<PAGE> 1
SEMIANNUAL REPORT / JUNE 30, 1999
AIM ADVISOR REAL ESTATE FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[ COVER IMAGE ]
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NEW YORK, NEW YORK
BY DIANA ONG (BORN 1940, CHINESE-AMERICAN)
EVOLVING FROM BROWNSTONES TO SKYSCRAPERS, FROM EMPTY FIELDS
TO INDUSTRIAL PARKS, THE REAL ESTATE SECTOR HAS TRANSFORMED
ITSELF THROUGH THE DECADES. LIKE NEW YORK CITY, THE FUND IS IN
A PRIME LOCATION TO TAKE ADVANTAGE OF FUTURE EXPANSIONS.
--------------------------------------------------
AIM Advisor Real Estate Fund is for shareholders who seek high total return on
investment through capital appreciation and current income through a portfolio
invested primarily in publicly traded securities of companies related to the
real estate industry.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Advisor Real Estate Fund performance figures are historical and reflect
reinvestment of all distributions and changes in net asset value.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 4.75% sales charge, and Class B and Class
C share performance reflects 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 differences in sales charge
structure and expenses.
o The fund's average annual total returns, including sales charges, as of
June 30, 1999, were: For Class A shares, -16.82% for one year and -2.87%
since inception (12/31/96). For Class B shares, -17.23% for one year and
-15.67% since inception (3/3/98). For C shares, -14.12% for one year and
8.91% since inception (5/1/95).
o Past performance cannot guarantee comparable future results.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
o Investing in a single-sector mutual fund may involve greater risk and
potential reward than investing in a more diversified fund.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The NAREIT (National Association of Real Estate Investment Trusts) Equity
Index tracks the performance of all tax-qualified REITs listed on the New
York Stock Exchange, American Stock Exchange and the Nasdaq National Market
System. Equity REITs are defined as REITs with 75% or more of their gross
invested book assets invested directly or indirectly in the equity
ownership of real estate.
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 An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE. RESULTS OF
AN INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF YOUR MONEY.
This report may be distributed only to current shareholders or to persons who
have received a current prospectus of the fund.
AIM ADVISOR REAL ESTATE FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
With only several months remaining in 1999, the question on
[PHOTO OF many of your minds may be, "How will the year 2000 computer
Charles T. issue affect AIM and my investments?" We would like you to
Bauer, feel comfortable. We are pleased to be able to report to
Chairman of you that as of June 1999 we achieved a major milestone
the Board of toward year 2000 compliance status: we have successfully
THE FUND completed the testing of all of our mission-critical
APPEARS HERE] systems.
Earlier this year, AIM participated in an industrywide
test that gave us a chance to see how our technology
systems might be affected by the changeover to the year
2000 (Y2K). Everything went as well as we had hoped; in
general, the industry sailed through the testing process
with flying colors. The financial industry has been seen as
a leader in planning for year 2000 concerns. Thus, it was
no surprise to most participants that the test was an
overwhelming success.
The general purpose of the process was to test electronic interfaces among
financial industry members in the United States and to follow transactions
through a typical trading cycle--from order entry to the settlement process.
Investment banks, broker-dealers, custodian banks and mutual fund companies all
worked together to make this possible. Approximately 400 firms were involved in
the testing; AIM was one of 70 asset managers.
During the testing process, thousands of transactions were submitted and
approximately 260,000 steps were tested. Of those, only a handful experienced
minor glitches--just 0.02% of the total number of transactions. All problems
were worked through quickly before the hypothetical trades were settled. Of
course, AIM will keep testing and planning throughout 1999 as a precaution.
AIM'S INTERNAL EFFORTS CONTINUE
As you know from our previous communications to you, AIM has been addressing
the year 2000 issue for several years. Now that we have finished adjusting our
applications and systems, our focus for the rest of 1999 is to continue
monitoring the year 2000 readiness status of outside sources we're linked to
electronically. On the investment side, our portfolio management staff is
continually evaluating the Y2K preparedness of the domestic and foreign
companies in which we invest.
We feel that our preparations for 2000 are very comprehensive, and the
industrywide testing showed that our colleagues in the financial industry are
also working hard to be ready for the new year. We do not think shareholders
need to take any extraordinary measures with their investments to prepare for
2000. However, if you have any lingering concerns, it may reassure you to know
that AIM is finalizing contingency plans that will be ready if necessary. Our
plans will give AIM employees guidelines to follow for a wide variety of
situations.
For a more comprehensive discussion of our Y2K efforts and for periodic
updates, please visit our Web site, www.aimfunds.com.
We are pleased to send you this report covering your fund's performance over
the last six months. If you have any questions or comments, please contact our
Client Services department at 800-959-4246, or e-mail your inquiry to us at
[email protected]. You can access information about your account through our
automated AIM Investor Line at 800-246-5463 or at our Web site. Thank you for
your continued participation in The AIM Family of Funds--Registered Trademark--.
We appreciate your business.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman
AIM Advisors, Inc.
------------------------------------------
THE FINANCIAL INDUSTRY
HAS BEEN SEEN AS A
LEADER IN PLANNING FOR YEAR 2000 CONCERNS.
------------------------------------------
PLEASE NOTE THAT THE INFORMATION ABOUT THE YEAR 2000 IN THIS LETTER IS DEEMED
AIM'S YEAR 2000 READINESS DISCLOSURE.
AIM ADVISOR REAL ESTATE FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
REIT MARKET REBOUND LIFTS FUND PERFORMANCE
HOW DID AIM ADVISOR REAL ESTATE FUND PERFORM DURING THE REPORTING PERIOD?
After several quarters of disappointing returns, the market environment for the
real estate investment trust (REIT) sector finally rebounded during the second
quarter of 1999. The fund's cumulative total return for the six-month reporting
period ended June 30, 1999, was 5.21% for Class A shares, 4.88% for Class B
shares, and 4.89% for Class C shares. These returns were calculated at net
asset value, that is, without the effects of sales charges. Boosted by
favorable sector positioning, fund performance outpaced the 4.78% return of the
NAREIT Index.
Net assets under management totaled $57 million at the reporting period's
end.
WHAT CAUSED THE REIT MARKET REBOUND?
In a defining moment for the REIT sector, Warren Buffett made headlines in April
when he took big stakes in several down-and-out REITs, such as Tanger Factory
Outlet Center. This action renewed investor interest in the sector and pushed
battered REIT share prices upwards.
In addition to this catalyst, solid market fundamentals contributed to the
sector's rebound. Through the first half of 1999, REIT dividend yields remained
attractive at 7.34%--153 basis points above the 10-year Treasury bond's yield.
In addition, the overwhelming majority of REITs met or exceeded first-quarter
1999 earnings estimates. Earnings growth for REITs averaged about 16% for the
first quarter of 1999, compared to 6% for the S&P 500. At the same time, the
broader market's rotation from large-cap and technology stocks to value,
small-cap and cyclical stocks also helped refocus investor interest in REITs.
Finally, the volume of management buyout and leveraged buyout activity in the
sector confirmed that excellent buying opportunities continued to be available
in the REIT sector.
LAST YEAR, INVESTORS WERE CONCERNED ABOUT THE POSSIBILITY OF OVERBUILDING. HAS
THIS SITUATION IMPROVED DURING THE REPORTING PERIOD?
Real estate supply-demand fundamentals continued to be in relatively good
balance during the reporting period. Building occupancies, as reported by most
REITs, remained strong, generally exceeding 95%. The property portfolios of
many REITs, particularly in the office sector, continued to have leases that
are well below current market rental rates. The embedded rental growth in these
portfolios should continue to provide solid earnings growth for the next
several years. Although increasing construction could detract from the positive
effects of these below-market rents, we believe that ongoing construction will
be absorbed into the marketplace. The REIT market's credit crunch last fall had
halted many new construction projects. Therefore, supply and demand in the REIT
sector should remain generally in equilibrium for most markets around the
United States.
WHAT OTHER CHANGES HAVE TAKEN PLACE IN THE REIT SECTOR?
The trend of growth by acquisition has ended, replaced by internal growth from
operations. In this capital-constrained environment, larger REITs, with more
capital and better positioning in their industry, should do well. Large-cap
REITs can often generate earnings growth by retaining a higher degree of cash
flow through a lower dividend payout ratio.
Public Storage, the fund's largest holding on June 30, has many of the
characteristics required for success in the cur-
YOUR FUND'S PERFORMANCE
============================================
FUND REBOUNDS STRONGLY
- --------------------------------------------
Total returns, excluding sales charges
12/31/98-6/30/99
5.21% 4.88% 4.89%
(Bar Chart)
6/30/98-12/31/98
- -17.00% -17.21% -17.35%
FUND FUND FUND
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
============================================
Past performance cannot guarantee comparable future results.
==========================================================
FUND OUTPERFORMS BENCHMARK
- ----------------------------------------------------------
As of 6/30/99
Six-month returns, excluding sales charges
5.21% 4.88% 4.89% 4.78%
(Bar Chart)
FUND FUND FUND NAREIT
CLASS A CLASS B CLASS C EQUITY
SHARES SHARES SHARES INDEX
==========================================================
-----------------------------------------
BOOSTED BY FAVORABLE SECTOR POSITIONING,
FUND PERFORMANCE OUTPACED THE
4.78% RETURN OF THE NAREIT INDEX.
-----------------------------------------
See important fund and index disclosures inside front cover.
AIM ADVISOR REAL ESTATE FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 6/30/99, based on total net assets
================================================================================
TOP 10 HOLDINGS
- --------------------------------------------------------------------------------
1. Public Storage, Inc. 4.64%
2. Equity Residential Properties Trust 4.49
3. Essex Property Trust, Inc. 4.00
4. Arden Realty Group, Inc. 3.92
5. Avalonbay Communities, Inc. 3.88
6. Vornado Realty Trust 3.78
7. Prentiss Properties Trust 3.70
8. Simon Property Group, Inc. 3.66
9. Charles E. Smith Residential Realty, Inc. 3.28
10. Liberty Property Trust 3.18
================================================================================
================================================================================
PROPERTY-TYPE DIVERSIFICATION
- --------------------------------------------------------------------------------
(Pie Chart)
Diversified 10%
Other 6%
Self-Storage 5%
Industrial 5%
Industrial/Office Mixed 4%
Health Care 1%
Lodging/~Resorts 11%
Retail 17%
Residential 18%
Office 23%
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
================================================================================
rent REIT market environment. First, the company is by far the largest
self-storage operator in the United States. It has a 20% market share of the
self-storage industry and serves more than 500,000 customers. The company owns
1,310 facilities in 37 states. Several factors, including the company's size,
numerous locations, and strong marketing focus, have all helped to establish
Public Storage as the brand-name self-storage company in the United States. In
addition, Public Storage has experienced strong internal growth throughout its
history. To raise capital, the company has not increased its dividend since
1994 and has maintained a payout ratio that is close to the minimum required by
REIT regulations. This strategy allows the company to retain about $150 million
annually for new investments. Given these strong fundamentals, we believe that
Public Storage should continue to perform well for the fund.
WHAT OTHER FACTORS CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE?
Property sector weightings contributed favorably to the fund's strong
performance in early 1999. The fund benefited from its extensive weightings in
the lodging/resorts and office REIT sectors. Both asset classes outperformed
the NAREIT Index during the first quarter of 1999. We continued to maintain an
emphasis on office REITs, which accounted for 23% of total net assets, up from
22% six months ago. The office sector has balanced fundamentals and a high
relative value compared to other sectors in the REIT universe. Several of the
fund's largest holdings in the office REIT sector, including Prentiss
Properties and Liberty Property Trust, outperformed the index during the second
quarter of 1999. Prentiss Properties, which has interests in more than 250
office and industrials properties through the United States, had a 26% return
for the second quarter of 1999.
Lodging/resorts holdings made up 11% of the fund's portfolio, compared to a
7% weighting in the NAREIT Index. Thanks to the exploding growth of the travel
business, lodging/resort REITs were also one of the best-performing REIT
industries during the reporting period. One standout player is Host Marriott,
at 2.31% of the fund's net assets. Last year the company acquired a dozen
high-end properties, including Ritz-Carlton and Four Seasons hotels. In the
first quarter of 1999, Host Marriott beat earnings estimates, posting a 15%
jump in funds from operations. Analysts expect the company's long-term earnings
growth to be around 14% compared with a 9% average for REITs.
WHAT IS YOUR OUTLOOK FOR THE REIT MARKET FOR THE REMAINDER OF 1999?
We are still very optimistic about current fundamentals in the REIT sector.
With most real estate markets in equilibrium, we continued to focus on stable
income generation and good internal growth prospects in our stock selection.
Accordingly, we are emphasizing companies with modest leverage, good dividend
coverage, and consistent internal earnings growth from their existing property
portfolios. Companies with modestly leveraged balance sheets are better
positioned to take advantage of attractive acquisition opportunities. Our
philosophy of broad property sector and geographic diversification has not
changed, and we believe that it should benefit the fund over the long term.
See important fund and index disclosures inside front cover.
AIM ADVISOR REAL ESTATE FUND
3
<PAGE> 6
SEMIANNUAL REPORT / FOR CONSIDERATION
TIME FOR A FINANCIAL TUNE-UP?
GET HELP FROM YOUR FINANCIAL CONSULTANT
Keeping track of your investment may require more than just glancing at its
total value. If you haven't checked the asset allocation of your portfolio in
a while, you should. It may look different now.
OUT OF BALANCE
Say you invested $50,000 in equity funds and $50,000 in fixed-income funds on
December 31, 1993, and simply reinvested your income and capital-gains
distributions for five years, making no new investments or withdrawals. (For
this example, we're using the S&P 500 Index and the Lehman Aggregate Bond Index
as indicators of stock and bond performance.*) During those five years, stocks
produced an average annual total return of 24.05%, while bonds grew only 7.27%
per year on average. As a result, you'd have $146,890 in stock funds and
$71,028 in bond funds (a 67/33 allocation) on December 31, 1998. If you wanted
to bring your allocation back into balance, you'd need to shift $37,931 from
stock to fixed-income funds.
TAX CONSEQUENCES
One way to rebalance is to shift your assets among different funds: selling
equity shares and moving the proceeds into your fixed-income funds. But keep in
mind that this step may trigger tax consequences, since the movement of shares
from one fund to another represents the sale of a security.
Alternatively, you can let your asset allocation change gradually by
altering the proportions of your new investments. Simply raise the amount you
invest in fixed-income funds and lower the amount going into equity funds.
TIME AND MARKETS SHIFT BALANCE
Market performance can affect the allocation of a portfolio. This example
illustrates an initial investment of $50,000 in equity funds and $50,000 in
bond funds. Five years later, the assets have shifted to $146,890 in stock
funds and $71,028 in bond funds, due to the strong performance of the stock
market.
===============================================================================
50% BOND FUNDS 67% STOCK FUNDS
50% STOCK FUNDS 33% BOND FUNDS
12/31/93 12/31/98
===============================================================================
TAX-SHELTERED PLANS
Rebalancing within a tax-sheltered plan, such as a 401(k) or an IRA, makes even
more sense, since there are no tax consequences for selling and buying new
shares.
PERIODIC CHECK-UPS
The key allocation to watch is your overall stock and fixed-income mix. It's
that mix that will have the biggest influence on your risk and return. However,
rebalancing doesn't mean fiddling constantly with your account or attempting to
time the market by moving money around to chase the hottest sectors. It simply
means revisiting your portfolio periodically to make sure it's still right for
you. Your financial consultant should be able to help you determine if your
current portfolio composition is meeting your short- and long-term financial
goals. That's why we recommend regular visits with your consultant as a way to
keep an eye on your nest egg.
*The Lehman Aggregate Bond Index is an unmanaged index generally considered
representative of corporate debt securities. The Standard & Poor's Composite
Index of 500 Stocks (the S&P 500) is a group of unmanaged securities widely
regarded by investors to be representative of the stock market in general.
Results shown assume the reinvestment of dividends. An investment cannot be
made in any index listed. Unless otherwise indicated, index results include
reinvested dividends and do not reflect sales charges.
AIM ADVISOR REAL ESTATE FUND
4
<PAGE> 7
SEMIANNUAL REPORT / FOR CONSIDERATION
YOU AND YOUR FINANCIAL CONSULTANT
Once a year, you and your financial consultant should meet to look ahead,
review investments and take another look at your goals, according to the Forum
for Investor Advice, a nonprofit association that educates investors about the
role and value of professional financial consultants.
Financial consultants can help you with every kind of financial goal,
whether that's saving up for a house, eliminating debt or saving for a
comfortable retirement. A consultant who knows you well and understands your
needs can make all the difference in your financial future. He or she can
o evaluate your total financial situation and help you formulate a
comprehensive financial plan;
o explain different types of investments, as well as their potential risks
and benefits;
o suggest an investment portfolio that can handle changing market conditions;
and
o help you make clear-headed decisions during market volatility.
(Photo)
GETTING THE MOST FROM YOUR PLANNING SESSION
Your consultant needs a complete picture of your financial status to prepare a
workable plan. Come prepared to talk about your financial situation, your goals
and your feelings about risk. And don't be afraid to ask lots of questions.
Good financial consultants take investor education seriously, so take advantage
of their store of knowledge and materials.
The Forum for Investor Advice suggests that you discuss the following with
your financial consultant:
o changes in the financial markets
o changes in your goals and current situation
o retirement plans
o estate planning
o outlook for the markets
Take along our checklist (right) to get you started on the path to good
planning. And don't forget to stay in touch. Maintaining regular contact with
your financial consultant can keep you moving toward your goals, especially
when your life circumstances or financial needs change.
CONSULTATION CHECKLIST
WHAT TO BRING:
[ ] A list of all your assets, including real estate, life insurance, stocks
and bonds, and mutual funds
[ ] A list of all your expenses, including likely future expenses
[ ] A timetable of your financial goals, including an estimate of when you want
to retire
WHAT TO ASK:
[ ] How can I estimate what my goals will cost?
[ ] How much money do I need to invest, and how often?
[ ] How many different kinds of investments do I need?
[ ] How do I determine my risk tolerance?
[ ] What are the possible risks of the investments you've suggested?
[ ] What effect will these investments have on my taxes? What forms will I need
to file?
[ ] How often do I need to revise my plan?
[ ] How will I know how my investments are doing?
[ ] How can I make changes to my plan?
[ ] What kinds of communication will I get from you?
[ ] Where can I get more information on what we've talked about?
[ ] What do I need to do after this meeting?
AIM ADVISOR REAL ESTATE FUND
5
<PAGE> 8
SCHEDULE OF INVESTMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
REAL ESTATE INVESTMENT TRUSTS &
COMMON STOCKS-92.64%
DIVERSIFIED-9.58%
Beacon Capital(a) 55,000 $ 845,625
- --------------------------------------------------------------
Duke Realty Investments, Inc. 25,000 564,062
- --------------------------------------------------------------
Glenborough Realty Trust, Inc. 32,600 570,500
- --------------------------------------------------------------
RioCan Real Estate Investment Trust
(Canada) 115,000 741,432
- --------------------------------------------------------------
Spieker Properties, Inc. 15,100 587,012
- --------------------------------------------------------------
Vornado Realty Trust 61,000 2,154,062
- --------------------------------------------------------------
5,462,693
- --------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.05%
Meditrust Corp. 45,800 598,262
- --------------------------------------------------------------
INDUSTRIAL PROPERTIES-4.79%
First Industrial Realty Trust, Inc. 56,700 1,555,706
- --------------------------------------------------------------
ProLogis Trust 58,000 1,174,500
- --------------------------------------------------------------
2,730,206
- --------------------------------------------------------------
INDUSTRIAL/OFFICE PROPERTIES-4.01%
Liberty Property Trust 72,950 1,814,631
- --------------------------------------------------------------
Reckson Associates Realty Corp. 20,000 470,000
- --------------------------------------------------------------
2,284,631
- --------------------------------------------------------------
LODGING-HOTELS-10.59%
Hospitality Properties Trust 50,200 1,361,675
- --------------------------------------------------------------
Host Marriott Corp. 111,046 1,318,671
- --------------------------------------------------------------
Interstate Hotels Corp.(a) 2,851 11,761
- --------------------------------------------------------------
MeriStar Hospitality Corp. 9,514 213,470
- --------------------------------------------------------------
MeriStar Hotels & Resorts, Inc.(a) 112,700 387,406
- --------------------------------------------------------------
Starwood Hotels & Resorts Worldwide,
Inc. 51,100 1,561,744
- --------------------------------------------------------------
Sunstone Hotel Investors, Inc. 94,100 799,850
- --------------------------------------------------------------
Wyndham International, Inc. 85,532 384,894
- --------------------------------------------------------------
6,039,471
- --------------------------------------------------------------
OFFICE PROPERTIES-23.33%
Arden Realty Group, Inc. 90,800 2,235,950
- --------------------------------------------------------------
Boston Properties, Inc. 25,000 896,875
- --------------------------------------------------------------
CarrAmerica Realty Corp. 58,400 1,460,000
- --------------------------------------------------------------
Equity Office Properties Trust 57,000 1,460,625
- --------------------------------------------------------------
Highwoods Properties, Inc. 57,950 1,590,003
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OFFICE PROPERTIES-(CONTINUED)
Kilroy Realty Corp. 32,700 $ 797,063
- --------------------------------------------------------------
Mack-Cali Realty Corp. 49,600 1,534,500
- --------------------------------------------------------------
Prentiss Properties Trust 89,700 2,107,950
- --------------------------------------------------------------
SL Green Realty Corp. 59,700 1,220,119
- --------------------------------------------------------------
13,303,085
- --------------------------------------------------------------
REGIONAL MALLS-8.06%
CBL & Associates Properties, Inc. 54,850 1,446,669
- --------------------------------------------------------------
General Growth Properties 20,500 727,750
- --------------------------------------------------------------
Macerich Co. (The) 19,500 511,875
- --------------------------------------------------------------
Simon Property Group, Inc. 75,300 1,910,738
- --------------------------------------------------------------
4,597,032
- --------------------------------------------------------------
RESIDENTIAL PROPERTIES-18.09%
Apartment Investment & Management
Co. 21,600 923,400
- --------------------------------------------------------------
Avalonbay Communities, Inc. 59,800 2,212,600
- --------------------------------------------------------------
Charles E. Smith Residential Realty,
Inc. 55,200 1,873,350
- --------------------------------------------------------------
Equity Residential Properties Trust 52,900 2,383,806
- --------------------------------------------------------------
Essex Property Trust, Inc. 64,500 2,281,688
- --------------------------------------------------------------
Post Properties, Inc. 15,600 639,600
- --------------------------------------------------------------
10,314,444
- --------------------------------------------------------------
SELF-STORAGE-4.36%
Public Storage, Inc. 88,800 2,486,400
- --------------------------------------------------------------
SHOPPING CENTERS-8.78%
Federal Realty Investment Trust 56,000 1,284,500
- --------------------------------------------------------------
JDN Realty Corp. 42,500 950,938
- --------------------------------------------------------------
Kimco Realty Corp. 42,900 1,678,463
- --------------------------------------------------------------
New Plan Excel Realty Trust 30,000 540,000
- --------------------------------------------------------------
Pan Pacific Retail Properties, Inc. 28,700 556,063
- --------------------------------------------------------------
5,009,964
- --------------------------------------------------------------
Total Real Estate Investment
Trusts & Common Stocks (Cost
$53,184,891) 52,826,188
- --------------------------------------------------------------
DOMESTIC PREFERRED STOCKS-0.90%
REGIONAL MALLS-0.31%
Simon Property Group, Inc., $2.19
Series B Pfd. 7,000 175,000
- --------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RESIDENTIAL PROPERTIES-0.31%
Equity Residential Properties, $1.75
Conv. Pfd. 7,000 $ 176,750
- --------------------------------------------------------------
SELF-STORAGE-0.28%
Public Storage, Inc., $2.50 Series E
Pfd. 6,000 161,625
- --------------------------------------------------------------
Total Domestic Preferred Stocks
(Cost $524,069) 513,375
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-4.62%
Dean Witter Reynolds, Inc., 4.85%,
07/01/99 (Cost $2,633,040) $2,633,040 $ 2,633,040
- --------------------------------------------------------------
TOTAL INVESTMENTS-98.16% 55,972,603
- --------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.84% 1,049,610
- --------------------------------------------------------------
NET ASSETS-100.00% $57,022,213
- --------------------------------------------------------------
</TABLE>
Investment Abbreviations:
Conv. - Convertible
Pfd. - Preferred
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value is at least 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts, and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(c)Joint repurchase agreement entered into 6/30/99 with a maturing value of
$100,012,472. Collateralized by U.S. Government obligations.
See Notes to Financial Statements.
7
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$56,342,000) $ 55,972,603
- ---------------------------------------------------------
Foreign currencies, at value (cost $49,364) 50,356
- ---------------------------------------------------------
Receivables for:
Investments sold 781,674
- ---------------------------------------------------------
Capital stock sold 104,288
- ---------------------------------------------------------
Interest and dividends 484,181
- ---------------------------------------------------------
Investment for deferred compensation plan 6,967
- ---------------------------------------------------------
Other assets 1,199
- ---------------------------------------------------------
Total assets 57,401,268
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 196,955
- ---------------------------------------------------------
Capital stock reacquired 86,899
- ---------------------------------------------------------
Deferred compensation plan 6,967
- ---------------------------------------------------------
Accrued distribution fees 83,708
- ---------------------------------------------------------
Accrued directors' fees and expenses 4,526
- ---------------------------------------------------------
Total liabilities 379,055
- ---------------------------------------------------------
Net assets applicable to shares outstanding $ 57,022,213
- ---------------------------------------------------------
NET ASSETS:
Class A $ 20,917,672
- ---------------------------------------------------------
Class B $ 7,977,536
- ---------------------------------------------------------
Class C $ 28,127,005
- ---------------------------------------------------------
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 1,782,997
- ---------------------------------------------------------
Class B:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 678,370
- ---------------------------------------------------------
Class C:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 2,394,807
- ---------------------------------------------------------
Class A:
Net asset value and redemption price per
share $ 11.73
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $11.73 / 95.25%) $ 12.31
- ---------------------------------------------------------
Class B:
Net asset value and offering price per
share $ 11.76
- ---------------------------------------------------------
Class C:
Net asset value and offering price per
share $ 11.74
- ---------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
For The Six Months Ended June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $5,784 foreign
withholding tax) $ 1,271,013
- ---------------------------------------------------------
Interest 40,811
- ---------------------------------------------------------
Total investment income 1,311,824
- ---------------------------------------------------------
EXPENSES:
Advisory fees 249,971
- ---------------------------------------------------------
Operating services fees 124,989
- ---------------------------------------------------------
Distribution fees-Class A 34,368
- ---------------------------------------------------------
Distribution fees-Class B 35,164
- ---------------------------------------------------------
Distribution fees-Class C 144,395
- ---------------------------------------------------------
Directors' fees and expenses 7,420
- ---------------------------------------------------------
Total expenses 596,307
- ---------------------------------------------------------
Less: Fees waived by advisor (20,253)
- ---------------------------------------------------------
Net expenses 576,054
- ---------------------------------------------------------
Net investment income 735,770
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN
CURRENCIES:
Net realized gain (loss) from:
Investment securities (4,870,766)
- ---------------------------------------------------------
Foreign currencies 265
- ---------------------------------------------------------
(4,870,501)
- ---------------------------------------------------------
Change in net unrealized appreciation of:
Investment securities 6,624,787
- ---------------------------------------------------------
Foreign currencies 894
- ---------------------------------------------------------
6,625,681
- ---------------------------------------------------------
Net gain from investment securities and
foreign currencies 1,755,180
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $ 2,490,950
- ---------------------------------------------------------
</TABLE>
8
<PAGE> 11
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended June 30, 1999 and the year ended December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 735,770 $ 2,687,688
- -----------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies (4,870,501) (7,868,208)
- -----------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies 6,625,681 (13,364,502)
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 2,490,950 (18,545,022)
- -----------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (533,103) (879,078)
- -----------------------------------------------------------------------------------------
Class B (167,099) (195,557)
- -----------------------------------------------------------------------------------------
Class C (653,441) (1,184,516)
- -----------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (434,776)
- -----------------------------------------------------------------------------------------
Class B -- (143,531)
- -----------------------------------------------------------------------------------------
Class C -- (703,226)
- -----------------------------------------------------------------------------------------
Share transactions-net:
Class A 380,816 11,098,948
- -----------------------------------------------------------------------------------------
Class B 906,273 8,539,414
- -----------------------------------------------------------------------------------------
Class C (5,311,468) 1,916,228
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets (2,887,072) (531,116)
- -----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 59,909,285 60,440,401
- -----------------------------------------------------------------------------------------
End of period $ 57,022,213 $ 59,909,285
- -----------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $ 70,238,674 $ 74,263,053
- -----------------------------------------------------------------------------------------
Undistributed net investment income (127,023) 490,850
- -----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of
investment securities (12,720,990) (7,850,489)
- -----------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities (368,448) (6,994,129)
- -----------------------------------------------------------------------------------------
$ 57,022,213 $ 59,909,285
- -----------------------------------------------------------------------------------------
</TABLE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Advisor Real Estate 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 four
diversified portfolios. The Fund currently offers three different classes of
shares: Class A shares, Class B shares and Class C shares. 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 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 closing bid price on that day. Each security reported on the NASDAQ
National
9
<PAGE> 12
Market System is valued at the last sales price on the valuation date, or
absent a last sales price, at the closing bid price. Securities for which
market prices are not provided by any of the above methods are valued at the
last bid price 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. Such distributions are
declared and paid quarterly. Distributions from net realized capital gains,
if any, are recorded on ex-dividend date and are paid annually.
C. Foreign Currency Translations-Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at the date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions. The
Fund does not separately account for that portion of the results of
operations resulting from changes in foreign exchange rates on investments
and the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gain or loss from investments.
D. Foreign Currency Contracts-A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
E. Federal Income Taxes-The Fund intends to comply with the requirements of the
Internal Revenue Code necessary to qualify as a regulated investment company
and, as such, will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is distributed
to shareholders. Therefore, no provision for federal income taxes is
recorded in the financial statements. The Fund has a capital loss
carryforward of $1,027,346 as of December 31, 1998 (which may be carried
forward to offset future taxable capital gains, if any) which expires, if
not previously utilized, through the year 2006. The Fund cannot distribute
capital gains to shareholders until the tax loss carryforwards have been
utilized.
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.
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 0.90% of
the Fund's average daily net assets. AIM has entered into a sub-advisory
agreement with INVESCO Realty Advisors, Inc. ("IRAI") whereby AIM pays IRAI an
annual rate of 0.35% of the Fund's average daily net assets on the first $100
million and 0.25% of the Fund's average daily 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, 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, 1999, AIM was paid $114,556 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 six months ended June 30, 1999, AIM voluntarily waived
operating services fees in the amount of $10,433. Pursuant to the amended
operating services agreement effective July 1, 1999 the Fund shall pay costs
incurred for providing operating expenses, such as accounting, legal (except
litigation), dividend disbursing, transfer agency, registrar, custodial,
shareholder reporting, sub-accounting and recordkeeping services and functions,
including, but not limited to, registration fees, shareholder meeting fees, and
proxy statement and shareholder report expenses. Further, the Fund's operating
expenses are limited to 0.45% of the Fund's average daily net assets. AIM no
longer receives payments under amended the operating services agreement.
Effective July 1, 1999, the Company entered into a master administrative
services agreement with AIM. The Fund has agreed to pay AIM for certain
administrative costs incurred in providing accounting services to the Fund.
Effective July 1, 1999, the Company entered into a transfer agency and service
agreement with A I M Fund Services, Inc. ("AFS"). The fund has agreed to pay AFS
a fee for providing transfer agency and shareholder services to the Fund.
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
10
<PAGE> 13
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 contractually
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,
1999, the Class A, Class B and Class C shares paid AIM Distributors $24,548,
$35,164 and $144,395, respectively, as compensation under the Plans. During the
six months ended June 30, 1999, AIM Distributors waived fees of $9,820 for the
Class A shares.
AIM Distributors received commissions of $8,745 from sales of Class A shares
of the Fund during the six months ended June 30, 1999. 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,
1999, AIM Distributors received commissions of $5,774 in contingent deferred
sales charges imposed on redemptions of shares. Certain officers and directors
of the Company are officers and directors of AIM, AFS and AIM Distributors.
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-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $975,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. During the six
months ended June 30, 1999, the Fund did not borrow under the line of credit
agreement. The funds which are party to the line of credit are charged a
commitment fee of 0.09% on the unused balance of the committed line. The
commitment fee is allocated among the funds based on their respective average
net assets for the period. Prior to May 28, 1999, the commitment fee rate was
0.05%.
NOTE 5-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, 1999 was
$12,876,448 and $20,660,819, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of June 30, 1999 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment
securities $ 2,092,747
- -------------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (2,878,889)
- -------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investment securities $ (786,142)
- -------------------------------------------------------------
Cost of investments for tax purposes is $56,758,745.
</TABLE>
NOTE 6-CAPITAL STOCK
Changes in the Fund's capital stock outstanding during the six months ended June
30, 1999 and the year ended December 31, 1998.
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Sold:
Class A 561,210 $ 6,433,892 1,866,966 $26,220,226
- -----------------------------------------------------------------------------
Class B* 193,009 2,199,548 965,596 13,668,547
- -----------------------------------------------------------------------------
Class C 225,138 2,554,160 867,066 12,416,738
- -----------------------------------------------------------------------------
Issued as reinvestment of
dividends:
Class A 44,189 491,496 103,931 1,234,506
- -----------------------------------------------------------------------------
Class B* 13,627 152,354 26,797 312,988
- -----------------------------------------------------------------------------
Class C 52,166 579,671 146,264 1,732,251
- -----------------------------------------------------------------------------
Reacquired:
Class A (575,930) (6,544,572 (1,266,277) (16,355,784)
- -----------------------------------------------------------------------------
Class B* (129,452) (1,445,629) (391,207) (5,442,121)
- -----------------------------------------------------------------------------
Class C (754,663) (8,445,299) (933,062) (12,232,761)
- -----------------------------------------------------------------------------
(370,706) $(4,024,379) 1,386,074 $21,554,590
- -----------------------------------------------------------------------------
</TABLE>
* Class B shares commenced sales March 3, 1998.
11
<PAGE> 14
NOTE 7-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A capital stock
outstanding during the six months ended June 30, 1999 and each of the years in
the two-year period ended December 31, 1998, for a share of Class B capital
stock outstanding during the six months ended June 30, 1999 and the period March
3, 1998 (date sales commenced) through December 31, 1998, and a share of Class C
capital stock outstanding during the six months ended June 30, 1999, each of the
years in the three-year period ended December 31, 1998 and the period May 1,
1995 (date operations commenced) through December 31, 1995.
<TABLE>
<CAPTION>
CLASS A(a) CLASS B
---------------------------- ------------------------
DECEMBER 31,
JUNE 30, ----------------- JUNE 30, DECEMBER 31,
1999 1998 1997(b) 1999 1998
-------- ------- ------- -------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.46 $ 15.74 $ 14.19 $ 11.48 $ 15.34
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Income from investment operations:
Net investment income 0.18 0.58(c) 0.34(c) 0.13 0.37(c)
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Net gains (losses) on securities (both realized and
unrealized) 0.40 (4.11) 2.39 0.41 (3.58)
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Total from investment operations 0.58 (3.53) 2.73 0.54 (3.21)
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Less distributions:
Dividends from net investment income (0.31) (0.50) (0.44) (0.26) (0.40)
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Distributions from net realized gains -- (0.25) (0.74) -- (0.25)
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Total distributions (0.31) (0.75) (1.18) (0.26) (0.65)
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Net asset value, end of period $ 11.73 $ 11.46 $ 15.74 $ 11.76 $ 11.48
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Total return(d) 5.21% (22.54)% 19.78% 4.88% (21.02)%
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $20,918 $20,087 $16,507 $ 7,978 $ 6,901
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Ratio of expenses to average net assets(e) 1.59%(f) 1.55% 1.60% 2.34%(f) 2.31%(g)
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Ratio of net investment income to average net assets(h) 3.14%(f) 4.37% 3.26% 2.38%(f) 3.62%(g)
- ------------------------------------------------------------ ------- ------- ------- -------- -------
Portfolio turnover rate 24% 69% 57% 24% 69%
- ------------------------------------------------------------ ------- ------- ------- -------- -------
</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
1.73% (annualized), 1.71% and 1.70% for 1999-1997 for Class A and 2.37%
(annualized) and 2.37% (annualized) for 1999-1998 for Class B.
(f) Ratios are annualized and based on average net assets of $19,801,881 and
$7,091,115 for Class A and Class B, respectively.
(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 3.00% (annualized) and 4.21% and 3.16% for 1999-1997 for
Class A and 2.35% (annualized) and 3.56% (annualized) for 1999-1998 for
Class B.
<TABLE>
<CAPTION>
CLASS C(a)
---------------------------------------------------
DECEMBER 31,
JUNE 30, ----------------------------------------
1999 1998 1997(b) 1996 1995
-------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.46 $ 15.74 $ 14.19 $ 10.76 $ 10.00
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Income from investment operations:
Net investment income 0.14(c) 0.50(c) 0.36(c) 0.33 0.16
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 0.40 (4.13) 2.26 3.51 0.75
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Total from investment operations 0.54 (3.63) 2.62 3.84 0.91
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.26) (0.40) (0.33) (0.31) (0.15)
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Distributions from net realized gains -- (0.25) (0.74) (0.10) --
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Total distributions (0.26) (0.65) (1.07) (0.41) (0.15)
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Net asset value, end of period $ 11.74 $ 11.46 $ 15.74 $ 14.19 $ 10.76
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Total return 4.89% (23.16)% 18.88% 36.43% 9.12%
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $28,127 $32,921 $ 43,934 $ 20,566 $ 5,565
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Ratio of expenses to average net assets(e) 2.34%(f) 2.31% 2.35% 2.40% 2.40%(g)
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Ratio of net investment income to average net assets(h) 2.38%(f) 3.62% 2.54% 3.21% 4.68%(g)
- ------------------------------------------------------------ ------- ------- -------- -------- --------
Portfolio turnover rate 24% 69% 57% 25% 7%
- ------------------------------------------------------------ ------- ------- -------- -------- --------
</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
2.38% (annualized) and 2.37% for 1999-1998.
(f) Ratios are annualized and based on average net assets of $29,118,247.
(g) Annualized.
(h) After fee waivers and/or expense reimbursements. Ratio of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements was 2.34% (annualized) and 3.56% for 1999-1998.
12
<PAGE> 15
<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; Carol F. Relihan A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Secretary 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Gary T. Crum Houston, TX 77046
Senior Vice President
Owen Daly II SUB-ADVISOR
Director Dana R. Sutton
Cortland Trust Inc. Vice President and Treasurer INVESCO Realty Advisors, Inc.
One Lincoln Centre, Suite 700
Edward K. Dunn Jr. Robert G. Alley 5400 LBJ Freeway/LB-2
Chairman, Mercantile Mortgage Corp.; Vice President Dallas, TX 75240
Formerly Vice Chairman and President,
Mercantile-Safe Deposit & Trust Co.; and Stuart W. Coco TRANSFER AGENT
President, Mercantile Bankshares Vice President
A I M Fund Services, Inc.
Jack Fields Melville B. Cox P.O. Box 4739
Chief Executive Officer Vice President Houston, TX 77210-4739
Texana Global, Inc.;
Formerly Member Karen Dunn Kelley CUSTODIAN
of the U.S. House of Representatives Vice President
State Street Bank and Trust Company
Carl Frischling Edgar M. Larsen 225 Franklin Street
Partner Vice President Boston, MA 02110
Kramer, Levin, Naftalis & Frankel LLP
Mary J. Benson COUNSEL TO THE FUND
Robert H. Graham Assistant Vice President and
President and Chief Executive Officer Assistant Treasurer Ballard Spahr
A I M Management Group Inc. Andrews & Ingersoll, LLP
Sheri Morris 1735 Market Street
Prema Mathai-Davis Assistant Vice President and Philadelphia, PA 19103
Chief Executive Officer, YWCA of the U.S.A., Assistant Treasurer
Commissioner, New York City Dept. for COUNSEL TO THE DIRECTORS
the Aging; and member of the Board of Directors, Renee A. Friedli
Metropolitan Transportation Authority of Assistant Secretary Kramer, Levin, Naftalis & Frankel LLP
New York State 919 Third Avenue
P. Michelle Grace New York, NY 10022
Lewis F. Pennock Assistant Secretary
Attorney DISTRIBUTOR
Jeffrey H. Kupor
Louis S. Sklar Assistant Secretary A I M Distributors, Inc.
Executive Vice President 11 Greenway Plaza
Hines Interests Nancy L. Martin Suite 100
Limited Partnership Assistant Secretary Houston, TX 77046
Ofelia M. Mayo
Assistant Secretary
Lisa A. Moss
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
</TABLE>
<PAGE> 16
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS INTERNATIONAL GROWTH FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund (1) AIM Advisor International Value Fund leadership in the mutual-fund industry
AIM Blue Chip Fund AIM Asian Growth Fund since 1976 and managed approximately
AIM Capital Development Fund AIM Developing Markets Fund $121 billion in assets for more than 6.3
AIM Constellation Fund AIM Europe Growth Fund million shareholders, including
AIM Dent Demographic Trends Fund AIM European Development Fund individual investors, corporate clients,
AIM Large Cap Growth Fund AIM International Equity Fund and financial institutions as of June 30,
AIM Mid Cap Equity Fund (A) AIM Japan Growth Fund 1999.
AIM Select Growth Fund AIM Latin American Growth Fund The AIM Family of Funds--Registered
AIM Small Cap Growth Fund (B) AIM New Pacific Growth Fund Trademark-- is distributed nationwide, and
AIM Small Cap Opportunities Fund AIM today is the 10th-largest mutual-fund
AIM Value Fund GLOBAL GROWTH FUNDS complex in the United States in assets under
AIM Weingarten Fund AIM Global Aggressive Growth Fund management, according to Strategic
AIM Global Growth Fund Insight, an independent mutual-fund
GROWTH & INCOME FUNDS monitor.
AIM Advisor Flex Fund GLOBAL GROWTH & INCOME FUNDS
AIM Advisor Large Cap Value Fund AIM Global Growth & Income Fund
AIM Advisor Real Estate Fund AIM Global Utilities Fund
AIM Balanced Fund
AIM Basic Value Fund (C) GLOBAL INCOME FUNDS
AIM Charter Fund AIM Emerging Markets Debt Fund (D)
AIM Global Government Income Fund
INCOME FUNDS AIM Global Income Fund
AIM Floating Rate Fund AIM Strategic Income Fund
AIM High Yield Fund
AIM High Yield Fund II THEME FUNDS
AIM Income Fund AIM Global Consumer Products and Services Fund
AIM Intermediate Government Fund AIM Global Financial Services Fund
AIM Limited Maturity Treasury Fund AIM Global Health Care Fund
AIM Global Infrastructure Fund
TAX-FREE INCOME FUNDS AIM Global Resources Fund
AIM High Income Municipal Fund AIM Global Telecommunications and Technology Fund (E)
AIM Municipal Bond Fund AIM Global Trends Fund (F)
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
MONEY MARKET FUNDS
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
</TABLE>
(1) AIM Aggressive Growth Fund reopened to new investors November 16, 1998. (A)
On September 8, 1998, AIM Mid Cap Growth Fund was renamed AIM Mid Cap Equity
Fund. (B) On September 8, 1998, AIM Small Cap Equity Fund was renamed AIM Small
Cap Growth Fund. (C) On September 8, 1998, AIM America Value Fund was renamed
AIM Basic Value Fund. (D) On September 8, 1998, AIM Global High Income Fund was
renamed AIM Emerging Markets Debt Fund. (E) On June 1, 1999, AIM Global
Telecommunications Fund was renamed AIM Global Telecommunications and Technology
Fund. (F) On September 8, 1998, AIM New Dimension Fund was renamed AIM Global
Trends 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.
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