Co., Inc. 40,000 2,892,500
- ---------------------------------------------------------------
RETAIL (DRUG STORES)-1.04%
Rite Aid Corp. 55,900 2,099,743
- ---------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-1.25%
Cognizant Corp. 40,000 2,520,000
- ---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.23%
Dun & Bradstreet Corp. 125,000 4,515,624
- ---------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.95%
First Data Corp. 57,800 1,925,462
- ---------------------------------------------------------------
SPECIALTY PRINTING-1.20%
Deluxe Corp. 68,000 2,435,250
- ---------------------------------------------------------------
TELEPHONE-1.67%
Telefonos de Mexico S.A.-ADR
(Mexico) 40,800 1,960,950
- ---------------------------------------------------------------
US West, Inc. 30,000 1,410,000
- ---------------------------------------------------------------
3,370,950
- ---------------------------------------------------------------
TEXTILES (APPAREL)-2.58%
Liz Claiborne, Inc. 60,400 3,155,900
- ---------------------------------------------------------------
VF Corp. 40,000 2,060,000
- ---------------------------------------------------------------
5,215,900
- ---------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TEXTILES (SPECIALTY)-1.00%
Unifi, Inc. 59,000 $ 2,020,750
- ---------------------------------------------------------------
TOBACCO-2.91%
Philip Morris Companies, Inc. 48,500 1,909,687
- ---------------------------------------------------------------
UST, Inc. 147,000 3,969,000
- ---------------------------------------------------------------
5,878,687
- ---------------------------------------------------------------
Total Common Stocks (Cost - $127,849,362) $ 193,099,726
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-4.55%(b)
Dean Witter Reynolds, Inc.,
6.10%, 07/01/98(c) (Cost
$9,207,735) $ 9,207,735 $ 9,207,735
- ---------------------------------------------------------------
TOTAL INVESTMENTS-100.09% 202,307,461
- ---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-(0.09%) (188,246)
- ---------------------------------------------------------------
NET ASSETS-100.00% $ 202,119,215
===============================================================
</TABLE>
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 daily to
ensure its market value as being 102% of the sales price of the repurchase
agreement. The investments in some repurchase agreements are through
participation in joint accounts with other mutual funds, private accounts,
and certain non-registered investments companies managed by the investment
advisor or its affiliates.
(c) Joint repurchase agreement entered into 6/30/98 with a maturing value of
$200,033,889. Collateralized by $203,366,000 U.S. Government obligations, 0%
to 9.375% due 07/01/98 to 09/21/04 with an aggregate market value at
06/30/98 of $209,153,696.
Abbreviations:
ADR -- American Depositary Receipt
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$137,057,097) $202,307,461
- ---------------------------------------------------------
Receivables for:
Capital stock sold 192,903
- ---------------------------------------------------------
Interest and dividends 346,214
- ---------------------------------------------------------
Investment for deferred compensation plan 3,117
- ---------------------------------------------------------
Other assets 3,470
- ---------------------------------------------------------
Total assets 202,853,165
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Capital stock reacquired 86,208
- ---------------------------------------------------------
Deferred compensation plan 3,117
- ---------------------------------------------------------
Accrued advisory fees 122,830
- ---------------------------------------------------------
Accrued operating services fees 31,096
- ---------------------------------------------------------
Accrued distribution fees 469,659
- ---------------------------------------------------------
Accrued directors' fees and expenses 21,040
- ---------------------------------------------------------
Total liabilities 733,950
- ---------------------------------------------------------
Net assets applicable to shares outstanding $202,119,215
=========================================================
NET ASSETS:
Class A $ 12,642,733
=========================================================
Class B $ 5,234,137
=========================================================
Class C $184,242,345
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 475,530
=========================================================
Class B:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 197,828
=========================================================
Class C:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 6,966,117
=========================================================
Class A:
Net asset value and redemption price per
share $ 26.59
- ---------------------------------------------------------
Offering price per share:
(Net asset value of
$26.59 divided by 94.50%) $ 28.14
=========================================================
Class B:
Net asset value and offering price per
share $ 26.46
=========================================================
Class C:
Net asset value and offering price per
share $ 26.45
=========================================================
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 216,505
- --------------------------------------------------------
Dividends (net of $8,046 foreign
withholding tax) 1,930,469
- --------------------------------------------------------
Total investment income 2,146,974
- --------------------------------------------------------
EXPENSES:
Advisory fees 705,603
- --------------------------------------------------------
Operating services fees 423,323
- --------------------------------------------------------
Directors' fees and expenses 4,913
- --------------------------------------------------------
Distribution fees-Class A 14,354
- --------------------------------------------------------
Distribution fees-Class B 5,094
- --------------------------------------------------------
Distribution fees-Class C 894,697
- --------------------------------------------------------
Total expenses 2,047,984
- --------------------------------------------------------
Less: Fees waived by advisor (46,665)
- --------------------------------------------------------
Net expenses 2,001,319
- --------------------------------------------------------
Net investment income 145,655
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM
INVESTMENT SECURITIES:
Net realized gain from investment
securities 19,585,057
- --------------------------------------------------------
Net unrealized appreciation (depreciation)
of investment securities (2,285,927)
- --------------------------------------------------------
Net gain on investment securities 17,299,130
- --------------------------------------------------------
Net increase in net assets resulting from
operations $17,444,785
========================================================
</TABLE>
7
<PAGE> 10
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 145,655 $ 45,808
- ------------------------------------------------------------------------------------------
Net realized gain from investment securities 19,585,057 17,674,268
- ------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment
securities (2,285,927) 24,024,117
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 17,444,785 41,744,193
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A -- (6,926)
- ------------------------------------------------------------------------------------------
Class C -- (10,706)
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (415,931)
- ------------------------------------------------------------------------------------------
Class C -- (17,806,373)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A 6,920,363 5,055,769
- ------------------------------------------------------------------------------------------
Class B 5,158,619 --
- ------------------------------------------------------------------------------------------
Class C (4,632,379) 11,252,055
- ------------------------------------------------------------------------------------------
Net increase in net assets 24,891,388 39,812,081
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 177,227,827 137,415,746
- ------------------------------------------------------------------------------------------
End of period $202,119,215 $177,227,827
==========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $113,374,324 $105,927,721
- ------------------------------------------------------------------------------------------
Undistributed net investment income 151,616 5,961
- ------------------------------------------------------------------------------------------
Undistributed net realized gain from investment securities 23,342,911 3,757,854
- ------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 65,250,364 67,536,291
- ------------------------------------------------------------------------------------------
$202,119,215 $177,227,827
==========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Advisor Large Cap Value Fund (the "Fund") is a series portfolio of AIM
Advisor Funds, Inc. (the "Company"). The Company is a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of five
diversified portfolios. The Fund currently offers three different classes of
shares: Class A shares, Class B shares and Class C shares. The new Class B
shares commenced sales on March 3, 1998. Class A shares are sold with a
front-end sales charge. Class B shares and Class C shares are sold with a
contingent deferred sales charge. Matters affecting each portfolio or class will
be voted on exclusively by the shareholders of such portfolio or class. The
assets, liabilities and operations of each portfolio are accounted for
separately. Information presented in these financial statements pertains only to
the Fund. The Fund's investment objective is to achieve a high total return on
investment through capital appreciation and current income, without regard to
federal income tax considerations.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities at the date of the
financial statements and the reported amounts of income 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 its last sales price on the exchange where
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
8
<PAGE> 11
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 the 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 prices are
not provided by any of the above methods are valued at the mean between last
bid and asked prices based upon quotes furnished by independent sources.
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 Company's Board of Directors. Investments with
maturities of 60 days or less are valued on the basis of amortized cost
which approximates market value.
B. Securities Transactions, Investment Income and Distributions-Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
C. Federal Income Taxes-The Fund intends to comply with the requirements of the
Internal Revenue Code necessary to qualify as a regulated investment company
and, as such, will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is distributed
to shareholders. Therefore, no provision for federal income taxes is
recorded in the financial statements.
D. Expenses-Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses are allocated
among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.75% of
the Fund's average daily net assets. AIM has entered into a sub-advisory
agreement with INVESCO Capital Management, Inc. ("ICM") whereby AIM pays ICM an
annual rate of 0.20% of the Fund's average daily net assets.
The Company, pursuant to an operating services agreement with AIM, has agreed
to pay AIM an annual rate of 0.45% of the Fund's average daily net assets for
providing or arranging to provide accounting, legal (except litigation),
dividend disbursing, transfer agency, registrar, custodial, shareholder
reporting, sub-accounting and recordkeeping services and functions. This
agreement provides that AIM pays all fees and expenses associated with these and
other functions, including, but not limited to, registration fees, shareholder
meeting fees, and proxy statement and shareholder report expenses. During the
six months ended June 30, 1998, AIM was paid $382,286 for such services. As of
June 1, 1998, AIM has voluntarily agreed to limit the operating services fees to
an annual rate of 0.45% of the first $50 million of the Fund's average daily net
assets and 0.10% of the Fund's average daily net assets in excess of $50
million. During the period June 1, 1998 through June 30, 1998, AIM voluntarily
waived operating services fees in the amount of $42,564.
The Company has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Company has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan"), and the
Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The
Fund, pursuant to the Class A and C Plan, pays AIM Distributors compensation at
an annual rate of 0.35% of the average daily net assets attributable to the
Class A shares and 1.00% of the average daily net assets attributable to the
Class C shares. AIM Distributors has voluntarily agreed to limit the Class A
shares plan payments to 0.25% for three years beginning August 4, 1997. The
Fund, pursuant to the Class B Plan, pays AIM Distributors compensation at an
annual rate of 1.00% of the average daily net assets attributable to the Class B
shares. Of these amounts, the Fund may pay a service fee of 0.25% of the average
daily net assets of the Class A, Class B or Class C shares to selected dealers
and financial institutions who furnish continuing personal shareholder services
to their customers who purchase and own the appropriate class of shares of the
Fund. Any amounts not paid as a service fee under the Plans would constitute an
asset-based sales charge. The Plans also impose a cap on the total sales
charges, including asset-based sales charges, that may be paid by the respective
classes. During the six months ended June 30, 1998, for the Class A and Class C
shares and the period March 3, 1998 (date sales commenced) through June 30, 1998
for the Class B shares, the Class A, Class B and Class C shares paid AIM
Distributors $10,253, $5,094 and $894,697, respectively, as compensation under
the Plans. During the six months ended June 30, 1998, AIM Distributors waived
fees of $4,101 for the Class A shares.
AIM Distributors received commissions of $19,399 from sales of Class A shares
of the Fund during the six months ended June 30, 1998. Such commissions are not
an expense to the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the six months ended June 30,
1998, AIM Distributors received commissions of $20,962 in contingent deferred
sales charges imposed on redemptions of shares. Certain officers and directors
of the Company are officers and directors of AIM, A I M Fund Services, Inc. and
AIM Distributors.
The combined effect of the advisory agreements, operating services agreement
and the distribution plan for the Fund is to place a cap or ceiling on the total
expenses of the Fund, other than brokerage commissions, interest, taxes,
litigation, directors' fees and expenses, and other extraordinary expenses. AIM
has voluntarily agreed to adhere to maximum expense ratios for the Fund. To the
extent that the Fund exceeds the amounts, AIM or its affiliates will waive its
fees to reimburse the Fund to assure that the Fund's expenses do not exceed the
designated maximum amounts
9
<PAGE> 12
except for those items specifically identified above. If, in any calendar
quarter, the average net assets of the Fund are less than $500 million, the
Fund's expenses shall not exceed 1.55% for Class A and 2.20% for Class C; on the
next $500 million of net assets, expenses shall not exceed 1.50% for Class A and
2.15% for Class C; on the next $1 billion of net assets, expenses shall not
exceed 1.45% for Class A and 2.10% for Class C; and on all assets over $2
billion, expenses shall not exceed 1.40% for Class A and 2.05% for Class C.
During the six months ended June 30, 1998, the Fund paid legal fees of $1,171
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Company's directors. A member of that firm is a director of the Company.
NOTE 3-DIRECTORS' FEES
Directors' fees represent remuneration paid or accrued to each director who is
not an "interested person" of AIM. The Company may invest directors' fees, if so
elected by a director, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the six months ended June 30, 1998, was
$47,520,252 and $44,091,244, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of June 30, 1998 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment
securities $68,642,452
- -------------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (3,392,088)
- -------------------------------------------------------------
Net unrealized appreciation of investment
securities $65,250,364
=============================================================
Investments have the same cost for tax and financial
statement purposes.
</TABLE>
NOTE 5-CAPITAL STOCK*
Changes in the Fund's capital stock outstanding during the six months ended June
30, 1998 and the year ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
-------- ------------ -------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 322,172 $ 8,310,921 198,806 $ 4,859,057
- ------------------ -------- ------------ -------- ------------
Class B** 199,036 5,190,418 -- --
- ------------------ -------- ------------ -------- ------------
Class C 386,726 9,974,419 745,080 17,246,229
- ------------------ -------- ------------ -------- ------------
Issued as
reinvestment of
dividends:
- ------------------ -------- ------------ -------- ------------
Class A -- -- 15,389 365,541
- ------------------ -------- ------------ -------- ------------
Class C -- -- 683,868 16,255,395
- ------------------ -------- ------------ -------- ------------
Reacquired:
Class A (54,041) (1,390,558) (6,796) (168,829)
- ------------------ -------- ------------ -------- ------------
Class B** (1,208) (31,799) -- --
- ------------------ -------- ------------ -------- ------------
Class C (573,912) (14,606,798) (955,477) (22,249,569)
- ------------------ -------- ------------ -------- ------------
278,773 $ 7,446,603 680,870 $ 16,307,824
================== ======== ============ ======== ============
</TABLE>
* Shares have been restated to reflect a 4 for 1 stock split, effected in the
form of a 300% stock dividend, on November 7, 1997.
** Class B shares commenced sales on March 3, 1998.
10
<PAGE> 13
NOTE 6-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A capital stock
outstanding during the six months ended June 30, 1998 and the year ended
December 31, 1997, for a share of Class B capital stock outstanding during the
period March 3, 1998 (date sales commenced) through June 30, 1998 and for a
share of Class C capital stock outstanding during the six months ended June 30,
1998 and each of the years in the five-year period ended December 31, 1997.
<TABLE>
<CAPTION>
CLASS A(a) CLASS B
------------------------ --------
JUNE 30, DECEMBER 31, JUNE 30,
1998 1997(b) 1998
-------- ------------ --------
<S> <C> <C> <C>
Net asset value, beginning of period $ 24.11 $ 20.57 $ 25.59
- ------------------------------------------------------------ ------- ------- -------
Income from investment operations:
Net investment income 0.11(c) 0.23(c) 0.02(c)
- ------------------------------------------------------------ ------- ------- -------
Net gains on securities (both realized and unrealized) 2.37 6.17 0.85
- ------------------------------------------------------------ ------- ------- -------
Total from investment operations 2.48 6.40 0.87
- ------------------------------------------------------------ ------- ------- -------
Less distributions:
Dividends from net investment income -- (0.15) --
- ------------------------------------------------------------ ------- ------- -------
Distributions from net realized gains -- (2.71) --
- ------------------------------------------------------------ ------- ------- -------
Total distributions -- (2.86) --
- ------------------------------------------------------------ ------- ------- -------
Net asset value, end of period $ 26.59 $ 24.11 $ 26.46
- ------------------------------------------------------------ ------- ------- -------
Total return(d) 10.29% 31.66% 3.40%
- ------------------------------------------------------------ ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $12,643 $ 5,000 $ 5,234
============================================================ ======= ======= =======
Ratio of expenses to average net assets(e) 1.41%(f) 1.46% 2.16%(f)
============================================================ ======= ======= =======
Ratio of net investment income to average net assets(g) 0.88%(f) 0.77% 0.13%(f)
============================================================ ======= ======= =======
Portfolio turnover rate 24% 34% 24%
============================================================ ======= ======= =======
Average brokerage commission rate(h) $0.0548 $0.0538 $0.0548
============================================================ ======= ======= =======
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effected in the form of a 300% stock dividend, on November 7,
1997.
(b) The Fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct sales charges and is not annualized for periods less than
one year.
(e) After fee waivers and/or reimbursements. Ratios of expenses to average net
assets prior to fee waivers and/or reimbursement were 1.55% (annualized) and
1.56% for 1998-1997 for Class A and 2.21% (annualized) for 1998 for Class B.
(f) Ratios are annualized and based on average net assets of $8,270,424 and
$1,549,614 for Class A and Class B, respectively.
(g) After fee waivers and/or reimbursements. Ratios of net investment income to
average net assets prior to fee waivers and/or reimbursement were 0.74%
(annualized) and 0.67% for 1998-1997 for Class A and 0.08% (annualized) for
1998 for Class B.
(h) 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.
<TABLE>
<CAPTION>
CLASS C(a)
-------------------------------------------------------------------
DECEMBER 31,
JUNE 30, ------------------------------------------------------
1998 1997(b) 1996 1995 1994 1993
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 24.08 $ 20.57 $ 17.60 $ 13.96 $ 14.90 $ 15.82
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.02(c) 0.01(c) 0.05 0.10 0.09 0.10
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net gains on securities (both realized and unrealized) 2.35 6.21 2.97 4.11 0.32 1.35
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total from investment operations 2.37 6.22 3.02 4.21 0.41 1.45
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income -- -- (0.05) (0.10) (0.09) (0.10)
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Distributions from net realized gains -- (2.71) -- (0.47) (1.26) (2.27)
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total distributions -- (2.71) (0.05) (0.57) (1.35) (2.37)
- ------------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 26.45 $ 24.08 $ 20.57 $ 17.60 $ 13.96 $ 14.90
============================================================ ======= ======== ========= ======== ======== ========
Total return(d) 9.84% 30.66% 17.17% 30.28% 2.69% 9.16%
============================================================ ======= ======== ========= ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $184,242 $172,228 $137,416 $113,573 $ 77,929 $ 86,659
============================================================ ======= ======== ========= ======== ======== ========
Ratio of expenses to average net assets(e) 2.16%(f) 2.21% 2.26% 2.28% 2.25% 2.25%
============================================================ ======= ======== ========= ======== ======== ========
Ratio of net investment income to average net assets(g) 0.13%(f) 0.02% 0.24% 0.64% 0.61% 0.62%
============================================================ ======= ======== ========= ======== ======== ========
Portfolio turnover rate 24% 34% 19% 17% 21% 47%
============================================================ ======= ======== ========= ======== ======== ========
Average brokerage commission rate(h) $0.0548 $ 0.0538 $ 0.0590 N/A N/A N/A
============================================================ ======= ======== ========= ======== ======== ========
</TABLE>
(a) Per share information and shares have been restated to reflect a 4 for 1
stock split, effected in the form of a 300% stock dividend, on November 7,
1997.
(b) The Fund changed investment advisors on August 4, 1997.
(c) Calculated using average shares outstanding.
(d) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(e) After fee waivers and/or reimbursements. Ratios of expenses to average net
assets prior to fee waivers and/or reimbursement were 2.21% (annualized) for
1998 and 2.25% for 1993.
(f) Ratios are annualized and based on average net assets of $180,422,241.
(g) After fee waivers and/or reimbursements. Ratios of net investment income to
average net assets prior to fee waivers and/or reimbursement were 0.08%
(annualized) for 1998 and 0.62% for 1993.
(h) 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.
11
<PAGE> 14
Directors & Officers
<TABLE>
<S> <C> <C>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
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 INVESCO Capital Management, Inc.
1315 Peachtree Street, N.E.
Edward K. Dunn Jr. Dana R. Sutton Atlanta, GA 30309
Chairman, Mercantile Mortgage Corp.; Vice President and Assistant Treasurer
Formerly Vice Chairman and President, TRANSFER AGENT
Mercantile-Safe Deposit & Trust Co.; and Robert G. Alley
President, Mercantile Bankshares Vice President A I M Fund Services, Inc.
P.O. Box 4739
Jack Fields Stuart W. Coco Houston, TX 77210-4739
Chief Executive Officer Vice President
Texana Global, Inc.; CUSTODIAN
Formerly Member Melville B. Cox
of the U.S. House of Representatives Vice President State Street Bank and Trust Company
225 Franklin Street
Carl Frischling Karen Dunn Kelley Boston, MA 02110
Partner Vice President
Kramer, Levin, Naftalis & Frankel COUNSEL TO THE FUND
Jonathan C. Schoolar
Robert H. Graham Vice President Ballard Spahr
President and Chief Executive Officer Andrews & Ingersoll, LLP
A I M Management Group Inc. Renee A. Friedli 1735 Market Street
Assistant Secretary Philadelphia, PA 19103
Lewis F. Pennock
Attorney P. Michelle Grace COUNSEL TO THE DIRECTORS
Assistant Secretary
Ian W. Robinson Kramer, Levin, Naftalis & Frankel
Consultant; Formerly Executive Jeffrey H. Kupor 919 Third Avenue
Vice President and Assistant Secretary New York, NY 10022
Chief Financial Officer
Bell Atlantic Management Nancy L. Martin DISTRIBUTOR
Services, Inc. Assistant Secretary
A I M Distributors, Inc.
Louis S. Sklar Ofelia M. Mayo 11 Greenway Plaza
Executive Vice President Assistant Secretary Suite 100
Hines Interests Houston, TX 77046
Limited Partnership Lisa A. Moss
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
12
<PAGE> 15
HOW AIM MAKES INVESTING
EASY FOR YOU
o LOW INITIAL INVESTMENT. You can get your investment program started for as
little as $500. Subsequent investments can be made for only $50.
o AUTOMATIC REINVESTMENT OF DIVIDENDS AND/OR CAPITAL GAINS. Distributions may
be received in cash or reinvested in the Fund free of charge. Over time, the
power of compounding can significantly increase the value of your assets.
o AUTOMATIC INVESTMENT PLAN. You may build your investment by regularly
purchasing additional shares. Pre-authorized checks for $50 or more can be
drafted monthly from your personal checking account.
o EASY ACCESS TO YOUR MONEY. Your shares may be redeemed at net asset value
any day the New York Stock Exchange is open. The price of shares sold may be
more or less than their original cost, depending on market conditions.
o SYSTEMATIC WITHDRAWAL PLAN. You may elect to receive checks of at least $50
monthly or quarterly through a systematic withdrawal plan.
o EXCHANGE PRIVILEGE. As your goals change, you may exchange all or part of
your assets for those of other funds within the same share class of The AIM
Family of Funds(R). The exchange privilege may be modified or discontinued
for any of the AIM funds. Certain restrictions apply.
o RETIREMENT PLANS. You may purchase shares of the fund for your Individual
Retirement Account (IRA) or any other type of retirement plan, and earn
tax-deferred dollars for your retirement.
o TOLL-FREE ACCESS. Current shareholders can call our AIM Investor Line at
800-246-5463 for 24-hour-a-day account information. Or, of course, you may
contact your financial consultant for assistance.
o www.aimfunds.com. As a current shareholder, you can check account balances
24 hours a day over the Internet. State-of-the-art encryption lets you send
us questions that include confidential information without the fear of
eavesdropping, tampering, or forgery.
-------------------------------------------------
Current shareholders
can call our
AIM Investor Line at
800-246-5463
for 24-hour-a-day
account information.
-------------------------------------------------
<PAGE> 16
<TABLE>
<S> <C> <C>
THE AIM FAMILY OF FUNDS--Registered Trademark--
GROWTH FUNDS INTERNATIONAL GROWTH FUNDS
AIM Aggressive Growth Fund(1) AIM Advisor International Value Fund
AIM Blue Chip Fund AIM Asian Growth Fund
AIM Capital Development Fund AIM Developing Markets Fund(2)
AIM Constellation Fund AIM Emerging Markets Fund(2)
AIM Mid Cap Growth Fund(2) AIM Europe Growth Fund(2)
AIM Select Growth Fund(3) AIM European Development Fund
[PHOTO OF AIM Small Cap Equity Fund(2) AIM International Equity Fund
11 GREENWAY PLAZA AIM Small Cap Opportunities Fund AIM International Growth Fund(2)
APPEARS HERE] AIM Value Fund AIM Weingarten Fund AIM Japan Growth Fund(2)
AIM Latin American Growth Fund(2)
GROWTH & INCOME FUNDS AIM New Pacific Growth Fund(2)
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS
AIM Advisor Large Cap Value Fund
AIM Advisor MultiFlex Fund AIM Global Aggressive Growth Fund
AIM Advisor Real Estate Fund AIM Global Growth Fund
AIM America Value Fund(2) AIM Worldwide Growth Fund(2)
AIM Balanced Fund
AIM Charter Fund GLOBAL GROWTH & INCOME FUNDS
INCOME FUNDS AIM Global Growth & Income Fund(2)
AIM Global Utilities Fund
AIM Floating Rate Fund(2)
AIM High Yield Fund GLOBAL INCOME FUNDS
AIM Income Fund
AIM Intermediate Government Fund AIM Global Government Income Fund(2)
AIM Limited Maturity Treasury Fund AIM Global High Income Fund(2)
AIM Global Income Fund
TAX-FREE INCOME FUNDS AIM Strategic Income Fund(2)
AIM High Income Municipal Fund THEME FUNDS
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Consumer Products and Services Fund(2)
AIM Tax-Free Intermediate Fund AIM Global Financial Services Fund(2)
AIM Global Health Care Fund(2)
MONEY MARKET FUNDS AIM Global Infrastructure Fund(2)
AIM Global Resources Fund(2)
AIM Dollar Fund(2) AIM Global Telecommunications Fund(2)
AIM Money Market Fund AIM New Dimension Fund(2)
AIM Tax-Exempt Cash Fund
</TABLE>
(1) AIM Aggressive Growth Fund was closed to new investors on June 5, 1997.
(2) Effective May 29, 1998, A I M Advisors, Inc. became advisor to the former GT
Global Funds. (3) On May 1, 1998, AIM Growth Fund was renamed AIM Select Growth
Fund. For more complete information about any AIM Fund(s), including sales
charges and expenses, ask your financial consultant or securities dealer for a
free prospectus(es). Please read the prospectus(es) carefully before you invest
or send money.
A I M Management Group Inc. has provided leadership in the mutual fund industry
since 1976 and managed approximately $101 billion in assets for more than 5.2
million shareholders, including individual investors, corporate clients, and
financial institutions, as of June 30, 1998. The AIM Family of Funds--Registered
Trademark-- is distributed nationwide, and AIM today is the ninth-largest mutual
fund complex in the U.S. in assets under management, according to Strategic
Insight, an independent mutual fund monitor.
INVEST WITH DISCIPLINE(SM)
