<PAGE> 1
AIM ADVISOR
INTERNATIONAL VALUE FUND
[AIM LOGO APPEARS HERE] SEMIANNUAL REPORT JUNE 30, 1998
<PAGE> 2
--------------------------------
AIM ADVISOR INTERNATIONAL
VALUE FUND
For shareholders who
seek a high total return
through capital appreciation
and current income
through a diversified portfolio
of foreign equity securities.
--------------------------------
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Advisor International 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 reflects 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.
o International investing presents certain risks not associated with investing
solely in the U.S. These include, but are not limited to, risks relating to
fluctuations in the value of the U.S. dollar relative to the value of other
currencies, the custody arrangements made for the Fund's foreign holdings,
differences in accounting, political risks, and the lesser degree of public
information required to be provided by non-U.S. companies.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o Lipper Analytical Services, Inc., is an independent mutual fund performance
monitor. The unmanaged Lipper International Fund Index represents an average
of the performance of the 30 largest international mutual funds.
o The Europe, Australia, and Far East Index (EAFE) is a group of unmanaged
foreign securities tracked by Morgan Stanley Capital International.
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, with
equities having the potential to produce returns above 30% again. 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--Registered
Trademark--. 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--Registered Trademark--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--.
---------------------------------
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.
---------------------------------
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
<PAGE> 4
The Managers' Overview
EUROPEAN EQUITIES DOMINATE WORLD MARKETS
A roundtable discussion with the Fund management team for AIM Advisor
International Value Fund for the six months ended June 30, 1998.
- -------------------------------------------------------------------------------
Q. HOW DID AIM ADVISOR INTERNATIONAL VALUE FUND PERFORM DURING THE REPORTING
PERIOD?
A. We are very pleased to report the Fund's total return was 14.74% for Class A
shares and 14.33% for Class C shares for the six-month period ended June 30,
1998. Since inception on March 3, 1998, Class B shares produced a cumulative
total return of 5.31%. The Fund fell just shy of the Morgan Stanley Capital
International (MSCI) Europe, Australia and Far East Index (EAFE) of foreign
stocks, which returned 15.93% during the same six-month period.
Shareholders will be pleased that the Fund's three-year performance has
outpaced its indexes. The Fund's Class C shares have an average annual total
return of 19.41% for the three-year period ended June 30, 1998.
Comparatively, the MSCI EAFE Index returned 10.69% over the same three-year
period, while the Lipper International Fund Index returned 15.12%.
Considering the Fund turned three years old on May 1, this was a nice way to
celebrate its birthday.
================================================================================
FUND OUTPERFORMED INDEX OVER THREE YEARS
- --------------------------------------------------------------------------------
Average Annual Total Returns for period
6/30/95-6/30/98
AIM Fund Class C Shares 19.41%
Lipper International Index 15.12%
MSCI EAFE Index 10.69%
================================================================================
Q. WHAT ACCOUNTED FOR THE FUND'S STRONG PERFORMANCE DURING THE PAST SIX MONTHS?
A. European stocks continued to rise dramatically as markets there comprised
all of the 10 top-performing international markets during the six-month
period ended June 30, 1998. Finland led the way with an astounding 65.58%
return, followed by Spain with a 43.90% advance. The Fund had over 8% of its
holdings in Spain as of June 30, 1998. Furthermore, all but one of the
Fund's top 10 holdings were in European companies. About 75% of the
portfolio was in European stocks at the end of the reporting period, and the
fundamentals seem to suggest that further progress may be possible for
markets in Europe.
Q. WHICH INDUSTRY SECTORS IN EUROPE PERFORMED ESPECIALLY WELL?
A. The financial, food, and telecommunications sectors did very nicely during
the first six months of 1998. The food industry was the Fund's largest
single weighting at 11.40% of the portfolio. The Fund owned such European
food producers and distributors as Nestle S.A., Groupe Danone, and Unilever
N.V., which produced strong returns for the Fund.
We continued to see exceptional performance in the financial sector, an
ongoing trend for quite some time now. With most of the world enjoying a
growing economy and stable interest rates, financial institutions have
prospered. Financial companies with particularly strong fundamentals, such
as HSBC Holdings PLC in the United Kingdom, Istituto Mobiliare Italiano
S.p.A. in Italy, and Societe Generale in France were among the Fund's top 10
holdings. The financial sector combined to make up just over 21% of the
Fund.
Telecommunications continued its excellent investment performance during
the reporting period as well. We are in the midst of a telecommunications
boom as telecommunication companies are adding wireless and cellular
communications and Internet connections to standard local and long-distance
telephone services. In this new age of information, we don't see this trend
slowing in the near term. The Fund's largest single holding, British
Telecommunications PLC, has aggressively taken advantage of these new
products and services. The United Kingdom was the Fund's largest country
weighting with just over 19%.
Q. IS THE WORST OVER FOR THE ASIAN ECONOMIES?
A. The long term prospects have been helped by the economic fall-out of last
autumn, such as the end of "crony capitalism" in many of the Asian
countries, but we remain very cautious about building up additional
positions at present. It will be some time before the dynamics of the region
will be where they were in the early 1990's and similar share price
performances may be possible. Until we see major restructurings and greater
corporate earnings, we will remain cautious in terms of weightings in Asia.
Interestingly, we are very positive on the Australian market, which is
considered part of Asia because of geography but its fundamentals seem more
similar to
------------------------------------
Our exposure to the European markets
provided the main impetus
for the Fund's performance during
the past six months.
------------------------------------
See important fund and index disclosures inside front cover.
<PAGE> 5
PORTFOLIO COMPOSITION
As of 6/30/98, based on total net assets
<TABLE>
<CAPTION>
===================================================================================================================
TOP 10 INDUSTRIES TOP 10 HOLDINGS TOP 10 COUNTRIES
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. British Telecommunications 3.21% 1. Foods 11.40% 1. United Kingdom 19.18%
PLC-ADR (United Kingdom)
2. HSBC Holdings PLC-ADR 2.72 2. Telephone 11.29 2. Japan 8.89
(United Kingdom)
3. Astra A.B.-ADR (Sweden) 2.58 3. Banks 8.31 3. Netherlands 8.82
(Money Center)
4. Telefonica de Espana-ADR 2.58 4. Oil 6.58 4. Spain 8.30
(Spain) (International Integrated)
5. Istituto Mobiliare Italiano 2.48 5. Banks (Regional) 6.56 5. Germany 8.04
S.p.A.-ADR (Italy)
6. Novartis A.G.-ADR 2.47 6. Health Care 6.47 6. Australia 7.37
(Switzerland) (Drugs-Major Pharmaceutical)
7. Societe Generale-ADR 2.47 7. Manufacturing 4.99 7. France 6.49
(France) (Diversified)
8. Akzo Nobel N.V.-ADR 2.47 8. Electric Companies 4.30 8. Italy 5.04
(Netherlands)
9. Groupe Danone-ADR (France) 2.45 9. Chemicals (Diversified) 3.65 9. Switzerland 4.85
10. News Corp. Ltd. 2.43 10. Health Care 2.43 10. Denmark 4.01
(The)(Australia) (Drugs-Generic & Other)
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>
to those in Europe. The News Corp. Ltd., led by media mogul Rupert Murdoch,
is an Australian-headquartered company with operations all over the globe.
It's stock performed very nicely during the reporting period and was the
portfolio's 10th-largest holding as of June 30. About 10% of the portfolio
was in Asia at the end of the reporting period, with three-quarters of that
percentage in Australia.
Q. WHAT ARE YOUR THOUGHTS ABOUT THE U.S.'S INTERVENTION OF THE YEN IN JUNE?
A. We believe it was a necessary move to avoid the appearance of "benign
neglect" and to dampen speculative activity against the yen. U.S.
intervention has been accompanied by pressure on Japan for more substantial
policy reactions. Japanese authorities will now have more time to devise a
concrete plan to revitalize their banking system and to implement
fundamental reforms. This would be a prerequisite for economic recovery,
which we expect will remain very difficult otherwise.
With this economic environment, we continued to own only blue chip
Japanese names in the Fund. These familiar names included Hitachi Ltd.,
Canon Inc., Fuji Photo Film, and Nintendo Co. Ltd. We had just shy of 9% of
the portfolio allocated in Japan at the end of the reporting period.
Q. LATIN AMERICA STRUGGLED TREMENDOUSLY DURING THE REPORTING PERIOD. WHAT ARE
YOUR THOUGHTS ABOUT THAT REGION?
A. Latin America has been unfairly treated as investors shied away from all of
the smaller equity markets in the wake of the Asian crisis. Countries in
this region have already implemented many of the reforms that Asia needs and
are arguably on a much firmer financial footing. We were exposed to four
stocks located in three Latin American countries and are optimistic for
longer term performance.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND IN THE NEAR TERM?
A. Sticking to our conservative investment discipline, we will continue to look
for quality, large-cap stocks that are undervalued or out of favor. Our
country and industry weightings are purely a by-product of where we find
value on a stock-by-stock basis. The largest exposures remain in the
financial, telecommunications, and food and beverage sectors. We cannot find
much value right now in the retail, electronic, and automobile sectors.
Though Europe is likely to remain our region of concentration, if we find a
stock in the Pacific Rim befitting our bottom-up analysis, we may cautiously
add a position in that area.
Additionally, the economic indicators in the U.S. remain positive, and
that is generally good for markets. We remain confident that the
international markets offer value at these levels, particularly relative to
U.S. large cap stocks.
-----------------------------------------
We remain confident that
the international markets
offer value at these levels, particularly
relative to U.S. large cap stocks.
-----------------------------------------
See important fund and index disclosures inside front cover.
<PAGE> 6
Long-Term Performance
The chart below compares your Fund's Class C shares to benchmark indexes. It is
intended to give you a general idea of how your Fund performed compared to the
stock market over the period 5/1/95-6/30/98. It is important to understand the
difference between your Fund and an index. An index measures the performance of
a hypothetical portfolio, in this case the Morgan Stanley Capital International
EAFE Index and Lipper International Fund Index. Unlike your Fund, an index is
not managed; therefore, there are no sales charges, expenses or fees. You cannot
invest in an index. But if you could buy all the securities that make up an
index, you would incur expenses that would affect the return of your investment.
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/98, including sales charges
================================================================================
CLASS C SHARES
Inception (5/1/95) 19.11%
1 Year 11.72
CLASS A SHARES
Inception (12/31/96) 15.11%
1 Year 7.33
CLASS B SHARES
Inception (3/3/98) 0.31*
*Total return provided is cumulative total return that has not been annualized
================================================================================
GROWTH OF A $10,000 INVESTMENT
================================================================================
Date AIM Advisor International Value Lipper International EAFE Index &
Fund - Class C Shares Index Fund Net Dividends
- --------------------------------------------------------------------------------
In thousands
5/1/95 $10,000.00 $10,000.00 $10,000.00
6/30/95 $10,215.00 $10,137.00 $ 9,708.00
9/30/95 $10,560.00 $10,689.00 $10,112.00
12/31/95 $11,128.00 $10,883.00 $10,522.00
3/31/96 $11,690.00 $11,362.00 $10,826.00
6/30/96 $12,069.00 $11,828.00 $10,997.00
9/30/96 $12,299.00 $11,838.00 $10,983.00
12/31/96 $13,463.00 $12,453.00 $11,158.00
3/31/97 $13,523.00 $12,766.00 $10,983.00
6/30/97 $15,428.00 $14,194.00 $12,409.00
9/30/97 $15,282.00 $14,462.00 $12,321.00
12/31/97 $15,210.00 $13,358.00 $11,356.00
3/31/98 $17,380.00 $15,347.00 $13,027.00
6/31/98 $17,390.00 $15,467.00 $13,165.00
================================================================================
Source: Towers Data Systems HYPO--Registered Trademark--. Your Fund's total
return includes sales charges, expenses, and management fees. The performance of
the Fund's Class C shares will differ from that of Class A and Class B shares
due to differing fees and expenses. For Fund performance calculations and
descriptions of the indexes cited on this page, please refer to the inside front
cover.
<PAGE> 7
SCHEDULE OF INVESTMENTS
June 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS-94.20%
ARGENTINA-1.34%
YPF Sociedad Anonima-ADR
(Oil-International Integrated) 60,000 $ 1,803,750
- --------------------------------------------------------------
AUSTRALIA-7.37%
Amcor Ltd.-ADR (Containers &
Packaging-Paper) 120,000 2,070,000
- --------------------------------------------------------------
National Australia Bank Ltd.-ADR
(Banks-Regional) 45,000 2,972,812
- --------------------------------------------------------------
News Corp. Ltd. (The)
(Publishing-Newspapers) 400,000 3,274,176
- --------------------------------------------------------------
Rio Tinto Ltd.-ADR (Metals Mining) 34,000 1,616,979
- --------------------------------------------------------------
9,933,967
- --------------------------------------------------------------
BRAZIL-0.64%
Telecomunicacoes Brasileiras
S.A.-ADR (Telephone) 8,000 873,500
- --------------------------------------------------------------
DENMARK-4.01%
Den Danske Bank-ADR (Banks-Money
Center) 25,000 2,999,120
- --------------------------------------------------------------
Novo Nordisk A.S.-ADR (Health
Care-Drugs-Major Pharmaceuticals) 35,000 2,408,436
- --------------------------------------------------------------
5,407,556
- --------------------------------------------------------------
FRANCE-6.49%
Elf Aquitaine S.A.-ADR
(Oil-International Integrated) 30,000 2,130,000
- --------------------------------------------------------------
Groupe Danone-ADR (Foods) 60,000 3,300,000
- --------------------------------------------------------------
Societe Generale-ADR (Banks-Major
Regional) 80,000 3,326,480
- --------------------------------------------------------------
8,756,480
- --------------------------------------------------------------
GERMANY-8.04%
BASF A.G.-ADR
(Chemicals-Diversified) 60,000 2,850,360
- --------------------------------------------------------------
Bayer A.G.-ADR
(Chemicals-Diversified) 40,000 2,069,764
- --------------------------------------------------------------
Deutsche Bank A.G.-ADR (Banks-Money
Center) 35,000 2,958,946
- --------------------------------------------------------------
RWE A.G.-ADR
(Manufacturing-Diversified) 50,000 2,958,390
- --------------------------------------------------------------
10,837,460
- --------------------------------------------------------------
HONG KONG-1.63%
Sun Hung Kai Properties Ltd.-ADR
(Real Estate Investment Trust) 250,000 1,061,476
- --------------------------------------------------------------
Swire Pacific Ltd.-ADR
(Manufacturing-Diversified) 300,000 1,132,440
- --------------------------------------------------------------
2,193,916
- --------------------------------------------------------------
ITALY-5.04%
ENI S.p.A-ADR. (Oil-International
Integrated) 8,000 520,000
- --------------------------------------------------------------
Istituto Mobiliare Italiano
S.p.A.-ADR (Banks-Regional) 70,000 3,338,125
- --------------------------------------------------------------
Telecom Italia S.p.A.-ADR
(Telephone) 40,000 2,940,000
- --------------------------------------------------------------
6,798,125
- --------------------------------------------------------------
JAPAN-8.89%
Canon, Inc.-ADR (Office Equipment &
Supplies) 75,000 1,715,626
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
JAPAN-(CONTINUED)
Dai Nippon Printing Co., Ltd.-ADR
(Specialty Printing) 11,000 $ 1,755,592
- --------------------------------------------------------------
Fuji Photo Film-ADR
(Photography/Imaging) 50,000 1,728,125
- --------------------------------------------------------------
Hitachi Ltd.-ADR
(Manufacturing-Diversified) 17,000 1,096,500
- --------------------------------------------------------------
Kirin Brewery Co., Ltd.-ADR
(Beverages-Alcoholic) 23,000 2,196,500
- --------------------------------------------------------------
Kyocera Corp.-ADR
(Electronics-Component
Distributors) 12,000 1,166,250
- --------------------------------------------------------------
Nintendo Co. Ltd. (Leisure
Time-Products) 25,000 2,326,549
- --------------------------------------------------------------
11,985,142
- --------------------------------------------------------------
MEXICO-1.53%
Cemex S.A. de C.V.-ADR (Building
Materials) 125,000 1,101,700
- --------------------------------------------------------------
Telefonos de Mexico S.A.-ADR
(Telephone) 20,000 961,250
- --------------------------------------------------------------
2,062,950
- --------------------------------------------------------------
NETHERLANDS-8.82%
Akzo Nobel N.V.-ADR (Chemicals) 30,000 3,326,250
- --------------------------------------------------------------
ING Groep N.V.-ADR
(Insurance-Life/Health) 45,000 2,941,875
- --------------------------------------------------------------
Royal Dutch Petroleum Co.-New York
Shares-ADR (Oil-International
Integrated) 45,000 2,466,563
- --------------------------------------------------------------
Unilever N.V.-New York Shares-ADR
(Foods) 40,000 3,157,500
- --------------------------------------------------------------
11,892,188
- --------------------------------------------------------------
NORWAY-1.15%
Norsk Hydro A.S.A.-ADR
(Manufacturing-Diversified) 35,000 1,544,375
- --------------------------------------------------------------
PORTUGAL-1.96%
Portugal Telecom S.A.-ADR
(Telephone) 50,000 2,646,875
- --------------------------------------------------------------
SINGAPORE-1.17%
Development Bank of Singapore
Ltd.-ADR (Banks-Money Center) 71,500 1,582,788
- --------------------------------------------------------------
SPAIN-8.30%
Banco Santander-ADR (Banks-Regional) 50,000 2,534,375
- --------------------------------------------------------------
Endesa S.A.-ADR (Electric Companies) 125,000 2,703,125
- --------------------------------------------------------------
Repsol S.A.-ADR (Oil-International
Integrated) 45,000 2,475,000
- --------------------------------------------------------------
Telefonica de Espana-ADR (Telephone) 25,000 3,476,561
- --------------------------------------------------------------
11,189,061
- --------------------------------------------------------------
SWEDEN-3.79%
Astra A.B.-ADR (Health
Care-Drugs-Generic & Other) 170,000 3,485,000
- --------------------------------------------------------------
Volvo A.B.-ADR (Automobiles) 55,000 1,625,938
- --------------------------------------------------------------
5,110,938
- --------------------------------------------------------------
SWITZERLAND-4.85%
Nestle S.A.-ADR (Foods) 30,000 3,210,021
- --------------------------------------------------------------
Novartis A.G.-ADR (Health
Care-Drugs-Major Pharmaceuticals) 40,000 3,328,032
- --------------------------------------------------------------
6,538,053
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-19.18%
Associated British Foods PLC-ADR
(Foods) 300,000 $ 2,823,090
- --------------------------------------------------------------
British Airways PLC-ADR (Airlines) 28,000 3,011,750
- --------------------------------------------------------------
British Telecommunications PLC-ADR
(Telephone) 35,000 4,322,500
- --------------------------------------------------------------
Carlton Communications PLC-ADR
(Electrical Equipment) 68,000 3,060,000
- --------------------------------------------------------------
Glaxo Wellcome PLC-ADR (Health
Care-Drugs-Major Pharmaceuticals) 50,000 2,990,625
- --------------------------------------------------------------
HSBC Holdings PLC-ADR (Banks-Money
Center) 15,000 3,668,415
- --------------------------------------------------------------
PowerGen PLC-ADR (Electric
Companies) 55,000 3,100,625
- --------------------------------------------------------------
Unigate PLC (Foods) 260,000 2,877,782
- --------------------------------------------------------------
25,854,787
- --------------------------------------------------------------
Total Common Stocks (Cost
$98,328,262) 127,011,911
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-4.57%(a)
Dean Witter Reynolds, Inc., 6.10%,
07/01/98(b) (Cost $6,154,799) $6,154,799 $ 6,154,799
- --------------------------------------------------------------
TOTAL INVESTMENTS-98.77% 133,166,710
- --------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.23% 1,652,261
- --------------------------------------------------------------
NET ASSETS-100.00% $134,818,971
==============================================================
</TABLE>
Notes to Schedule of Investments:
(a) 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 market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts, and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(b) Joint repurchase agreement entered into 06/30/98 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
$104,483,061) $133,166,710
- ---------------------------------------------------------
Foreign currencies, at value (cost $14,805) 14,924
- ---------------------------------------------------------
Receivables for:
Capital stock sold 2,128,841
- ---------------------------------------------------------
Interest and dividends 548,680
- ---------------------------------------------------------
Investment for deferred compensation plan 2,996
- ---------------------------------------------------------
Total assets 135,862,151
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Capital stock reacquired 101,367
- ---------------------------------------------------------
Deferred compensation plan 2,996
- ---------------------------------------------------------
Investments purchased 509,318
- ---------------------------------------------------------
Accrued advisory fees 107,582
- ---------------------------------------------------------
Accrued operating services fees 25,051
- ---------------------------------------------------------
Accrued distribution fees 290,047
- ---------------------------------------------------------
Accrued directors' fees and expenses 6,819
- ---------------------------------------------------------
Total liabilities 1,043,180
- ---------------------------------------------------------
Net assets applicable to shares outstanding $134,818,971
=========================================================
NET ASSETS:
Class A $ 17,231,114
=========================================================
Class B $ 2,692,275
=========================================================
Class C $114,895,582
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 1,001,983
=========================================================
Class B:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 157,704
=========================================================
Class C:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 6,730,970
=========================================================
Class A:
Net asset value and redemption price per
share $ 17.20
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $17.20 divided
by 94.50%) $ 18.20
=========================================================
Class B:
Net asset value and offering price per
share $ 17.07
=========================================================
Class C:
Net asset value and offering price per
share $ 17.07
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $291,116 foreign
withholding tax) $ 1,697,440
- --------------------------------------------------------
Interest 111,176
- --------------------------------------------------------
Total investment income 1,808,616
- --------------------------------------------------------
EXPENSES:
Advisory fees 583,191
- --------------------------------------------------------
Operating services fees 258,932
- --------------------------------------------------------
Distribution fees-Class A 19,267
- --------------------------------------------------------
Distribution fees-Class B 2,958
- --------------------------------------------------------
Distribution fees-Class C 525,186
- --------------------------------------------------------
Directors' fees 3,527
- --------------------------------------------------------
Total expenses 1,393,061
- --------------------------------------------------------
Less: Fees waived by advisor (28,458)
- --------------------------------------------------------
Net expenses 1,364,603
- --------------------------------------------------------
Net investment income 444,013
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN
CURRENCIES:
Net realized gain (loss) from:
Investment securities 877,714
- --------------------------------------------------------
Foreign currencies (14,919)
- --------------------------------------------------------
862,795
- --------------------------------------------------------
Net unrealized appreciation of:
Investment securities 13,624,958
- --------------------------------------------------------
Foreign currencies 74
- --------------------------------------------------------
13,625,032
- --------------------------------------------------------
Net gain from investment securities and
foreign currencies 14,487,827
- --------------------------------------------------------
Net increase in net assets resulting from
operations $14,931,840
========================================================
</TABLE>
7
See Notes to Financial Statements.
<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 $ 444,013 $ 88,685
- -----------------------------------------------------------------------------------------
Net realized gain from investment securities and foreign
currencies 862,795 885,467
- -----------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currencies 13,625,032 7,942,380
- -----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 14,931,840 8,916,532
- -----------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A -- (4,884)
- -----------------------------------------------------------------------------------------
Class C -- (54,101)
- -----------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (99,400)
- -----------------------------------------------------------------------------------------
Class C -- (1,300,488)
- -----------------------------------------------------------------------------------------
Share transactions-net:
Class A 7,473,139 8,386,957
- -----------------------------------------------------------------------------------------
Class B 2,667,507 --
- -----------------------------------------------------------------------------------------
Class C 8,140,356 33,845,537
- -----------------------------------------------------------------------------------------
Net increase in net assets 33,212,842 49,690,153
- -----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 101,606,129 51,915,976
- -----------------------------------------------------------------------------------------
End of period $134,818,971 $101,606,129
=========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $105,239,920 $ 86,958,918
- -----------------------------------------------------------------------------------------
Undistributed net investment income 418,269 (25,744)
- -----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies 477,146 (385,649)
- -----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 28,683,636 15,058,604
- -----------------------------------------------------------------------------------------
$134,818,971 $101,606,129
=========================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Advisor International 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
U.S. or foreign 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. If a mean is not available, as is the case in some
foreign markets, the closing bid will be used absent a last sales price.
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 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. 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 time. 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 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. 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.
C. 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.
D. 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.
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. Expenses-Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses which are
attributable to more than one class are allocated among the classes.
9
<PAGE> 12
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 1.00% of
the Fund's average daily net assets. AIM has entered into a sub-advisory
agreement with INVESCO Global Asset Management Limited ("IGAM") whereby AIM pays
IGAM an annual rate of 0.35% of average net assets up to $50 million; 0.30% on
average net assets over $50 million up to $100 million; and 0.25% on average net
assets in excess of $100 million.
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, 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 $237,394 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 $22,953.
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 $13,762, $2,958 and $525,186, respectively, as compensation under
the Plans. During the six months ended June 30, 1998, AIM Distributors waived
fees of $5,505 for the Class A shares.
AIM Distributors received commissions of $13,349 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 $31,713 in contingent deferred
sales charges imposed on redemptions of Fund 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 except for those items specifically identified above.
If, in any calendar quarter, the average net assets of the Fund are less than
$100 million, the Fund's expenses shall not exceed 1.80% for Class A and 2.45%
for Class C; on the next $400 million of net assets, expenses shall not exceed
1.75% for Class A and 2.40% for Class C; on the next $500 million, expenses
shall not exceed 1.70% for Class A and 2.35% for Class C; on the next $1 billion
of net assets, expenses shall not exceed 1.65% for Class A and 2.30% for Class
C; and on all assets over $2 billion, expenses shall not exceed 1.60% for Class
A and 2.25% for Class C.
During the six months ended June 30, 1998, the Fund paid legal fees of $1,127
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.
10
<PAGE> 13
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
$15,851,434 and $2,487,680, 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 $34,970,995
- -------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (6,287,346)
- -------------------------------------------------------------------------
Net unrealized appreciation of investment securities $28,683,649
=========================================================================
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 607,075 10,131,280 638,784 $ 9,521,875
- ------------------------------------- ---------- ------------ ----------- ------------
Class B** 158,612 2,682,836 -- --
- ------------------------------------- ---------- ------------ ----------- ------------
Class C 1,106,572 18,229,264 3,118,584 44,774,893
- ------------------------------------- ---------- ------------ ----------- ------------
Issued as reinvestment of dividends:
Class A -- -- 5,815 92,368
- ------------------------------------- ---------- ------------ ----------- ------------
Class C -- -- 59,331 998,719
- ------------------------------------- ---------- ------------ ----------- ------------
Reacquired:
Class A (168,559) (2,658,141) (81,132) (1,227,286)
- ------------------------------------- ---------- ------------ ----------- ------------
Class B** (908) (15,329) -- --
- ------------------------------------- ---------- ------------ ----------- ------------
Class C (615,346) (10,088,908) (806,643) (11,928,075)
- ------------------------------------- ---------- ------------ ----------- ------------
1,087,446 18,281,002 2,934,739 $ 42,232,494
===================================== ========== ============ =========== ============
</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.
11
<PAGE> 14
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, each of the years in the two-year period ended December 31, 1997 and the
period May 1, 1995 (date operations commenced) through December 31, 1995.
<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 $ 14.99 $ 13.42 $ 16.21
- ------------------------------------------------------------ ---------- ---------- ----------
Income from investment operations:
Net investment income 0.12(c) 0.17(c) 0.04(c)
- ------------------------------------------------------------ ---------- ---------- ----------
Net gains on securities (both realized and unrealized) 2.09 1.69 0.82
- ------------------------------------------------------------ ---------- ---------- ----------
Total from investment operations 2.21 1.86 0.86
- ------------------------------------------------------------ ---------- ---------- ----------
Less distributions:
Dividends from net investment income -- (0.07) --
- ------------------------------------------------------------ ---------- ---------- ----------
Distributions from net realized gains -- (0.22) --
- ------------------------------------------------------------ ---------- ---------- ----------
Total distributions -- (0.29) --
- ------------------------------------------------------------ ---------- ---------- ----------
Net asset value, end of period $ 17.20 $ 14.99 $ 17.07
============================================================ ========== ========== ==========
Total return(d) 14.74% 13.84% 5.31%
============================================================ ========== ========== ==========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 17,231 $ 8,444 $ 2,692
============================================================ ========== ========== ==========
Ratio of expenses to average net assets(e) 1.66%(f) 1.71% 2.41%(f)
============================================================ ========== ========== ==========
Ratio of net investment income to average net assets(g) 1.44%(f) 0.83% 0.69%(f)
============================================================ ========== ========== ==========
Portfolio turnover rate 2% 9% 2%
============================================================ ========== ========== ==========
Average brokerage commission rate(h) $ 0.0470 $ 0.0507 $ 0.0470
============================================================ ========== ========== ==========
</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 expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.80% (annualized) and 1.81% for 1998-1997 for Class A and 2.45%
(annualized) for 1998 for Class B.
(f) Ratios are annualized and based on average net assets of $11,100,683 and
$899,661 for Class A and Class B, respectively.
(g) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 1.30% (annualized) and 0.73% for 1998-1997 for Class A
and 0.65% (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
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.93 $ 13.42 $ 11.13 $ 10.00
- ------------------------------------------------------------ -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) 0.05 0.01(c) (0.01) --
- ------------------------------------------------------------ -------- -------- -------- --------
Net gains on securities (both realized and unrealized) 2.09 1.73 2.34 1.13
- ------------------------------------------------------------ -------- -------- -------- --------
Total from investment operations 2.14 1.74 2.33 1.13
- ------------------------------------------------------------ -------- -------- -------- --------
Less distributions:
Dividends from net investment income -- (0.01) -- --
- ------------------------------------------------------------ -------- -------- -------- --------
Distributions from net realized gains -- (0.22) (0.04) --
- ------------------------------------------------------------ -------- -------- -------- --------
Total distributions -- (0.23) (0.04) --
- ------------------------------------------------------------ -------- -------- -------- --------
Net asset value, end of period $ 17.07 $ 14.93 $ 13.42 $ 11.13
============================================================ ======== ======== ======== ========
Total return(d) 14.33% 12.98% 20.99% 11.28%
============================================================ ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $114,896 $ 93,162 $ 51,916 $ 9,467
============================================================ ======== ======== ======== ========
Ratio of expenses to average net assets(e) 2.41%(f) 2.46% 2.50% 2.50%(g)
============================================================ ======== ======== ======== ========
Ratio of net investment income (loss) to average net
assets(h) 0.69%(f) 0.08% (0.16)% 0.03%(g)
============================================================ ======== ======== ======== ========
Portfolio turnover rate 2% 9% 5% 2%
============================================================ ======== ======== ======== ========
Average brokerage commission rate(i) $ 0.0470 $ 0.0507 $ 0.0602 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 expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
2.45% (annualized) for 1998.
(f) Ratios are annualized and based on average net assets of $105,907,713.
(g) Annualized
(h) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 0.65% (annualized) for 1998.
(i) 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.
12
<PAGE> 15
Directors & Officers
<TABLE>
<CAPTION>
BOARD OF DIRECTORS OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director
ACE Limited; John J. Arthur A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Treasurer 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Carol F. Relihan Houston, TX 77046
Senior Vice President and Secretary
Owen Daly II SUB-ADVISOR
Director Gary T. Crum
Cortland Trust Inc. Senior Vice President INVESCO Global Asset Management Limited
12 Bermudian Rd., 3rd Floor
Edward K. Dunn Jr. Dana R. Sutton P.O. Box HM66
Chairman, Mercantile Mortgage Corp.; Vice President and Assistant Treasurer Hamilton, HM AX, Bermuda
Formerly Vice Chairman and President,
Mercantile-Safe Deposit & Trust Co.; and Robert G. Alley TRANSFER AGENT
President, Mercantile Bankshares Vice President
A I M Fund Services, Inc.
Jack Fields Stuart W. Coco P.O. Box 4739
Chief Executive Officer Vice President Houston, TX 77210-4739
Texana Global, Inc.;
Formerly Member Melville B. Cox CUSTODIAN
of the U.S. House of Representatives Vice President
State Street Bank and Trust Company
Carl Frischling Karen Dunn Kelley 225 Franklin Street
Partner Vice President Boston, MA 02110
Kramer, Levin, Naftalis & Frankel
Jonathan C. Schoolar COUNSEL TO THE FUND
Robert H. Graham Vice President
President and Chief Executive Officer Ballard Spahr
A I M Management Group Inc. Renee A. Friedli Andrews & Ingersoll, LLP
Assistant Secretary 1735 Market Street
Lewis F. Pennock Philadelphia, PA 19103
Attorney P. Michelle Grace
Assistant Secretary COUNSEL TO THE DIRECTORS
Ian W. Robinson
Consultant; Formerly Executive Jeffrey H. Kupor Kramer, Levin, Naftalis & Frankel
Vice President and Assistant Secretary 919 Third Avenue
Chief Financial Officer New York, NY 10022
Bell Atlantic Management Nancy L. Martin
Services, Inc. Assistant Secretary DISTRIBUTOR
Louis S. Sklar Ofelia M. Mayo A I M Distributors, Inc.
Executive Vice President Assistant Secretary 11 Greenway Plaza
Hines Interests Suite 100
Limited Partnership Lisa A. Moss Houston, TX 77046
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
Mary J. Benson
Assistant Treasurer
</TABLE>
<PAGE> 16
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C>
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 Japan Growth Fund(2)
AIM Weingarten Fund AIM Latin American Growth Fund(2)
AIM New Pacific Growth Fund(2)
GROWTH & INCOME FUNDS
GLOBAL GROWTH FUNDS
AIM Advisor Flex Fund
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund
AIM Advisor MultiFlex Fund AIM Global Growth Fund
AIM Advisor Real Estate Fund AIM Worldwide Growth Fund(2)
AIM America Value Fund(2)
AIM Balanced Fund GLOBAL GROWTH & INCOME FUNDS
AIM Charter Fund
AIM Global Growth & Income Fund(2)
INCOME FUNDS AIM Global Utilities Fund
AIM Floating Rate Fund(2) GLOBAL INCOME FUNDS
AIM High Yield Fund
AIM Income Fund AIM Global Government Income Fund(2)
AIM Intermediate Government Fund AIM Global High Income Fund(2)
AIM Limited Maturity Treasury Fund AIM Global Income Fund
AIM Strategic Income Fund(2)
TAX-FREE INCOME FUNDS
THEME FUNDS
AIM High Income Municipal Fund
AIM Municipal Bond Fund AIM Global Consumer Products and Services Fund(2)
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Financial Services Fund(2)
AIM Tax-Free Intermediate Fund AIM Global Health Care Fund(2)
AIM Global Infrastructure Fund(2)
MONEY MARKET FUNDS AIM Global Resources Fund(2)
AIM Global Telecommunications Fund(2)
AIM Dollar Fund(2) AIM New Dimension Fund(2)
AIM Money Market Fund
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-
