[GRAPHIC OF INVESCO LOGO OMITTED]
CIM HIGH YIELD SECURITIES - 2000 SEMI-ANNUAL REVIEW AND OUTLOOK
We are pleased to provide this semi-annual report for CIM High Yield
Securities ("the Fund") as of June 30, 2000. The following pages include a
listing of the Fund's holdings as of June 30, 2000 and its financial
statements as of and for the six months ended on that date.
Following the high yield market's disappointing performance in 1999,
conditions continued to deteriorate during the first six months of 2000.
Contrary to hopes, the onset of "Y2K" did not bring improvement in the
market's fortunes. The high yield market instead experienced significant
outflows from high yield mutual funds, a marked increase in default rates,
and a reduced new issue calendar, all of which negatively influenced its
performance.
Reflecting those conditions as well as a couple of negative
portfolio-specific events, the Fund's total return for the first-half of
2000 (six months ended June 30), based on net asset value and before Fund
expenses, was -2.99%. After Fund expenses, the total net asset value-based
return for the same period was -3.52%. On a market value basis, the Fund's
total return for the six months ended June 30, 2000 was 9.49%. The negative
portfolio-specific events that occurred in the first six months of 2000
included the April default by Safety Components International, Inc. and the
decline in the value of Vlasic Foods International Inc. bonds during the
month of May. Past performance is not indicative of future results.
The first-half returns of market benchmarks were also disappointing.
For the six month period ended June 30, 2000, the Credit Suisse First Boston
Domestic+ High Yield Index posted a total return of -1.38%, which was down
significantly from its subpar 2.26% return in 1999. The first-half 2000
performance occurred despite the high yield market's strong rebound during
June, in which the Index returned 2.12% following the Federal Open Market
Committee's May 16th decision to increase the federal funds rate by 50 basis
points. Even with June's rebound, however, the high yield market
significantly underperformed other higher grade fixed-income asset classes
in the six months ended June 30, 2000. For example, investment grade
corporate bonds returned 2.40% over that time frame, as measured by the
Salomon Smith Barney (SSB) High Grade Corporate Index, and U.S. Treasuries
returned 5.35% during the period, as measured by the SSB Treasury Index.
Going into the second half of the year, we are somewhat sanguine but
also cautious. Many observers of the high yield market are increasingly
optimistic about near term prospects, highlighting the market's "attractive"
yield and yield spread levels and an apparent buildup in "sidelined" cash,
which a recent Salomon Smith Barney report suggested may total as much as
$9.4 billion. Moreover, recent economic and other releases have suggested
that the economy may indeed be slowing and that default rates may also be
starting to decline, both of which would improve market sentiment
substantially. While we are encouraged by the above dynamics, we
nevertheless remain concerned about the market's ability to absorb
unforeseen negative surprises, such as another increase in the federal funds
rate by the Federal Reserve Board or an unexpected spike in default rates.
As a result, in managing in the current "mixed signals" environment, we plan
to intensify our focus on credit selection, diversification, and liquidity,
until the likely outcome of today's uncertainties becomes more evident.
We thank you for your continued support and look forward to an
improved second-half of 2000.
INVESCO, Inc.
<PAGE>
(Blank page inserted here.)
<PAGE>
CIM HIGH YIELD SECURITIES
STATEMENT OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- -----------
<S> <C> <C>
CORPORATE BONDS AND NOTES -- 123.6%
TELECOMMUNICATION -- 29.0%
$1,250,000 Flag Telecom Holding Ltd., Sr. Notes, 11.625%, 03/30/10 ........................... $ 1,212,500
500,000 Leap Wireless, Sr. Notes, 12.500%, 04/15/10*** .................................... 442,500
1,000,000 Level 3 Communications, Sr. Notes, 11.250%, 03/15/10*** ........................... 990,000
1,000,000 MGC Communications, Inc./Mpower Communications, Sr. Notes,
13.000%, 04/01/10*** ............................................................ 945,000
550,000 NATG Holdings LLC/Orius Capital Corp., Sr. Sub. Notes, 12.750%, 02/01/10*** ....... 569,250
1,000,000 NEXTLINK Communications, Inc., Sr. Notes, 10.750%, 11/15/08 ....................... 990,000
1,000,000 PSINet, Inc., Sr. Notes, 11.000%, 08/01/09 ........................................ 930,000
1,000,000 Primus Telecommunications Group, Sr. Notes, 11.750%, 08/01/04 ..................... 805,000
500,000 RCN Corp., Sr. Notes, 10.125%, 01/15/10 ........................................... 418,750
300,000 Spectrasite Holdings, Inc., Sr. Notes, 0.000%, 03/15/10** ......................... 165,000
1,000,000 Williams Communications Group, Inc., Sr. Notes, 10.875%, 10/01/09 ................. 982,500
875,000 Winstar Communications Group, Sr. Notes, 12.750%, 04/15/10*** ..................... 820,312
1,000,000 Worldwide Fiber, Inc., Sr. Notes, 12.000%, 08/01/09 ............................... 945,000
------------
10,215,812
------------
HOTELS AND CASINOS -- 9.7%
525,000 Circus Circus Enterprise, 9.250%, 12/01/05 ........................................ 509,250
700,000 Florida Panther Holdings, 9.875%, 04/15/09 ........................................ 659,750
1,000,000 Hollywood Casino Corp., Sr. Sub. Notes, 11.250%, 05/01/07 ......................... 1,027,500
500,000 Lodgian Financing Corp., Sr. Sub. Notes, 12.250%, 07/15/09 ........................ 403,125
800,000 MGM Grand, Inc., Sr. Sub. Notes, 9.750%, 06/01/07 ................................. 818,000
------------
3,417,625
------------
ELECTRONICS -- 9.6%
700,000 Chippac International Ltd., Sr. Sub. Notes, 12.750%, 08/01/09 ..................... 763,000
675,000 Fairchild Semiconductor, 10.375%, 10/01/07 ........................................ 690,187
420,000 Intersil Corp., 13.250%, 08/15/09 ................................................. 481,950
625,000 SCG Holding & Semiconductor Co., Sr. Sub. Notes, 12.000%, 08/01/09 ................ 670,313
900,000 Viasystems, Inc., Sr. Sub. Notes, 9.750%, 06/01/07 ................................ 783,000
-------------
3,388,450
-------------
BUILDING AND DEVELOPMENT -- 7.5%
1,000,000 American Plumbing & Mechanics, Sr. Sub. Notes, 11.625%, 10/15/08 .................. 937,500
1,050,000 Atrium Companies, Inc., Sr. Sub. Notes, 10.500%, 05/01/09 ......................... 889,875
900,000 Prison Realty Trust, Inc., Sr. Notes, 12.000%, 06/01/06 ........................... 814,500
------------
2,641,875
------------
LEISURE -- 6.8%
1,000,000 Polaroid Corp., Sr. Notes, 11.500%, 02/15/06 ...................................... 1,045,000
1,000,000 Premier Parks, Inc., Sr. Notes, 9.750%, 06/15/07 .................................. 971,250
500,000 Riddell Sports, Inc., Sr. Sub. Notes, 10.500%, 07/15/07 ........................... 387,500
------------
2,403,750
------------
</TABLE>
See Notes to Financial Statements.
1
<PAGE>
CIM HIGH YIELD SECURITIES
STATEMENT OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- -----------
<S> <C> <C>
CHEMICALS AND PLASTICS -- 6.8%
$1,000,000 Avecia Group PLC, Sr. Notes, 11.000%, 07/01/09 .................................... $ 985,000
1,000,000 Lyondell Chemical Co., Sr. Sub. Notes, 10.875%, 05/01/09 .......................... 997,500
400,000 Sovereign Specialty Chemicals, Sr. Sub. Notes, 11.875%, 03/15/10*** ............... 413,500
------------
2,396,000
------------
OIL AND GAS -- 6.3%
750,000 Costilla Energy, Inc., Sr. Notes, 10.250%, expire 10/01/06
(10/03/96, cost $750,000)+(a) ................................................... 330,000
525,000 Frontier Oil Corp., Sr. Notes, 11.750%, 11/15/09 .................................. 527,625
550,000 R & B Falcon Corp., 12.250%, 03/15/06 ............................................. 602,250
750,000 Swift Energy Co., Sr. Sub. Notes, 10.250%, 08/01/09 ............................... 763,125
------------
2,223,000
------------
PACKAGING AND CONTAINERS -- 5.8%
1,000,000 Huntsman Packaging Corp., Sr. Sub. Notes, 13.000%, 06/01/10*** .................... 1,035,000
1,000,000 Stone Container Corp., Sr. Sub. Notes, 12.250%, 04/01/02 .......................... 1,005,000
------------
2,040,000
------------
BROADCAST, RADIO AND CABLE T.V. -- 5.6%
250,000 Charter Communications, Sr. Sub. Notes, 10.250%, 01/15/10 ......................... 243,125
1,250,000 Galaxy Telecommunication L.P., Sr. Sub. Notes, 12.375%, 10/01/05 .................. 1,087,500
700,000 XM Satellite Radio, Inc., Sr. Sub. Notes, 14.000%, 03/15/10*** .................... 619,500
------------
1,950,125
------------
AUTOMOTIVE -- 5.2%
765,000 American Axle & Manufacturing, Inc., Sr. Sub. Notes, 9.750%, 03/01/09 ............. 717,188
500,000 Exide Corp., Sr. Notes, 10.000%, 04/15/05 ......................................... 432,500
1,000,000 Safety Components, Sr. Sub. Notes, 10.125%, 07/15/07 (a) .......................... 205,000
550,000 Tenneco Automotive, Inc., Sr. Sub. Notes, 11.625%, 10/15/09 ....................... 492,250
------------
1,846,938
------------
HOME FURNISHINGS -- 3.2%
650,000 O'Sullivan Industries, 13.375%, 10/15/09*** ....................................... 628,875
550,000 Winsloew Furniture, Inc., 12.750%, 08/15/07 ....................................... 508,750
------------
1,137,625
------------
FINANCIAL INTERMEDIARIES -- 2.5%
900,000 AmeriCredit Corp., 9.875%, 04/15/06 ............................................... 877,500
------------
APPAREL/TEXTILES -- 2.4%
1,000,000 CMI Industries, Sr. Sub. Notes, 9.500%, 10/01/03 .................................. 485,000
1,000,000 Pillowtex Corp., Sr. Sub. Notes, 10.000%, 11/15/06 ................................ 355,000
------------
840,000
------------
ECOLOGICAL -- 2.4%
1,000,000 Allied Waste North American, Sr. Notes, 10.000%, 08/01/09 ......................... 840,000
------------
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
CIM HIGH YIELD SECURITIES
STATEMENT OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- -----------
<S> <C> <C>
CORPORATE BONDS AND NOTES -- (CONTINUED)
FOOD SERVICE -- 2.2%
$ 750,000 Sbarro, Inc., Sr. Notes, 11.000%, 09/15/09 ........................................ $ 770,625
------------
FOOD DRUG RETAILER -- 2.1%
850,000 Stater Brothers Holdings, Sr. Notes, 10.750%, 08/15/06 ............................ 752,250
------------
HEALTHCARE -- 2.0%
700,000 Triad Hospitals Holdings, Sr. Sub. Notes, 11.000%, 05/15/09 ....................... 719,250
-------------
STEEL -- 2.0%
700,000 Acme Metals, Inc., Sr. Notes, 10.875%, 12/15/07(a) ................................ 103,250
600,000 LTV Corp., Sr. Notes, 11.750%, 11/15/09 ........................................... 507,000
500,000 Republic Technology/RTI Capital, 13.750%, 07/15/09*** ............................. 88,125
------------
698,375
------------
AEROSPACE -- 2.0%
1,000,000 Fairchild Corp., 10.750%, 04/15/09 ................................................ 697,500
------------
INDUSTRIAL EQUIPMENT -- 1.8%
300,000 Blount, Inc., Sr. Sub. Notes, 13.000%, 08/01/09 ................................... 307,500
500,000 Nationsrent, Inc., Sr. Sub. Notes, 10.375%, 12/15/08 .............................. 322,500
------------
630,000
------------
COSMETICS/TOILETRIES -- 1.8%
775,000 Chattem, Inc., Sr. Sub. Notes, 8.875%, 04/01/08 ................................... 623,875
------------
OTHER RETAILERS -- 1.7%
1,000,000 Ames Department Stores, Sr. Notes, 10.000%, 04/15/06 .............................. 610,000
------------
AIR TRANSPORTATION -- 1.5%
600,000 Northwest Airlines, Inc., 7.875%, 03/15/08 ........................................ 530,250
------------
SURFACE TRANSPORTATION -- 1.4%
750,000 Ameritruck Distribution Corp., Sr. Sub. Notes, 12.250%, 11/15/05(a) ............... 0
525,000 North American Van Lines, Sr. Sub. Notes, 13.375%, 12/01/09*** .................... 496,125
------------
496,125
------------
MANUFACTURING DIVERSIFIED -- 1.3%
500,000 WEC Co., Inc., Sr. Notes, 12.000%, 07/15/09 ....................................... 448,125
------------
FOOD PRODUCTS -- 1.0%
1,000,000 Vlasic Foods International, Inc., Sr. Sub. Notes, 10.250%, 07/01/09 ............... 355,000
------------
TOTAL CORPORATE BONDS AND NOTES (Cost $51,064,228) ................................ 43,550,075
------------
UNITED STATES GOVERNMENT SECURITIES -- 3.2%
UNITED STATES TREASURY BILL:
1,125,000 5.097%++, 07/13/00 ................................................................ 1,123,119
------------
TOTAL UNITED STATES GOVERNMENT SECURITIES
(Cost $1,123,119) .............................................................. 1,123,119
------------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
CIM HIGH YIELD SECURITIES
STATEMENT OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<S> <C> <C>
COMMON STOCK -- 0.3%
1,601 Harvest Foods, Inc. (cost $36)**+ ................................................. $ 1,601
8,806 Tele1 Europe BV (cost $0)**+ ...................................................... 106,222
------------
TOTAL COMMON STOCK
(Cost $36) ...................................................................... 107,823
------------
WARRANTS -- 2.3%
1,000 Globalstar Telecom, Warrants, expire 02/15/04
(cost $0)**+*** ................................................................. 1,000
650 Intersils Corp., Warrants, expire 08/15/09
(cost $0)**+*** ................................................................. 552,500
700 MGC Communications, Inc., Warrants, expire 10/01/04
(cost $0)**+*** ................................................................. 210,000
650 O'Sullivan Industries, Warrants, expire 10/05/09
(cost $0)**+*** ................................................................. 1,300
650 O'Sullivan Industries, Inc., Warrants, expire 10/05/09
(cost $0)**+*** ................................................................. 1,300
1,000 Primus Telecom, Warrants, expire 08/01/04
(cost $0)**+ .................................................................... 30,750
500 Republic Technology, Warrants, expire 07/15/09
(cost $0)**+*** ................................................................. 5
550 Winsloew Furniture, Inc., Warrants, expire 08/15/07
(cost $0)**+*** ................................................................. 5,500
------------
802,355
------------
TOTAL INVESTMENTS (Cost $52,187,383*) .............................................. 129.4% 45,583,372
OTHER ASSETS AND LIABILITIES (NET) ................................................. (29.4) (10,361,165)
------ -----------
NET ASSETS ......................................................................... 100.0% $35,222,207
====== ===========
</TABLE>
--------------------------------------------------------------------------------
* Aggregate cost for Federal income tax purposes.
** Non-income producing security.
*** Security purchased in a transaction exempt from registration under Rule 144A
of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified institutional
buyers.
+ Securities for which market quotations are not readily available are valued
by or at the direction of the Board of Trustees. Parenthetical disclosure
includes the cost of the security. The total fair value of such securities
at June 30, 2000 is $1,240,178 which represents 3.521% of total net assets.
++ Rate represents annualized yield at date of purchase.
(a) Issuer in default.
See Notes to Financial Statements.
4
<PAGE>
CIM HIGH YIELD SECURITIES
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost $52,187,383) (Note 1)
See accompanying statement .............................................. $ 45,583,372
Cash ...................................................................... 8,307
Interest receivable ....................................................... 1,584,808
Prepaid expenses .......................................................... 786
-------------
Total Assets ........................................................... 47,177,273
LIABILITIES:
Notes payable (including accrued interest of $164,510) (Note 5) .......... $11,914,510
Investment advisory fee payable (Note 2) .................................. 14,077
Administration fee payable (Note 2) ....................................... 3,224
Custodian fees payable (Note 2) ........................................... 3,037
Accrued expenses and other payables ....................................... 20,218
------------
Total Liabilities ...................................................... 11,955,066
-------------
NET ASSETS ..................................................................... $ 35,222,207
-------------
NET ASSETS consist of:
Accumulated undistributed net investment income ........................... $ 182,261
Accumulated net realized loss on investments sold ......................... (5,828,981)
Unrealized depreciation of investments .................................... (6,604,011)
Shares of beneficial interest, $0.01 per share par value,
issued and outstanding 5,878,325 ........................................ 58,783
Paid-in capital in excess of par value .................................... 47,414,155
-------------
Total Net Assets ....................................................... $ 35,222,207
=============
NET ASSET VALUE PER SHARE
($35,222,207 / 5,878,325 shares of beneficial interest outstanding) ....... $ 5.99
=============
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
CIM HIGH YIELD SECURITIES
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest ................................................................... $ 2,874,215
-----------
Total Investment Income .................................................. 2,874,215
EXPENSES:
Interest expense (Note 5) .................................................. $456,100
Investment advisory fee (Note 2) ........................................... 90,615
Miscellaneous .............................................................. 26,592
Legal and audit fees ....................................................... 31,503
Trustees' fees and expenses (Note 2) ....................................... 21,532
Administration fee (Note 2) ................................................ 19,891
Custodian fees (Note 2) .................................................... 7,170
Shareholder servicing agent fees (Note 2) .................................. 10,500
---------
Total Expenses ........................................................... 663,903
-----------
NET INVESTMENT INCOME .......................................................... 2,210,312
===========
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(Notes 1 and 3):
Net realized loss on investments sold during the period .................. (368,885)
Net unrealized depreciation of investments during the period ............. (2,979,917)
-----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS ................................ (3,348,802)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................... $(1,138,490)
===========
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
CIM HIGH YIELD SECURITIES
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<S> <C> <C>
NET INCREASE IN CASH:
Cash flows from operating activities:
Interest received ......................................................... $ 2,751,567
Operating expenses paid ................................................... (233,129)
------------
Net cash provided by operating activities ...................................... $ 2,518,438
Cash flows from investing activities:
Increase in short-term securities, net .................................... (506,108)
Purchases of long-term securities ......................................... (21,113,488)
Proceeds from sales of long-term securities ............................... 22,354,846
-------------
Net cash provided by investing activities ...................................... 735,250
-------------
Net cash provided by operating and investing activities ...................... 3,253,688
Cash flows from financing activities:
Interest payments on notes payable ........................................ (468,674)
Principal payments on notes payable ....................................... (750,000)
Cash dividends paid ....................................................... (2,028,051)
-------------
Net cash used in financing activities .......................................... (3,246,725)
-------------
Net increase in cash ........................................................... 6,963
Cash -- beginning of period .................................................... 1,344
-------------
Cash -- end of period .......................................................... $ 8,307
=============
RECONCILIATION OF NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS TO NET CASH PROVIDED BY OPERATING AND
INVESTING ACTIVITIES:
Net decrease in net assets resulting from operations ........................... $ (1,138,490)
Interest expense .......................................................... 456,100
Decrease in investments ................................................... 4,084,052
Increase in interest receivable ........................................... (122,648)
Decrease in prepaid expenses .............................................. 1,360
Decrease in investment advisory fee payable ............................... (3,814)
Decrease in administration fee payable .................................... (109)
Increase in custodian fee payable ......................................... 659
Decrease in accrued expenses and other payables ........................... (23,422)
-------------
Total adjustments ................................................ 4,392,178
-------------
Net cash provided by operating and investing activities ........................ $ 3,253,688
=============
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
CIM HIGH YIELD SECURITIES
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 2000 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1999
------------- -----------------
<S> <C> <C>
Net investment income .......................................................... $ 2,210,312 $ 4,246,404
Net realized loss on investments sold during the period ........................ (368,885) (355,116)
Net unrealized depreciation of investments during the period ................... (2,979,917) (1,968,740)
------------ ------------
Net increase/(decrease) in net assets resulting from operations ................ (1,138,490) 1,922,548
Distributions to shareholders from net investment income ....................... (2,028,051) (4,173,046)
Net increase in net assets from Fund share transactions (Note 4) ............... 0 72,647
------------- ------------
Net decrease in net assets ..................................................... (3,166,541) (2,177,851)
NET ASSETS:
Beginning of period ............................................................ 38,388,748 40,566,599
------------- ------------
End of period (including undistributed net investment income of
$182,261 and $0, respectively) .............................................. $ 35,222,207 $ 38,388,748
============= ============
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
CIM HIGH YIELD SECURITIES
FINANCIAL HIGHLIGHTS
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
6/30/00 ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/99 12/31/98* 12/31/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
--------- -------- ------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating performance:
Net asset value, beginning
of period ........... $ 6.53 $ 6.91 $ 7.96 $ 7.69 $ 7.32 $ 7.11 $ 8.02 $ 7.58 $ 7.10
------- ------- ------- ------- ------- ------- ------- ------- -------
Net investment income 0.38 0.72 0.71 0.78 0.78 0.77 0.82 0.87 0.83
Net realized and
unrealized gain/(loss)
on investments ...... (0.57) (0.39) (1.07) 0.30 0.36 0.23 (0.89) 0.71 0.46
------- ------- ------- ------- ------- ------- ------- ------- -------
Net increase/(decrease) in
net assets resulting from
investment operations (0.19) 0.33 (0.36) 1.08 1.14 1.00 (0.07) 1.58 1.29
Change in net asset value
from Fund share
transaction -- -- -- -- -- -- -- (0.31) --
Distributions:
Dividends from net
investment income ... (0.35) (0.71) (0.69) (0.78) (0.77) (0.79) (0.84) (0.83) (0.81)
Dividends in excess of net
investment income -- -- -- (0.03) -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- -------
Total from distributions (0.35) (0.71) (0.69) (0.81) (0.77) (0.79) (0.84) (0.83) (0.81)
------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period .............. $ 5.99 $ 6.53 $ 6.91 $ 7.96 $ 7.69 $ 7.32 $ 7.11 $ 8.02 $ 7.58
======= ======= ======= ======= ======= ======= ======= ======= =======
Market value, end of
period .............. $ 5.438 $ 5.250 $ 7.190 $ 8.313 $ 8.125 $ 7.875 $ 7.125 $ 7.875 $ 7.500
======= ======= ======= ======= ======= ======= ======= ======= =======
Total investment return 9.49% (18.89)% (5.45)% 13.31% 14.38% 22.72% 0.99% 16.55%(3) 25.70%
======= ======= ======= ======= ======= ======= ======= ======= =======
Ratios to average net
assets / supplemental
data:
Net assets, end of period
(in 000's) .......... $35,222 $38,389 $40,567 $45,848 $43,495 $40,636 $38,678 $42,901 $30,024
Ratio of net investment
income to average
net assets .......... 12.20%+ 10.76% 9.37% 10.08% 10.46% 10.32% 10.82% 11.17% 11.00%
Ratio of operating expenses
to average net assets 1.15%(2)+ 1.02%(2) 1.02%(2) 1.06%(2) 1.10%(2) 1.14%(2) 0.95%(2) 1.09%(2) 1.65%(2)
Portfolio turnover
rate(1) ............. 45.6% 98.0% 62.4% 154.5% 172.2% 79.9% 50.6% 114.3% 40.6%
YEAR YEAR
ENDED ENDED
12/31/91 12/31/90
-------- --------
<S> <C> <C>
Operating performance:
Net asset value, beginning
of period ........... $ 5.65 $ 7.38
------- -------
Net investment income 0.84 0.86
Net realized and
unrealized gain/(loss)
on investments ...... 1.44 (1.72)
------- -------
Net increase/(decrease) in
net assets resulting from
investment operations 2.28 (0.86)
Change in net asset value
from Fund share
transaction ......... -- --
Distributions:
Dividends from net
investment income (0.83) (0.87)
Dividends in excess of net
investment income ... -- --
------- -------
Total from distributions (0.83) (0.87)
------- -------
Net asset value, end of
period .............. $ 7.10 $ 5.65
======= =======
Market value, end of
period .............. $ 6.625 $ 4.750
======= =======
Total investment return 58.61% (20.89)%
======= =======
Ratios to average net
assets / supplemental
data:
Net assets, end of period
(in 000's) .......... $28,015 $22,283
Ratio of net investment
income to average
net assets .......... 12.59% 13.00%
Ratio of operating expenses
to average net assets 2.46% 2.35%
Portfolio turnover
rate(1) ............. 51.2% 34.9%
</TABLE>
--------------------------------------------------------------------------------
* On May 29, 1998 the Fund entered into a new investment advisory agreement
with INVESCO (NY), Inc. (now known as INVESCO, Inc.) due to the acquisition
of Chancellor LGT Asset Management, Inc. by AMVESCAP PLC.
(1) This rate is, in general, the percentage computed by taking the lesser of
the cost of purchases or proceeds from the sales portfolio securities for a
period and dividing it by the monthly average value of such securities
during the period, excluding short term securities.
(2) The annualized operating expense ratio excludes interest expense. The
annualized ratios including interest expense were 3.67%, 3.13%, 2.98%,
3.06%, 3.19%, 3.52%, 2.80%, 2.63% and 2.06% for the six months ended June
30, 2000 and the years ended December 31, 1999, 1998, 1997, 1996, 1995,
1994, 1993, and 1992, respectively.
(3) The total return for the year ended December 31, 1993, adjusted for the
dilutive effect of the rights offering completed in August of 1993, is
21.07%.
+ Annualized
See Notes to Financial Statements.
9
<PAGE>
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2000
1. SIGNIFICANT ACCOUNTING POLICIES
CIM High Yield Securities (the "Fund") was organized under the laws of the
Commonwealth of Massachusetts on September 11, 1987 and is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a diversified, closed-end management investment
company. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
PORTFOLIO VALUATION: Fixed-income securities (other than short-term
obligations, but including listed issues) are valued based on prices obtained by
one or more independent pricing services approved by the Board of Trustees.
Securities (other than fixed-income securities) for which the principal
market is one or more securities exchanges are valued at the last reported sale
price (or if there has been no current sale, at the closing bid price) on the
primary exchange on which such securities are traded. If a securities exchange
is not the principal market for a security, such security will, if market
quotations are readily available, be valued at the closing bid price in the
over-the-counter market (or the last sale price in the case of securities
reported on the NASDAQ national market system for which any sales occurred
during the day).
Portfolio securities for which there are no such valuations are valued at
fair value as determined in good faith by or at the direction of the Board of
Trustees. Short-term obligations with maturities of less than 60 days are valued
at amortized cost which approximates market value.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Dividend income is
recorded on the ex-dividend date. Interest income, including, where applicable,
amortization of premium and accretion of discount on investments, is recorded on
the accrual basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund distributes monthly
to shareholders substantially all of its net investment income. Capital gains,
if any, net of capital losses, are distributed annually. Income distributions
and capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.
FEDERAL INCOME TAXES: It is the Fund's policy to comply with the
requirements of the Internal Revenue Service applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no Federal income tax should be payable by the Fund.
CASH FLOW INFORMATION: Cash, as used in the Statement of Cash Flows, is
the amount reported in the Statement of Assets and Liabilities. The Fund invests
in securities and distributes dividends from net investment income and net
realized gains (which are either paid in cash or reinvested at the discretion of
shareholders). These activities are reported in the Statement of Changes in Net
Assets. Information on cash payments is presented in the Statement of Cash
Flows. Accounting practices that do not affect reporting activities on a cash
basis include unrealized gain or loss on investment securities and accretion
income recognized on investment securities.
10
<PAGE>
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reported period. Actual results could differ from those estimates.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER RELATED PARTY
TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with INVESCO, Inc. (the "Adviser"). The Advisory Agreement provides
that the Fund will pay the Adviser a fee, computed and payable monthly, at the
annual rate of .50% of the Fund's average weekly net assets. INVESCO (NY), Inc.
was the Fund's investment adviser until January 1, 2000, when through a series
of corporate transactions, INVESCO (NY), Inc. was merged into INVESCO, Inc. No
"assignment" of the Advisory Agreement resulted from these transactions.
The Fund has also entered into an Administration and Support Agreement
with PFPC Inc. (formerly First Data Investor Services Group, Inc.) ("PFPC"), to
provide all administrative services to the Fund other than those related to the
investment decisions. PFPC is paid a fee computed and payable monthly at an
annual rate of .09% of the Fund's average weekly net assets, but no less than
$40,000 per annum.
The Fund pays each Trustee not affiliated with the Adviser $6,000 per year
plus $1,000 per meeting and committee meeting attended, and reimburses each such
Trustee for travel and out-of-pocket expenses relating to their attendance at
such meetings. The Fund pays the actual out-of-pocket expenses of the Trustees
affiliated with the Adviser relating to their attendance at such meetings.
Boston Safe Deposit & Trust Company, an indirect wholly-owned subsidiary of
Mellon Bank Corporation, serves as the Fund's custodian. PFPC serves as the
Fund's shareholder servicing agent (transfer agent).
3. PURCHASE AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of investment securities,
excluding short-term investments, during the six months ended June 30, 2000,
amounted to $21,113,488 and $22,354,846, respectively.
At June 30, 2000, aggregate gross unrealized appreciation for all
securities (other than restricted securities), in which there is an excess of
value over tax cost amounted to $528,467, and the aggregate gross unrealized
depreciation for all securities (other than restricted securities) in which
there is an excess of tax cost over value amounted to $7,322,159.
At June 30, 2000, aggregate gross unrealized appreciation for restricted
securities in which there is an excess of value over tax costs amounted to
$869,223, and the aggregate gross unrealized depreciation for restricted
securities in which there is an excess of tax cost over value amounted to
$679,542.
11
<PAGE>
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
4. FUND SHARES
The Fund has one class of shares of beneficial interest, par value $0.01
per share, of which an unlimited number of shares are authorized. Transactions
in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued as reinvestment of dividends ................... 0 $0 10,529 $72,647
-- -- ------ -------
Net increase .......................................... 0 $0 10,529 $72,647
== == ====== =======
</TABLE>
5. NOTES PAYABLE
The Fund currently has a $12.5 million ("commitment amount") line of
credit provided by Fleet National Bank (the "Bank") under an Amended Credit
Agreement (the "Agreement") dated September 18, 1992, primarily to leverage its
investment portfolio. Under this Agreement, the Fund may borrow up to the lesser
of $12.5 million or 25% of its gross assets. Interest is payable at either the
Bank's Base Rate or its applicable Money Market Rate, as selected by the Fund
from time to time in its loan requests. The Fund is charged a commitment fee of
one quarter of one percent per annum of the average daily unused commitment
amount. The Agreement requires, among other provisions, that the percentage
obtained by dividing total indebtedness for money borrowed by total assets of
the Fund shall not exceed 30%. At June 30, 2000, the Fund had borrowings of
$11,750,000 outstanding under this Agreement. During the six months ended June
30, 2000, the Fund had an average outstanding daily balance of $12,500,000 with
interest rates ranging from 6.5625% to 7.5300% and average debt per share of
$2.13. For the six months ended June 30, 2000, interest expense totaled $456,100
under this Agreement.
6. CAPITAL LOSS CARRYFORWARD
Capital loss carryforwards are available to offset future realized capital
gains. To the extent that these carryforwards are used to offset future capital
gains, it is probable that the amount which is offset will not be distributed to
shareholders.
At December 31, 1999, the Fund had available for Federal tax purposes
unused capital loss carryforwards of $1,552,171, $330,065, $679,423, $253,172,
$2,499,736 and $133,391 expiring in 2000, 2002, 2003, 2004, 2006, and 2007,
respectively.
7. CONCENTRATION OF RISK
The Fund invests in securities offering high current income which
generally will be in the lower rating categories of recognized ratings agencies
(below investment-grade bonds). These securities generally involve more credit
risk than securities in the higher rating categories. In addition, the trading
market for high yield securities may be relatively less liquid than the market
for higher-rated securities. The Fund's use of leverage also increases exposure
to capital risk.
12
<PAGE>
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
8. PORTFOLIO MANAGER CHANGES
From April, 1999 through August, 2000, the Portfolio Manager was John
Fenn. In August, 2000, Martha Metcalf became the Portfolio Manager for the Fund.
Prior to joining INVESCO, Inc., Ms. Metcalf was Vice President and Portfolio
Manager for J.P. Morgan Investment Management, Inc.
13
<PAGE>
CIM
=======================================================================
HIGH YIELD SECURITIES
Semi-Annual Report
June 30, 2000
This report is sent to shareholders of CIM High Yield Securities for their
information. It is not a Prospectus, circular or representation intended for use
in the purchase or sale of shares of the Fund or any securities mentioned in the
report.
For Additional Information about
CIM High Yield Securities
Call 1-800-331-1710.
CIM 3192 8/00
