<PAGE> 1
SEMIANNUAL REPORT / JUNE 30 1999
AIM ADVISOR LARGE CAP VALUE FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-------------------------------------
WALL STREET TO TRINITY CHURCH (1993, SERIES)
BY BEAU REDMOND, LIVING AMERICAN
WHILE VISITING NEW YORK IN 1980, THE ARTIST WANTED TO SKETCH A
WALL STREET SCENE BUT DID NOT HAVE ANY DRAWING PAPER, SO HE
USED WHAT HE DID HAVE, A PAGE FROM THE WALL STREET JOURNAL.
THEN, INSTEAD OF TRANSFERRING THE SKETCH TO CANVAS, HE PAINTED
ON THE NEWSPAPER PAGE, CREATING AN EVOCATIVE MEDIUM THAT WOULD
LEAD TO PAINTINGS SUCH AS THIS ONE. THIS PIECE CALLS TO MIND THE
INDELIBLE LINK BETWEEN WALL STREET AND THE STOCK MARKET, WHERE
LARGE-CAP COMPANIES ARE A MAJOR DRIVING FORCE.
-------------------------------------
AIM Advisor Large Cap Value Fund is for shareholders who seek a high total
return on investment through capital appreciation and current income, without
regard to federal income tax considerations.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Advisor Large Cap Value Fund 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 5.50% 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 investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values.
o 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.
o An investment cannot be made in any index listed. Unless otherwise
indicated, index results include reinvested dividends and do not reflect
sales charges.
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 LARGE CAP VALUE FUND
<PAGE> 3
SEMIANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
With only several months remaining in 1999, the question on
many of your minds may be, "How will the year 2000 computer
[PHOTO OF issue affect AIM and my investments?" We would like you to
Charles T. feel comfortable. We are pleased to be able to report to you
Bauer, that as of June 1999 we achieved a major milestone toward
Chairman of year 2000 compliance status: we have successfully completed
the Board of the testing of all of our mission-critical systems.
THE FUND Earlier this year, AIM participated in an industrywide
APPEARS HERE] 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
A I M Advisors, Inc.
PLEASE NOTE THAT THE INFORMATION ABOUT THE YEAR 2000 IN THIS LETTER IS DEEMED
AIM'S YEAR 2000 READINESS DISCLOSURE.
-------------------------------------
THE FINANCIAL INDUSTRY
HAS BEEN SEEN AS A
LEADER IN PLANNING FOR
YEAR 2000 CONCERNS.
-------------------------------------
AIM ADVISOR LARGE CAP VALUE FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
BROADENING OF NARROW MARKETS HELPS FUND
THE FIRST HALF OF 1999 USHERED IN SOME SIGNIFICANT CHANGES TO FINANCIAL MARKETS.
HOW DID AIM ADVISOR LARGE CAP VALUE FUND PERFORM?
The second quarter of 1999 brought a reversal of trends from the first quarter
and the past several years with cyclical and value stocks enjoying a resurgence.
AIM Advisor Large Cap Value Fund showed mixed results in this market
environment.
For the six months ended June 30, 1999, the fund posted a total return of
5.62% for Class A shares, 5.17% for Class B shares and 5.22% for Class C shares.
These returns are at net asset value, which does not include sales charges.
Comparatively, the S&P 500 Index had a return of 12.38% for the six-month
period.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
During the first quarter of 1999, the fund underperformed the S&P 500 Index, as
did many other funds, due to the narrowness of U.S. markets. A handful of
large-cap growth stocks drove the markets during that time as investors looked
to large, well-established companies and high-flying Internet stocks. The
Russell 1000 Value Index also trailed the S&P 500, returning 1.43% vs. 4.98% for
the first quarter of the year, confirming this trend.
Technology stocks were the best performers during the first quarter, a
sector in which the fund was underweighted, so that served as a drag on the
fund's performance. The fund was also overweighted in utilities during the first
quarter, which was the worst-performing sector during those three months.
With the comeback of value stocks and the broadening of the markets, the
fund performed much better. All three share classes of the fund beat the S&P 500
during the second quarter of 1999 with returns as follows: Class A, 8.88%; Class
B and Class C, 8.69%; S&P 500, 7.05%. The two largest contributors to the fund's
outperformance were its consumer-staples and technology holdings.
WHAT ARE SOME TECHNOLOGY HOLDINGS THAT HELPED THE FUND?
While the fund has maintained an underweighting in technology stocks compared to
the S&P 500, its technology holdings posted strong returns, which greatly
contributed to the fund's performance during the second quarter. Tech stocks
that did well for the fund include IBM, whose stock hit a record high in May
when the company announced that it was on track for double-digit revenue growth.
We also like the software companies Oracle, a leading developer of
database-management systems software, and Computer Associates International,
which likens its software to the plumbing under a sink, not the fancy faucet on
top.
GIVEN THAT FINANCIAL STOCKS ARE THE FUND'S LARGEST SECTOR ALLOCATION, HOW DID
THE RECENT INTEREST-RATE HIKE AFFECT THEM?
The Federal Reserve Board (the Fed) approved a 0.25% increase in the federal
funds rate on June 30, a move that was widely anticipated. Because the move was
expected, much of the rate hike was already priced into financial products like
mortgages, so the effects for consumers should be minimal. The rate hike was
good news for markets and consumers because, in the long run, the U.S. economic
expansion should continue.
Most economists feel that the rate hike will barely cause a hiccup in the
markets.
SECTOR ALLOCATION
As of 6/30/99, based on total net assets
================================================================================
Health Care 9.1%
Financials 20.6%
Capital Goods 9.7%
Energy 5.4%
Technology 14.9%
Basic Materials 3.5%
Consumer Staples 10.1%
Communications Services 5.9%
Consumer Cyclicals 14.2%
Transportation 2.7%
Utilities 3.8%
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
================================================================================
-------------------------------------
ALL THREE SHARE CLASSES OF THE FUND
BEAT THE S&P 500 DURING THE SECOND
QUARTER OF 1999...
-------------------------------------
See important fund and index disclosures inside front cover.
AIM ADVISOR LARGE CAP VALUE FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
As of 6/30/99, based on total net assets
<TABLE>
<CAPTION>
===============================================================================================================
TOP 10 HOLDINGS TOP 10 INDUSTRIES
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Morgan Stanley, Dean Witter, 1. Oil (International Integrated) 5.10%
Discover & Co. 2.59%
2. Schering-Plough Corp. 2.35 2. Computers (Hardware) 4.87
3. Bell Atlantic Corp. 2.33 3. Financial (Diversified) 4.68
4. Lowe's Companies, Inc. 2.24 4. Banks (Money Center) 4.65
5. International Business Machines Corp. 2.17 5. Computers (Software & Services) 4.40
6. Southwest Airlines Co. 2.09 6. Health Care (Drugs-Major
Pharmaceuticals) 4.30
7. Bank One Corp. 2.06 7. Telephone 4.15
8. Exxon Corp. 2.00 8. Banks (Major Regional) 3.89
9. Merck & Co., Inc. 1.95 9. Electric Companies 3.60
10. American Home Products Corp. 1.92 10. Health Care (Diversified) 3.57
The fund's portfolio is subject to change, and there is no assurance that the fund will continue
to hold any particular security.
===============================================================================================================
</TABLE>
As a result, our financial holdings continue to do well. Fund holding Bank
One, the largest credit-card issuer in the country, saw its 1998 sales jump by
93.6% over the previous year. Morgan Stanley Dean Witter, our largest holding,
is the number-two retail broker in the United States, and its Discover unit has
become a leading credit-card issuer. And Bank of America has seen a marked
improvement in its stock price since being hit by the global financial crisis
last year.
WHAT CHANGES HAVE YOU MADE TO THE PORTFOLIO?
We have been gradually adding to our communications-services holdings. We
particularly like telecommunications companies because of the exciting things
happening on the Internet and because we think these could be good defensive
stocks should markets take a turn for the worse. We increased our Bell Atlantic
position--a stock we think is quite undervalued--and we added starter positions
in AT&T and MCI WorldCom.
HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD?
The fund uses a bottom-up approach to stock selection, which avoids attempts to
forecast the economy or interest rates. We evaluate each company's historical
profitability relative to its current price. Our holdings reflect this
high-quality value bias.
As of June 30, 1999, the fund's top sectors were as follows: financials,
20.6%; technology, 14.9%; consumer cyclicals, 14.2%; and consumer staples,
10.1%. The fund had 74% of its assets invested in large- and mega-cap stocks and
26% invested in mid-cap stocks. The fund is broadly diversified with 74 holdings
in the portfolio across 11 sectors.
WHAT IS YOUR NEAR-TERM OUTLOOK?
Some analysts think that the summer will bring a slowdown in the markets because
of continued interest-rate and inflation worries. During the last twenty years,
each initial rate increase has left many stocks stumbling after a few months as
rising rates slow the economy and hamper earnings growth. Even so, corporate
earnings are still likely to remain robust for the most part. It remains to be
seen whether the markets will continue to favor value and other cyclical stocks
as has recently been the case.
Strong economic growth continues to buoy the U.S. markets. If the revival of
value and cyclical stocks continues, we believe the fund is well positioned to
take advantage of such an environment. Regardless of market trends, we will
continue to focus on high-quality value stocks that we think will benefit the
fund.
================================================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/99, including sales charges
CLASS A SHARES
Inception (12/31/96) 17.61%
1 year 3.23
CLASS B SHARES
Inception (3/3/98) 5.99%
1 year 3.36
CLASS C SHARES
10 years 14.55%
5 years 20.18
1 year 7.39
Past performance cannot guarantee comparable future results.
================================================================================
MARKET VOLATILITY CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE.
RESULTS OF AN INVESTMENT MADE TODAY MAY DIFFER
SUBSTANTIALLY FROM THE HISTORICAL
PERFORMANCE SHOWN.
See important fund and index disclosures inside front cover.
AIM ADVISOR LARGE CAP VALUE FUND
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-88.10%
AIRLINES-2.09%
Southwest Airlines Co. 132,450 $ 4,122,506
- --------------------------------------------------------------
BANKS (MAJOR REGIONAL)-3.89%
Bank One Corp. 68,160 4,059,780
- --------------------------------------------------------------
National City Corp. 55,000 3,602,500
- --------------------------------------------------------------
7,662,280
- --------------------------------------------------------------
BANKS (MONEY CENTER)-4.65%
Bank of America Corp. 45,674 3,348,475
- --------------------------------------------------------------
Chase Manhattan Corp. (The) 34,500 2,988,562
- --------------------------------------------------------------
First Union Corp. 60,000 2,820,000
- --------------------------------------------------------------
9,157,037
- --------------------------------------------------------------
BANKS (REGIONAL)-0.85%
Commerce Bancshares, Inc. 41,690 1,678,022
- --------------------------------------------------------------
BEVERAGES (NON-ALCOHOLIC)-1.01%
PepsiCo, Inc. 51,600 1,996,275
- --------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.98%
MediaOne Group, Inc.(a) 26,000 1,933,750
- --------------------------------------------------------------
CHEMICALS-0.41%
Dow Chemical Co. (The) 6,400 812,000
- --------------------------------------------------------------
COMPUTERS (HARDWARE)-4.87%
Compaq Computer Corp. 67,900 1,608,381
- --------------------------------------------------------------
International Business Machines
Corp. 33,000 4,265,250
- --------------------------------------------------------------
Sun Microsystems, Inc.(a) 54,100 3,726,137
- --------------------------------------------------------------
9,599,768
- --------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-4.40%
Cadence Design Systems, Inc.(a) 59,000 752,250
- --------------------------------------------------------------
Computer Associates International,
Inc. 56,000 3,080,000
- --------------------------------------------------------------
Electronic Data Systems Corp. 31,700 1,793,031
- --------------------------------------------------------------
Oracle Corp.(a) 82,150 3,049,819
- --------------------------------------------------------------
8,675,100
- --------------------------------------------------------------
CONSTRUCTION (CEMENT & AGGREGATES)-1.83%
Vulcan Materials Co. 74,700 3,604,275
- --------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-1.85%
SUPERVALU, INC. 142,000 3,647,625
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRIC COMPANIES-3.60%
DTE Energy Co. 35,000 $ 1,400,000
- --------------------------------------------------------------
GPU, Inc. 35,000 1,476,562
- --------------------------------------------------------------
Southern Co. 70,000 1,855,000
- --------------------------------------------------------------
Teco Energy, Inc. 103,500 2,354,625
- --------------------------------------------------------------
7,086,187
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-1.79%
General Electric Co. 31,200 3,525,600
- --------------------------------------------------------------
ELECTRONICS (COMPONENT DISTRIBUTORS)-0.74%
W.W. Grainger, Inc. 27,000 1,452,937
- --------------------------------------------------------------
ELECTRONICS (DEFENSE)-1.41%
Raytheon Co.-Class B 39,400 2,772,775
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-0.99%
Intel Corp. 32,900 1,957,550
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-4.68%
American General Corp. 48,600 3,663,225
- --------------------------------------------------------------
Fannie Mae 50,000 3,418,750
- --------------------------------------------------------------
MGIC Investment Corp. 44,000 2,139,500
- --------------------------------------------------------------
9,221,475
- --------------------------------------------------------------
FOODS-1.46%
H.J. Heinz Co. 57,350 2,874,669
- --------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-3.57%
Abbott Laboratories 71,200 3,239,600
- --------------------------------------------------------------
American Home Products Corp. 65,800 3,783,500
- --------------------------------------------------------------
7,023,100
- --------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC &
OTHER)-0.67%
Mylan Laboratories, Inc. 50,000 1,325,000
- --------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR
PHARMACEUTICALS)-4.30%
Merck & Co., Inc. 51,800 3,833,200
- --------------------------------------------------------------
Schering-Plough Corp. 87,400 4,632,200
- --------------------------------------------------------------
8,465,400
- --------------------------------------------------------------
HOUSEHOLD FURN. & APPLIANCES-1.33%
Maytag Corp. 37,600 2,620,250
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HOUSEHOLD PRODUCTS
(NON-DURABLES)-1.10%
Kimberly-Clark Corp. 37,900 $ 2,160,300
- --------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-1.90%
Jefferson-Pilot Corp. 36,000 2,382,750
- --------------------------------------------------------------
Torchmark Corp. 39,700 1,354,762
- --------------------------------------------------------------
3,737,512
- --------------------------------------------------------------
INSURANCE (PROPERTY-CASUALTY)-0.82%
Allstate Corp. (The) 45,000 1,614,375
- --------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-2.59%
Morgan Stanley, Dean Witter,
Discover & Co. 49,750 5,099,375
- --------------------------------------------------------------
IRON & STEEL-1.04%
Nucor Corp. 43,000 2,039,813
- --------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.45%
Dover Corp. 25,200 882,000
- --------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-1.36%
Illinois Tool Works, Inc. 17,000 1,394,000
- --------------------------------------------------------------
Textron, Inc. 15,700 1,292,306
- --------------------------------------------------------------
2,686,306
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-1.50%
Federal Signal Corp. 38,800 822,075
- --------------------------------------------------------------
York International Corp. 49,700 2,127,781
- --------------------------------------------------------------
2,949,856
- --------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-1.06%
Pitney Bowes, Inc. 32,600 2,094,550
- --------------------------------------------------------------
OIL (INTERNATIONAL INTEGRATED)-2.00%
Exxon Corp. 51,000 3,933,375
- --------------------------------------------------------------
PHOTOGRAPHY/IMAGING-1.56%
Xerox Corp. 52,000 3,071,250
- --------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-1.74%
Gannett Co., Inc. 48,000 3,426,000
- --------------------------------------------------------------
RAILROADS-0.48%
GATX Corp. 25,000 951,563
- --------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-3.16%
Lowe's Companies, Inc. 78,000 4,421,625
- --------------------------------------------------------------
Sherwin-Williams Co. 64,700 1,795,425
- --------------------------------------------------------------
6,217,050
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (DEPARTMENT STORES)-1.21%
J.C. Penney Co., Inc. 49,000 $ 2,379,563
- --------------------------------------------------------------
RETAIL (DRUG STORES)-0.70%
Rite Aid Corp. 55,900 1,376,538
- --------------------------------------------------------------
RETAIL (SPECIALTY)-0.59%
Office Depot, Inc.(a) 52,700 1,162,694
- --------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-1.20%
Limited, Inc. (The) 52,139 2,365,807
- --------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-1.47%
Dun & Bradstreet Corp. (The) 81,800 2,898,788
- --------------------------------------------------------------
SPECIALTY PRINTING-1.05%
Deluxe Corp. 53,100 2,067,581
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-1.42%
AT&T Corp. 32,200 1,797,163
- --------------------------------------------------------------
MCI WorldCom, Inc.(a) 11,700 1,009,125
- --------------------------------------------------------------
2,806,288
- --------------------------------------------------------------
TELEPHONE-4.15%
Ameritech Corp. 25,000 1,837,500
- --------------------------------------------------------------
Bell Atlantic Corp. 70,100 4,582,788
- --------------------------------------------------------------
US West, Inc. 30,000 1,762,500
- --------------------------------------------------------------
8,182,788
- --------------------------------------------------------------
TEXTILES (APPAREL)-1.27%
VF Corp. 58,500 2,500,875
- --------------------------------------------------------------
TOBACCO-1.35%
Philip Morris Companies, Inc. 48,500 1,949,094
- --------------------------------------------------------------
UST, Inc. 24,600 719,550
- --------------------------------------------------------------
2,668,644
- --------------------------------------------------------------
WASTE MANAGEMENT-1.56%
Browning-Ferris Industries, Inc. 71,500 3,074,500
- --------------------------------------------------------------
Total Domestic Common Stocks
(Cost $101,794,063) 173,560,972
- --------------------------------------------------------------
FOREIGN STOCKS-5.82%
GERMANY-1.35%
DaimlerChrysler A.G. (Automobiles) 30,000 2,666,250
- --------------------------------------------------------------
NETHERLANDS-1.24%
Royal Dutch Petroleum Co.-New York
Shares-ADR (Oil-International
Integrated) 40,400 2,434,100
- --------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SPAIN-1.86%
Repsol S.A.-ADR (Oil-International
Integrated) 180,000 $ 3,656,250
- --------------------------------------------------------------
UNITED KINGDOM-1.37%
Hanson PLC-ADR
(Manufacturing-Diversified) 61,000 2,706,875
- --------------------------------------------------------------
Total Foreign Stocks (Cost
$6,406,897) 11,463,475
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-7.68%(b)
Dean Witter Reynolds, Inc., 4.85%,
07/01/99 (Cost $15,121,175)(c) $15,121,175 $ 15,121,175
- --------------------------------------------------------------
TOTAL INVESTMENTS-101.60% 200,145,622
- --------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(1.60%) (3,149,946)
- --------------------------------------------------------------
NET ASSETS-100.00% $196,995,676
==============================================================
</TABLE>
Investment Abbreviation:
ADR - American Depositary Receipt
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 06/30/99 with a maturing value of
$100,013,472. Collateralized by U.S. Government obligations.
See Notes to Financial Statements.
6
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$123,322,135) $200,145,622
- ---------------------------------------------------------
Receivables for:
Investments sold 736,524
- ---------------------------------------------------------
Capital stock sold 343,238
- ---------------------------------------------------------
Interest and dividends 236,640
- ---------------------------------------------------------
Investment for deferred compensation plan 7,450
- ---------------------------------------------------------
Other assets 7,477
- ---------------------------------------------------------
Total assets 201,476,951
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 3,852,855
- ---------------------------------------------------------
Capital stock reacquired 173,616
- ---------------------------------------------------------
Deferred compensation plan 7,450
- ---------------------------------------------------------
Accrued distribution fees 431,265
- ---------------------------------------------------------
Accrued directors' fees and expenses 16,089
- ---------------------------------------------------------
Total liabilities 4,481,275
- ---------------------------------------------------------
Net assets applicable to shares outstanding $196,995,676
- ---------------------------------------------------------
NET ASSETS:
Class A $ 13,943,140
=========================================================
Class B $ 5,855,790
=========================================================
Class C $177,196,746
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 526,110
=========================================================
Class B:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 222,325
=========================================================
Class C:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 6,728,053
=========================================================
Class A:
Net asset value and redemption price per
share $ 26.50
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $26.50
divided by 94.50%) $ 28.04
=========================================================
Class B:
Net asset value and offering price per
share $ 26.34
=========================================================
Class C:
Net asset value and offering price per
share $ 26.34
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $46,854 foreign
withholding tax) $ 1,850,530
- --------------------------------------------------------
Interest 88,702
- --------------------------------------------------------
Total investment income 1,939,232
- --------------------------------------------------------
EXPENSES:
Advisory fees 723,879
- --------------------------------------------------------
Operating services fees 434,220
- --------------------------------------------------------
Directors' fees and expenses 4,532
- --------------------------------------------------------
Distribution fees-Class A 24,073
- --------------------------------------------------------
Distribution fees-Class B 24,614
- --------------------------------------------------------
Distribution fees-Class C 871,539
- --------------------------------------------------------
Total expenses 2,082,857
- --------------------------------------------------------
Less: Fees waived by advisor (257,824)
- --------------------------------------------------------
Net expenses 1,825,033
- --------------------------------------------------------
Net investment income 114,199
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM
INVESTMENT SECURITIES:
Net realized gain from investment
securities 9,882,203
- --------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities (227,443)
- --------------------------------------------------------
Net gain on investment securities 9,654,760
- --------------------------------------------------------
Net increase in net assets resulting from
operations $ 9,768,959
========================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
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 $ 114,199 $ 383,276
- ------------------------------------------------------------------------------------------
Net realized gain from investment securities 9,882,203 13,666,132
- ------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (227,443) 9,514,639
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 9,768,959 23,564,047
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (58,535) (63,186)
- ------------------------------------------------------------------------------------------
Class B (2,833) (4,659)
- ------------------------------------------------------------------------------------------
Class C (111,122) (130,140)
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (1,168,568)
- ------------------------------------------------------------------------------------------
Class B -- (558,881)
- ------------------------------------------------------------------------------------------
Class C -- (14,182,679)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A (2,402,104) 10,506,884
- ------------------------------------------------------------------------------------------
Class B (1,726,663) 7,500,215
- ------------------------------------------------------------------------------------------
Class C (14,160,234) 2,997,348
- ------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (8,692,532) 28,460,381
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 205,688,208 177,227,827
- ------------------------------------------------------------------------------------------
End of period $196,995,676 $ 205,688,208
==========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $109,343,167 $ 127,632,168
- ------------------------------------------------------------------------------------------
Undistributed net investment income 152,498 210,789
- ------------------------------------------------------------------------------------------
Undistributed net realized gain from investment securities 10,676,524 794,321
- ------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 76,823,487 77,050,930
- ------------------------------------------------------------------------------------------
$196,995,676 $ 205,688,208
==========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Advisor Large Cap Value Fund (the "Fund") is a series portfolio of AIM
Advisor Funds, Inc. (the "Company"). The Company is a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of 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 (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or
8
<PAGE> 11
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 Market System is valued at the last sales price on the valuation
date, or absent a last sales price, at the closing bid price. 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. Securities for which market prices are not provided by any of
the above methods are valued based upon quotes furnished by independent
sources and are valued at the last bid price in the case of equity
securities and in the case of debt obligations, the mean between the last
bid and asked prices. 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. Federal Income Taxes-The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
D. Expenses-Distribution expenses directly attributable to a class of shares
are charged to that class' operations. All other expenses are allocated
among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at the annual rate of 0.75% of
the Fund's average daily net assets. AIM has entered into a sub-advisory
agreement with INVESCO Capital Management, Inc. ("ICM") whereby AIM pays ICM an
annual rate of 0.20% of the Fund's average daily net assets.
The Company, pursuant to an operating services agreement with AIM, has agreed
to pay AIM an annual rate of 0.45% of the Fund's average daily net assets for
providing or arranging to provide accounting, legal (except litigation),
dividend disbursing, transfer agency, registrar, custodial, shareholder
reporting, sub-accounting and recordkeeping services and functions. This
agreement provides that AIM pays all fees and expenses associated with these and
other functions, including, but not limited to, registration fees, shareholder
meeting fees, and proxy statement and shareholder report expenses. During the
six months ended June 30, 1999, AIM was paid $183,274 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 $250,946.
Pursuant to the amended operating services agreement effective July 1, 1999
the Fund shall pay costs incurred for providing operating services, 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 the amended
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 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 $17,195, $24,614 and $871,539,
respectively, as compensation under the
9
<PAGE> 12
Plans. During the six months ended June 30, 1999, AIM Distributors waived fees
of $6,878 for the Class A shares.
AIM Distributors received commissions of $12,477 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 $9,283 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
$16,751,665 and $41,828,034, 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 $79,271,916
- -------------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (2,448,429)
- -------------------------------------------------------------
Net unrealized appreciation of investment
securities $76,823,487
=============================================================
</TABLE>
Investments have the same cost for tax and financial
statement purposes.
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 were as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
----------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
-------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 163,660 $ 4,169,110 546,830 $ 13,836,246
- --------------------------------------------------------------------------
Class B* 122,129 3,081,175 312,678 8,015,582
- --------------------------------------------------------------------------
Class C 275,972 6,910,522 745,155 18,894,552
- --------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A 2,166 55,081 48,828 1,187,383
- --------------------------------------------------------------------------
Class B* 114 2,861 20,082 485,925
- --------------------------------------------------------------------------
Class C 3,780 94,875 553,152 13,379,377
- --------------------------------------------------------------------------
Reacquired:
Class A (262,156) (6,626,295) (180,617) (4,516,745)
- --------------------------------------------------------------------------
Class B* (192,246) (4,810,699) (40,432) (1,001,292)
- --------------------------------------------------------------------------
Class C (843,476) (21,165,631) (1,159,833) (29,276,581)
- --------------------------------------------------------------------------
(730,057) $(18,289,001) 845,843 $ 21,004,447
==========================================================================
</TABLE>
* Class B shares commenced sales on March 3, 1998.
10
<PAGE> 13
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 for a share of
Class C capital stock outstanding during the six months ended June 30, 1999 and
each of the years in the five-year period ended December 31, 1998.
<TABLE>
<CAPTION>
CLASS A(a) CLASS B
------------------------------ ------------------------
DECEMBER 31,
JUNE 30, ------------------ JUNE 30, DECEMBER 31,
1999 1998(b) 1997(b) 1999(b) 1998
-------- ------- ------- -------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 25.20 $ 24.11 $20.57 $ 25.06 $25.59
- ------------------------------------------------------------ ------- ------- ------ ------- ------
Income from investment operations:
Net investment income 0.11 0.20 0.23 0.01 0.02
- ------------------------------------------------------------ ------- ------- ------ ------- ------
Net gains on securities (both realized and unrealized) 1.30 3.11 6.17 1.29 1.57
- ------------------------------------------------------------ ------- ------- ------ ------- ------
Total from investment operations 1.41 3.31 6.40 1.30 1.59
- ------------------------------------------------------------ ------- ------- ------ ------- ------
Less distributions:
Dividends from net investment income (0.11) (0.12) (0.15) (0.02) (0.02)
- ------------------------------------------------------------ ------- ------- ------ ------- ------
Distributions from net realized gains -- (2.10) (2.71) -- (2.10)
- ------------------------------------------------------------ ------- ------- ------ ------- ------
Total distributions (0.11) (2.22) (2.86) (0.02) (2.12)
- ------------------------------------------------------------ ------- ------- ------ ------- ------
Net asset value, end of period $ 26.50 $ 25.20 $24.11 $ 26.34 $25.06
============================================================ ======= ======= ====== ======= ======
Total return(c) 5.62% 14.07% 31.66% 5.17% 6.51%
============================================================ ======= ======= ====== ======= ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $13,943 $15,684 $5,000 $ 5,856 $7,325
============================================================ ======= ======= ====== ======= ======
Ratio of expenses to average net assets(d) 1.20%(e) 1.30% 1.46% 1.95%(e) 2.05%(f)
============================================================ ======= ======= ====== ======= ======
Ratio of net investment income to average net assets(g) 0.81%(e) 0.91% 0.77% 0.06%(e) 0.16%(f)
============================================================ ======= ======= ====== ======= ======
Portfolio turnover rate 9% 52% 34% 9% 52%
============================================================ ======= ======= ====== ======= ======
</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) Calculated using average shares outstanding.
(c) Does not deduct sales charges and is not annualized for periods less than
one year.
(d) After fee waivers and/or reimbursements. Ratios of expenses to average net
assets prior to fee waivers and/or reimbursement were 1.56% (annualized),
1.55% and 1.56% for 1999-1997 for Class A and 2.21% (annualized) and 2.20%
(annualized) for 1999-1998 for Class B.
(e) Ratios are annualized and based on average net assets of $13,869,928 and
$4,963,583 for Class A and Class B, respectively.
(f) Annualized.
(g) After fee waivers and/or reimbursements. Ratios of net investment income
(loss) to average net assets prior to fee waivers and/or reimbursement were
0.45% (annualized), 0.66% and 0.67% for 1999-1997 for Class A, and (0.20)%
(annualized) and 0.01% (annualized) for 1999-1998 for Class B.
<TABLE>
<CAPTION>
CLASS C(a)
------------------------------------------------------------------------
DECEMBER 31,
JUNE 30, --------------------------------------------------------
1999 1998 1997(b) 1996 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 25.05 $ 24.08 $ 20.57 $ 17.60 $ 13.96 $ 14.90
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.01 0.04 0.01 0.05 0.10 0.09
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Net gains on securities
(both realized and unrealized) 1.30 3.05 6.21 2.97 4.11 0.32
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Total from investment operations 1.31 3.09 6.22 3.02 4.21 0.41
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.02) (0.02) -- (0.05) (0.10) (0.09)
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Distributions from net realized gains -- (2.10) (2.71) -- (0.47) (1.26)
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Total distributions (0.02) (2.12) (2.71) (0.05) (0.57) (1.35)
- ----------------------------------------------------- -------- -------- -------- -------- -------- --------
Net asset value, end of period $ 26.34 $ 25.05 $ 24.08 $ 20.57 $ 17.60 $ 13.96
===================================================== ======== ======== ======== ======== ======== ========
Total return(c) 5.22% 13.15% 30.66% 17.17% 30.28% 2.69%
===================================================== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $177,197 $182,679 $172,228 $137,416 $113,573 $ 77,929
===================================================== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.95%(d)(e) 2.05%(d) 2.21% 2.26% 2.28% 2.25%
===================================================== ======== ======== ======== ======== ======== ========
Ratio of net investment income to average net assets 0.06%(e)(f) 0.16%(f) 0.02% 0.24% 0.64% 0.61%
===================================================== ======== ======== ======== ======== ======== ========
Portfolio turnover rate 9% 52% 34% 19% 17% 21%
===================================================== ======== ======== ======== ======== ======== ========
</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) Calculated using average shares outstanding.
(c) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(d) After fee waivers and/or reimbursements. Ratios of expenses to average net
assets prior to fee waivers and/or reimbursement were 2.21% (annualized) and
2.20% for 1999-1998.
(e) Ratios are annualized and based on average net assets of $175,752,435.
(f) After fee waivers and/or reimbursements. Ratios of net investment income
(loss) to average net assets prior to fee waivers and/or reimbursement were
(0.20)% (annualized) and 0.01% for 1999-1998.
11
<PAGE> 14
<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; 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 Capital Management, Inc.
1315 Peachtree Street, N.E.
Edward K. Dunn Jr. Robert G. Alley Atlanta, GA 30309
Chairman, Mercantile Mortgage Corp.; Vice President
Formerly Vice Chairman and President, TRANSFER AGENT
Mercantile-Safe Deposit & Trust Co.; and Stuart W. Coco
President, Mercantile Bankshares Vice President A I M Fund Services, Inc.
P.O. Box 4739
Jack Fields Melville B. Cox Houston, TX 77210-4739
Chief Executive Officer Vice President
Texana Global, Inc.; CUSTODIAN
Formerly Member Karen Dunn Kelley
of the U.S. House of Representatives Vice President State Street Bank and Trust Company
225 Franklin Street
Carl Frischling Edgar M. Larsen Boston, MA 02110
Partner Vice President
Kramer, Levin, Naftalis & Frankel LLP COUNSEL TO THE FUND
Mary J. Benson
Robert H. Graham Assistant Vice President and Ballard Spahr
President and Chief Executive Officer Assistant Treasurer Andrews & Ingersoll, LLP
A I M Management Group Inc. 1735 Market Street
Sheri Morris Philadelphia, PA 19103
Prema Mathai-Davis Assistant Vice President and
Chief Executive Officer, YWCA of the U.S.A., Assistant Treasurer COUNSEL TO THE DIRECTORS
Commissioner, New York City Dept. for
the Aging; and member of the Board of Directors, Renee A. Friedli Kramer, Levin, Naftalis & Frankel LLP
Metropolitan Transportation Authority of Assistant Secretary 919 Third Avenue
New York State New York, NY 10022
P. Michelle Grace
Lewis F. Pennock Assistant Secretary DISTRIBUTOR
Attorney
Jeffrey H. Kupor A I M Distributors, Inc.
Louis S. Sklar Assistant Secretary 11 Greenway Plaza
Executive Vice President Suite 100
Hines Interests Nancy L. Martin Houston, TX 77046
Limited Partnership Assistant Secretary
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>
12
<PAGE> 15
AIM FUNDS(sm) KEEPS YOU
POSTED ON YOUR INVESTMENT
We inform our shareholders about their investments with regular mailings
throughout the year. Here is a description of the documents you will receive
concerning your account and fund.
o DAILY CONFIRMATION STATEMENTS. A record of the transactions you initiate.
For example, if you transfer part or all of your investment from one AIM
fund to another, you will receive a statement confirming that the
transaction took place.
o QUARTERLY STATEMENTS. These show you how your account has performed over the
fiscal quarter and provide information on any applicable dividend payments.
Statement inserts that sometimes accompany these mailings may give specific
information about your fund or may contain educational information of
general interest.
o PROXY. As a shareholder of an AIM fund, you have the right to vote on any
change to a fund's published bylaws or objectives. If the fund's board of
directors proposes such a change, AIM will send a proxy to the shareholders.
The proxy allows you to direct an authorized person to cast your vote
according to your instructions. You can vote your proxy by mail, phone or
e-mail.
o PROSPECTUS. AIM sends you an updated version of your fund's prospectus every
year. Your prospectus contains valuable information about your fund's
objectives, risks, management and fees. Because this information is
important, you should keep your prospectus with your other fund records.
o ANNUAL AND SEMIANNUAL REPORTS. AIM fund reports are sent to you twice a
year, the semiannual covering the first six months of the fiscal year for a
fund and the annual covering the entire fiscal year. These reports give you
an idea of how your fund performed compared to the market in general. The
reports also give you information about the holdings in your fund's
portfolio and how market conditions and management decisions have affected
your fund.
o YEAR-END TAX INFORMATION. This includes your year-end account statement,
cost-basis statement and any tax forms pertinent to your AIM account. The
tax forms report distributions you have received from your AIM funds,
redemptions or exchanges you have made and any contributions you have made
to tax-advantaged retirement accounts. It is important to retain the latter,
IRS Form 5498, if you need to track deductible vs. nondeductible IRA
contributions. The cost-basis statements are also important to retain
because they can be very useful for calculating capital gains or losses if
you use the "average basis single category" method of calculating cost
basis. Year-end tax information will be accompanied by tax communications
from AIM to help you fill out your tax forms. Your tax advisor can assist
you in sorting through your year-end statements and other tax
communications.
-------------------------------------
WE INFORM
OUR SHAREHOLDERS ABOUT
THEIR INVESTMENTS
WITH REGULAR MAILINGS
THROUGHOUT THE YEAR.
-------------------------------------
<PAGE> 16
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS MONEY MARKET FUNDS A I M Management Group Inc. has
AIM Aggressive Growth Fund(1) AIM Money Market Fund provided leadership in the
AIM Blue Chip Fund AIM Tax-Exempt Cash Fund mutual-fund industry since 1976
AIM Capital Development Fund and managed approximately $121
AIM Constellation Fund INTERNATIONAL GROWTH FUNDS billion in assets for more than
AIM Dent Demographic Trends Fund AIM Advisor International Value Fund 6.3 million shareholders,
AIM Large Cap Growth Fund AIM Asian Growth Fund including individual investors,
AIM Mid Cap Equity Fund(A) AIM Developing Markets Fund corporate clients and financial
AIM Select Growth Fund AIM Europe Growth Fund institutions, as of June 30,
AIM Small Cap Growth Fund(B) AIM European Development Fund 1999.
AIM Small Cap Opportunities Fund AIM International Equity Fund The AIM Family of
AIM Value Fund AIM Japan Growth Fund Funds--Registered Trademark--
AIM Weingarten Fund AIM Latin American Growth Fund is distributed nationwide, and
AIM New Pacific Growth Fund AIM today is the 10th-largest
GROWTH & INCOME FUNDS mutual-fund complex in the
AIM Advisor Flex Fund GLOBAL GROWTH FUNDS United States in assets under
AIM Advisor Large Cap Value Fund AIM Global Aggressive Growth Fund management, according to
AIM Advisor Real Estate Fund AIM Global Growth Fund Strategic Insight, an
AIM Balanced Fund independent mutual-fund monitor.
AIM Basic Value Fund(C) GLOBAL GROWTH & INCOME FUNDS
AIM Charter Fund AIM Global Growth & Income Fund
AIM Global Utilities Fund
INCOME FUNDS
AIM Floating Rate Fund GLOBAL INCOME FUNDS
AIM High Yield Fund AIM Emerging Markets Debt Fund(D)
AIM High Yield Fund II AIM Global Government Income Fund
AIM Income Fund AIM Global Income Fund
AIM Intermediate Government Fund AIM Strategic Income Fund
AIM Limited Maturity Treasury Fund
THEME FUNDS
TAX-FREE INCOME FUNDS AIM Global Consumer Products and Services Fund
AIM High Income Municipal Fund AIM Global Financial Services Fund
AIM Municipal Bond Fund AIM Global Health Care Fund
AIM Tax-Exempt Bond Fund of Connecticut AIM Global Infrastructure Fund
AIM Tax-Free Intermediate Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund(E)
AIM Global Trends Fund(F)
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(1) A I M 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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