<PAGE> 1
SEMIANNUAL REPORT / JUNE 30 1999
AIM ADVISOR INTERNATIONAL VALUE FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-------------------------------------
TRADER GEORG (GISZE)
BY HANS HOLBEIN THE YOUNGER
THIS PAINTING DEPICTS A GERMAN MERCHANT IN LONDON, PRESUMABLY
ON SOME KIND OF BUSINESS VENTURE. THE VARIOUS ITEMS SURROUNDING
HIM--LEDGERS AND LISTS, FOREIGN COINS, ORNAMENTAL AND EXOTIC-
LOOKING OBJECTS--CALL TO MIND HIS TRAVELS IN SUPPORT OF HIS PRO-
FESSION. TRADERS SUCH AS GEORG FORMED THE BASIS OF THE GLOBAL
MARKETPLACE AS WE KNOW IT, ALLOWING COMPANIES SUCH AS THOSE IN
WHICH THIS FUND INVESTS TO BE OPEN TO THE TRADERS OF TODAY.
-------------------------------------
AIM Advisor International Value Fund is for shareholders who seek a high total
return through capital appreciation and current income through a diversified
portfolio of foreign equity securities.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Advisor International Value Fund 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.
o International investing presents certain risks not associated with investing
solely in the United States. These include risks relating to fluctuations in
the value of the U.S. dollar relative to the values of other currencies, the
custody arrangements made for the fund's foreign holdings, differences in
accounting, political risks and the lesser degree of public information
required to be provided by non-U.S. companies.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The EAFE--Registered Trademark-- (Europe, Australasia and the Far East)
Index is a group of unmanaged foreign securities tracked by Morgan Stanley
Capital International.
o The unmanaged Lipper International Funds Index represents an average of the
performance of the 30 largest international mutual funds. It is compiled by
Lipper, Inc., an independent mutual funds performance monitor. Results shown
reflect 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 INTERNATIONAL VALUE 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 you
Chairman of that as of June 1999 we achieved a major milestone toward
the Board of year 2000 compliance status: we have successfully completed
THE FUND the testing of all of our mission-critical systems.
APPEARS HERE] 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
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 INTERNATIONAL VALUE FUND
<PAGE> 4
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
SLUGGISH EUROPE HAMPERS
FUND PERFORMANCE
INTERNATIONAL MARKETS HAVE BEEN VOLATILE SINCE LAST YEAR. HOW DID AIM ADVISOR
INTERNATIONAL VALUE FUND PERFORM?
So far during 1999, international markets have seen a reversal of a long-time
trend with Japan, Asia and Latin America outperforming Europe. This shift
hindered the performance of AIM Advisor International Value Fund during the
reporting period.
For the six months ended June 30, 1999, the fund posted a total return of
2.66% for Class A shares and 2.31% for Class B and Class C shares. These returns
are at net asset value, which does not include sales charges. Comparatively, the
EAFE Index had a return of 3.97% for the period, while the Lipper International
Funds Index had a return of 6.90%.
Even though the fund trailed its indexes during the reporting period, it
continues to provide competitive returns over the long term (see the bar chart
on the next page).
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
Most of the fund's holdings (more than 70% of the portfolio) continued to be in
Europe. Those stocks have suffered from the weakness of the euro, the common
currency adopted by 11 European countries at the beginning of 1999. The fund has
also been hit to some extent by an underweighting in Japan at about 14% of the
portfolio. Japan and the emerging markets--including Asia and Latin America,
markets in which the fund had no weighting--were some of the strongest
performers during the first half of the year.
The debut of the euro went smoothly. Unfortunately, its subsequent
depreciation has been a drag on European market returns this year, although
Europe continues to be a dominant region in international equity markets. Merger
and acquisition activity has persisted into 1999, with corporate activity
especially robust in Europe.
Nevertheless, Europe has been enveloped in an economic malaise--the European
Central Bank (ECB) seems to be divided on the cause of and cure for Europe's
slump. There has been a pronounced lack of growth in the larger economies, such
as Germany, and economists are concerned about Europe's economic outlook because
of widely varying growth rates among the 11 euro-zone countries.
WHY DO YOU STILL LIKE EUROPE?
We think the long-term outlook for Europe is favorable, and there have been
positive short-term developments:
o The ECB cut interest rates in April to stimulate the economy and boost
investor confidence in Europe.
o The euro's decline in value means European exporters are more competitive
because their goods are cheaper.
o European companies are more focused on shareholder value.
PORTFOLIO COMPOSITION
As of 6/30/99, based on total net assets
<TABLE>
<CAPTION>
================================================================================================================================
TOP 10 HOLDINGS TOP 10 INDUSTRIES TOP 10 COUNTRIES
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <S> <C>
1. HSBC Holdings 3.50% 1. Health Care (Drugs- 9.60% 1. United Kingdom 21.71%
PLC (United Kingdom) Major Pharmaceuticals)
2. Repsol S.A. (Spain) 3.04 2. Oil (Integrated International) 8.29 2. Japan 14.03
3. Societe Generale (France) 2.98 3. Foods 8.20 3. Netherlands 10.02
4. Telecom Italia Mobile 2.83 4. Banks (Major Regional) 7.64 4. France 8.33
S.p.A. (Italy)
5. Nintendo Co. Ltd. (Japan) 2.70 5. Telephone 7.63 5. Spain 7.98
6. News Corp. Ltd. (The) (Australia) 2.62 6. Banks (Money Center) 7.48 6. Germany 7.92
7. Endesa S.A. (Spain) 2.61 7. Electric Companies 6.08 7. Australia 7.21
8. National Australia 2.58 8. Electrical Equipment 3.85 8. Italy 6.62
Bank Ltd. (Australia)
9. ING Group N.V. (Netherlands) 2.53 9. Chemicals (Diversified) 3.78 9. Switzerland 4.32
10. Groupe Danone (France) 2.41 10. Electronics 3.06 10. Denmark 3.77
(Component Distribution)
The fund's portfolio is subject to change, and there is no assurance that the
fund will continue to hold any particular security.
================================================================================================================================
</TABLE>
See important fund and index disclosures inside front cover.
AIM ADVISOR INTERNATIONAL VALUE FUND
2
<PAGE> 5
SEMIANNUAL REPORT / MANAGERS' OVERVIEW
We believe corporate restructuring and privatization will continue to drive
the European economy over the long term. When companies move from government
control to private ownership, they become more efficient because they have to
trim costs to be more streamlined and competitive.
While recent earnings have declined, European companies have long-term
growth expectations superior to those in the United States. Inflation is also
likely to remain benign thanks to ongoing deregulation and increased price
competition between most products. And European stocks are selling at a cheaper
price than U.S. stocks.
IS ASIA'S FINANCIAL CRISIS OVER?
We think Asia has seen the bottom and is beginning to recover. Emerging markets
tend to be volatile, so when things are good they tend to recover quickly, and
vice versa. As earnings are upgraded, more investors will probably move back
into those markets. Clearly more restructuring is needed in many countries to
solve long-term problems. Even though Japan has recently enjoyed a resurgence,
many economic indicators still suggest that its economy has not yet fully
rebounded. Still, some analysts believe Japan's economy has bottomed out.
HOW HAVE YOU MANAGED THE FUND IN THIS CHALLENGING ENVIRONMENT?
We continued to stick to our discipline and seek undervalued securities across
all the overseas markets. We adhere to a bottom-up approach in which individual
stock selection takes precedence over geographic selection, focusing on
attractively-priced quality stocks that offer long-term potential for attractive
returns. For this reason, we have not increased our emerging-markets holdings.
At the end of the reporting period, the fund had 51 holdings.
WHAT ARE SOME HOLDINGS YOU LIKE?
The United Kingdom continues to be our largest country weighting at 21.71%. U.K.
valuations are at attractive levels, interest rates have declined, the economy
is recovering and earnings growth prospects are above other international growth
rates.
U.K. companies we like include our top holding, HBSC Holdings, a major
banking-services firm with more than 550 offices in nearly 80 countries. Others
include Carlton Communications, a television production and broadcasting
company, and prescription-drug giant Glaxo Wellcome, maker of the heartburn drug
Zantac.
Philips Electronics of the Netherlands was added to the fund's portfolio
during the reporting period. The world's third-largest consumer electronics
maker and number one in Europe, Philips markets its products under the Philips,
Marantz, Magnavox and Norelco names.
Our top sectors at the end of the reporting period included financials,
22.6%; consumer staples, 10.7%; health care, 10.0%; and consumer cyclicals,
9.3%.
WHAT IS YOUR OUTLOOK?
We believe we will see a recovery in the relative performance of European
markets as economies improve and the euro stabilizes. The leading markets in
terms of returns so far this year--Japan and the emerging markets--may begin to
lag as investors take profits.
We should see continued restructuring in Europe as well as more mergers and
acquisitions and privatization activity. While returns in Europe have been lower
than in the United States, Europe is going the way the United States has already
gone with the development of an equity culture. Right now Europe is experiencing
its own baby boom and seeing a shift of assets to equities. If Europe starts
growing again and the United States slows, then the euro should do better. We
believe the fund is well positioned to take advantage of a stronger euro.
==========================================================
RESULTS OF A $10,000 INVESTMENT
FUND VS. BENCHMARK INDEXES
5/1/95--6/30/99
- -----------------------------------------------------------
[BAR CHART]
CLASS C SHARES $17,177
LIPPER INTERNATIONAL FUNDS INDEX $16,085
EAFE INDEX $14,168
Part performance cannot guarantee comparable future results.
============================================================
============================================================
AVERAGE ANNUAL TOTAL RETURNS
As of 6/30/99, including sales charges
CLASS A SHARES
Inception (12/31/96) 8.58%
1 year -5.98
CLASS B SHARES
Inception (3/3/98) 0.01%
1 year -6.17
CLASS C SHARES
Inception (5/1/95) 13.87%
1 year -2.22
================================================================================
Your fund's total return includes sales charges, expenses and management fees.
The performance of the fund's Class B and Class C shares will differ from Class
A shares due to differing fees and expenses. For fund data performance
calculations and descriptions of indexes cited above, please refer to the inside
front cover.
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 INTERNATIONAL VALUE FUND
3
<PAGE> 6
SCHEDULE OF INVESTMENTS
June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY
INTEREST-96.38%
AUSTRALIA-7.21%
National Australia Bank Ltd.-ADR
(Banks-Regional) 40,000 $ 3,360,000
- --------------------------------------------------------------
News Corp. Ltd. (The)
(Publishing-Newspapers) 400,000 3,408,374
- --------------------------------------------------------------
Rio Tinto Ltd.-ADR (Metals Mining) 40,000 2,623,544
- --------------------------------------------------------------
9,391,918
- --------------------------------------------------------------
DENMARK-3.77%
Den Danske Bank-ADR (Banks-Money Center) 28,000 3,036,802
- --------------------------------------------------------------
Novo-Nordisk A.S.-ADR (Health
Care-Drugs- Major Pharmaceuticals) 35,000 1,872,500
- --------------------------------------------------------------
4,909,302
- --------------------------------------------------------------
FRANCE-8.32%
Credit Commercial de France
(Banks-Major Regional) 15,000 1,620,103
- --------------------------------------------------------------
Elf Aquitaine S.A.-ADR
(Oil-International Integrated) 30,000 2,206,875
- --------------------------------------------------------------
Groupe Danone-ADR (Foods) 60,000 3,138,750
- --------------------------------------------------------------
Societe Generale (Banks-Major
Regional) 110,000 3,877,357
- --------------------------------------------------------------
10,843,085
- --------------------------------------------------------------
GERMANY-9.48%
BASF A.G.-ADR
(Chemicals-Diversified) 60,000 2,635,920
- --------------------------------------------------------------
Bayer A.G.-ADR
(Chemicals-Diversified) 55,000 2,288,643
- --------------------------------------------------------------
DaimlerChrysler A.G.-ADR
(Automobiles) 23,000 2,044,125
- --------------------------------------------------------------
Deutsche Bank A.G.-ADR (Banks-Money
Center) 36,000 2,147,335
- --------------------------------------------------------------
RWE A.G.-ADR
(Manufacturing-Diversified) 40,000 1,852,156
- --------------------------------------------------------------
SAP A.G.-ADR (Computers-Software &
Services) 40,000 1,385,000
- --------------------------------------------------------------
12,353,179
- --------------------------------------------------------------
ITALY-6.62%
ENI S.p.A.-ADR (Oil-International
Integrated) 32,000 1,920,000
- --------------------------------------------------------------
Istituto Bancario San Paolo di
Torino-ADR (Banks-Major Regional) 109,725 3,017,437
- --------------------------------------------------------------
Telecom Italia S.p.A.-ADR (Telephone) 35,000 3,681,562
- --------------------------------------------------------------
8,618,999
- --------------------------------------------------------------
JAPAN-15.22%
Canon, Inc.-ADR (Office Equipment &
Supplies) 75,000 2,184,375
- --------------------------------------------------------------
Fuji Photo Film-ADR
(Photography/Imaging) 50,000 1,900,000
- --------------------------------------------------------------
Hitachi Ltd.-ADR
(Manufacturing-Diversified) 20,000 1,888,750
- --------------------------------------------------------------
Honda Motor Co., Ltd.-ADR
(Automobiles) 18,000 1,561,500
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
JAPAN-(CONTINUED)
Kirin Brewery Co., Ltd.-ADR
(Beverages- Alcoholic) 23,000 $ 2,731,250
- --------------------------------------------------------------
Kyocera Corp.-ADR
(Electronics-Component
Distributors) 28,000 1,678,250
- --------------------------------------------------------------
Murata Manufacturing Co., Ltd.
(Electronics- Component Distributors) 35,000 2,303,431
- --------------------------------------------------------------
Nintendo Co. Ltd. (Leisure Time-Products) 5,000 3,515,916
- --------------------------------------------------------------
Takefuji Corp.
(Financial-Diversified) 20,000 2,068,623
- --------------------------------------------------------------
19,832,095
- --------------------------------------------------------------
NETHERLANDS-10.02%
Akzo Nobel N.V.-ADR (Chemicals) 45,000 1,906,875
- --------------------------------------------------------------
ING Groep N.V.-ADR
(Insurance-Life/Health) 60,000 3,300,000
- --------------------------------------------------------------
Koninklijke (Royal) Philips
Electronics N.V.-ADR (Electrical
Equipment) 20,000 2,017,500
- --------------------------------------------------------------
Royal Dutch Petroleum Co.-New York
Shares (Oil-International Integrated) 45,000 2,711,250
- --------------------------------------------------------------
Unilever N.V.-ADR (Foods) 44,642 3,113,779
- --------------------------------------------------------------
13,049,404
- --------------------------------------------------------------
PORTUGAL-1.74%
Portugal Telecom S.A.-ADR
(Telephone) 55,000 2,265,312
- --------------------------------------------------------------
SPAIN-7.97%
Banco Popular Espanol S.A.
(Banks-Major Regional) 20,000 1,437,687
- --------------------------------------------------------------
Endesa S.A.-ADR (Electric Companies) 160,000 3,400,000
- --------------------------------------------------------------
Repsol S.A.-ADR (Oil-International
Integrated) 195,000 3,960,938
- --------------------------------------------------------------
Telefonica S.A.-ADR (Telephone) 10,810 1,590,421
- --------------------------------------------------------------
10,389,046
- --------------------------------------------------------------
SWITZERLAND-4.32%
Nestle S.A.-ADR (Foods) 30,000 2,702,643
- --------------------------------------------------------------
Novartis A.G.-ADR (Health
Care/Drugs-Major Pharmaceuticals) 40,000 2,920,384
- --------------------------------------------------------------
5,623,027
- --------------------------------------------------------------
UNITED KINGDOM-21.71%
Associated British Foods PLC-ADR
(Foods) 264,000 1,723,867
- --------------------------------------------------------------
AstraZeneca Group PLC-ADR (Health
Care- Drugs-Major Pharmaceuticals) 80,000 3,135,000
- --------------------------------------------------------------
British Airways PLC-ADR (Airlines) 25,000 1,785,938
- --------------------------------------------------------------
British Steel PLC-ADR (Iron & Steel) 55,000 1,433,438
- --------------------------------------------------------------
British Telecommunications PLC
(Telephone) 14,000 2,397,500
- --------------------------------------------------------------
Carlton Communications PLC-ADR
(Electrical Equipment) 70,000 3,001,250
- --------------------------------------------------------------
Glaxo Wellcome PLC-ADR (Health
Care-Drugs- Major Pharmaceuticals) 40,000 2,265,000
- --------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
HSBC Holdings PLC-ADR (Banks-Money
Center) 12,500 $ 4,559,451
- --------------------------------------------------------------
Marks & Spencer PLC (Retail-Stores) 200,000 1,156,968
- --------------------------------------------------------------
PowerGen PLC-ADR (Electric
Companies) 55,000 2,358,125
- --------------------------------------------------------------
Scottish Power PLC (Electric
Companies) 250,000 2,159,463
- --------------------------------------------------------------
SmithKline Beecham PLC-ADR (Health
Care- Drugs-Major
Pharmaceuticals) 35,000 2,312,188
- --------------------------------------------------------------
28,288,188
- --------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests (Cost
$96,079,408) 125,563,555
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-3.21%(A)
Dean Witter Reynolds, Inc., 4.85%,
07/01/99 (Cost $4,184,116)(b) $4,184,116 $ 4,184,116
- --------------------------------------------------------------
TOTAL INVESTMENTS-99.59% 129,747,671
- --------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-0.41% 530,013
- --------------------------------------------------------------
NET ASSETS-100.00% $130,277,684
==============================================================
</TABLE>
Investment Abbreviations:
ADR - American Depositary Receipt
Notes to Schedule of Investments:
(a) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure 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.
(b) 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.
5
<PAGE> 8
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$100,263,524) $129,747,671
- ---------------------------------------------------------
Foreign currencies, at value (cost $98,537) 97,252
- ---------------------------------------------------------
Receivables for:
Capital stock sold 249,417
- ---------------------------------------------------------
Interest and dividends 769,140
- ---------------------------------------------------------
Investment for deferred compensation plan 7,189
- ---------------------------------------------------------
Total assets 130,870,669
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Capital stock reacquired 343,012
- ---------------------------------------------------------
Deferred compensation plan 7,189
- ---------------------------------------------------------
Accrued operating services fees 1,653
- ---------------------------------------------------------
Accrued distribution fees 236,735
- ---------------------------------------------------------
Accrued directors' fees and expenses 4,396
- ---------------------------------------------------------
Total liabilities 592,985
- ---------------------------------------------------------
Net assets applicable to shares outstanding $130,277,684
- ---------------------------------------------------------
NET ASSETS:
Class A $ 27,368,298
=========================================================
Class B $ 4,289,543
=========================================================
Class C $ 98,619,843
=========================================================
CAPITAL STOCK, $0.001 PAR VALUE PER SHARE:
Class A:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 1,609,093
=========================================================
Class B:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 254,452
=========================================================
Class C:
Authorized 100,000,000
- ---------------------------------------------------------
Outstanding 5,851,042
=========================================================
Class A:
Net asset value and redemption price per
share $ 17.01
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $17.01 divided
by 94.50%) $ 18.00
=========================================================
Class B:
Net asset value and offering price per
share $ 16.86
=========================================================
Class C:
Net asset value and offering price per
share $ 16.86
=========================================================
</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 $281,309 foreign
withholding tax) $2,022,455
- --------------------------------------------------------
Interest 77,790
- --------------------------------------------------------
Total investment income 2,100,245
- --------------------------------------------------------
EXPENSES:
Advisory fees 645,658
- --------------------------------------------------------
Operating services fees 290,545
- --------------------------------------------------------
Distribution fees-Class A 46,603
- --------------------------------------------------------
Distribution fees-Class B 18,782
- --------------------------------------------------------
Distribution fees-Class C 493,519
- --------------------------------------------------------
Directors' fees and expenses 4,027
- --------------------------------------------------------
Total expenses 1,499,134
- --------------------------------------------------------
Less: Fees waived by advisor (152,514)
- --------------------------------------------------------
Net expenses 1,346,620
- --------------------------------------------------------
Net investment income 753,625
- --------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES AND FOREIGN
CURRENCIES:
Net realized gain (loss) from:
Investment securities 3,088,526
- --------------------------------------------------------
Foreign currencies (30,675)
- --------------------------------------------------------
3,057,851
- --------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of:
Investment securities (851,632)
- --------------------------------------------------------
Foreign currencies (776)
- --------------------------------------------------------
(852,408)
- --------------------------------------------------------
Net gain from investment securities and
foreign currencies 2,205,443
- --------------------------------------------------------
Net increase in net assets resulting from
operations $2,959,068
========================================================
</TABLE>
6
<PAGE> 9
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 $ 753,625 $ 226,806
- -----------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities and
foreign currencies 3,057,851 (5,494,200)
- -----------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities and foreign currencies (852,408) 15,275,348
- -----------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 2,959,068 10,007,954
- -----------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A -- (160,712)
- -----------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A -- (237)
- -----------------------------------------------------------------------------------------
Class B -- (51)
- -----------------------------------------------------------------------------------------
Class C -- (1,274)
- -----------------------------------------------------------------------------------------
Share transactions-net:
Class A (1,593,679) 18,784,781
- -----------------------------------------------------------------------------------------
Class B (81,632) 4,303,232
- -----------------------------------------------------------------------------------------
Class C (8,658,001) 3,112,106
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets (7,374,244) 36,045,799
- -----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 137,651,928 101,606,129
- -----------------------------------------------------------------------------------------
End of period $130,277,684 $137,651,928
=========================================================================================
NET ASSETS CONSIST OF:
Capital (par value and additional paid-in) $102,825,725 $113,159,037
- -----------------------------------------------------------------------------------------
Undistributed net investment income 811,955 58,330
- -----------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currencies (2,841,540) (5,899,391)
- -----------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currencies 29,481,544 30,333,952
- -----------------------------------------------------------------------------------------
$130,277,684 $137,651,928
=========================================================================================
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Advisor International Value Fund (the "Fund") is a series portfolio of AIM
Advisor Funds, Inc. (the "Company"). The Company is a Maryland corporation and
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end series management investment company consisting of 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 U.S. or foreign tax considerations.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular
day, the security is valued at the 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 date. 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
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 officers in a manner specifically authorized by the Board of
Directors of the Company. Short-term obligations having 60 days or less to
maturity are valued at amortized cost which approximates market value.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of the New York Stock Exchange. The
values of such securities used in computing the net asset value of the
Fund's shares are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of the New York Stock
Exchange. Occasionally, events affecting the values of such securities and
such exchange rates may occur between the times at which they are determined
and the close of the New York Stock Exchange which will not be reflected in
the computation of the Fund's net asset value. If events materially
affecting the value of such securities occur during such period, then these
securities will be valued at their fair value as determined in good faith by
or under the supervision of the Board of Directors.
B. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at the date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions. 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.
C. Foreign Currency Contracts -- A foreign currency contract is an obligation
to purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
D. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Such distributions are
declared and paid annually.
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 $5,869,981 as of December 31, 1998 (which may be carried
forward to offset future taxable capital
8
<PAGE> 11
gain if any) which expires, if not previously utilized, through the year
2006.
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 1.00% of
the Fund's average daily net assets. AIM has entered into a sub-advisory
agreement with INVESCO Global Asset Management Limited ("IGAM") whereby AIM pays
IGAM an annual rate of 0.35% of average net assets up to $50 million; 0.30% on
average net assets over $50 million up to $100 million; and 0.25% on average net
assets in excess of $100 million.
The Company, pursuant to an operating services agreement with AIM, has agreed
to pay AIM an annual rate of 0.45% of the Fund's average daily net assets for
providing or arranging to provide accounting, legal (except litigation),
dividend disbursing, registrar, custodial, shareholder reporting, sub-accounting
and recordkeeping services and functions. This agreement provides that AIM pays
all fees and expenses associated with these and other functions, including, but
not limited to, registration fees, shareholder meeting fees, and proxy statement
and shareholder report expenses. During the six months ended June 30, 1999, AIM
was paid $151,347 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
$139,128.
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, $33,288, $18,782 and $493,519,
respectively, as compensation under the Plans. During the six months ended June
30, 1999, AIM Distributors waived fees of $13,315 for the Class A shares.
AIM Distributors received commissions of $5,961 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 $41,011 in contingent deferred
sales charges imposed on redemptions of Fund 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 was 0.05%.
9
<PAGE> 12
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
$15,913,052 and $24,307,572, 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 $30,976,555
- ------------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (1,492,408)
- ------------------------------------------------------------
Net unrealized appreciation of investment
securities $29,484,147
============================================================
</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, 1999 DECEMBER 31, 1998
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 451,727 $ 7,524,073 1,753,054 $ 28,241,964
- -------------------------------------------------------------------------------------------------------------------
Class B* 98,180 1,617,043 309,463 5,088,103
- -------------------------------------------------------------------------------------------------------------------
Class C 596,569 9,755,432 1,767,625 28,826,767
- -------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A -- -- 9,847 156,574
- -------------------------------------------------------------------------------------------------------------------
Class B* -- -- 3 46
- -------------------------------------------------------------------------------------------------------------------
Class C -- -- 71 1,122
- -------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (549,795) (9,117,752) (619,207) (9,613,757)
- -------------------------------------------------------------------------------------------------------------------
Class B* (103,929) (1,698,675) (49,265) (784,917)
- -------------------------------------------------------------------------------------------------------------------
Class C (1,122,800) (18,413,433) (1,630,166) (25,715,783)
- -------------------------------------------------------------------------------------------------------------------
(630,048) $(10,333,312) 1,541,425 $ 26,200,119
===================================================================================================================
</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,
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 $ 16.57 $ 14.99 $13.42 $16.48 $16.21
- ------------------------------------------------------------ ------- ------- ------ ------ ------
Income from investment operations:
Net investment income 0.15 0.09 0.17 0.08 --
- ------------------------------------------------------------ ------- ------- ------ ------ ------
Net gains on securities (both realized and unrealized) 0.29 1.59 1.69 0.30 0.27
- ------------------------------------------------------------ ------- ------- ------ ------ ------
Total from investment operations 0.44 1.68 1.86 0.38 0.27
- ------------------------------------------------------------ ------- ------- ------ ------ ------
Less distributions:
Dividends from net investment income -- (0.10) (0.07) -- --
- ------------------------------------------------------------ ------- ------- ------ ------ ------
Distributions from net realized gains -- -- (0.22) -- --
- ------------------------------------------------------------ ------- ------- ------ ------ ------
Total distributions -- (0.10) (0.29) -- --
- ------------------------------------------------------------ ------- ------- ------ ------ ------
Net asset value, end of period $ 17.01 $ 16.57 $14.99 $16.86 $16.48
============================================================ ======= ======= ====== ====== ======
Total return(c) 2.66% 11.20% 13.84% 2.31% 1.67%
============================================================ ======= ======= ====== ====== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $27,368 $28,281 $8,444 $4,290 $4,289
============================================================ ======= ======= ====== ====== ======
Ratio of expenses to average net assets(d) 1.49%(e) 1.57% 1.71% 2.24%(e) 2.32%(f)
============================================================ ======= ======= ====== ====== ======
Ratio of net investment income to average net assets(g) 1.76%(f) 0.84% 0.83% 1.01%(f) 0.09%(g)
============================================================ ======= ======= ====== ====== ======
Portfolio turnover rate 13% 9% 9% 13% 9%
============================================================ ======= ======= ====== ====== ======
</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 expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
1.81% (annualized), 1.81% and 1.81% for 1999-1997 for Class A and 2.46%
(annualized) and 2.46% (annualized) for 1999-1998 for Class B.
(e) Ratios are annualized and based on average net assets of $26,851,299 and
$3,787,489 for Class A and Class B, respectively.
(f) Annualized.
(g) After fee waivers and/or expense reimbursements. Ratios of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements were 1.44% (annualized), 0.60% and 0.73% for 1999-1997 for
Class A and 0.79% (annualized) and (0.05)% (annualized) for 1999-1998 for
Class B.
<TABLE>
<CAPTION>
CLASS C(a)
------------------------------------------------------------
DECEMBER 31,
JUNE 30, ----------------------------------------------
1999(B) 1998 1997(b) 1996 1995
-------- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.48 $ 14.93 $ 13.42 $ 11.13 $10.00
- ------------------------------------------------------------ ------- -------- ------- ------- ------
Income from investment operations:
Net investment income (loss) 0.08 -- 0.01 (0.01) --
- ------------------------------------------------------------ ------- -------- ------- ------- ------
Net gains on securities (both realized and unrealized) 0.30 1.55 1.73 2.34 1.13
- ------------------------------------------------------------ ------- -------- ------- ------- ------
Total from investment operations 0.38 1.55 1.74 2.33 1.13
- ------------------------------------------------------------ ------- -------- ------- ------- ------
Less distributions:
Dividends from net investment income -- -- (0.01) -- --
- ------------------------------------------------------------ ------- -------- ------- ------- ------
Distributions from net realized gains -- -- (0.22) (0.04) --
- ------------------------------------------------------------ ------- -------- ------- ------- ------
Total distributions -- -- (0.23) (0.04) --
- ------------------------------------------------------------ ------- -------- ------- ------- ------
Net asset value, end of period $ 16.86 $ 16.48 $ 14.93 $ 13.42 $11.13
============================================================ ======= ======== ======= ======= ======
Total return(c) 2.31% 10.38% 12.98% 20.99% 11.28%
============================================================ ======= ======== ======= ======= ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $98,620 $105,083 $93,162 $51,916 $9,467
============================================================ ======= ======== ======= ======= ======
Ratio of expenses to average net assets(d) 2.24%(e) 2.32% 2.46% 2.50% 2.50%(f)
============================================================ ======= ======== ======= ======= ======
Ratio of net investment income (loss) to average net
assets(g) 1.01%(f) 0.09% 0.08% (0.16)% 0.03%(g)
============================================================ ======= ======== ======= ======= ======
Portfolio turnover rate 13% 9% 9% 5% 2%
============================================================ ======= ======== ======= ======= ======
</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 expense reimbursements. Ratio of expenses to
average net assets prior to fee waivers and/or expense reimbursements was
2.46% (annualized) and 2.46% for 1999-1998.
(e) Ratios are annualized and based on average net assets of $99,521,721.
(f) Annualized
(g) After fee waivers and/or expense reimbursements. Ratios of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements were 0.79% (annualized) and (0.05)% 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 Global Asset Management Limited
12 Bermudian Rd., 3rd Floor
Edward K. Dunn Jr. Robert G. Alley P.O. Box HM66
Chairman, Mercantile Mortgage Corp.; Vice President Hamilton, HM AX, Bermuda
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 Director 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>
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 INTERNATIONAL GROWTH FUNDS A I M Management Group Inc. has
AIM Aggressive Growth Fund(1) AIM Advisor International Value Fund provided leadership in the
AIM Blue Chip Fund AIM Asian Growth Fund mutual-fund industry since 1976 and
AIM Capital Development Fund AIM Developing Markets Fund managed approximately $121 billion
AIM Constellation Fund AIM Europe Growth Fund in assets for more than 6.3 million
AIM Dent Demographic Trends Fund AIM European Development Fund shareholders, including individual
AIM Large Cap Growth Fund AIM International Equity Fund investors, corporate clients and
AIM Mid Cap Equity Fund(A) AIM Japan Growth Fund financial institutions, as of June
AIM Select Growth Fund AIM Latin American Growth Fund 30, 1999.
AIM Small Cap Growth Fund(B) AIM New Pacific Growth Fund The AIM Family of
AIM Small Cap Opportunities Fund Funds--Registered Trademark--is
AIM Value Fund GLOBAL GROWTH FUNDS distributed nationwide, and AIM
AIM Weingarten Fund AIM Global Aggressive Growth Fund today is the 10th-largest
AIM Global Growth Fund mutual-fund complex in the United
GROWTH & INCOME FUNDS States in assets under management,
AIM Advisor Flex Fund GLOBAL GROWTH & INCOME FUNDS according to Strategic Insight, an
AIM Advisor Large Cap Value Fund AIM Global Growth & Income Fund independent mutual-fund monitor.
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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